Insights from Early FY 2021 DOD Budget Hearings


It is the season when the House and Senate Armed Service Committees hold hearings with top DOD officials to discuss the military’s FY2021 budget request. The hearings have revealed a cluster of common issues forcing the services to make hard choices to achieve future force readiness: the need to adapt to great power competition, debates on balancing forward thinking against current readiness, and how to best support and make use of the defense industrial base.

Both Congress and DOD are intent on updating the equipment and design of the armed forces for an era of great power competition. Several technologies were highlighted as being high priorities for modernizing the forces, including AI, hypersonics, autonomous systems, and the nuclear triad. However the process of modernization is expected to be expensive. Expecting its topline budget will not be significantly raised in the near future, DOD has had to make hard choices when structuring its priorities, and is conducting a defense-wide review of its programs to align spending with the national defense strategy and find savings. DOD will likely have to continue making hard choices in its modernization priorities, as the chairman of the House Armed Service Committee indicated that DOD will likely not receive the often requested 3-5% real annual budget growth.

To pursue rapid modernization given a static budget, DOD is looking towards divesting from some of its legacy systems. Several Congressmen pushed back against this, raising concerns over how divestment and retiring old systems would affect factories in their districts and whether divesting could lead to capability gaps. For example, in a hearing on Air Force projection forces in the proposed budget there was lengthy conversation on the risk of retiring old B-1 and B-2 bombers while the transition to the B-21 is ongoing. An Assistant Secretary for the Air Force described the difficult balance to be struck between updating enough B-2s to maintain an effective bombing fleet while not drawing too much from funds needed for new systems. The Acting Navy Secretary described a similarly difficult balancing act when asked to defend the decision to cut shipbuilding funds in favor of ship maintenance and shipyard renovation, even as he asserted the Navy is looking to go beyond a 355 ship fleet.

Congress frequently questioned whether the defense industrial base could keep up with growing demand, and how the military is working with industry in support of its modernization efforts. DOD witnesses were supportive of industry’s recent efforts and future capacity while recognizing the need to change not only acquisition rules but the culture around risk taking. Witnesses pointed to pitch days as an example of new efforts to work closer with small businesses. New prototyping tools and practices were also highlighted, with digital prototyping allowing services an easier means to “try before [they] buy”, and providing feedback from equipment training to industry so warfighter insights can guide development. Judging by the hearings, Congress favorably received DOD’s efforts to work closer with industry, and achieve acquisition cost-savings.

Topics: Budget, Defense Department, Legislative Information

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