The political fight over the U.S. federal debt ceiling makes the outcome for the fiscal 2024 defense budget difficult to predict. Most Republicans and many Democrats prefer to increase the Pentagon’s FY24 top line over the $842 billion requested by the Biden administration on March 9. But a handful of GOP lawmakers aim to impose deep federal spending cuts as the price of extending federal borrowing power.

The severe economic consequences of a default may force the administration to negotiate with these holdouts, despite its pledge otherwise. Thus, some mix of defense and nondefense budget cuts is hard to rule out.

But this debate takes place against a geopolitical backdrop of rising tensions between the United States and its advanced adversaries Russia and China.

Ukraine will require continued U.S. support to stave off and reverse the Russian invasion. And China is rapidly increasing its defense spending while continuing efforts to strengthen its sphere of influence across the world stage.

All of this would seem to indicate the need to sustain or increase America’s defense spending, despite fiscal headwinds. The management consulting firm Oliver Wyman poses some scenarios for how the Defense Department’s budget may unfold over the next several years.

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