Daily Management Review

US Debt Ceiling Agreement Leaves $16 Billion In Unfinished Defence Projects


US Debt Ceiling Agreement Leaves $16 Billion In Unfinished Defence Projects
After the United States enacted a historic bill that raises the debt ceiling but limits federal spending, a $16 billion list of lower priority defence equipment like tanks, helicopter upgrades, and a ship that would typically be funded as part of the defence budget may no longer be purchased.
Legislators, the Department of Defence, and other agencies are now left wondering how to pay for projects that were, in previous years, last-minute additions to the must-pass defence policy and appropriations legislation that often get approved with little debate.
The debt agreement set a cap on national defence expenditure at $886 billion in fiscal 2024, which was what US President Joe Biden sought.
Abrams tanks made by General Dynamics, a jet made by Lockheed Martin, and a ship for the Marines made by Huntington Ingalls Industries are among the "unfunded priorities" lists of the military services.
Each military creates its own list, and this year's includes long-range radars, new facilities, ship modifications, and bombs to safeguard the United States.
According to congressional officials, the relevant committees were considering a national security budget of more than $900 million for fiscal 2024 before the debt agreement.
Normally, billions of dollars' worth of legislative initiatives as well as some of the $16 billion in unmet priorities would be included. In the end, aides said that the top line for defence could have received an additional $30 to $40 billion.
Congress has recently increased defence expenditure, typically by tens of billions of dollars, more than any president has requested.
Congress raised expenditure by more than $20 billion a year in 2022 and 2023. Prior to that, the Pentagon increased the amount of money available for a decade using "Overseas Contingency Operations" (OCO) funds to get around budget caps enacted by Congress.
The debt ceiling agreement this year might make that more challenging.
After the $48 billion that Congress allocated for Ukraine in December has been spent, Biden is widely anticipated to ask for more money in August or September to defend Ukraine against the Russian invasion.
It is currently anticipated that the Ukraine's additional budget request will cover a wider spectrum of military expenses and may even include some extras and side projects.
The Senate's Democratic and Republican leaders formally agreed late on Thursday, just before the debt ceiling bill passed, in response to complaints from defence hawks, that the spending caps in the bill wouldn't prevent the Senate from passing supplemental spending legislation to increase funding for the Department of Defence.
"I am certain that there will be an emergency supplemental spending bill for Ukraine that includes non-Ukraine defence needs and priorities in it," said Mackenzie Eaglen, a senior scholar at the American Enterprise Institute.
"This supplemental will not be enough to entirely make up the spread between what Congress likely would have increased defense above the president's budget and final non-Ukraine enacted toplines," Eaglen added. "But it will be a relief valve for select priorities."