Trump Administration adds Billions of Dollars to Defense for FY 2017 and FY 2018

The FY 2018 preliminary budget outline, America First - A Budget Blueprint to Make America Great Again, sets out the Administration’s budget, policy, and management priorities in advance of its full budget release, expected in May.

The FY 2018 budget outlines a total the Department of Defense (DOD) discretionary budget of $639 billion, including a base budget of $574 billion, a 10% increase over the FY 2017 annualized budget enacted under the current Continuing Resolution (CR) passed in December and which expires near the end of April. The FY 2018 DOD budget also includes $65 billion for Overseas Contingency Operations (OCO).  

Other aspects of the FY 2018 DOD budget include:

• Increases DOD’s total budget authority by $52 billion above the current 2017 level of $587 billion
• Repeals the defense sequestration by restoring $52 billion to DOD, as well as $2 billion to other national defense programs outside DOD
• Focuses on urgent warfighting readiness needs, including munitions, personnel gaps, deferred maintenance and modernization, cyber vulnerabilities, and degraded facilities
• Fights the ISIS threat by funding the DOD’s critical efforts to strike ISIS targets, support U.S. partners fighting on the ground, disrupt ISIS’ external operations, and cut off its financing
• Provides funding to address gaps in preparedness, such as insufficient stocks of critical munitions, personnel gaps, deferred maintenance and modernization, cyber vulnerabilities, and degraded facilities
• Initiates reform efforts to increase effectiveness, efficiency, and reduce cost wherever feasible
   

FY 2017 DOD Budget Amendment

In addition to the FY 2018 Budget request, the White House issued an FY 2017 Budget Amendment which requested an additional $30 billion in FY 2017 funding for DOD to rebuild the U.S. Armed Forces and accelerate the campaign to defeat the Islamic State of Iraq and Syria (ISIS). Details of the request include:

• Provides $24.9 billion in the DOD base budget for urgent warfighting readiness needs and to begin a sustained effort to rebuild the U.S. Armed Forces
  • Seeks to address critical budget shortfalls in personnel, training, maintenance, equipment, munitions, modernization, and infrastructure investment
• Includes $5.1 billion in the Overseas Contingency Operations (OCO) budget for DOD to accelerate the campaign to defeat ISIS and support Operation Freedom's Sentinel in Afghanistan
• Recommends non-defense discretionary reductions of $18 billion in FY 2017, which would offset half of the amounts proposed for DOD and fully offset the proposed FY 2017 increases for DHS
   

FY 2017 Budget Amendment: All Defense – Base Budget

Source: OMB

Implications

The proposed Defense increase could result in new opportunities in areas included in Secretary Mattis’ department review, including munitions, facilities O&M, R&D, cybersecurity, and business operations. The emphasis in the budget on defense readiness may have positive implications for technology and system modernization, but the priority of front-line readiness means infrastructure investments will be scrutinized.

The rescinding of sequestration caps the 2013 BCA, if enacted by Congress, will remove at least some of the budget consternation and uncertainty in the immediate term and coming years. Efforts and debate may then center on vision, strategy, and priorities and less on legislative maneuvers to circumvent the BCA caps. However, even without the shadow of sequestration, expect continued rigorous debate among appropriators on Defense spending priorities and, therefore, budgets.

Continued emphasis on the importance of cyber-capabilities and cybersecurity across domains and platforms will drive the further evolution in defense strategy and likely additional targeted investments to leverage technology advances that provide mission support and assurance, including improving warfare capabilities and networked battlefield technologies like DOD’s Combat Cloud.

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Learn more about the overall priorities and agency-level trends and initiatives in the FY 2018 discretionary budget outline by reading Deltek First Look: FY 2018 Federal Budget Blueprint.