The Political Report: 1/21/20

 In Political Report

Impeachment Drama to Dominate Washington but FY2021 Maneuvering is Underway (cont.)

The impeachment trial of President Trump will make headlines this week but inter-service fights over the not-yet-released FY2021 budget are already well underway.

Last week saw the Chief of Naval Operations (CNO) Admiral Michael Gilday make a claim to a larger share of the topline budget going to the US Navy and the predictable response from the Army.

While its highly unlikely the White House and Office of Management and Budget (OMB) will depart from the recent year’s trend of even distributions among the services, expect this type of conflict to continue through the FY2021 process as the low growth in topline values under the 2019 Bipartisan Budget Act (BBA) puts pressure on the services to execute on the National Defense Strategy (NDS).

The topline defense number has benefitted from steady growth since 2013 at just above inflation levels (average growth of ~3 percent). This has given the services space both to maintain and sustain existing investment activity while also taking up new priorities under the Trump administration’s NDS.

However, the 2019 BBA provides basically level spending from FY2020 to FY2021 ($738 billion to $740.5 billion). While the Pentagon is working to extract savings from Operations & Maintenance accounts, military personnel costs are almost certain to grow as a share of the DoD budget given expected pay raises and growing health care costs.

This means that investment accounts will be under pressure to offset these higher costs. This, combined with a series of very expensive programs that are underway, creates major problems for the services. Should the FY2021 budget again feature low growth through the Future Years Defense Program, expect to see some very difficult choices in the budget that comes out in February.

House Activity

The House is out of session this week.

Senate Activity

The Senate will be conducting the impeachment trial of President Trump.

Congressional Defense Activity

  • SASC
    • No hearings scheduled
  • HASC
    • No hearings scheduled
  • SAC-D
    • No hearings scheduled
  • HAC-D
    • No hearings scheduled
  • SFRC
    • No hearings scheduled
  • HFAC
    • No hearings scheduled
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