Dispute Over Pentagon Funds Part of White House Budget Delay

The Pentagon and the White House budget office have been at odds over the first defense budget under President Joe Biden.

The disagreement may be at least partly to blame for delays in releasing the budget outline that was widely expected this week, according to two people familiar with the situation who asked not to be named because the information isn’t public.

The Pentagon has been crafting a fiscal 2022 budget plan that assumes the military will receive $704 billion to $708 billion, essentially a flat budget instead of the increase anticipated under former President Donald Trump.

The White House didn’t provide specifics on when it would release its budget priorities. “I know it’ll be out soon,” White House spokeswoman Jen Psaki said Thursday.

Robert Friedlander, a spokesman for the Office of Management and Budget said the document would be released “soon,” but declined to give a timeline. Two people familiar with the process said the budget preview wouldn’t be released until next week.

The Pentagon did not immediately respond to a request for comment.

The Trump administration had planned to propose about $722 billion for the Defense Department in the fiscal year that begins Oct. 1 -- although lawmakers of both parties have predicted less would be available amid competing spending demands and rising deficits from coronavirus relief packages.

The Pentagon-only budget doesn’t include defense spending that goes to other agencies, primarily to the Energy Department, which maintains the nation’s nuclear weapons.

Decrease in Real Terms

A “topline” of $704 billion to $708 billion under Biden would amount to a decrease of about 2% in real terms, adjusting for inflation from this year’s enacted appropriation of about $704 billion. The topline proposed by the OMB is still unclear.

Lawmakers are also expected to focus on how much of the Pentagon funds come from the Overseas Contingency Operations account, or OCO, a separate pool of money that funds Afghanistan and Iraq operations and personnel costs. The last Trump plan earmarked a $20 billion placeholder figure.

The topline considered by the Pentagon is in contrast to real growth in the budget of 3% to 5% first endorsed by then-Defense Secretary Jim Mattis in 2017, then by the National Defense Strategy Commission in 2018 and by a group of GOP defense hawks led by Representative Mike Rogers of Alabama, the top Republican on the House Armed Services Committee.

Democrats Split on Spending

Democrats face a wide rift over defense spending. In a March 16 letter to Biden, 50 progressive Democrats, including Representatives Ro Khanna of California and Alexandria Ocasio-Cortez of New York, suggested cuts of more than 10% to the Pentagon budget.

“While we are heartened that your administration is not contemplating expanding the Pentagon’s already inflated budget, our new Democratic majorities in Congress along with your administration should go further,” they wrote. “Rather than requesting a flat Pentagon budget, we urge you to seek a significantly reduced Pentagon topline.”

Senator Bernie Sanders, the Vermont independent who now leads the Budget Committee, has long called for cutting the defense budget by 10%.

Pentagon personnel were working under “not to exceed” guidance from the Office of Management and Budget, rather than the formal “passback”--a back-and-forth process between Pentagon and OMB that sets the budget specifics.

The fiscal 2022 budget will be the first in a decade in which defense and non-defense spending aren’t constrained by budget caps, meaning that Congress has an opening to shift funds from defense to non-defense spending, or the reverse.

Congressional math is likely to prevent Democrats from taking a scalpel to the Pentagon’s budget. Senate committees are evenly split between Democrats and Republicans, so every proposal would have to attract Republican votes.

©2021 Bloomberg L.P.

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