02 February 2004
New Defense Budget Continues Focus on Terrorism, Transformation
Funding increase projected for missile defense
President Bush submitted a new defense budget February 2 that
tops the $400 billion mark and focuses on the administration's
continued prosecution of the war on terrorism as well as transforming
the military to meet 21st century threats.
The $401.7 billion defense budget for fiscal year 2005, which
begins October 1, does not include Department of Energy defense-related
programs, but it embraces spending for key programs such as missile
defense, next-generation aircraft and avionics, unmanned aerial
vehicles, precision munitions, night vision equipment, cruise missile
defense, improved reconnaissance and intelligence capabilities,
as well as anti-submarine and electronic warfare technologies.
All of the military services are requesting increases in funds
over fiscal year 2004. The Navy, for example, is seeking $11.1
billion to help buy nine ships in the coming fiscal year, including
the first procurement of its new DD(X) destroyer and a new Littoral
Combat Ship. The Army is focused on acquiring Future Combat Systems
and Stryker interim armored vehicles, as well upgrading its M1-A2
Abrams main battle tanks. The Air Force continues to spend money
to increase its heavy airlift capability by buying the C-17 aircraft
and focusing on space programs such as the Evolved Expandable Launch
The Missile Defense Agency is seeking a $1.5 billion increase
over last year, from $7.7 billion to $9.2 billion, to create a
multi-layered defense against hostile intercontinental ballistic
missiles. President Bush called for an initial operating capability
for the Ballistic Missile Defense system by the end of calendar
year 2004. The '05 budget proposes funding 20 ground-based interceptors
(with an initial deployment of six in Alaska and four in California)
and 10 sea-based interceptors on three ships, as well as upgraded
radars and command-and-control systems.
Other budget highlights include a $710 million request for Joint
Unmanned Combat Air Vehicles, $4.6 billion to restructure the Joint
Strike Fighter program, and $408 million to develop a space-based
radar system that will be able to identify and track targets moving
on the ground. The V-22 tilt-rotor aircraft program continues on
track with a $1.7 billion request to fund 11 airframes.
The FY 2005 budget does not seek any supplemental appropriations
for ongoing U.S. military operations in Iraq, as defense officials
say they cannot realistically anticipate what will be needed after
sovereignty is returned to Iraq this summer. No supplemental money
is being sought to operations in Afghanistan, either. However,
the Defense Department is seeking legislative authority in this
budget for $200 million to help the Afghan National Army, up to
$500 million to equip and support the Iraqi and Afghan military
and security forces as well as those of "friendly nearby regional
nations" who have been supporting the war against terrorism, and
another $300 million for the military Commanders Emergency Response
Program for humanitarian relief and reconstruction projects in
Iraq and Afghanistan.
The new budget does not account for two future initiatives that
may have a considerable impact on future defense requests: the
Global Defense Posture Review, which will likely see the withdrawal
of U.S. troops from some countries and new deployments into others;
as well as the next round of base closings, which will not begin
until FY 2006.
The president's '05 defense budget supports the ongoing defense
transformation process under way at the Pentagon and its efforts
to modernize forces. This is reflected in the nearly $75 billion
request for procurement and almost $70 billion for research, development,
test and evaluation.
Following are excerpts on the Defense Department news release
summarizing key elements of the FY 2005 budget:
9:00 A.M., Monday, 02 February 2004
Fiscal 2005 Department of Defense Budget Release
President George W. Bush today sent Congress his fiscal 2005 defense
budget. The budget requests $401.7 billion in discretionary budget
authority for the Department of Defense (DOD). This represents
a seven percent increase over fiscal 2004 funding levels, after
taking into account congressionally directed rescissions.
The budget maintains implementation of the Bush administration
defense strategy and continues the transformation of the U.S. military
to ensure that it has the capabilities needed to counter 21st century
security threats most effectively and efficiently. The budget balances
support for this long-term transformation with resources for current
global operations and requirements.
Successfully Pursue the Global War on Terrorism
The fiscal 2005 budget includes robust readiness and acquisition
funding, important legislative authorities, and other essentials
for winning the global war on terrorism.
Readiness. The request funds the military's training and readiness
requirements and sustains prudent readiness standards, e.g., for
flying hours. Ongoing initiatives include:
• Improving metrics to evaluate force readiness, with emphasis
on evaluating readiness relative to a full range of missions, not
merely the traditional major regional contingency operation.
• Fleet Response Plan, adopted in fiscal 2004, expands in fiscal
2005 and will increase the availability of naval assets for duty
Transformation/acquisition overview. Recent operations in Iraq,
Afghanistan, and the global war on terrorism have reinforced the
importance of transforming U.S. military capabilities, and the
FY 2005 budget continues the President's strong commitment to defense
transformation and force modernization. This transformation and
other acquisition of new capabilities are funded in the appropriation
titles of research, development, test, and evaluation (RDT&E) and
procurement. The fiscal 2005 request is:
• $74.9 billion for procurement -- up from $60 billion in fiscal
• $68.9 billion for RDT&E -- up from $41 billion in fiscal 2001.
Lessons learned. The Department of Defense is continuing to compile
and take action on lessons learned from U.S. operations in Iraq,
Afghanistan, and the global war on terrorism.
• Some lessons are not new, and already are addressed in DOD
programs -- notably, the importance of readiness, training, force
protection, operational speed, joint interoperability, intelligence,
precision weapons, unmanned vehicles, communications, and command
and control. Already in DOD plans, for example, are cutting-edge
communications systems to eliminate bandwidth problems and improve
• New lessons learned mostly involve advanced capabilities that
U.S. forces require in order to counter more decisively unconventional
threats like those encountered in Iraq and Afghanistan. Some of
these capabilities can be and are being fielded rapidly --- such
as better systems to detect explosives and other terrorist threats.
Other lessons will require more time and investment, and these
will be addressed during the next year as the department develops
its defense program for fiscal 2006 and beyond.
Legislative support. The fiscal 2005 budget includes legislative
authorities vital to the fight against terrorism, notably:
• Train and equip support (up to $500 million) to the military
and security forces in Iraq, Afghanistan, and friendly nearby regional
nations to enhance their capability to combat terrorism and support
U.S. operations in Iraq and Afghanistan.
• Commanders Emergency Response Program (up to $300 million)
to enable military leaders in Iraq and Afghanistan to respond to
urgent humanitarian relief and reconstruction needs.
• Increased drawdown authority ($200 million) under the Afghanistan
Freedom Support Act to provide added help for the Afghan National
Supplemental appropriations. The fiscal 2004 supplemental appropriations
bill signed into law last November will provide sufficient resources
to enable DOD to finance its incremental costs for operations in
Iraq, Afghanistan, and the global war on terrorism. For fiscal
2005, the department cannot yet determine the scope of these operations
nor their incremental costs, and so these possible costs are not
budgeted for in the fiscal 2005 request. The department does not
anticipate that supplemental appropriations will be requested during
the rest of calendar year 2004.
Managing Demand on the Force
Recent operations have placed a heavy demand on America's military,
and the Department of Defense is working to avoid overloading its
military people with excessive, unsustainable stress. DOD leaders
believe that a permanent increase to military personnel levels
would be the most expensive option for managing demand on the force,
and has other disadvantages as well. Instead, the Department is
developing and advancing numerous initiatives that can reduce demand
more quickly and produce other benefits as well. These initiatives
Expanding military capabilities. DOD is expanding military capabilities
available for meeting national security requirements by divesting
the military of lower-priority functions and by enabling it to
perform its missions more efficiently. Additionally, ongoing transformation
initiatives will allow the military to fulfill many missions with
greater speed, precision, and effectiveness, and often with fewer
Rebalancing forces. Recent operations have shown that certain
military skills and types of units are being stressed far more
than others. DOD is rebalancing its military units and people to
enhance the total force's responsiveness to crises and resolve
stressed career fields. DOD objectives include:
• Structure forces to reduce the need for involuntary mobilization
of Reserve components during the early stages of a rapid response
• Structure forces to limit involuntary Reserve mobilization
to reasonable and sustainable rates.
• Use innovative management to improve the mobilization process,
enhance volunteerism, and establish a more predictable rotational
Rebalancing includes, for example, increasing the active Army's
early responsiveness in such functions as transportation, quartermaster,
medical, and engineer. Rebalancing within the Reserve components
includes phasing out some late-deploying artillery, air defense,
and heavy engineer units and adding high-demand military police,
transportation, medical, civil affairs, and psychological operations
units. Progress in rebalancing forces:
• Fiscal 2003: About 10,000 military spaces.
• Fiscal 2004: About 20,000 military spaces.
• Fiscal 2005: About 20,000 military spaces.
Military-to-civilian conversions. Essentially the same benefit
as a permanent military personnel increase could come from converting
positions currently filled by military personnel to positions ions
that could be supported by DOD civilians or contractors. The department
has identified more than 50,000 positions to begin such conversion.
• For fiscal 2004, the services will begin converting 10,000
positions from military to civilian.
• The fiscal 2005 budget includes $572 million to achieve the
conversion of another 10,070 positions.
Personnel management. The department is working to achieve more
flexibility to manage its m military people, which could help relieve
stress on military skills that have been in high demand during
recent operations. One example is the "continuum of service" concept,
which -- instead of being constrained by the distinction between
active and Reserve components -- would permit a range of participation
from full-time to available only during crises. It would make it
easier for skilled individuals to perform military duty without
the current accounting and management co constraints. Throughout
their career, individuals could have a continuum of participation
geared to their lives and DOD needs.
Emergency authorities. Existing authorities give the department
critical tools to manage an intense operating tempo by exceeding
its authorized military personnel level. However, DOD leaders will
continue to assess the adequacy of the current authorized level
to ensure its sufficiency for meeting America's security needs
without excess stress.
Reshaping Defense Global Posture and Basing
The results of two comprehensive initiatives will be of great
importance in the years ahead: The DOD U.S. Global Defense Posture
Review and the 2005 Base Realignment and Closure (BRAC) Commission.
Global Defense Posture Review. DOD is continuing its comprehensive
review to scrutinize all aspects of America's global defense posture
-- including personnel, infrastructure, equipment, sourcing and
surge capabilities. The goal is to ensure that United States military
capabilities are cc) configured to make them optimally deployable
and best able to meet the challenges of the new global al strategic
environment. The United States is seeking the full participation
of its allies and global al partners in this review. The Bush administration
has begun and will continue to consult with the Congress. The fiscal
2005 budget does not include any proposals reflecting any findings
from this review. Possible shifts of military capabilities from
overseas to U.S. locations will be considered in conjunction with
BRAC 2005. The work of this commission will be critical to streamlining
DOD facilities and saving billions of dollars that would be better
spent on transformation, not excess facilities. The budget includes
funding beginning in fiscal 2006 for implementation of BRAC 2005
Transforming Military Capabilities
The transformation of America's military capabilities involves
developing and fielding new military systems to achieve a new portfolio
of military capabilities to decisively combat the full range of
security threats -- now and well into the future. A key objective
is to provide robust capabilities and innovative approaches for
the full spectrum of potential missions. For example, unmanned
aerial vehicles continue to provide new capabilities and advantages
that have proven critical in the global war on terrorism. Transformation
will continue to require a strong science and technology (S&T)
program. The fiscal 2005 S&T request is $10.5 billion, a 1.6 percent
real increase over the fiscal 2004 request.
DOD continues to emphasize realistic cost and schedule estimates
for acquisition programs, as demonstrated in the fiscal 2005 program
by its additional funding for Future Combat Systems, and schedule
adjustments for the Joint Strike Fighter. Below are highlights
of transformation and acquisition programs of special interest
in the proposed budget and their total fiscal 2005 RDT&E and procurement
Missile Defense Agency. $9.2 billion, $1.5 billion above fiscal
2004. The increase includes $0.9 billion to continue to field an
initial defensive capability for the Ballistic Missile Defense
System and $0.6 billion to begin fielding its next increment. This
initial capability for defending the United States from ballistic
missile attack is scheduled to be operational by the end of 2004,
and by the end of 2005 is scheduled to include: 20 ground-based
interceptors, up to 10 sea-based interceptors, and upgraded radars
and command and control.
Cruise Missile Defense. $239 million to accelerate the Joint Land
Attack Cruise Missile Elevated Netted Sensor System, begin integrating
the Surface Launched Advanced Medium-Range Air-to-Air Missile into
the projected Cruise Missile Defense architecture, and accelerate
development of a joint integrated fire control capability. Goals
include contingency capabilities in 2008 and first units equipped
Future Combat Systems (FCS) and Stryker Brigade Combat Teams (SBCT).
$3.2 billion to support the transformation of the Army by fully
funding the FCS and $1.0 billion to procure the combat vehicles
for the 5th SBCT. The fiscal 2005 budget supports the fielding
of the 4th SBCT and sustains the three SBCTs already in the force.
Total program. $11.1 billion to support procurement of nine ships
in fiscal 2005 -- up from seven ships for fiscal 2004. Fiscal 2005
begins a period of transition and transformation for shipbuilding
as the last DDG 51 destroyers are built, and the first DD(X) destroyer
and Littoral Combat Ship are procured. This increased commitment
is further shown in the average shipbuilding rate from fiscal 2005-2009
of 9.6 ships per year. This will sustain the current force level
and significantly add to Navy capabilities.
CVN-21. $1.0 billion to continue development of and to procure
long-lead equipment to support this planned 2007 aircraft carrier,
whose innovations include an enhanced flight deck, a new nuclear
power plant, allowance for future technologies, and reduced manning.
New ship classes/technologies. $1.6 billion to continue development
of technologies to be applied to a new generation of 21st century
surface ships including DDX destroyer, littoral combat ship, CG(X)
cruiser, and the Maritime Preposition Force (Future) ship.
Communications, Intelligence, and Related Systems
Space Based Radar. $408 million to continue development of a system
to identify and track moving ground targets, which will significantly
strengthen United States intelligence capabilities.
Transformational Satellite Communications. $775 million to continue
development of a new system based on laser communications and greatly
enhanced radio-frequency capability, which would free users from
current bandwidth constraints and provide greatly enhanced interoperability
and connectivity to support net-centric operations.
Joint Tactical Radio System. $600 million to provide internet
protocol based, ad-hoc mobile wireless networking capability --
enabling information exchange among joint warfighting elements,
civil and national authorities for seamless networking.
Joint Unmanned Combat Air Systems. $710 million. J-UCAS consolidates
all previous unmanned combat air vehicles programs. It will develop
a common operating system and enhance competition to achieve the
best capabilities. The program will accelerate key capabilities
leading to an operational assessment in fiscal 2007-2009.
EA-18G. $0.4 billion to develop the next generation solution to
detect, identify, locate, and suppress hostile emitters for decades
to come, providing electronic attack and information operations
capability against integrated air defense systems and adversary
infrastructure while supporting strike forces and ground assets.
Joint Strike Fighter (JSF). $4.6 billion. The JSF program is being
restructured to provide for cost growth in its system development
and demonstration (SDD) phase. The total cost estimate for SDD
increases from $33.0 billion to $40.5 billion. Schedule delays
on this very complex aircraft are prudent and necessary to mature
its design and ensure its ultimate success.
V-22. $1.7 billion to support ongoing development and procurement
of 11 aircraft. The program has been structured to enhance interoperability
in the next increment, implement additional cost-reduction initiatives,
and pursue a more executable production ramp following operational
testing, Milestone C review, and DOD certification.
Improve and Integrate Intelligence Capabilities
Recent operations have reinforced the criticality of timely intelligence
about threats to America's security. The fiscal 2005 budget reflects
this lesson by sustaining robust funding to strengthen intelligence
activities and capabilities. The department also is advancing several
ongoing and planned initiatives, to include:
• Improve information sharing and the horizontal integration
of organizations producing and using intelligence.
• Improve human intelligence collection worldwide.
• Increase the development and use of promising technologies.
• Enhance the effectiveness and coherence of signal intelligence
systems' focus on terrorism.
Fiscal 2005 DOD Budget by Title
(Discretionary budget authority $ in billions)
FY 04 FY 05 FY 06 FY 07 FY 08 FY 09
Military Personnel 97.9 104.8 109.4 113.1 116.8 120.4
Operation & Maintenance *127.6 140.6 146.1 151.2 156.3 163.9
Procurement 75.3 74.9 80.4 90.6 105.1 114.0
RDT&E 64.3 68.9 71.0 70.7 71.6 70.7
Military Construction 5.5 5.3 8.8 12.1 10.8 10.2
Family Housing 3.8 4.2 4.6 4.5 3.6 3.5
Revolving & Mgmt Funds & Other **0.8 3.0 2.3 1.6 1.4 4.9
Total ***375.3 401.7 422.7 443.9 465.7 487.7
*Includes $3.5 billion rescission to the fiscal 2003 Iraq Freedom
**Includes $1.8 billion rescission to DOD appropriations in fiscal
2004 Omnibus Appropriations Act.
***Also includes $.8 billion in prior-year program rescissions
to Procurement, RDT&E, Military Construction, Family Housing, and
National Defense Sealift Fund.
FY 2005 DOD Budget by Component
(Discretionary budget authority $ in billions)
FY 04 FY 05 FY 06 FY 07 FY 08 FY 09
Army 95.4 97.2 102.7 108.0 113.7 116.5
Navy/Marine 115.1 119.3 125.5 130.2 137.5 148.2
Air Force 110.9 120.5 128.2 132.6 138.8 142.7
Defense-wide *53.9 64.7 66.3 73.0 75.7 80.3
Total **375.3 401.7 422.7 443.9 465.7 487.7
*Includes $3.5 billion rescission to the fiscal 2003 Iraq Freedom
Fund and $1.8 billion rescission to DOD appropriations in the fiscal
2004 Omnibus Appropriations Act.
**Includes $.8 billion in prior-year program rescissions to Procurement,
RDT&E, Military Construction, Family Housing, and National Defense
(Some columns may not add correctly due to rounding)
Copies of DOD budget documents are available at the following
Internet address: http://www.dod.mil/comptroller/defbudget/fy2005/.