Biden prepares largest Pentagon budget in history as spending cuts loom

The Biden administration is preparing to ask Congress for the largest Pentagon budget in history, according to the Defense Department’s chief financial officer, as partisan squabbling over the debt ceiling raises the specter of deep cuts to the military’s funding plans.

Officials are “very close” to settling on a final topline number for the Defense Department, which the White House will include as part of its overall fiscal 2024 budget request set for release on March 9, Pentagon Comptroller Michael McCord said in an interview.

“I do expect it will be a bigger number than Congress provided last year,” McCord said. While he declined to give details about the proposal since it’s still in flux, he said the Pentagon will invest in munitions to replenish U.S. stockpiles and support the continued fight in Ukraine, where both sides are expending thousands of rounds a day.

In December, lawmakers appropriated $858 billion in national defense funding — $45 billion more than Biden sought. That included $817 billion for the Pentagon, and billions more for nuclear weapons development through the Energy Department and other national security programs.

At the time, it was the most the U.S. had ever spent on the Defense Department, reflecting the Pentagon’s efforts to simultaneously counter the threat from Russia, keep pace with China’s growing technological advantage, modernize aging arsenals and fight inflation.

But the outlook for Biden’s Pentagon budget is increasingly uncertain now that Republicans have taken over the House, where a partisan fight is brewing over the nation’s debt limit. With just four months to go until the Treasury Department could run out of ways to stave off a default, Republican lawmakers have demanded deep spending cuts — including potentially defense — in exchange for raising the debt ceiling.

Republicans have yet to rally around a specific set of conditions to raise the debt limit, but House Speaker Kevin McCarthy has voiced support for capping spending at fiscal 2022 levels. If the Pentagon is not spared from those cuts, reverting to last year’s budget levels would amount to a nearly $75 billion cut across the board — roughly 10 percent.

There are deep divisions within the Republican Party on the issue of potential defense cuts. Many hawkish members have sought to quash any talk of reducing the Pentagon’s budget, instead looking to make cuts to non-military programs. Defense boosters are actually eyeing another increase this year of up to 5 percent to mitigate the effects of inflation and meet threats from Moscow and Beijing.

But a small but vocal faction of budget hardliners in the GOP conference is hellbent on cutting defense spending — and even some, such as Rep. Marjorie Taylor Greene (R-Ga.), oppose continued aid to Ukraine. Those lawmakers will be hard to win over.

The parallels between the current situation and the debate that led to automatic cuts known as sequestration 12 years ago are not lost on McCord. In 2011, Republicans had just taken over control of the House and were demanding spending cuts in exchange for raising the debt ceiling. The crisis ended in the Budget Control Act, which forced hundreds of billions of dollars in spending cuts over the next 10 years.

This time, lawmakers will have to make tough choices about which parts of the defense budget to cut, McCord said.

“You are going to have to face the harder question of what is it that you want to do less? Do you want to have fewer people? Do you want to have fewer ships? Fewer airplanes? Smaller pay raises? That's where the money is in the defense budget,” he said.

Although it’s not certain defense cuts will be part of a budget deal, McCarthy has strongly hinted the Pentagon could be on the chopping block. He told Fox News in January that the Defense Department could “be more efficient,” and even identified some potential targets that would be popular among his party:

“Eliminate all the money spent on ‘wokeism,’” he said, referring to DoD personnel policies aimed at diversity, inclusion and climate change put into effect during the Biden administration. “Eliminate all the money [they are spending] trying to find different fuels.”

But McCord said the amounts saved from cutting those types of programs would be miniscule.

“I’m not aware that anybody knows the number … but you would need a super telescope,” McCord said.

As for spending on alternative fuels, McCord said that’s already well under 1 percent of the Pentagon’s total budget.

He chastised Republicans for what he called a “complete reversal of the last two years” of calling for bigger defense budgets.

“It would appear to be largely the same people saying, ‘well, now it should be smaller,’” he said. “It is puzzling to me that the message we've gotten from Congress the last few years was in one direction, for a robust budget, and in both years they added to our request.”

Lawmakers have consistently voted to boost defense spending on a bipartisan basis, noted defense budget expert Todd Harrison, the managing director at Metrea Strategic Insights. But he also acknowledged the role that budget hawks will play.

“Everything is uncertain until Congress figures out how they are gonna resolve this standoff over the debt ceiling,” Harrison said. “The problem is that Biden can negotiate all he wants with McCarthy, but it’s not clear McCarthy can deliver the votes in the House.”

The possibility of spending cuts and even defaulting on the nation’s debt adds to a dangerous environment of uncertainty at the Pentagon, McCord said.

“If we started missing payments, there's no free get out of jail card,” McCord said, of the possibility of default. “There is no exact playbook for this. So there is a certain extra layer of uncertainty and of course, the stakes are bigger.”

Connor O’Brien contributed to this report.