Editor's Note: This story was updated at 6:38 p.m. ET with clarification on the budget figures. The story initially listed third offset funding as $35 million. A senior defense official contacted Defense News to clarify that was only for science and technology funding. This story has been updated to reflect that.
BRUSSELS — The Pentagon’s fiscal 2017 budget request includes $71.8 billion for research and development, a 4 percent uptick from the previous year’s enacted $69 billion.
Included in that is $3.6 billion in fiscal 2017 for the so-called third offset technology push, with $18 billion spread over the Future Years Defense Program (FYDP), a senior Pentagon official told Defense News.
According to the official, over the FYDP the Pentagon plans to spend $3 billion on Anti-Area/Access-Denial (A2/AD) technologies, $500m on guided munitions challenges, $3 billion on submarine and undersea challenges, $3 billion on human-machine collabroation and teaming, $1.7 billion on cyber and EW issues, and $500 million on expanding wargaming and operational concept tests and demonstrations.
In a series of public events leading up to the budget, Secretary of Defense Ash Carter emphasized that the department’s spending would focus on advanced technologies and capabilities, something he reiterated Tuesday while in transit from Washington to Brussels for a series of meetings with US allies.
“We have a wide spectrum of challenges, and one of them is to make sure the American military remains the first with the most when it comes to capability,” Carter said.
Carter repeatedly used the word “deterrence” when discussing the strategic mindset which shaped his budget choices, including the need to deter both North Korea and Russia from making moves against the US or its allies — largely through the development of new technologies they cannot counter.
In December, Deputy Secretary of Defense Bob Work laid out the key components of the third offset program, which included autonomous "deep learning" machines and systems, human-machine collaboration, assisted-human operations, advanced human-machine teaming and semiautonomous weapons. Those are largely futuristic concepts, which require significant R&D.
Last week, Carter revealed a list of programs that the Strategic Capabilities Office is developing. Those include putting sensors onto bombs to create better targeting capabilities, swarming autonomous vehicles, the installation of a projectile developed for the electromagnetic railgun on existing weapons and an “arsenal plane” that would be based on an existing, older platform.
In contrast to Work’s third offset development, the technologies Carter listed in the SCO are more near-term.
Overall, the budget requests $12.5 billion for science and technology funding. That number is $200 million more than the building requested in its FY16 request, but $500 million less than it received from Congress last year.
It includes $45 million for the Defense Innovation Unit-Experimental (DIU-X), a cornerstone of Carter’s desire to reach out to Silicon Valley. It also supports $137 million for six DoD-led Manufacturing Initiative Institutes, part of a White House-directed program to establish a national network of manufacturing centers.
And while the third offset may be getting a relatively small $35 million in the S&T budget total, the budget directs $902 million to the Strategic Capabilities Office, which was largely unknown until Carter featured its work in his Feb. 2 speech.
The term “third offset” has been used interchangeably to include all technological developments, something Ben FitzGerald of the Center for a New American Security in a Feb 5. discussion with Defense News.
“While the Secretary did not use the term offset strategy explicitly in his budget preview speech, the impact of offset thinking is clear in the budget decisions he unveiled,” FitzGerald said. “From a capability perspective, investments in Virginia-class submarines and payload modules, nuclear capability, arsenal planes, and swarming autonomous vehicles all support the underlying thinking of a third offset strategy.
“The secretary may not wish to brand his investments with the third offset label, which is totally fine — it’s important that he owns this push regardless of the label," he said. "[Carter’s] discussion of high end threats, inflections points, increased lethality, prioritizing capability over capacity and the need to take a long-term view are all in alignment with the needs of a third offset strategy.”
On Tuesday, Carter downplayed the difference between the third offset push and the work being done by the SCO.
“They’re both trying to do related things, obviously they have different projects, but they’re all contributing to the high-end, high-technology,” Carter said. “Basically trying to do the same thing, namely make sure we maintain the qualitative edge in advanced capabilities.”
In Washington, Pentagon comptroller Mike McCord also downplayed the money being labeled directly as third offset, saying: "There is not a tag in our budget system that says this program is a third offset idea and this one is not or could not be, so it’s a little less precise than saying what is connected to the submarine program.”
Andrew Clevenger in Washington contributed to this report.