Military Capabilities

Pentagon budget 2020: DoD officials appear sanguine on growing national debt

13 March 2019

OMB projects that in 2024 annual interest payments on the national debt will be about USD709 billion, which that year would surpass the projected discretionary national defence spending. Although in the past military leaders warned the debt would affect defence spending, this year officials said they are not planning for changes. Source: Republic of Korea Navy

US defence officials previously feared that rising interest rates and growing federal debt would push the government’s net interest costs so high that they would squeeze out funding available for personnel, training, equipment, modernisation, maintenance, and more. Interest rates are now higher and the debt is now larger, but Pentagon budget officials are no longer worrying about either.

The White House on 11 March requested USD750 billion in discretionary national defence funding for fiscal year 2020 (FY 2020), with USD718.349 billion for the US Department of Defense (DoD) and about USD32 billion for other national security efforts.

The national defence budget – as well as the ‘domestic’ budget – is legally capped by the 2011 Budget Control Act. However, the White House’s Office of Management and Budget (OMB) instructed the Pentagon to use the uncapped Overseas Contingency Operations (OCO) account to bypass the legislated limits, which were meant to lower discretionary spending and begin lowering the US public debt. Pentagon officials said about USD97.9 billion was shifted into the unlimited OCO account.

Asked by Jane’s if the Pentagon was concerned about or planning for future pressure on discretionary spending caused by growing interest payments on a growing national debt, Pentagon Deputy Comptroller Elaine McCusker said that the DoD has “nothing from our perspective”. She added, “We’ve always maintained our watched words in both ‘security’ and ‘solvency’ when we look at what our requirements are and what budget we require to carry out the strategy.”

Interest payments on the national debt represent the fastest growing part of the US federal budget, and they are projected to grow 2.6-times as much as total spending by 2024, and 1.9-times as much by 2029, according to OMB’s budget submission. Said another way, OMB projected that in 2024 annual interest on the national debt would be about USD709 billion, which would be higher than the projected discretionary national defence spending (USD698 billion).

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