'How Much and How Fast': Biden Watchers Anticipate Defense Spending Crunch

Defense spending is likely to decline or at least flat-line in the coming years, regardless of who wins November’s presidential election. The pressures on the economy from the coronavirus pandemic and a growing budget deficit are just too great. If former Vice President Joe Biden defeats President Donald Trump, the Pentagon’s $700 billion budget may be cut a bit deeper. But the biggest difference between Trump’s and Biden’s future defense budgets, many said, won’t be the bottom line of total spending — it will be how those dollars would be allocated.

Defense One interviewed several current and former top-ranking political and military officials, and budget watchers to ask what they expect a Biden presidency would mean for defense spending and the global defense industry. The actual size and scope of any Pentagon cut, they say, may depend less on Biden and more on how other Democrats fare at the polls in congressional races. It also will depend on Biden’s policy advisors, their vision for a new national security strategy, and whatever awaits them over the horizon.

If the former vice president is elected president and Democrats win control of Congress, even just a greater share of the Senate, defense spending cuts are considered more likely as they shift focus to domestic and social programs. But even though there will likely be calls from progressive Democrats to slash defense spending, few defense budget veterans expect Biden and Congress to seek dramatic reductions like those seen from the Budget Control Act in the past decade. No matter how many Democrats are in Congress or the White House, the United States must continue to find ways to counter China and Russia, defend against North Korea and Iran, and deal with inevitable Middle East instability. The enemy, as they say, gets a vote.

Part 1: What if Joe Biden Wins?
Part 2: Biden’s China Policy Starts With Building a Stronger America
Part 3: How Biden Would Wage Great Power Competition
Part 4: 'How Much and How Fast': Biden Watchers Anticipate Defense Spending Crunch 

“The budget is heavily influenced by threats to security,” said Robert Hale, former Pentagon comptroller for six years during the Obama administration, now a senior fellow at the Center for a New American Security, or CNAS. “I don't see those declining a lot.”

Former officials predict defense spending in a Biden administration will compete with other costly national priorities, including healthcare, repairing the U.S. economy after the coronavirus pandemic, climate change, and other domestic priorities. Biden, in articles and speeches, has proposed massive projects from infrastructure to energy and education, all requiring new federal spending. 

In foreign policy, the Pentagon also may have to compete with an attempt to surge new funding and attention into rebuilding the State Department, USAID, and other non-military tools, which Biden and his advisors are promising. That effort may not add up to much when compared to the military’s massive warchest, but it would force Congress to rethink how every national security dollar is spent. 

If Trump wins a second term and continues seeking to make good on his promise to “rebuild” America’s military, it is by no means a blank check for defense companies. The administration’s defense spending forecast in its latest budget plan already shows little to no real growth through 2025.

“Even before the coronavirus pandemic, I don’t really see a world in which defense spending continues to go up,” said Susanna Blume, a former Pentagon staffer who is now a senior fellow at CNAS, where she specializes in defense strategy, planning and budget. “I think we’re looking at some kind of a reduction and the question is how much and how fast.”

One clue: Biden already has pledged to reduce large U.S. deployments into the so-called “forever wars.” Further spending cuts likely would have to lead to reductions in troop numbers and weapons buys, Hale predicted, because officials will likely be reluctant to keep high personnel numbers but cut into their training and maintenance. Mandatory spending cuts — the result of the Budget Control Act sequester in 2013 — led to a decline in military readiness for much of the mid-2010s. 

How Big of a Cut?

Americans should know by early 2021. The largest cuts are typically made during the first few months of a new administration. With relatively few political appointees at the Pentagon, that’s the period of time when the White House plays its largest role in shaping the federal budget, said Gordon Adams, who ran defense budgeting during the Clinton administration and worked on President Barack Obama’s transition team. “It’s exactly why this moment is critical for Biden,” Adams said. “There’s no moment where the incoming president has more capacity to change the defense numbers than in a transition in the first year.” Less than three months after Obama moved into the White House in 2009, he had then-Defense Secretary Robert Gates lay out a plan to cut billions of dollars from weapons projects to reign in Pentagon spending and focus on near-term projects that supported troops fighting in Iraq and Afghanistan.

The Trump administration’s fiscal 2021 budget request for the Pentagon that Congress is currently reviewing is about $705 billion. (When nuclear weapons funding at the Energy Department and national security spending at other agencies is factored in, the defense spending request totals $741 billion.) For the next year, Trump’s plan projects a $722 billion Pentagon budget would be needed in fiscal 2022, about 2.4 percent higher than 2021. But Defense Secretary Mark Esper and other senior defense officials already have argued for higher 3-percent-to-5-percent annual increases in defense spending, costing tens of billions more.

Adams, who is not advising the Biden campaign, said he would recommend the original $722 billion forecasted budget as the highest of three spending options for Biden’s first year, alongside decreases of 2 percent and 5 percent. Those would mean cuts of between $14 billion and $36 billion. From the lowest to highest options between Biden and Trump, the difference could mean more than $70 billion that year.

“I don’t see a Biden administration making big, big cuts to defense,” Robert Work, former deputy defense secretary for Obama who is now chairman of Govini, an artificial intelligence-driven analysis firm, said in June. “But what I see a potential Biden administration doing is defining the priorities within defense in a different way.”

Byron Callan, an analyst with Capital Alpha Partners, wrote in a June 1 note to clients that he predicts Biden could cut defense spending by up to 2 percent. He also expects increased debate over buying new nuclear weapons.

“The way I’m handicapping it is ‘22 and out is going to be really, really tough, and it will only get tougher depending on the pressure from the top and whether or not the defense [budget] really starts to decline,” Work said. A Biden administration also would likely reinstate climate change as a Pentagon priority, Work said, which the Obama administration considered a national security threat.

Hale, the former Pentagon comptroller, said that even a 2 percent or 3 percent cut in spending would slow the procurement of new weapons and likely lead to force structure reductions. “It's the only way to get that kind of saving — billions of dollars —  out of a $700 billion budget,” he said. Efficiency drills, Hale said, can always find ways to save, but only in the single-digit billions of dollars.

The Pentagon is facing a number of hefty bills in the years ahead as it has been trying to buy new aircraft, ships, ground vehicles and nuclear weapons as decades-old weapons reach the end of their lives. “There's a bow wave of procurement I think out there and they'll have to find a way to accommodate that within flat budgets,” Hale said. “It'll be a struggle for them.” In some cases, canceling new projects isn't an option since the weapons are a half century old, or older, as is the case with most Air Force refueling tankers, security helicopters and pilot training jets. A budget crunch could mean fewer annual buys, which in turn tend to drive per-unit costs up. 

Prioritizing Technology

Toward the end of the Obama administration, defense officials focused on new technology that would allow the military to fight the wars of the future. More recently, military officials have prioritized connecting the military branches’ extensive computer networks so they can fight more effectively and efficiently. Some are watching to see if those investments would continue or have to compete with fewer dollars alongside traditional weapons, vehicles, and hardware.

“How you take your cuts is much more important than whether you take a cut,” Blume said. “If DoD takes a topline reduction and guts modernization to pay that bill while preserving all of their force structure” — the total number of troops, weapons, squadrons, etc. — “that’s a mistake and it would be a mistake if Congress made them do that. But I do certainly see pathways toward reducing defense spending that does not gut investments in advanced technology.”

“It’s definitely possible, [but] politically more difficult,” Blume continued. “There’s definitely a much bigger constituency behind buying hardware and keeping bases open than there is behind the next-generation of military technology. It’s a harder sell, but it’s certainly possible.”

Several former officials pointed to Marine Corps Commandant Gen. David Berger’s plan to reshape his service by cutting older, larger weapons and formations, such as tanks, artillery units and helicopter squadrons, as a blueprint for the kinds of changes needed in other service branches. If so, that could mean significant force structure changes that are often considered politically off limits would be in play, like cutting the number of Navy aircraft carriers, or reducing the number of manned combat jets or land forces. Congress has routinely blocked the military from retiring big, favored weapons. In early June, the Senate Armed Services Committee blocked the military from retiring decades old warplanes. Congress also blocked Obama administration requests to close bases.

“BRAC is the biggest single way to save money,” Hale said. “[It] probably could save $2 billion or $3 billion a year.” Others argue that realigning military bases, and all of their people, equipment and functions, actually costs more money in the short term; any real savings come years later. 

No matter who wins the White House, if defense officials want more money, the Pentagon should give Congress more visibility into the analysis behind decisions to make changes, like retiring weapons, one former senior military official said. 

“I think bringing Congress in much earlier into the process and having these discussions ahead of time rather than dropping a budget and fighting over what it was that we proposed,” would help Biden or another future president sell any budget cuts, the official said. “Include Congress in the conversations much earlier, invite them into the wargames, show them why it's so important in a setting that they can get their minds around it and then go back and talk to the people in a way that makes sense.”