The Political Report 1/29/20

 In Political Report

Main Story: Two Weeks Until the Budget Release: Avascent Expectations & What to Watch

While public fighting among the services over spending levels is well underway, the FY2021 budget request is apparently on track to be released on Monday, February 10. While we have heard rumblings that this might get delayed, this publication will assume the budget will be released on time. With only two weeks until the release and no major congressional budget drama to report on, this seems as good a time as any to talk a bit about expectations for the budget request and what we’ll be looking for in the release. This isn’t meant to be a comprehensive list of significant programs; rather, we’re going to highlight some of the things we’ll be thinking about as we work through the budget data as it is unveiled.

First, how successful is the Army in keeping its major development efforts on schedule and under budget? Last year’s budget and appropriations process saw the Army take major steps toward reorienting its investment accounts around the National Defense Strategy, cutting funding from dozens of existing procurement programs to channel it into new major development programs such as the Future Long Range Assault Aircraft (FLAARA). The future years defense program (FYDP) in the FY2020 request featured swift transitions from development to acquisition, but it remains to be seen if the Army can successfully navigate these critical programs to successful conclusion. The recent cancellation of the Army’s Optionally Manned Fighting Vehicle offers reasons for both optimism and pessimism; the Army’s decision to reboot the program quickly after industry’s offers did not meet expectations is a good example of failing fast – a core principle of agile program management. However, the fact that only one competitor was qualified to submit and failed to meet requirements points to a potential disconnect between industrial capacity and a program office’s expectations. It is difficult to see other major programs moving forward successfully if the cause of this problem is not adequately addressed.

Second, how will the other services progress toward the type of priority shift the Army accomplished in the FY2020 budget? Secretary of Defense Mark Esper had been the architect of the Army’s transformational budget and is now seeking to push through similar transitions within other services and in pushing for major reforms to the so-called “Fourth Estate”. Claiming savings from O&M budgets has been a long stated but rarely achieved goal of the Department. It will be interesting to see how these efforts are rendered in the FY2021 budget; simply baking savings into the FYDP is a likely indication they may not be as successful as the administration may hope.

Lastly, at a topline level, the White House has frequently limited growth in the defense budget through the FYDP. The FY2018 request saw national defense spending decline from $680 billion in FY2019 to $673 billion in FY2022. While the FY2019 and FY2020 FYDP’s saw growth through the period, it was well below inflation level expansion, resulting in a real decline in value. It will be curious to see , given the limited topline increase locked into the 2019 Bipartisan Budget Act, how the administration approaches spending levels through the FYDP.

House Activity

The House will work through various legislation from the Financial Services Committee, mostly focused on regulation of credit reporting.

Senate Activity

The Senate will be conducting the impeachment trial of President Trump. It is possible it could wrap up this week or extend further if the Senate votes to call witnesses.

Congressional Defense Activity

  •  HFAC
    • 1/28 “Escalation with Iran: Outcomes and Implications for U.S. Interests and Regional Stability,” Subcommittee on the Middle East, North Africa, and International Terrorism, 2172 Rayburn, 10am
    • 1/28 “Ending Global Religious Persecution,” Joint Hearing of the Subcommittee on Africa, Global Health, Global Human Rights, and International Organizations and the Oversight and Reform Committee’s Subcommittee on Civil Rights and Civil Liberties, 2172 Rayburn, 2pm
    • 1/29 “Evaluating the Trump Administration’s Policies on Iran, Iraq and the Use of Force,” Full Committee Hearing, 2172 Rayburn, 10am
    • 1/29 “Resisting Anti-Semitism and Xenophobia in Europe,” Subcommittee on Europe, Eurasia, Energy, and the Environment”, 2172 Rayburn, 2pm
  • SFRC
    • 1/28 “CLOSED/TS/SCI: U.S.-Iran Policy and Authorities for the Use of Force,” Full Committee Hearing, SVC-217 The Capitol, 9am
  • SASC
    • 1/28 “United States Strategy in Afghanistan” Hearing has been postponed
    • 1/30 “United States Africa Command and United States Southern Command,” Full Committee Hearing, SD-G50 Dirksen, 9am
  •  HASC
    • 1/28 “Security Update on the Korean Peninsula,” Full Committee Hearing, 2118 Rayburn, 10am
  •  SAC-D
    • No hearings scheduled
  •  HAC-D
    • No hearings scheduled
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