Several Army program could be stalled if, like the past eight years, the Pentagon is forced to operate under a continuing resolution into 2017.
New programs cannot start and ongoing development efforts are barred from moving to production under a CR, which funds the Defense Department at the same levels as the previous fiscal year.
Army Secretary Eric Fanning lamented the familiar budgetary impasse on Tuesday at a forum hosted by the Library of Congress.
“We’re under a continuing resolution right now. We start every single year with a continuing resolution,” Fanning said. “This is a very disruptive and expensive way to govern, to manage.”
The government is under a continuing resolution that funds the Defense Department at fiscal 2016 levels until Dec. 9. Congress will need another CR or some form of funding bill before that date to avoid a shutdown.
“All it does is let you spend what you spent last year, so if you’ve got any new program in your budget you are not authorized to spend on it,” Fanning added. “What does that do to your people? What does it do to contracts? What does it do to the industrial base? It adds cost year after year after year to operate in such fiscal confusion.”
The Association of the U.S. Army (AUSA) and other defense-related associations, along with 14 defense contractors, sent a letter to the House and Senate leadership urging them to pass both the defense appropriations and authorizations bills before the end of the year.
The letter said that a “continuing resolution for defense that extends beyond the one under which we are currently operating will unnecessarily delay new programs, prevent the ramping up of mature programs, and affect defense readiness and operational issues.”
A new report by the Center for Strategic and Budgetary Assessment echoes that concern and points out specific programs that could suffer under an extended CR. The programs include the Air Force KC-46 Pegasus aerial refueling tanker, the Navy’s Ohio-class submarine replacement and the Marine Corps’ CH-53K King Stallion heavy lift helicopter and F-35B short-takeoff and vertical landing variant of the Joint Strike Fighter.
“DoD cannot start procurement of new systems, as continuing resolutions typically prohibit ‘new starts,’” the report, authored by CSBA Research Fellow Katherine Blakeley and research assistant Maureen Smolskis, said. “For programs that are already underway, a continuing resolution can hamper the programs’ transitions from RDT&E into procurement. Due to Pentagon accounting rules, money in RDT&E cannot be used for procurement, leaving programs stalled out.”
Department-wide, efforts like the European Reassurance Initiative (ERI) to boost troop presence in Europe to bolster NATO against Russia are at stake. The dramatic increase in funding requested for the ERI is not covered by 2016 funding levels.
Programs like the Joint Light Tactical Vehicle (JLTV) that are scheduled to ramp up production will sit idle under an extended CR, according to the CSBA report. Plans are to nearly triple production from 686 in fiscal 2016 to 1,828 in fiscal 2017, an increase for which there is no funding under a CR. The Marine Corps also plans to boost its production purchases of JLTV in fiscal 2017, wherein “these requested quantity increases are mirrored by requested funding increases,” the report said.
Under a CR, the Army will be about $338 million short of the $588 million it will need to hit its JLTV production goal. The Marines will fall about $53 million short of their $113 million target, according to the report.
“With the continuing resolution in place, neither service will be able to get this increased funding until a budget deal can be reached. If a deal cannot be reached, then the program could face the types of major delays it has avoided so far.”
Funding is available from other programs where a decrease was requested from fiscal 2016 to 2017, but under a CR those dollars cannot be transferred between programs. One such program is the ongoing work to modify Stryker wheeled combat vehicles with blast-resistant double-V hulls and automotive upgrades. Plans are to upgrade 123 of the vehicles in fiscal 2017, 5 percent fewer than in the current fiscal year, the report said.
That leaves with Army with $978 million in a pot that it says only needs $591 million to satisfy production goals. The extra $387 million “means the money can’t be used for other programs. As a result, the Army will be stuck buying upgrades it doesn’t want as higher priority programs, like the JLTV, languish,” the CSBA report said.
The Army also has a share in production of the AGM-114 Hellfire missile, also used by the Air Force and Navy. The missiles have been a mainstay munition used against Islamic State targets in Iraq and Syria. That depletion in Hellfire stocks spurred an increase of 3,827 in Army missile purchases in its fiscal 2017 funding request. The Navy plans to buy Hellfires in 2017 for the first time while the Air Force plans to decrease its purchase of the missiles by two-thirds to just 1,500.
Under a CR, the Army would get far less funding and the Air Force far more than each needs to purchase the planned Hellfire buy and none of the funds could be reallocated.
“The continuing resolution prevents the funding shifts necessary for the Army to buy more missiles and for the Air Force to scale back its buy,” the CSBA report said.