Military Connection: Pending Defense Budget Fears: By Debbie Gregory

The PentagonFor the second straight year, the Pentagon is expected to submit a five-year budget to Congress that will infringe on mandatory spending caps, this time by as much as $60 billion.

Defense officials have said for months that the 2011 Budget Control Act (BCA), which limits how much the Pentagon can spend, wouldn’t limit the 2016 request. It has been reported that the Joint Chiefs of Staff have pushed for an increase of $60 billion over the $535 billion cap for defense, with another $10 billion for Department of Energy programs.

Budget planners from the Pentagon estimate that, unless overturned, the automatic cuts will reduce defense budget request through 2021 by an average $31 billion a year. The nonpartisan Congressional Budget Office projected that unless Congress reverses the caps, the cuts could average closer to $47 billion a year.

A Pentagon report from March, 2014 outlined how $35.3 billion per-year in cuts would fall under sequestration in 2016, and remains relevant for companies and investors

The five year plan for fiscal 2015-2019, released in February and still pending before Congress, called for $115 billion more than sequestration permits. That plan also included $35.3 billion more than allowed for fiscal 2016, if the cuts return in full force, as planned, after a two-year pause.

The Pentagon aims to spend at least ten percent more each year for the next five years than it currently does on nuclear upgrades and modernization programs.

One of the main areas that would be cut is the upgrading of aircraft throughout all branches of the military. The Pentagon is expected to cut 17 of the 343 F-35 fighters it planned to buy, in fiscal years 2016 through 2019.

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Military Connection: Pending Defense Budget Fears: By Debbie Gregory