Despite the U.S. military requesting and receiving near-record budgets in recent years, rising costs in each of its funding categories will continue to apply pressure on procurement and research-and-development funding as future budgets will be more constrained, per a new government watchdog document.
The Defense Department can expect to continue to feel budget constraints as the U.S. government deficit remains large for the next decade and is expected to grow in the years thereafter, according to “Prospects for DoD’s Acquisition Budget Over the Next Decade,” a presentation published Oct. 29 by the Congressional Budget Office (CBO).
The Pentagon’s fiscal year 2020 budget request included a $718 billion topline – a 2 percent increase over 2019 – but planned for funding to remain flat through the five-year Future Years Defense Plan (FYDP). That will have an impact on the department’s weapons-buying power as funds continue to rise in areas including military pay and benefits, operations and maintenance, and the costs of building new capabilities, the CBO said.
“Costs of developing and buying weapons have been, on average, 20 to 30 percent higher than DoD’s initial estimates,” the report said.
The CBO projected that the cost of the Pentagon’s current defense-wide funding plans would increase by about 13 percent, or $76 billion, in real terms from 2025 to 2034. Most of the increase in costs would come from operations and support funds, however, an increase in procurement costs is also expected. The Air Force and Navy in particular have the greatest increases in acquisition costs beyond the FYDP, the organization said.
On a wider scale, the CBO projected in its presentation that federal debt will rise to 144 percent of GDP by 2049, and warned that the end of the 2011 Budget Control Act (BCA) – which Congress voted to end early via the 2019 Bipartisan Budget Act passed in August – may not help reduce pressure on spending.
If future defense budgets continue to be constrained, its internal pressures related to rising O&M, military personnel and acquisition costs will reduce the buying power of defense dollars every year, and reduce the amount of procurement and R&D that can be performed, CBO said.