Correction: A previous version of this story contained an erroneous amount of reprogrammed money. The story has been updated to show the Pentagon reprogrammed $1.5 billion in FY19 funds.

WASHINGTON — In the wake of the Pentagon reprogramming $1.5 billion in fiscal 2019 funds to support President Donald Trump’s border wall with Mexico, only the U.S. Air Force appears to be losing money appropriated for equipment updates.

The funding largely comes from personnel accounts in the Air Force, Navy and Army. But the Air Force is the only service to lose funding for hardware, including nuclear and conventional weapons, surveillance aircraft updates, and space programs.

Overall, the Pentagon reprogrammed $818.465 million from FY19 defense appropriations, as well as $681.535 million from FY19 overseas contingency operations accounts, or OCO, to reach that $1.5 billion total.

Lawmakers expressed concern that the use of military resources and manpower on the southern border will damage military readiness. However, acting Defense Secretary Patrick Shanahan said last week that ongoing deployments to support the Defense Department aren’t doing so.

“We’ve seen no degradation to readiness,” he told Senate appropriators May 8 at a defense budget hearing. “In fact, in some cases, it’s enhanced our readiness because the troops get to perform certain functions.”

Congressional Democrats and some Republicans have objected to the administration’s use of this mechanism for funding the president’s border wall, arguing it bypasses Congress’ constitutional power of the purse. For the second time in recent weeks, the Pentagon ignored decades of precedent and carried out the transfer of funds without first consulting with the Senate Appropriations Committee.

Sen. Patrick Leahy, the Senate Appropriations Committee’s top Democrat, led a letter to Shanahan on May 10 to object to the latest instance, saying it harms hurricane cleanup at Tyndall Air Force Base, Florida.

“We are dismayed that the Department has chosen to prioritize a political campaign promise over the disaster relief needs of our service members, given the finite reprogramming authority available," the lawmakers wrote.

They noted that Shanahan’s decision to notify Congress of the reprogramming came a day after he testified before the subpanel that oversees defense spending, and they wrote that they welcomed his views on “how you intend to repair the damaged relationship between the defense oversight committees and the [Defense] Department.”

The letter was also signed by the Senate Armed Services Committee’s top Democrat, Sen. Jack Reed, as well as Democratic Sens. Dick Durbin, Brian Schatz, Tom Udall , Patty Murray, Chris Murphy, Tammy Baldwin, Dianne Feinstein and Jon Tester.

The reprogramming could be a topic at Shanahan’s future confirmation hearing for the full job of defense secretary. A date for that hearing has not been set.

Why the Air Force?

About half of the non-OCO $818 million sum the Defense Department wants to redirect to the border comes from Air Force accounts, with space and missile programs taking the biggest hit. In total, the Pentagon expects the service to shear $402 million off its FY19 budget.

About $210 million would be cut from Air Force space programs, specifically the Evolved Expendable Launch Vehicle program, which funds the use of rockets that send satellites and other capabilities into space. According to the reprogramming document, one rocket launch has been canceled because of Maxar Technologies subsidiary SSL’s departure from the Robotic Servicing of Geosynchronous Satellites program. SSL was set to build a robot capable of fixing satellites in orbit, but pulled out of the Defense Advanced Research Projects Agency effort earlier this year because of concerns that it may not see a return on investment.

The Air Force’s program for modernizing its E-3 Sentry early warning aircraft — more commonly called AWACS — also could lose funding that it no longer needs in FY19.

The program, "Diminishing Manufacturing Sources Replacement of Avionics for Global Operations and Navigation,” or DRAGON, updates the E-3’s avionics and brings it into compliance with future air traffic control requirements. But it is moving too slowly to use all of the funds it was appropriated in FY19, so the administration aims to have $57 million diverted for border protection.

DRAGON has been delayed for two reasons, according to the reprogramming request. First, “aircraft have been available for programmed depot maintenance” at a slower-than-planned rate, dragging out the modification schedule. Additionally, DRAGON integration can only occur after AWACS are upgraded to the Block 40/45 configuration, and not all aircraft have gone through that process.

The Air Force sees AWACS as a key part of its initial version of the Advanced Battle Management System, a family of systems that will provide ground surveillance across the different military services. Instead of retiring seven E-3s in FY18, Gen. Mike Holmes, head of Air Combat Command, said those planes could be upgraded with new sensors and communications gear.

However, DRAGON isn’t the only modernization effort for the Sentry that is moving slower than expected. In November, Bloomberg reported that the service terminated a contract with Boeing to upgrade the AWAC’s characteristic disc-shaped radar due to repeated delays.

Other Air Force programs that will take a hit include a planned upgrade to the Minuteman III intercontinental ballistic missile and the air-launched cruise missile programs.

A number of top defense officials previously said nuclear modernization is the top priority for the Pentagon, including Ellen Lord, the department’s acquisition head, who on May 1 told Congress: “We have weapons that are decades over what was supposed to be their useful life. And we are out of time. We need to continue on the path we’re on, or we are going to fall behind and not have the nuclear deterrence that we enjoy today.”

The document reprograms $24.3 million, of the $124.5 million appropriated in FY19, from the Minuteman III Launch Control Block Upgrade program; the document claims funds are available due to a “slip in the production schedule for FY 2020.”

Meanwhile, $29.6 million — more than half of the $47.6 million appropriated for the air-launched cruise missile programs in FY19 — will be reprogrammed. The explanation for that change: “Funds are available due to contract savings from reduced guided missile flight controller modification requirements; and due to lack of executable requirements for Support Equipment and Low Cost Mods in FY 2019.”

The reprogramming of funds for the Hellfire missile is also notable, as the Pentagon has identified a lack of munitions stockpiles as a major issue to address in its budget request. As an example, the FY20 budget called for the maximum rate of production possible on Hellfire: $730.8 million for 9,000 of the weapons.

The document states that funds are “available due to contract savings from all variants that provide precision kill capabilities. Savings are attributed to negotiated lower unit costs per missile system.”

Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.

Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.

Valerie Insinna is Defense News' air warfare reporter. She previously worked the Navy/congressional beats for Defense Daily, which followed almost three years as a staff writer for National Defense Magazine. Prior to that, she worked as an editorial assistant for the Tokyo Shimbun’s Washington bureau.

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