The Weekly Wire: For Your Situational Awareness 3.22.19

 In Weekly Wire
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US Army

With the release of the FY2020 President’s Budget Request, the US Army unveiled a radical shift in budget strategy as it looks to implement the Army Modernization Strategy. The $182 billion for the force signals important changes to the budget as many legacy programs such as the Bradley fighting vehicle, CH-47F Block II, and others received significant cuts in order to shift $25 billion in funding over the Future Year’s Defense Plan toward the 30 modernization programs under the Army’s six modernization priorities. As a result, over the next five years, Army RDT&E spending is projected to cannibalize a significant portion of the Army Procurement budget, and Army planners expect development spending will be on par with procurement spending by 2024. This new development spending will be directed toward priority programs such as Future Attack Reconnaissance Aircraft, Mobile Protected Firepower, Optionally Manned Fighting Vehicle, a revamped Precision Strike Missile, and Mobile Medium Range Missile that are designed to help the Army retain overmatch against near-peer competitors. However, all of this will tax the Army’s investment budget under a restrictive future topline, and the Army will have to continue to make hard decisions within existing programs in order to fund such developments. Such a drastic shift will likely lead to significant roadblocks emerging within Congress, as members will likely have concerns around such a drastic shift in budget strategy and the repercussions upon the existing industrial base.

US Navy

The US Navy requested $205.6 billion in its FY2020 President’s Budget Request released last week, a 4.6 percent increase from last year. The Navy has the largest budget of the military services, representing 28 percent of the Pentagon total. Increased RDT&E spending, investments in unmanned systems, and cuts to expensive surface vessels reflect the Navy’s focus on competition with China and Russia. RDT&E spending will exceed $20 billion in FY2020, a 9.5 increase from last year and the largest percentage increase of any of the service’s accounts. The Navy plans to procure 17 MQ-4C Triton and eight MQ-25 Stingray UAVs through 2024, as well as spend $447 million in 2020 for the purchase of unmanned surface vessels. In addition, $359 million has been allocated towards unmanned undersea vehicles.

Controversially, the budget cancels the planned midlife refueling in 2024 of the aircraft carrier USS Harry S. Truman. The move would result in its retirement and cut the carrier fleet from 11 to 10 vessels. Industry press reports that the retirement was opposed by the Navy, which sees carriers as vital for power projection, while Pentagon leaders insisted that the platforms are too costly and vulnerable to Chinese and Russian anti-ship missiles. The strategic arguments are unlikely to have much purchase on Capitol Hill, and key congressional leaders have said they will fully fund the carrier program.

US Marine Corps

According to the Department of Defense’s FY2020 President’s Budget Request, the US Marine Corps will only ask for 10 F-35B aircraft in fiscal year 2020. In keeping with this, the funding level for the procurement in FY2020 is only $1.63 billion, which is 59 percent of the funding for FY2019. However, it is extremely unlikely that this is the actual amount of funding or aircraft that will be appropriated. Delaying the Marine Corps’ acquisition of the F-35s would have significant consequences for the Corps’ readiness and would disrupt much of the Marine Corp Aviation Plan. Therefore, this request was most likely made with the understanding that Congress would appropriate more than was requested – an action which would allow the Marine Corps to protect the funding of other projects which may have been at risk of cuts.

US Air Force

The US Air Force requested $1.05 billion for eight F-15EX in FY2020, and 18 F-15EX per year from 2021-24. The first eight aircraft will cost about $131 million per aircraft, an understandably high price tag due to the small initial buy and the standing up costs of the program. It’s interesting to note that the unit cost for the 72 planes in the request from 2021-24 increases slightly per year, rising from $91.8 million in 2021 to $97.4 million in 2024. This likely accounts for future inflation, as the per unit costs rise roughly 2 percent annually and is in line with DoD inflation projections. Much ink has been spilled over the F-15EX vis a vis the F-35. The 2021-24 F-15EX unit costs suggest that the aircraft is roughly competitive with the F-35A from a price comparison standpoint. A key difference will be the operating cost of the F-15EX, which is expected to be significantly lower than that of the F-35. The F-15EX will be based on the F-15QA being sold to Qatar but will incorporate USAF-only capabilities including the Eagle Passive Active Warning and Survivability System and Suite 9.1 Operational Flight Program software. Going forward, the US Air Force plans to buy a total of 144 F-15EXs.

US Air Force – Space

Following the official creation of Space Force enacted under the “Space Directive Policy – 4” signed in February, the US Air Force is setting aside $72.4 million to set up Space Force headquarters according to the FY2020 President’s Budget Request. The Space Development Agency and US Space Command will be allocated $149.8 million and $83.8 million respectively. Space Force will reside under the US Air Force while US Space Command falls under the Unified Combatant Commands of the Joint Chiefs of Staff which houses various regional and specialized commands. The creation of the Space Development Agency announced in 2018 has been met with some criticism from the Air Force, including from Air Force Secretary Heather Wilson. The Space Development Agency will be outside of the Air Force service where it will be a “joint procurement arm for space products.” The Space Development Agency’s necessity has been called into question by the Air Force, which already has a Space Rapid Capabilities Office and a Space and Missile Systems Center which focus on space acquisitions. It remains unclear how the Space Development Agency will fit into existing and new space initiatives.

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