The Senate Appropriations Committee released their FY25 Senate Appropriations Bill. It cleverly employed an “emergency funding” approach that could allow it to avoid Fiscal Responsibility Act (aka Sequestration 2.0) limitations. This logic was based on the supplemental bills passed for Ukraine, Taiwan and Gaza earlier this year. If passed in its current form, it would provide $852.1B in FY25 - roughly $21B more than the sequestration level.
Check out the FY25 Defense Budget Analysis to refresh on DoD’s objectives and our analysis of HAC-D’s marks on the FY25 defense budget (which differ in a number of areas from this bill).
Overall Take
The emergency funding that is outlined through the budget could make a major dent across aircraft and shipbuilding lines - if successfully passed.
Innovation funding was viewed very skeptically and the broader RDER effort has the potential to be absorbed into the more discrete Replicator initiative.
Unmanned technology is still funded at relatively miniscule levels even through there are more discrete lines that don’t stand out at the top-level.
There are clear winners and losers (Air Force RDT&E gets schwacked but Shipbuilding and Air Force Aircraft Procurement see big increases).
There are a lot of discrete marks - an exhausting amount (we just focused on the larger, potentially impactful ones).
This bill has as much report language as it has budget marks - we pulled the key sections which are generally not viewed as helpful to the reform we support.
Emergency Budget Lines
The SAC-D allocated the additional $20.8B “emergency funding” across 12 major lines of effort. This is a similar There are adds against specific budget lines where this funding has been applied. The adds in the investment portfolio are against unfunded requirements that the CCMDs and Services submitted to Congress. If you want to see those full lists, check out the FY25 Defense Budget Analysis where we covered them.
$3.5B: Make Targeted investments in Air, Land, Cyber, and Space Capabilities.
$3.4B: Provide the Air Force 500 Additional Aircraft
$2.7B: INDOPACOM Unfunded Priorities & Other Efforts
$2.7B: Revitalize the U.S. Defense Industrial Base
$2.2B: Increase Navy Acquisition of Battle Force Ships
$1.8B: CENTCOM Operational and Force Protection & Other Efforts
$1.2B: Increase Air Defense, Missiles, and Other Munitions
$1.2B: Address Anticipated Fuel Funding Shortfalls
$838.7M: Increase and Accelerate Fielding of cUAS Systems
$781.5M: Quality of Life Initiatives
$479M: Improve Counterterrorism Activities
$450M: Accelerate SDA Offensive Space Control
Shipbuilding and Air Force Aircraft lines got the bulk of the plus-up with Army Ammunition also faring very well. Interestingly, the Space Force was proposed a $1B plus-up in RDT&E but no adds in Procurement.
Winners and Losers (Non-Emergency Budget)
While it will be a boon to defense to receive the emergency funding, there is no telling how that will be received on the House side and in a Presidential election year, the FY25 budget deliberations could be more challenging. Hence the focus here will be on the more realistic budget that is likely to pass. We provide the HAC-D marks here for comparison so you can see where the major negotiation deltas might be.
The biggest winner is Navy Shipbuilding & Conversion with a $4.6B plus-up.
The next biggest winner is Air Force Aircraft Procurement with a $1.9B plus-up. Army and Navy Aircraft Procurement fared less well.
Army Ammunition was a winner with a $1.1B plus-up although that was dedicated towards Industrial Facilities (Modular Artillery and Modernization).
The National Guard and Reserve also won with a dedicated line for $1B. The commanders are requested to submit their priorities within 30 days to Congress. The Guard received the bulk of the funding.
Operational Test and Evaluation got a significant plus-up ($502M) which hits +$1B with the additional emergency funding.
The biggest apparent loser was Air Force RDT&E with a $2.3B reduction but $1.9B of that was likely a classified pass-through cut that may not impact the Air Force. Air Force Other Procurement also took a hit against classified programs.
Navy Aircraft was a major loser with a nearly $1B cut. Much of that was derived from the MQ-25 reduction but F-35 took a slice as well.
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