Military Forces and Acquisition Programs: How Did They Fare in the FY 2024 Budget?
On March 13, the Department of Defense (DOD) rolled out its FY 2024 budget, the first that was fully informed by the administration’s 2022 National Defense Strategy. Although there were no major surprises, a few items stand out: the U.S. Army’s end strength remains low, and the Army’s struggles to sustain its programs. The U.S. Navy continues to retire ships as fast as it builds them, meaning that fleet growth will take a long time. The Marine Corps accelerates its force redesign. The Air Force divests hundreds of older aircraft, but slow procurement means the fleet will shrink as it adds capability.
What’s Happening with the Money
Shaping all budget decisions was the fact that, although the overall budget goes up 3.2 percent in nominal terms, that is only a 0.8 percent real increase, and that assumes inflation subsides to 2.4 percent. Future budgets rise at the rate of inflation (2.1 percent). However, implementing the administration’s robust national defense strategy―confronting China as the “pacing challenge” and Russia as the “acute threat,” engaging globally with allies and partners, modernizing the nuclear triad, and keeping faith with service members and their families―requires substantial resources. As a result, a strategy-resources gap has opened. Although such gaps can exist for many years, they are, in effect, a bluff and someday might be called. Likely, the administration is counting on Congress to solve the problem by increasing the defense budget substantially, as it has in the last three years.
In making budget comparisons, the baseline is critical. Many of the administration’s comparisons go back to FY 2022-enacted level or the FY 2023 administration request. Increases from those lower baselines show large growth. In contrast, growth from the FY 2023 enacted level is very modest.
Acquisition funding (procurement and research, development, test, and evaluation appropriations, or RDT&E) increases by $12.9 billion in FY 2024 but gets squeezed over the long term, growing by only 5.7 percent over the five years. That means it will not keep up with inflation. RDT&E stays essentially constant in nominal dollars over the five years, meaning it loses purchasing power. The balance between procurement and RDT&E shifts further toward procurement, from 1.2:1 to 1.35:1. Although that is a change from the RDT&E-heavy budgets of recent years, the procurement/RDT&E balance was close to 1:1 during the 1980s. At some point, militaries need to buy equipment.
U.S. Army: Last in Line with a ‘Holding On’ Budget
The Army’s $185.5 billion budget represents a 0.1 percent nominal increase over the FY 2023 enacted level, but a 3.3 percent decrease in real terms. This year-over-year change is the smallest of all the services. Although there is no indication of a strategic decision to cut the size of the Army in order to fund the Air Force and Navy, that has been the effect.
The regular force remains at 452,000, likely due to shortfalls in recruiting and retention. Plans show slow growth to 464,000 by FY 2028. However, Army officials want a regular end strength of 485,000 and, in the not-too-distant past, talked about personnel levels over 500,000. Thus, FY 2024 is substantially below where the Army wants to be.
The total Army is down to 951,800 soldiers, about 100,000 below the 2015 level. This is also below the 980,000 specified as a minimum by the 2016 National Commission on the Future of the Army.
Despite the budget and personnel reductions, the Army terminates no major programs or combat units. This squeezes acquisition programs and creates personnel shortages in units, likely a readiness problem. However, it indicates that the Army hopes for better budget times ahead when it can refill its units and fund all its planned acquisition programs.
Procurement quantities are mostly level, with the usual ups and downs. Notable increases are long-range precision strike capabilities: the U.S. Army’s Mid-Range Capability, which begins production, and the Precision Strike Missile, which ramps up to 110. Also increasing are the Joint Light Tactical Vehicles (from 1,355 in FY 2023 to 1,753 in FY 2024), Next Generation Squad Weapons (from 16,186 to 33,473), and Armored Multi-purpose Vehicles (AMPV, from 43 to 91). One exception is the Abrams tank at 34, down from 90, probably with the expectation that Congress will add money. Overall, this appears to be a broad-based acquisition strategy. Munitions, discussed below, get more attention.
On the horizon are some costly programs―future vertical lift, long-range hypersonic weapon, and Optionally Manned Fighting Vehicle (Bradley replacement), for example. These programs will have difficulty elbowing their way into an already full budget.
Ukraine supplementals are mixed news for Army acquisition. The Army has sent thousands of systems out of its inventory. Congress has provided money to replace these transfers, but it will take several years, in some cases, many years, for the replenishment to complete. That creates a window of risk.
The good news is that the Army will be getting new systems. In some cases, for example, Javelin and HIMARS, these will be similar systems but with the most current upgrades and right off the production line, thus extending the service life of the inventory. In other cases, the Army will get entirely new systems to replace the old, for example, AMPV to replace the obsolete M113s sent to Ukraine.
Navy: Divest with Long-Term Plans to Grow
The Navy continues to aggressively decommission ships with 11 early retirements. As a result, the ship count remains at 285 through the five-year defense planning period and below 300 until the late 2030s.
The budget proposes building nine ships, enough to get fleet size into the 300s over the long term, but the navy would need to build 10 or more to get to the mid-300s as many of its plans project. The navy intends to save enough money by retiring older ships now so that it can buy more ships in the future. The outyear budgets do show ship construction rising to 14 in FY 2028.
There is no decision about fleet size. Last year, the Navy published three long-term options, ranging from 316 to 367 ships. The budget does not indicate a decision among the options. That might come out when the Navy publishes its 30-year shipbuilding plan in a few months. Although the decision will only affect construction beyond the FYDP―all three options are the same within the FYDP―the decision will establish what kind of Navy will be there in the long term.
Here’s a look at the specific ship categories:
- Destroyers: Building two per year, about right for the projected fleet size.
- Submarines: Building two SSNs and one Columbia-class ballistic missile submarine. This has been the rate in recent years and reflects the maximum number the current industrial base can produce. Indeed, building three submarines a year will stretch industrial capacity.
The tripartite Australia/UK/U.S. agreement on submarines (AUKUS) rolled out with the budget and called for some immediate actions, such as placing Australian personnel on U.S. Navy submarines. Longer-term, the plan is for Australia to acquire three Virginia-class submarines in the early 2030s. Whether these will be new builds or existing submarines is unclear, and limitations on the submarine industrial base will force trade-offs. Because this program is a decade in the future, it is more aspirational than a plan at this point.
- Amphibious Ships: This is a dumpster fire. Disagreements among the Navy, the Marine Corps, and the Office of the Secretary of Defense (OSD) have produced a stalemate. The Marine Corps created the problem in the commandant’s initial guidance when he suggested that large ships were too vulnerable and the fleet needed to move to smaller ships: “We must continue to seek the affordable and plentiful at the expense of the exquisite and few when conceiving of the future amphibious portion of the fleet. We must also explore new options . . . that are smaller and less expensive.” The Navy and OSD then proposed the logical step of ceasing the production of large amphibious ships. Thus, the building of the LPD 17 Flight II class has “paused.”
The small ship program, Light Amphibious Warship/Landing Ship Medium, has run into its own problems. The Marine Corps wants an inexpensive ship by building to commercial standards and reducing armament. The Navy wants more survivability features. Last year, the first ship was delayed to FY 2025, where it remains. No announcement has been made regarding its capabilities. Thus, there is an impasse with both the traditional ships and the new class.
- Naval Aircraft: The total proposed procurement is 88, down from 116 in FY 23. The Navy needs to procure about 150 to maintain its fleet of 4,000 aircraft, so the fleet will age, and the inventory will shrink. Procurement of FA-18E/F, E-2D, TH-73A, CMV-22, and MV-22B finished in FY 2023, so there is no procurement of these aircraft in the FY 2024 budget. The budget would buy 35 F-35s, about the same as last year. Uncrewed systems on the sea and in the air: The budget continues the slow but steady development of uncrewed systems. Development and procurement of prototypes for the large uncrewed surface vessel (LUSV) and extra-large uncrewed underwater vessel (XLUUV) continues at about $100 million each. Procurement of the MQ-25, an uncrewed tanker intended for carrier operations, moves ahead slowly: three in FY 24, increasing to four in future years. The slow pace of fielding uncrewed aircraft and vessels frustrates many observers who want to move more quickly. The Navy’s measured pace reflects a reaction to congressional criticism about moving too quickly and a desire to avoid another acquisition debacle.
Marine Corps: Accelerating Force Design 2030
The Marine Corps received about $200 million to accelerate its restructuring, reflecting the DOD leadership’s support for the project and incentivizing other services to do likewise. Thus, the budget includes large buys of Naval Strike Missiles and Tactical Tomahawks for the Marine Corps’ shore-based missile units. The budget also includes 16 F-35Bs for the Marine Corps and the final 5 of 18 MQ-9s. Armed drones like MQ-9 are a new capability for the Marine Corps, but the corps is still far behind the army and air force, both of which have about 200.
To help pay for these new capabilities, Marine Corps end strength comes down 5,000 to 172,000, which has become the new long-term level. This is 2,000 lower than the previous plan (174,000).
Air Force: Divest Now to Invest Later
The Air Force proposes to retire 310 more aircraft. Plans to retire the entire A-10 fleet by 2029 have set off concerns in Congress, which has protected the fleet for many years. Some of these concerns are parochial (many A-10 units are in the Guard/reserve and stationed widely among the states), but other arguments are strategic, contending that the Air Force has an obligation to support U.S. Army ground troops.
One problem with the “divest to invest” strategy is that, while the Air Force divests aggressively, the investment part is not yet evident. The budget proposes buying 95 new aircraft, whereas 182 are needed to maintain the current inventory of 5,500 at 30 years of service life. As a result of large retirements and relatively few new procurements, the Air Force’s total aircraft inventory will shrink by 189 to 4,964. Here are some highlights from the budget:
- F-35: up from 77 to 83
- F-15EX: constant at 24
- B-21: $3 billion RDT&E, $2.3 billion procurement, though no numbers have been specified (the program is still building test articles and not operational aircraft)
- C130: down to only two, a clear plea for congressional additions
Development continues on several major efforts.
- Collaborative combat aircraft: $500 million, which is developing autonomous “loyal wingmen” to complement crewed aircraft
- Next Generation Air Dominance (NGAD): $1.9 billion-plus Next Generation Advanced Propulsion (NGAP) engine, $0.6 billion on this sixth-generation aircraft, which will replace the current F-22/F-35 fleet, that is moving ahead rapidly
Nuclear Enterprise: On Track
All three nuclear modernization programs―the Sentinel intercontinental ballistic missile system (ICBM), which replaces the LGM-30 Minuteman, the B-21, and the long-range standoff missile―are fully funded.
Space Force: Growing, but Still Small
The Space Force adds 800 “Guardians” as more personnel transfer in. Total military personnel will be 9,400, about 5 percent of the size of the Marine Corps, the next-smallest DOD service. The Space Force budget request of $30 billion is a $3.9 billion increase. The major procurement item is 15 launches for $2.6 billion. The major RDT&E programs are Resilient Missile Warning/Missile Tracking ($2.3 billion, up $1.1 billion), Space Technology Development & Prototyping ($2.1 billion, up $1.1 billion), and next-generation overhead persistent infrared satellite ($2.6 billion, down $.8 billion).
Few details have been published, but one item stands out: the budget procures another 12 Armed Overwatch aircraft. These inexpensive, propeller-driven aircraft will provide a radically different kind of air support. Whereas the Air Force proposes to use hundred-million-dollar F-35s to support the army, the United States Special Operations Command (SOCOM) will use $22 million armed overwatch aircraft.
Munitions: Long-Term Commitments but Few Increases in the Short Term
Because of the high demand for munitions to supply Ukraine and analyses indicating that key munitions run out quickly in a conflict with China, munitions have been a central theme in the budget rollout. The reality in the base budget is mixed.
The big news is that the DOD uses multiyear procurement authority for five systems: Naval Strike Missile (NSM, Navy/Marine Corps), RIM-174 Standard Missile (SM-6, Navy), Advanced Medium Range Air-to-Air Missile (AMRAAM, Air Force/Navy), Long Range Anti-Ship Missile (LRASM, Air Force), Joint Air-to-Surface Standoff Missile - Extended Range (JASSM-ER, Air Force). This entails substantial upfront costs, over $1 billion, but will produce savings downstream.
Congress provided this authority, which has long been available for ships and aircraft, in the FY 2023 National Defense Authorization Act. It responded to industry arguments that companies could not build capacity to meet expected demand without a multiyear commitment. Companies needed a steady stream of funding to take on the long-term commitment of expanding factories and hiring staff.
The multiyear buys do not include Javelin, Stinger, or guided multiple launch rocket systems (GMLRS). These would seem to have the stable requirements and long-term demand needed for multiyear procurement. Perhaps they will be included in future years.
Compared with FY 2023 enacted levels, there is little net change in numbers, with some systems increasing and others decreasing.
- SM-6, GMLRS JASSM: unchanged
- SDB II, Hellfire, Joint Direct Attack Munition (JDAM), Joint Air-to-Ground Missile (JAGM): down
- LRASM: up to 118, production maximum; procurement also up tactical Tomahawks, MK 48 torpedo, rolling airframe missile, and Evolved SeaSparrow Missile
Long-range strike, long a DOD goal, is becoming a reality. Procurement begins on the Navy Conventional Prompt Strike and U.S. Army Mid-Range capability; procurement of the Army’s Precision Strike Missile continues. The budget also procures 24 hypersonic missiles and aggressively pursues development, though details are scarce.
Complicating analyses of munitions production is that Ukrainian supplementals, not the base budget, fund stockpile replenishment. Because these funds make DOD whole after the drawdown, they do not increase warfighting capability. However, the orders do affect the defense industry.
Anything on Ukraine?
Despite all the discussion about the cost of the war in Ukraine, there is little about Ukraine funds in the budget. The budget does contain $300 million, the prewar level of support. Otherwise, the administration has deferred this decision until the future, when the needs of the war become more apparent. The $35 billion that Congress provided in December should last into midsummer. Then, unless Ukraine’s operational tempo has declined, more money will be needed to finish out FY 2023 and then provide support for FY 2024. Last year, the administration did not ask for the following year’s money until mid-September, so this request is unlikely to come soon.
Mark F. Cancian is a senior fellow in the International Security Program at the Center for Strategic and International Studies in Washington, D.C.