FY25 Appropriations Update: The House Proposes Another Set of Difficult Funding Cuts for the Defense Research Accounts

The House Appropriations Committee has taken the lead and begun its work to craft their spending plans and legislation for Fiscal Year 2025 (FY25). As we have done in years past, CRA will examine the House and Senate’s budget plans for each federal research agency of note to the computing community and provide a summary and breakdown. The first agency to check is the Department of Defense (DOD) and the House’s defense appropriations bill.

To give a brief overview, DOD’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.

Regular readers will recall that the Administration’s requested budget for these accounts, released in March, was quite bad. In a redux of last year’s situation, the House appropriators’ funding plan is better than what the Administration proposed but not objectively good for the accounts.

Getting into the details of the House’s plan, Basic Research (6.1) would receive a cut of 4.2 percent compared to its FY24 levels. The account would decrease from $2.63 billion in FY24 to $2.52 billion for FY25, a reduction of $110 million. There is little good news when looking into the details of each service branch: the 6.1 programs at the Army, Navy, and Air Force would receive significant cuts of 7.4, 7.0, and 10.0 percents respectively, while the Space Force and Defense-Wide programs would increase by 4.6 and 4.1 percent. There is some good news going a little deeper into the details: the “University Research Initiative” subaccounts would see plus ups in the Army (+2.9 percent), Navy (+17.4 percent), and Space Force (+2.3 percent), but the Air Force’s program would receive a cut of 20 percent.

The Applied Research (6.2) account is in much worse shape. The full account would see a 13.0 percent cut compared to last year’s budget, decreasing from $7.60 billion in FY24 to $6.61 billion under the House’s plan (a loss of almost a billion dollars).

And much like the applied research account, the Advanced Technology Development (6.3) account would receive a cut under the House’s framework. It would go from $11.29 billion in FY24 to $9.86 billion in FY25, a cut of $1.43 billion (or -12.6 percent).

Lastly, the relatively good news: DARPA would escape budget cuts under the House’s plan, though it would be effectively flat funded. The agency’s budget would increase from $4.12 billion in FY24 to $4.21 billion in FY25, an increase of 2.0 percent (or +$90 million).

FY24 FY25 PBR FY25 House $ Change % Change
DOD 6.1 $2.63B $2.45B $2.52B -$110M -4.2%
DOD 6.2 $7.60B $5.80B $6.61B -$900M -13.0%
DOD 6.3 $11.29B $9.00B $9.86B -$1.43B -12.6%
DARPA $4.12B $4.37B $4.21B +$90M 2.0%

These poor numbers can be traced to the difficult environment surrounding the Federal budget process. The Department of Defense acknowledged in March, when their request was released, that their budget plans come from a zero-growth outlook. Even with the defense spending friendly House appropriators, there is only so much room they have to work with. And it appears that defense research isn’t one of their priorities.

There is some policy direction of note in the appropriator’s bill report. Specifically, the appropriators have voiced their support for DOD’s Chief Digital and Artificial Intelligence Officer and the efforts that office is undertaking. The office is fully funded under House’s budget. The committee further directs DOD to consider AI applications for reforming and improving the administrative functions of the department, not just for battlefield applications.

What happens next? The bill was approved by the full House Appropriations Committee on June 13th and now heads to the full House for consideration, where it is likely to be passed. Then we will have to wait for the Senate to release their plan for the Defense department; that committee’s leadership has recently announced that they plan to begin considering their funding bills in July.

However, the general view in Washington is that the appropriations process will not progress to the conference stage until after the November elections. There is still a long road ahead before we have any clarity on a final FY25 budget. Please keep checking back for more updates.

FY25 Appropriations Update: The House Proposes Another Set of Difficult Funding Cuts for the Defense Research Accounts