Department of Defense

Want to Reduce the Deficit? Cut the Pentagon’s Wish Lists.

By Christian Bale
Monday, July 18, 2022, 8:01 AM

President Biden recently announced that his administration oversaw a federal budget deficit reduction of $350 billion last year and is projecting a $1.7 trillion reduction by the end of the fiscal year. Now that the administration is winding down emergency coronavirus programs, it hopes that shrinking the federal deficit will help combat rising inflation. 

A renewed focus on deficit reduction is a welcome development. Put simply, the federal deficit is the difference between what the government spends and how much it collects in taxes during a fiscal year. In contrast, the federal debt is the cumulation of all federal deficits. The government has been operating at a deficit since 2001, and since 2016, the combination of interest payments on the federal debt and increased spending on Social Security and health care have outstripped the growth of federal revenue. During the first quarter of 2022, the federal debt eclipsed $30 trillion for the first time.

One way the administration could bolster its deficit reduction efforts is by preventing military services from sending their “wish lists” to members of Congress. Like all executive branch agencies, the Department of Defense does not submit its annual budget request directly to Congress. Rather, since 1921, the Budget and Accounting Act has required agencies to submit their funding request to the White House’s Office of Management and Budget (OMB).

After months of analysis and meetings with the agencies, OMB transmits a presidential budget to Congress. In addition to reflecting the administration’s priorities, the president’s budget attempts to balance competing federal spending needs. Yet for decades, the highest ranking officers of the U.S. military services have sidestepped this process by sending their funding wish lists (proponents prefer the term “unfunded priorities”) to members of Congress without review from OMB or even the secretary of defense. 

Lawmakers on the powerful defense appropriations committees of the House and Senate—many of whom represent districts where weapons systems are manufactured—encourage the wish lists and typically fund most of their requests in bipartisan fashion. For example, around this time last year, the Senate Armed Services Committee endorsed a $25 billion increase to President Biden’s military spending proposal with only Sen. Elizabeth Warren opposing the measure. The Senate bill supported a number of unfunded priorities, including six additional F-35 Joint Strike Fighters, even though the F-35 has not been operationally tested and will likely require significant future appropriations to retrofit the existing aircraft. For fiscal year 2023, military leaders have asked Congress for more than $21 billion in unfunded priorities. 

Clamping down on tens of billions in unfunded priorities will not substantially abate a federal deficit on the scale of trillions of dollars ($2.8 trillion in fiscal year 2021), but it would boost the administration’s broader deficit reduction efforts, and it is a step the administration can take immediately. 

Additionally, although perhaps less pressing than concerns about inflation, wish lists merit the administration’s attention because they raise significant constitutional concerns. By sidestepping the president and the secretary of defense—who presumptively declined to advocate for the contents of the wish lists—military officials erode the principle of civilian control of the military. Of course, Congress, which holds the purse strings, may disagree with executive branch leaders on spending priorities and appropriate funds for weapons systems that it feels are acutely needed. 

Wish lists also implicate the Constitution’s Recommendations Clause, which empowers the president with the authority to propose legislation to Congress and, as a corollary, to refuse congressional demands to propose legislations. OMB has cited this provision as a basis to require executive branch agencies to first submit legislative proposals for review before transmitting them to Congress. If the current administration decides to take this path to further stem federal deficits, it can build on the work begun during the Obama administration. In 2009, Secretary of Defense Robert Gates (who also served as secretary during the George W. Bush administration) ordered the service chiefs to brief him on their unfunded priorities lists before sending them to Congress. 

As a result, in the spring of 2009, the services asked Congress for less than $3.5 billion in unfunded priorities, a nearly 90 percent cut from 2008. In 2012, the chiefs of the Marine Corps, Navy, and Air Force did not even attempt to submit wish lists. Absent Secretary Gates’s leadership, the wish lists soon returned. 

Beyond political pressure from individual members of Congress, a significant roadblock for the administration is that the National Defense Authorization Act (NDAA) for Fiscal Year 2017 and successive NDAAs have required the military chiefs to submit annual “report[s] on the unfunded priorities of the armed force or forces or combatant command under the jurisdiction or command of such office.”

But the administration has options. Invoking the Recommendations Clause, the administration could simply refuse to comply with the mandate. Past White Houses have taken this route when Congress has demanded legislative proposals. Or the president could urge Congress to repeal the unfunded priorities list requirement. Another route would be for Secretary of Defense Lloyd Austin, like Secretary Gates before him, to impose significant oversight over the development of the wish lists. 

This last option offers the possibility of achieving substantial deficit reductions while still complying with the NDAA. All three options merit consideration though, because any significant deficit reduction not involving cuts to mandatory spending problems like Social Security, Medicare, and Medicaid, will require taking a hard look at the Defense Department—an agency that owns $3 trillion in assets and receives approximately 45 percent of federal discretionary dollars.