One of the lines often heard is that munitions accounts are “bill payers” for other lines, particularly weapons platforms like vehicles, aircraft, and ships. Former Rear Admiral Mark Montgomery made the claim in a recent HASC hearing, putting it this way:
We buy it at absolutely minimum production rates at the factory, and the reason we do that is we cut munitions production — every service puts in 100% of the munitions they need at the beginning of the budget cycle and it is the bill payer every budget cycle.
Unfortunately, I cannot validate that claim because on the public side, we do not see what the program offices and services request up the chain. We only see what comes out in the President’s Budget. And it is hard to validate that number against the true “requirement,” let alone what we perceive the services may have initially scoped in their request.
However, over the last 20 years, we’ve seen waves of munitions procurement. From $10 billion to $15 billion, then back down to $10 billion with the budget control act, then a surge to $20 billion during ISIS, and then another fall to $15 billion, and then back up to $20 billion with the Ukraine supplemental for FY 2022. More is to come from Ukraine in FY 2023, but another dive might follow that. [This excludes strategic missiles and MDA. See munitions procurement data here, ammunition deep dive here, and data on Ukraine supplemental in FY 22 here.]
Bill Paying from Request to Expiration
Another way to look at the “bill payer” hypothesis is to look at the DD1416 data to see how munitions procurement lines changed between the budget request, congressional enactment, and finally the close of the appropriation to include supplementals and reprogramming.
Between FY 2011 and FY 2020, we find that Congress tends to cut roughly 40 percent of all munitions procurement line items, amounting to about 5 percent of the dollars requested.
Congress tends to only increase the request on 5 percent or less of munitions procurement lines, yet those lines that did get an increased faired pretty well, adding roughly 20 percent upon enactment.
Interestingly, by the time the appropriations expire, roughly 60 percent of the budget lines are reduced and 20 percent are increased. So we see some additional horse trading going on. It is relatively rare for a munitions budget line to actually execute the amount of funds requested in the President’s Budget.
The overall picture isn’t clear cut. The figure below shows, for tactical missile and ammunition budget activities specifically, the percent difference between the funds actually executed vs. the funds requested in the budget. It is a little choppy. In FY 2011 to FY 2014, DoD spent less than it requested by about 5 to 10 percent. In FY 2015 and FY 2018, there were boosts. Missiles and ammunition again became bill payers in FY 2019 through FY 2021 until the Ukraine supplemental appropriations.
If we exclude FY 2022 for Ukraine, between FY 2011 and FY 2021 missile procurement executed $1.48 billion less than requested. For ammunition, the figure was $2.41 billion. Congress played a big part in that, as enactment explained a fair share of that delta. Of that nearly $4 billion in munitions reduction to request, more than $3 billion is explained by Congressional cuts for enactment.
Overall, the Navy and Air Force faired the worst. The Navy shed 6 percent of its total munitions procurement between request and execution over the years FY 2011 and FY 2021. The figure for the Air Force was 2.4 percent, and for the Army, just 0.5 percent. Ammunition did quite poorly for all three services, yet Army missiles overall saw a relative boost of 2.1 percent.
The table below shows the Net Change (Actual Execution minus President’s Budget Request) compared to the Budget Request for each service. The big increases in missiles from FY 2011 to FY 2016 were concentrated in Patriot missiles at over $1 billion during that time. GMLRS, HIMARS, and ATACMS saw big increases during FY 2018 to the tune of $500 million, while FY 2018 155mm artillery shells were the big increases nearing $300 million. AMRAAM has tended to be a loser almost every year, totaling $1 billion in reductions relative to request between FY 2011 and FY 2021.
The thing is that munitions budgets are choppy. Not only do they change year-to-year, but there’s high volatility between request and execution. 155MM budget lines, for example, on average see a 27 percent change between budget request and execution. About half the time the figure is a decrease, the other half the time it is increased. About half the changes are less than 10 percent of the request, the other half are above a 10 percent delta. That can make planning in the industrial base hard. Who knows what’s actually going to happen?
For LRASMs, the long-range anti-ship missile, we’ve seen a pretty steady increase in the President’s Budget request from $89 million to $161 million, but actual execution averages a 37 percent delta, with $163 million in additions from FY 2017 to FY 2019 and $100 million in reductions from FY 2021 and FY 2022.
I’ll hopefully do a deeper dive into year-over-year volatility at the line item level next.
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