News analysis

Budget a major boost for US military but raises deficit fears

The United States' two-year federal spending agreement passed last Friday contains the steepest rise in defence spending in about 15 years.

Under the 2011 Budget Control Act, discretionary defence funding for this year was capped at US$549 billion (S$730 billion), and US$562 billion for next year.

The new defence budget gives the Pentagon an increase of US$80 billion this year and US$85 billion next year. It also gives the military US$140 billion more for overseas contingency operations - or war funding to be split between the two years.

Dr Michael Mazarr, senior political scientist at the Rand Corporation, told The Sunday Times : "In a single year, we are adding more to the defence budget than Russia's entire defence expenditure and more than South Korea and Germany's spending on defence combined."

Professor Carl Thayer, of the Australian Defence Force Academy of the University of New South Wales, said the agreement means that "now and in the foreseeable future, China's defence budget will continue to be dwarfed by (that of) the US, which is 3.6 times larger". China officially spent US$193 billion on defence last year.

The spike in the US defence budget is good news for US allies and defence partners, especially in the Indo-Pacific, said Prof Thayer.

"The two-year defence budget will make it easier for Pentagon planners, raise troop morale (troops get a 2.4 per cent pay hike) and reassure countries dependent on the US to maintain a stable rules-based order."

Under a deal struck by the Republicans and Democrats, spending on domestic social programmes such as the opioid crisis was also increased.

But the problem - which applies to the whole budget - is whether such spending can be sustained beyond a year or two.

Details have not yet emerged, but the journal Defence One reported Defence Secretary James Mattis as saying he was happy with US$700 billion for this year, and US$716 billion for next year. Those numbers appear to be the rough totals of base and overseas contingency operations funding, Defence One reported.

But adding a trillion dollars to the deficit a year because of tax cuts and this spending agreement was not sustainable, Dr Mazarr said.

"We have to increase the revenue base, to afford higher defence spending over time, or... formally tell the Department of Defence we don't need (the military) to do as much," he said.

"But we've chosen what has become the traditional American third way which is to do neither of these things and just spend money we don't have."

An inadequately resourced military has been a concern of US military leaders for some years, especially since 2011 budget caps - which the new spending bill lifts.

Last Tuesday, Mr Mattis told the House Armed Services Committee: "We will prioritise rebuilding readiness while modernising our existing force."

Dr Patrick Cronin, senior director at the Centre for a New American Security, said the budget helps the implementation of the Trump government's security and defence strategies.

But he said it was important to spend on diplomacy too. "Our defence strategy rightly looks to safeguard information dominance and conventional and nuclear superiority. Yet defence spending alone cannot win the battle of narratives, and military forces on their own cannot stave off irregular, grey-zone challenges to global security and regional norms."

A version of this article appeared in the print edition of The Sunday Times on February 11, 2018, with the headline 'Budget a major boost for US military but raises deficit fears'. Print Edition | Subscribe