Biden’s budget request steady but unimaginative on defence
28 Apr 2021|

US President Joe Biden has sent Congress his requested budget for the 2022 fiscal year. Due to the timelines of a presidential transition year, there’s not a lot of detail yet, but there’s enough to answer one big question in the strategic policy sphere: there won’t be a big change to the defence budget.

The document’s preamble states that ‘America is confronting four compounding crises of unprecedented scope and scale all at the same time.’ For those of us in the national security community, it’s a useful reminder of Biden’s priorities that China’s increasing power and aggression is not one of the four; rather, they are the pandemic, the resulting economic crisis, a ‘national reckoning on racial inequality centuries in the making’, and climate change. Competition with China is mentioned, but Biden makes clear that it isn’t simply or even mainly a military problem. Instead, he seeks to outcompete China through ‘a comprehensive strategy to reimagine and rebuild a new American economy’.

On top of that, Biden wasn’t exactly dealt a great hand in terms of cash in the bank. The budget request is only for discretionary funding. The bulk of the US federal budget is mandated or non-discretionary funding, which includes things like Social Security (retirement and disability benefits) and Medicare (health care for seniors). Over the past 35 years, mandated expenditure has grown from rough parity with discretionary funding to more than twice as much. In 2020 it blew out even further, to around three times as much, because of unemployment benefits and other support payments made during the pandemic (discretionary spending was around US$1.6 trillion and mandated was nearly US$4.9 trillion). With that, the annual deficit, which had been approaching US$1 trillion, surged past US$3 trillion. That also brought the public debt to US$21 trillion, or around 100% of GDP.

Within the discretionary budget, there’s been a rough 50–50 split between defence and non-defence spending. With most of the federal budget essentially untouchable, it might have been tempting for Biden to take the razor to defence spending to find the discretionary funds to support his domestic priorities. But he hasn’t done that. His discretionary budget request maintains an almost even split between defence and non-defence spending, despite his intent to reverse the long-term trend of declining non-defence discretionary spending.

The total defence request is US$753 billion, around US$12 billion more than President Donald Trump’s 2021 budget. Of that, US$715 billion is for the Department of Defense itself. In comparison, the rest of the discretionary budget, which funds everything else from energy to education, is only slightly more at US$769 billion. Defence spending is around 3.2% of GDP—far more than America’s allies, including Australia.

It’s a budget that probably disappoints the doves who want significant readjustment of spending priorities, and it’s about as good as the hawks could have reasonably hoped for.

The request acknowledges that more detail is to come. Even so, the lack of specifics around the Department of Defense stands out. While other departments’ individual programs are described with dollars attached, the DoD has only high-level language with no dollars. Whether that’s because issues such as health, energy and the environment are higher priorities, or because the administration hasn’t yet been able get its arms around the elephantine problems facing the DoD is not clear. But the discrepancy between the boilerplate language on defence and the sense of urgency and renewal in other areas is striking.

What is there on defence largely gives an impression of continuity. Countering the threat from China remains the department’s top challenge. There’s a commitment to ‘a strong, credible nuclear deterrent for the security of the Nation and US allies’. The recapitalisation of the ballistic missile submarine fleet—the US Navy’s most expensive program—will continue.

The Biden administration’s conviction that the means to manage competition with China are not purely military ones is evident in the document’s emphasis on rebuilding the economy and working with partners and allies. Importantly, the request includes a substantial increase to the State Department budget. But the need to deliver military capability is also real.

The administration seeks to ‘reimagine’ the economy, and elsewhere Biden has proposed bold ideas that affect all departments, such as putting climate change into their core planning. But there are few clear signs in this document of imagination at work in the administration’s plans specifically for defence. However, doing business the same way is unlikely to enable the US to counter the threats it perceives around the world.

The army, navy and air force all face major recapitalisation challenges, with fleets ageing out and the mounting cost of replacements simply unaffordable. Meanwhile, Chinese military power grows apace, reflecting its role as the world’s factory. China’s shipyards are pumping out ships at a rate the US can’t match. Trump’s defence secretary grappled for a year with the problem of how to design a navy that could counter China before delivering a plan that was essentially unaffordable and unachievable.

Biden’s administration will have to wrestle with the same challenges, and the lack of detail in the budget request suggests it hasn’t resolved where, or indeed whether, it will make fundamental changes. The boilerplate language leaves some room for manoeuvring. For example, it doesn’t sign up to a target for the size of the fleet, such as the 355 ships that have been an unattainable and arguably distracting goal for years. There are references to innovation and emerging technologies, such as ‘remotely operated and autonomous systems’ and hypersonics.

The request also refers to divesting ‘legacy capacity and force structure’. Again, this is standard boilerplate, but potentially offers cover for some large force structure decisions, such as reducing the size of the army to reinvest in the maritime and air assets needed in the Pacific.

Biden’s decision to follow through on the withdrawal of US forces from Afghanistan suggests that he’s willing to make tough calls. One may not agree with the decision, but he broke with the status quo, even if the outcome is not clear. That decision will likely play well to a US public tired of ‘endless wars’, but it won’t by itself make much difference to the balance of power in the western Pacific. That will likely require a combination of more tough decisions and greater imagination than was revealed in this budget request.