The push to supersize Pentagon spending ratchets up

The bid for a larger Pentagon budget is gaining steam, as top lawmakers and the defense industry push to enlarge President Joe Biden's already historically high $813 billion military spending proposal.

Defense leaders, meanwhile are signaling that they would take Congress up on having more money to fight inflation.

Rising costs, along with balancing the response to Russia's invasion of Ukraine with the long-term challenge posed by China, are fueling the fight to increase the defense topline as congressional committees begin their deliberations on Pentagon programs next week.

Top Republicans, who contend inflation will devour Biden's proposed 4 percent defense hike, envision an even larger cash infusion when annual defense policy and spending bills come up for debate in the coming weeks.

"I just think we have everything on our side on this thing," Sen. Jim Inhofe of Oklahoma, the top Senate Armed Services Republican, said in a brief interview. "We ought to be able to get the adequate increases that we want."

Democrats will be forced to either back Biden's blueprint or — as they did last year — ladle on billions more in military spending.

"There's always upward pressure on the topline on the budget. We'll have to deal with that," Senate Armed Services Chair Jack Reed (D-R.I.) told POLITICO. "We're trying, I think, collectively — House, Senate, leadership ... and the White House — to come up with a topline."

Biden is proposing a $30 billion increase in national defense spending in his fiscal 2023 budget from the current level. Congress already allocated roughly $29 billion more than the commander in chief sought for defense in fiscal 2022, with Democrats and Republicans joining forces to rebuke Biden's first Pentagon plan.

The $813 billion national defense proposal includes $773 billion for the Pentagon, as well as tens of billions for nuclear weapons programs overseen by the Energy Department.

Progressive Democrats who've pushed to constrain military spending will almost certainly put up a fight, and may even push for a level lower than Biden's proposal. But the party's left flank has to date been steamrolled by bipartisan majorities that back more money for defense.

The Senate Armed Services Committee will consider its annual version of the National Defense Authorization Act in mid-June. The House Armed Services Committee will unveil the initial details of its defense bill and hold subcommittee markups next week. House appropriators are aiming to approve legislation for the Pentagon before the end of the month.

Neither Reed nor House Armed Services Chair Adam Smith (D-Wash.) has said whether they will match or exceed Biden's proposal in their bills. But Smith recently signaled he's prepared to hold the line, saying he is "100 percent confident" that the $813 billion Biden is seeking can meet U.S. national security needs.

Armed Services Republicans, led by Inhofe and Rep. Mike Rogers of Alabama, have called for a 5 percent increase to the Pentagon's topline above inflation. Though neither has cited a specific figure yet, the move would mean tens of billions more on top of a proposed national defense budget that is already the largest ever in nominal terms.

Still, many Republicans are confident there is bipartisan support for another boost.

"I think it's very likely what we did last year in the NDAA — where we put forward a real 3 percent increase during the NDAA markup — I think that's highly likely on the authorization side," said Sen. Dan Sullivan (R-Alaska), "which gives the appropriators then kind of the room and signal that that's where we need to go."

On top of the uncertain trajectory of inflation, the long-term response to Russia's invasion of Ukraine will weigh heavily on defense deliberations.

Congress has allocated billions in emergency defense funds to arm Ukraine, replace weapons sent into the fight against Russia and support the deployment of more troops to Europe.

A $40 billion aid package passed last month will bolster Ukraine for the next few months. But more military funding could be in the offing as the war drags on and as lawmakers and the Pentagon look to beef up U.S. military presence on NATO's eastern edge.

"While this budget was being prepared, the Ukraine situation was not as obviously relevant as it is today. So there's lots of pressure," Reed said. "The inflation issue was not as palpable as it is today. So the factors have changed."

The military services have also outlined $17.8 billion in priorities that weren't included in the budget proposal and which will likely guide congressional spending — including money to buy more F-35 fighters, speed up shipbuilding efforts, manufacture more munitions and ramp up hypersonic weapons testing.

The defense industry is also sounding off on the budget. The Aerospace Industries Association, a top advocacy group, joined the calls for higher defense spending last week, urging House and Senate leaders to adopt a 3 to 5 percent post-inflation hike.

AIA President and CEO Eric Fanning argued in a letter to Armed Services and Appropriations committee heads that "no credible analysis can support" competition with China and Russia with smaller budgets.

"The topline discussion should start with support for adequate financial investment," Fanning wrote. "Three to five percent growth above the inflation rate is the level of investment required to support America's global force, maintain our competitive edge over adversaries, and catch up technologically in areas where we are falling behind."

Pentagon leadership also hasn't ruled out the possibility of more money to tackle inflation.

Deputy Defense Secretary Kathleen Hicks in May said the department would work with Congress "to make sure that we have the purchasing power for this program" in the coming fiscal year.

"If at the end of the day it's this program with an inflation factor that is, again, going to be a projection by the United States Congress that we feel is closer to accurate, and then we work on, through supplementals next year, anything where we're off. ... I think that's a really good outcome for us," Hicks said at an event hosted by the Reagan Institute. "We want this program."

Republicans have seized on testimony in April from Defense Secretary Lloyd Austin and Joint Chiefs Chair Gen. Mark Milley acknowledging that the budget's assumptions are outdated.

Still, Austin and Pentagon brass have defended their proposal as robust in the face of inflation. Comptroller Mike McCord noted that the Pentagon doesn't use the widely cited Consumer Price Index, which now pegs inflation at more than 8 percent, to calculate the change in its costs. He also told lawmakers that the administration responded to inflation by adding approximately $20 billion per year to Pentagon budget projections through fiscal 2027.

Hicks, however, warned against heaping on billions of dollars for weapons the Pentagon didn't request — an annual tactic that Congress will likely employ if lawmakers approve a higher topline.

"What we don't want is added topline that's filled with new programs that we can't support and afford in the out-years and that doesn't cover inflation," she said. "That is my number one concern."

Even if Democrats and Republicans coalesce around a larger NDAA topline, lawmakers will still need to iron out defense appropriations legislation to fund the military.

Top House and Senate appropriators are trying to forge an agreement on defense and domestic spending that will pave the way for government funding bills to pass, but a deal remains elusive as Republicans push for defense increases to counter inflation.

A deal would also need to lock in increased funding for domestic programs for Democrats to support it.

"Inflation impacts the entire government," Smith said. "Inflation is not just going to be talked about in the context of the defense budget. It's going to be talked about in the context of the entire budget."

The path to a government funding deal will ultimately resemble the last spending pact sealed in March, predicted Rep. Ken Calvert, the top Republican on the House Defense Appropriations panel.

"Non-defense discretionary is going to come down and defense is going to go up at the end of the day, or we'll be under a [continuing resolution]," Calvert said. "That's it. It's not complicated."