Although the final results of the U.S. midterm elections won’t be known until Dec. 6, Democrats have secured a majority in the Senate and Republicans a majority in the House. The only lingering question is the margin of those majorities.
Congress still has to complete the fiscal 2023 National Defense Authorization Act (NDAA) and appropriations for defense. The federal government is funded by a continuing resolution through Dec. 16. Another continuing resolution is likely to fund it to Dec. 22 or even after the Christmas holiday. But the most probable outcome is that fiscal-year appropriations will be passed before year-end, with Congress adding at least $30 billion to the Biden administration’s request along with additional defense funds in another Ukraine supplemental.
The NDAA is considered “must-pass” legislation because it authorizes military pay. Republican leadership indicated after the Republican House majority was declared that a vote on the NDAA should be pushed into 2023 so provisions related to abortion and vaccinations could be added. Of the 23 NDAAs that have been enacted since fiscal 2000, nine were signed by the president in December and five in January. Of the January signings, two occurred on the first day or two of the New Year; the latest was Jan. 28 after a veto. This pattern suggests that the 2023 NDAA could still be completed and enacted in the current session of Congress. Deferring passage until 2023 would set up the potential for a lengthy delay.
Many observors expect Congress will gridlock in 2023-24, which could create risk for Pentagon budgets. The 2022 election almost certainly will result in one of the smallest majorities by a political party in Congress in recent memory. Since 1971, there has been only one other session of Congress, the 107th in 2001-03, in which the party in power had a single-digit majority.
Despite the risks to Congress’ ability to legislate, there may be some for optimism about defense budgets in fiscal 2024 and 2025. The Biden administration could submit requests that show approximately 2% annual growth. This would be below the rate of inflation that defense is likely seeing though the Consumer Price Index and is not indicative of the personnel, material expenses and costs contractors are seeing. Besides inflation, money will be needed as major weapons programs in development transition to production, and funds will be required to replenish stockpiles of weapons that have been sent to aid Ukraine.
The main risk for defense could come from the House, where there are larger cohorts of members who may not support higher defense spending. A minority of left-leaning Democrats have voted against Pentagon budget increases and supported resolutions in 2021 and 2022 to cut defense spending, although these resolutions failed. The influence of the Freedom Caucus, whose members are broadly opposed to government spending and deficits, is another factor to consider. More recently, some House members have objected to the magnitude of military aid to Ukraine.
Recent history shows that while liberal Democrats and the Freedom Caucus have been a factor in debates over defense spending, the NDAA has still been completed on a bipartisan basis. In July, the House passed its version of the NDAA with 329 “yea” votes and 101 “nay” votes. Of the nay votes, 62 came from Republicans, some of whom may have wanted to see more defense spending. The 2022 election could add a few more members to the Freedom Caucus in the House, but elections in New York state resulted in wins by moderate Republicans, which may be an offsetting factor.
There are other factors that may support U.S. defense spending increases in 2024-25. First, a GOP-controlled House is likely to set up a Joint Committee on China, and we expect the speaker of the House to visit Taiwan in 2023-24. Relations will remain tense with China, though there’s a bit of room for cooperation on some common issues. However, it’s hard to expect more strident views on China emerging from a Congress that couldn’t also get defense appropriations completed.
The margin of the House Republican majority in the 118th Session of Congress may limit brinkmanship that results in negative outcomes for defense. During the debt ceiling crisis and passage of the Budget Control Act in 2011-12, there were 242 Republicans and 193 Democrats. And the nine-seat margin the next Congress may have is one seat fewer than the Democrats had in the 117th session.
A final consideration is that if the U.S. enters even a mild recession in 2024-25, the inability of Congress to pass defense appropriations could be less palatable.
The views expressed are not necessarily those of Aviation Week.
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