WASHINGTON — The three-star general in charge of building the U.S. Army’s requirements is worried the service won’t find enough efficiencies in its future budgets to cover the costs of modernization, especially those costs that have not been realized.
The Army wants to “turn the modernization dial pretty hard” in the coming fiscal years, particularly in 2021 and 2022, Lt. Gen. James Pasquarette, the Army G-8, said Sept. 18 at an Association of the U.S. Army breakfast.
The service managed to find roughly $33 billion in its equipping portfolio to apply to modernization programs in FY20, and it’s investing more toward those priorities in FY21 after having conducted a second deep dive into all its line items across the budget to reallocate funding for future readiness.
The Army is placing “a big bet” on future readiness in FY20, Pasquarette said, and in FY21, the Army is “doubling down” on that bet.
In FY20, the Army is investing $8.6 billion in modernization efforts and, across the next five years, investing a total of $57 billion, a 137 percent increase from the previous year’s five-year plan, according to Pasquarette.
The Defense Department knows its budget top lines in 2021 — $738 billion — and 2022 — $741 billion — because of a two-year budget deal worked out with Congress.
But “I don’t know if there’s enough efficiencies and reforms under our steady top line” to accomplish everything the Army wants to do to modernize, Pasquarette said.
There will have to be some choices “we are going to have to put before leadership as we move through the ‘22 [five-year budget plan] on how to balance the program,” he said. “We have already taken a pretty good, hard look at the portfolio in deep dives, and if we take another third one ... I’m not sure there are the efficiencies there again to fund what we see coming in this program.”
The Army “took a pretty hard swing" in the most recent “night court” process, which the Army has performed two years in a row to pull funding out of programs that don’t contribute to lethality or the predicted future operating environment, Pasquarette said, then applying the funding to modernization priorities.
“If we do it again in the same way, it will get harder,” he said. There’s “an invisible line that’s out there. You don’t know if you’ve crossed it.”
Army leadership recently said because there’s less low-hanging fruit to apply to the service’s priorities, night court isn’t going to get easier. And there’s more hidden costs unaccounted for, Pasquarette noted. “We don’t have a clear picture of what those bills are” for modernization programs down the road, he said.
“I think as we transition from [research, development, testing and evaluation] to procurement, there are unrealized bills out there that we are going to have to figure out how to resource,” he added.
Additionally, some of the 186 canceled or pared-back programs in FY19 are being fought over in Congress, so some funding might have to be restored to those efforts and pulled away from modernization priorities.
For instance, congressional defense committees have gone against the Army’s wish to not buy CH-47F Chinook Block II helicopters for the active force, adding funding back in to pay for them.
“We are going through the marks right now on that,” Pasquarette said, adding the Army is in the process of working with congressional staff to reconsider funding decisions as bills are ironed out in conference committee. “We think we are going to land in a place we will be comfortable with,” he said.
“We are doing the analysis and looking at what areas maybe we need to take a look at, putting a little bit of money back into if we think we took it down too much, and so that is what we owe the leadership. They may decide to accept that risk,” he added.
Aside from the challenge of continuously trying to find money within the Army budget to pay for modernization bills that will likely be larger than predicted, Pasquarette said the service’s strategy also assumes a flat budget top line. “I’m not sure that’s a good assumption,” he said.
“When the budget does go down,” he added, “will we have the nerve to make hard choices to protect future readiness? Often that’s the first lever we pull in trying to protect end strength and current readiness at the cost of future readiness.”
The Army is gearing up to look at the five-year defense spending plan covering fiscal years 2022-2026 at the end of the current year, Pasquarette said, and he’s confident that Army leadership is prepared to solve the concerns he raised. “I know they are committed to the future readiness of the U.S. Army,” he said.
The Army’s ambitious modernization plan being executed via Army Futures Command includes fielding an integrated tactical network beginning in FY21.
Also in FY21, the service will field a mobile short-range air defense system mounted on a Stryker as well as Iron Dome as an interim solution for its indirect fire protection capability, or IFPC.
A next-generation squad weapon and a squad automatic rifle will be fielded in FY23 as well as the first units with the Precision Strike Munition, Extended Range Cannon Artillery system, a hypersonic missile battery and the enduring IFPC capability.
In FY24, the Extended Range Cannon Artillery system with an autoloader will be fielded, followed by the future tactical unmanned aircraft system in FY25 and the optionally manned fighting vehicle in FY26.
Other program’s fieldings are farther off, such as future vertical lift aircraft.
Jen Judson is the land warfare reporter for Defense News. She has covered defense in the Washington area for 10 years. She was previously a reporter at Politico and Inside Defense. She won the National Press Club's best analytical reporting award in 2014 and was named the Defense Media Awards' best young defense journalist in 2018.