The latest national security budget proposal by President Joe Biden, unveiled on Monday, sees a marginal 1% increase from the previous year, totaling $895 billion.
This modest uplift reflects constraints set by a budget agreement made in mid-2023, capping growth and impacting various defense initiatives, including replenishing armaments for Ukraine and Israel.
According to a senior defense official, this limited increase fails to match inflation rates, indicating that the constraints should not surprise anyone involved in its enactment.
The Pentagon is earmarked to receive $850 billion from the total budget, affecting acquisitions such as the F-35 jets by Lockheed Martin and air defenses for Guam.
Notably, expansions in naval assets, including aircraft carriers by Huntington Ingalls Industries and Virginia-class submarines by Huntington and General Dynamics, are expected to experience delays.
Despite the fiscal tightness, the proposal includes a 4.5% pay raise for military personnel while aiming to retire costlier, older equipment ahead of their service life, including 10 Navy ships and specifically two Littoral Combat Ships.
Before the implementation of the budget cap, projections for 2025 estimated a need for $880 billion by the Pentagon, with national security funding at $929 billion.
However, the 1% cap has necessitated reductions in these forecasts, igniting discussions in Congress that might push the defense budget above $900 billion for fiscal 2025.
The Pentagon has also adapted by entering multiyear contracts for munitions, a practice previously reserved for aircraft and ships, highlighting a strategic shift in procurement.
Key missile acquisitions have been adjusted in response to the cap, with plans to purchase 230 Precision Strike Missiles (PrSM) and 205 Long Range Anti-Ship Missiles (LRASM), marking significant increases from previous targets.
These adjustments reflect a strategic pivot towards addressing the threat posed by China’s navy, with Lockheed Martin manufacturing both missile types.
Defense spending, representing approximately half of the U.S. discretionary budget, contrasts with allocations for transportation, education, and diplomacy.
The entitlements such as Social Security make up the nondiscretionary part.
The 2024 budget, still pending Congressional approval, sustains the government under a continuing resolution, maintaining 2023 spending levels.
This has led to a reduced order for Lockheed Martin’s F-35 jets, dropping from 83 to 68, resulting in a significant reduction in expenditure on these aircraft.