The U.S. Army’s FY 2024 Budget Outlook

The U.S. Army, including the Regular force, the Reserves and National Guard, requested a total of $185.3B in budgetary resources for fiscal year 2024. This represents a slight increase of $400M compared to the $184.9B enacted in FY 2023. Breaking down the request into the major buckets of the budget – Operations and Maintenance, Procurement, and Research, Development, Test and Evaluation – reveals where changes will be felt and what industry might expect in the fiscal year to come.

Operations and Maintenance (O&M)

O&M funding provides the basic resources Army components need to perform their missions. Overall, Army leadership requested $71.9B in O&M funding, which is $2.1B less than the force received in FY 2023.

Referring to the chart below, we can see that the requested O&M budget for the Regular Army is down compared to FY 2023, but still up compared to FY 2022. The funding requested for the Army Reserves and Army National Guard is slightly up by contrast.

In terms of the programs slated to receive the biggest boost, here are the top three for each part of the Army request.

Regular Army

• Base Operations Support - $9.9B
• Force Readiness Operations Support - $7.1B
• Facilities Sustainment, Restoration & Modernization - $5.4B

Army National Guard

• Management and Operational Headquarters - $1.5B
• Base Operations Support - $1.2B
• Aviation Assets - $1.1B

Army Reserves

• Echelons Above Brigade - $721M
• Land Forces Operations Support - $708M
• Base Operations Support - $608M

Procurement

Turning to the funding requested for new acquisitions, the Army asked for a total of $23.8B, which translates into $2.2B less than the funding received in FY 2023.

The Army’s Procurement request is broken down into type of item or service being purchased. As we can see, only the request for missile procurement is positive. The largest category, funding for “Other,” meaning communications, ISR, and electronics, is flat. Since most of our audience is focused on technology, here are the top five programs by requested funding from the “Other” category.

• Combat Communications - $1.4B
• Tactical Vehicles - $1.4B
• Elect Equipment/Tactical Surveillance - $1.2B
• Elect Equipment/Tactical C2 Systems - $623.7M
• Training Equipment - $527.7M

Research, Development, Test, and Evaluation (RDT&E)

Last, but not least, here is a look at the Army’s requested RDT&E funding for FY 2024. It is a mixed bag, being lower than the FY 2023 enacted level, but higher than the funding received in FY 2022.

Here are the top five Army RDT&E programs by budget request. Aviation needs and missiles dominate the request.

• Aviation Advanced Development - $1.5B
• Manned Ground Vehicle - $997M
• Hypersonics Engineering, Manufacture, and Development - $901M
• Lower Tier Air Missile Defense Sensor - $816.7M
• Army Test Ranges and Facilities - $439M

Bottom Line

The Army may be receiving a small amount of additional funding in FY 2024, assuming the request passes Congress untouched, which is a big if. Most programs will still see flat or declining budgets in the year to come as any increases go to air and missile systems.