Pentagon to work with Congress to mitigate inflation’s budget bite
Members of both parties have criticized President Biden's proposed 2.2 percent increase in defense funding for fiscal 2023
The Biden administration will seek supplemental defense funding if inflation cuts too much into Pentagon buying power in fiscal 2023, Deputy Defense Secretary Kathleen Hicks said Friday.
Lawmakers of both parties, but particularly Republicans, have harshly criticized the Pentagon’s budget request for the fiscal year starting in October of $773 billion, which is 2.2 percent more than Congress appropriated for fiscal 2022, saying it's too small given high inflation.
Speaking Friday at the Reagan Institute, Hicks touted the budget request as a thoughtful, well-balanced approach to meeting today’s challenges while making smart investments in future technologies.
But she acknowledged that inflation needs to be addressed, both for fiscal 2022 and fiscal 2023.
The department is ready to work with Congress to determine a more accurate projection of inflation in 2023, she said, and if the agreed-upon figure is too low, the Pentagon will come back and ask for supplemental funds.
“I think that’s a really good outcome for us,” Hicks said.
Inflation is an immediate problem because the Pentagon has to buy fuel and other goods and services that cost more now than planners expected them to when assembling the fiscal 2022 budget.
Congress can help further, Hicks said, by reaching agreement on appropriations before the end of the current fiscal year, avoiding the use of a continuing resolution that keeps funding flat.
“The best inflation buster we have is on-time appropriations,” she said.
Hicks also signaled to Congress what approach would not be helpful to the Defense Department.
“What we don’t want is added topline that’s filled with new programs that we can’t support or afford in the out-years, and that doesn’t cover inflation,” she said, a possible criticism of Congress’ actions last year, when lawmakers added about $30 billion to the Pentagon’s request, largely to procure more big-ticket items, such as an additional guided-missile destroyer.
Immediate and future needs
Hicks outlined her approach to planning, and building a budget to match, by describing the next three Future Years Defense Programs, or FYDPs, which are five-year chunks of projected budgets.
The current FYDP, in this case for 2023 through 2027, focuses on immediate needs and steady investment in modernizing the nuclear triad: nuclear missiles and bombs deliverable from land, air and sea.
The third FYDP focuses on reshaping the military around technologies the Pentagon is developing to create battlefield advantages in the future.
Designing the middle FYDP is particularly challenging, as it represents the transition from the way things are done now to the new approach.
For this transition to succeed, it requires Congress to trust that the Defense Department can manage it, she said.
“The lack of that confidence is what keeps sliding us back, so that first FYDP is just the reality we live with forever,” she said.
Hicks’ nominal topic was the National Defense Strategy, a planning document developed by every new administration and updated as needed.
But her ability to delve into the details of the Biden administration’s new NDS was hampered by the fact that an unclassified version has not yet been made public. A classified version was submitted to Congress in March, at which time the Pentagon released a two-page fact sheet about the planning document, this administration’s update on the 2018 National Defense Strategy.
Consequently, Hicks stuck to the Defense Department’s boilerplate language that China is the “pacing challenge,” while Russia represents an “acute threat.”
She said the Pentagon’s fiscal 2023 budget is underpinned by the NDS and is sufficient to meet its demands.
“I’m sort of known as somebody who does my homework,” she said. “I promise, if anyone opens the books, I’ve done the homework and we have matched those.”