First published at 11:13 a.m.; updated at 6 p.m.

WASHINGTON — The Pentagon unveiled its fiscal 2017 budget request Tuesday morning, asking Congress for $582.7 billion in military funding.

The Defense Department's request, which includes $523.9 billion in base budget money and $58.8 billion in overseas contingency operations (OCO) funding according to budget documents, represented a tiny 0.4 percent increase from the $580.3 billion total Congress enacted for 2016. However, the base budget figure is $23.9 billion less than the Pentagon planned on having this year when it completed its 2016 budget.

The budget includes $71.8 billion for research and development, a 4 percent uptick from the previous year's enacted $69 billion. The fruits of R&D investment are expected to provide a foundation for the so-called third offset strategy, the Pentagon's plan to produce a battlefield advantage built on cutting-edge technology.

With Defense Secretary Ash Carter traveling in Europe, his deputy Robert Work introduced the budget at the Pentagon Tuesday. He applauded Congress for providing two years of budget certainty through the Bipartisan Budget Act (BBA), a two-year deal that lifts spending levels above sequestration's caps through FY2017.

"The present budget allows us to execute our national military and defense strategies," he said. "However, given the current level of funding, we simply cannot reduce every risk associated with every strategic challenge."

Therefore, it became necessary to prioritize strengthening conventional deterrents against the most advanced potential adversaries and to focus on achieving balance of force structure, modernization and readiness, Work said.

And while the Pentagon is comfortable with its current funding levels, uncertainty still looms as it tries to make long-term plans. Between 2018 and 2021, the final year of sequestration, there is a roughly $100 billion difference between the amount DoD thinks it will need and what is allowable under the spending caps, he said.

Pentagon comptroller Mike McCord said the BBA provided a budget around $21.8 billion lower than the DoD had projected. OCO funds provided $5 billion of base budget relief, and fuel cost and inflation savings as well as new efficiencies saved another $5.6 billion. The remaining $11.2 billion shortfall was cut from program funding, he said, so the US Army lost nine Apache and 24 Blackhawk helicopters, the Air Force lost five F-35A joint strike fighters, the Navy lost two V-22 Ospreys and added four Landing Craft Air Cushions to the service life extension program, and the US Marine Corps lost 77 Joint Light Tactical Vehicles.

"Modernization took the brunt of the reduction. I would say not in a stupid way, we didn't terminate programs," he said. "We were careful and thoughtful about how we approached this."

As Defense Secretary Ash Carter indicated in a Feb. 2 speech previewing the budget, the request reflects the need to address rising great powers Russia and China; growing threats from North Korea; the potentially disruptive influence of Iran in the Middle East; and operations against the Islamic State group in Iraq, Syria and elsewhere.

Including OCO funding, Operation and Maintenance (O&M) funding gained $6.5 billion, from $244.4 billion in 2016 to $250.9 billion in 2017. Procurement dropped by $6.8 billion, from $118.9 billion to $112.1 billion.

Within the OCO funding, which ticked up by $200 million, funding for operations in Afghanistan is down $1.2 billion, from $42.9 billion to $41.7 billion. Anti-Islamic State group efforts received a 50 percent bump, from $5 billion to $7.5 billion. The European Reassurance Initiative, which covers military support for Europe following Russia's invasion of Ukraine, rose from $800 million to $3.4 billion, while the Counterterrorism Partnerships Fund dropped from $1.1 billion to $1 billion.

The figures released Tuesday also map out the Pentagon's expected base budgets through 2021. After 2017's $523.9 billion, there is a jump to $556.7 billion in 2018, followed by more modest increases to $564.8 billion, $570.4 billion and $585.2 billion in subsequent years.

Unlike recent years, when the Pentagon's budget requests soared past the caps established by the Budget Control Act, also known as sequestration, this year's request came under the relative certainty of the BBA, which established spending levels above the caps for FY2016 and FY2017.

While the OCO funding request was relatively flat, there are hints that congressional Republicans and Democrats may differ on the appropriate amount of OCO funding, even with the BBA agreement in place.

House Armed Services Chairman Rep. Mac Thornberry, R-Texas, and other Republicans in Congress have argued the defense budget should be raised at least $15 billion via an increase in OCO funding based on threats facing the US and other developments since the budget deal was struck in 2015.

Other major line items in the budget include $8.1 billion for submarines, $3.4 billion for the and $7 billion for cyber efforts.

Outlook for the Services

Rear Adm. William Lescher, Deputy Assistant Secretary of the Navy for Budget speaks Tuesday about the service's budget request at the Pentagon.

Photo Credit: Mike Morones/staff

The Navy Department's top line took a major hit, dropping $7 billion from last year's plan — $152.9 in baseline funding against last year's projection of $159.9 billion. The 3 percent dip below projection is planned to last just this year, rising back to $159.7 billion forecast for 2018.

OCO funding remains steady, $9.5 billion in 2017 against $9.4 billion last year, and includes six aircraft — two F/A-18 Super Hornets and four RQ-21 Blackjack drones for the Marines.

The Navy is asking for seven new ships, essentially down one from last year's plan. The service reduced its ship buy by one Littoral Combat Ship, asking for two ships instead of last year's plan for three or Carter's December direction to buy just one.

The Department is asking for a total of 94 manned and unmanned aircraft, the same number as forecast a year ago. The most significant change is the insertion of 14 F/A-18 Super Hornets planned for 2018, a move directed by Carter that reverses an earlier Navy decision to end procurement of the Boeing-built aircraft.

As expected, the Army's fiscal 2017 budget request of $148 billion pivots the Army to Europe but also sacrifices some modernization efforts, cutting mainly from the aviation procurement account while bolstering vehicle spending. The Army's base budget request is $125 billion with an additional overseas contingency operations account of $23 billion.

As Defense News reported Feb. 6, the service will see a big ramp-up in OCO funding for Europe as part of ERI, the effort to deter Russia's military aggression in Eastern Europe and to bolster allies' defense capabilities. A large chunk of that funding — $2.8 billion — will belong to the Army and will reside in the OCO account. A small amount of funding in the base budget was pushed into OCO for Europe, a defense official told Defense News last week.

In order to preserve readiness and planned end strength, the Army's procurement request in fiscal 2017 of $15.1 billion is $1.3 billion less than what was enacted in fiscal 2016. Within modernization, Army aviation is taking the biggest punch while vehicle procurement is plussed up in the request, according to official documents.

CH-47F Chinooks, AH-64 Apaches and UH-60M Black Hawk procurement were all reduced, but major vehicle programs like the Joint Light Tactical Vehicle and Stryker armored personnel carrier lethality were protected.

The facilities budget continues to be a bill payer for the Army. The service is taking a $294 million cut in facility funding after already taking hits in the last few budget cycles. In fiscal 2014, the Army's total facilities budget was $2.6 billion, and by fiscal 2016 it had fallen to $1.6 billion.

The Air Force is requesting $166.9 billion overall in FY2017, a slight uptick from the $167.9 billion requested in FY2016. Included in that top line is $46.9 billion for operations and maintenance, $22.4 billion for procurement, $19.6 billion for research, development, technology and evaluation, and $12.3 billion for overseas contingency operations.

Air Force Deputy for Budget Carolyn M. Gleason (left) and Air Force Deputy Assistant Secretary for Budget Maj. Gen. James F. Martin Jr. conduct a briefing about the FY2017 budget request Tuesday at the Pentagon.

Photo Credit: Mike Morones/staff

As first reported by Defense News, the Air Force is deferring five F-35As, requesting just 43 in its FY2017 budget submission, down from a planned 48. The delayed F-35A ramp to the ultimate goal of 1,763 aircraft is one of the "tough choices" the Air Force was forced to make in this years budget negotiations, according to documents. The service is partially funding Block 4 software upgrades for the jet and research and development of nuclear weapons capability.

In other delays, the Air Force is also slowing procurement of Lockheed Martin's C-130J Super Hercules transport aircraft, which will eventually replace the aging C-130Hs. The Air Force included 11 C-130s overall in its budget request: three C-130Js (including one through the OCO budget), three HC-130Js and six MC-130Js. However, the Air Force is holding onto its legacy EC-130 Compass Call aircraft, a key component of the fleet's electronic attack capability. Meanwhile, the service requested funding to recapitalize the Compass Call fleet by moving the plane's electronics onto new business jet bodies.

In another expected move, the Air Force is deferring retirement of the A-10 Warthog until 2022, and funding additional contract maintainers. The service will replace the attack plane with F-35s on a squadron-by-squadron basis to ensure commanders have sufficient aircraft to confront the threat. In the meantime, the Air Force has launched a program to upgrade the A-10 to keep it flying well into the next decade, releasing a draft statement of work Feb. 2 for updated wings.

As Defense News previously reported, the Air Force's FY2017 budget request fully funds the Long Range Strike Bomber and the 15-aircraft KC-46 tanker buy. The request additionally includes commitment to moving forward with the Joint Surveillance and Target Attack Radar System recapitalization effort, the Combat Rescue Helicopter, and the recapitalization of Air Force One. JSTARS is expected to reach initial operational capability by 2024, according to the documents.

Staff writers Chris Cavas, Joe Gould, Jen Judson and Lara Seligman in Washington contributed to this report.

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