Appropriations Update: House Defense FY20 R&D Numbers are Better than the Administration’s, but are not Great

In our continuing series looking at the House of Representative’s actions on Fiscal Year 2020 (FY20), we turn to the House Defense Appropriations bill, which was passed in June. The Department of Defense’s Science and Technology (DOD S&T) program is made up of three accounts: 6.1 (basic research), 6.2 (applied research), and 6.3 (advanced technology development). These accounts are themselves made up of individual accounts for each of the three services (Army, Navy, and Air Force), as well as a Defense Wide account. The Defense Advanced Research Projects Agency (DARPA) is a section under the Defense Wide account. Unfortunately, the numbers that the House settled on for these accounts are not good, but they are better than what the Administration requested.

First, let’s take a moment to look at the Trump Administration’s request for these accounts from back in March. The Administration requested cuts, relative to FY19, to all three accounts (-8 percent for 6.1; -12 percent for 6.2; and -13 percent for 6.3), while recommending an increase to DARPA (+3.8 percent). While disconcerting, especially given the Administration’s push to increase overall defense spending, this has been the norm for the past three years. The general view from the policy community is that Pentagon leaders do this as a deliberate budget tactic; namely that they pull money from what is seen as a Congressional priority (ie: research funding) to put toward something else that does not have the same support. If it works, Congress puts money back into R&D and the money “sticks” elsewhere in the DOD budget. The obvious pitfall is if Congress doesn’t put that money back into research, then these accounts are cut.

That’s what it looks like the problem is this year, at least with the House numbers. For all three accounts, the House’s plan calls for less money than last year’s budget but more than what the Administration requested (see the chart below; I’m including the Presidential Budget Request (PBR) in the chart below for comparison). And DARPA would see an increase over FY19 funding, but less than what the President requested for FY20. The argument could be made that the House is simply mitigating Administration cuts.

FY19 FY20 PBR $ Change % Change FY20 House $ Change % Change
DOD 6.1 $2.53B $2.32B -$210M -8.4% $2.51B -$220M -0.8%
DOD 6.2 $6.07B $5.32B -$750M -12.6% $5.56B -$510M -8.4%
DOD 6.3 $7.36B $6.42B -$940M -13.8% $6.78B -$580M -7.9%
DARPA $3.43B $3.56B +$130M +3.8% $3.53B +$100M +2.9%

Another possibility is that the House is setting up their own negotiating ploy. In the ongoing negotiations over the whole Federal budget, the Democrat controlled House wants to make sure that domestic spending is increased to the same extent as defense spending; while the Trump Administration’s stance is to boost defense, while cutting domestic. The House Appropriators’ thinking could be, by cutting an Administration priority now, they could get concessions in later negotiations. Assuming this is correct, it makes the Senate Defense numbers all the more important, as they are likely to be somewhere in the middle and close to where a final number would end up.

With regard to the Senate numbers, there is potentially good news on the horizon. News reports say that the Administration and Congressional leaders are close to agreeing to a budget deal that would allow the Senate to begin work on their appropriations bills. While short on details, it sounds like the agreement is done in principle, with specifics still needing to be worked out. This is a big change from what we reported with the Energy and Water appropriations bill.

It’s important to understand what would be agreed to with this budget deal and what wouldn’t. It would set a top line number for the entire federal budget; this would allow the Senate to quickly work on their individual appropriation bills and hopefully have a conferenced budget deal for consideration in the October/November timeframe. It would not guarantee those bills to be passed. And the Administration remains an unknown variable in this equation; how will the President act? Fiscal Year 2020 is far from over, so be sure to check back for new developments.

Appropriations Update: House Defense FY20 R&D Numbers are Better than the Administration’s, but are not Great