The US Department of Defense’s (DoD’s) budget looks vulnerable to cuts as the federal government budget deficit is projected to surge to $3.7 trillion in 2020, a result of economic fallout from the coronavirus. The pain is likely to be delayed, however. That is because planning for fiscal year 2021 and FY2022 is already under way.

It is also because the US Congress would hate to cut defence programmes and the people they employ in the midst of a deep economic recession, say defence industry researchers.

F-35A Lightning II’s from Hill Air Force Base Utah

Source: US Air Force

Lockheed Martin F-35A Lightning IIs from Hill AFB

Instead, expect a shrinking Pentagon budget in the mid-2020s. Though the USA might have tamed coronavirus and started to see its economy grow again by the middle of the decade, Washington will have to face up to the hard fiscal and economic realities of years of lost revenue.

Even if the defence budget stayed at a constant 3.2% of US GDP, a coronavirus-shrunken economy, which could be $10-19 trillion smaller over the decade, would give the government less tax revenue, says Ted Harshberger, vice-president and director of the RAND Corporation’s Project Air Force campaign.

“You end up with about $350 billion to $600 billion less to allocate to defence over that 10-year time frame than would have been the case if we didn’t have the pandemic,” he says.

Even before the coronavirus pandemic hit the US treasury, the DoD was expecting a flat or slightly smaller budget and was adjusting its plans. For example, the US Air Force (USAF) laid out plans in its FY2021 budget proposal to retire dozens of older aircraft to save money on operational costs. Aircraft on the chopping block included 13 Boeing KC-135 and 16 Boeing KC-10 tankers, 24 Lockheed Martin C-130H tactical transports, 17 Boeing B-1B bombers and 24 Northrop Grumman RQ-4 Global Hawk Block 20/30 unmanned air vehicles.

With the money saved, the service wants to develop its Joint All Domain Command and Control network, Next Generation Air Dominance fighter, Northrop B-21 Raider stealth bomber and hypersonic missiles, among other modernisation priorities. Still, cutting the USAF’s fleet to reinvest the savings in future technologies is not a proven strategy.

“Can we shrink our way to new technology? The answer is: it’s not easy. There are jobs there,” says Richard Aboulafia, vice-president of analysis at Teal Group, noting the work tied to production and MRO work on military aircraft. Plus, a smaller air force does not sit well with some. “Some people just really like force structure,” says Aboulafia. “They might not be prepared to spend what’s necessary to sustain it, but they like the idea of big forces in place. Bragging rights, diplomacy, whatever it is, they like it.”

Facing political pressures from the US Congress, the Pentagon may have to spread cuts across many programmes in a haphazard way.

“What you always see in downturns is some squeezing across the board,” says Mark Cancian, senior adviser with the Center for Strategic and International Studies (CSIS) International Security Program. “You know, forces get a little smaller, retire some legacy platforms, maybe an acquisition programme would be reduced, but not necessarily terminated. [For example] instead of building 80-ish [Lockheed] F-35s a year, we would buy 50.”

Sometimes budget cuts are not well thought out, says Todd Harrison, director of defense budget analysis and the director of the Aerospace Security Project at CSIS. “Historically, we tend to go into these things fairly unprepared,” he says. “When you need to make last-minute cuts in defence spending, those cuts tend to be focused on things like military construction funding, and operation and maintenance funding, particularly things like training and readiness.”


The whims of Washington may ultimately target programmes that get bad headlines.

“It’s going to depend upon what’s performing well and poorly when the knives come out,” says Harshberger. He points out that hypersonic missiles, directed energy weapons and missile defence systems typically have been difficult to turn into operational weapons and might stumble.

“You’re definitely going to see an emphasis on shovel-ready platforms,” says Aboulafia. “That might disadvantage [the US Army’s] Future Vertical Lift.”

Instead, the service might be forced by Congress to continue to buy Sikorsky UH-60 Black Hawks, Boeing CH-47 Chinooks and Boeing AH-64 Apache attack helicopters, rather than spending cash on futuristic rotorcraft that would not produce substantial manufacturing jobs until 2030.

Several defence industry researchers point out that the Future Vertical Lift programme, which includes the army’s Future Long Range Assault Aircraft and Future Attack Reconnaissance Aircraft, could be vulnerable to cuts, especially when compared against China and Russia’s sophisticated anti-aircraft defences. “It’s hard to imagine a lot of utility coming from rotary-wing aircraft that have a large radar signature,” says Harrison.

Sikorsky Raider X

Source: Sikorsky

Sikorsky Raider X, a candidate for the US Army’s Future Attack Reconnaissance Aircraft programme

Budget priorities might also depend on who wins the White House. “A [Joe] Biden administration would cut nuclear modernisation. You don’t get a whole lot of money out of that, but that is one very clear difference between the Republicans and the Democrats,” says Cancian. “The Democrats tend to take more of a foreign policy with a human rights perspective, so they would be much less enthusiastic about selling weapons to the Saudis, for example, or the Gulf states, whereas the Trump administration has been quite happy to do that.”

Other cuts are likely to target redundancies between the five US military services. “The army wants to invest in low-Earth orbit satellites to support its concept of providing future multi-domain operations. Well, why shouldn’t that be the responsibility of the Space Force?” says Mark Gunzinger, the Mitchell Institute’s director of future aerospace concepts and capabilities assessments. “I think that’s where the real savings are: across-service trade-offs.”

If so, the Pentagon may start to ask tough questions about the equipment that each military service wants. “You do start to have to wonder, what is unique? What’s different about Marine Corps aviation? Why does the navy’s army need an air force?” says Harrison. “That kind of roles and missions review could lead to some significant structure savings, as we look to combine and eliminate redundancies across the services.”

That may mean moving aircraft from one service to another. For example, the US Navy’s Boeing P-8A Poseidon maritime patrol aircraft could be transferred to the USAF, where it might also play a role in the service’s Joint All Domain Command and Control network. “We have four different air forces and they do overlap quite a bit,” says Harrison.


In some cases, aircraft might be able to replace ground- or sea-based weapons. In particular, aerospace technologies with speed, range and the ability to penetrate enemy defences are likely to be winners in future defence budgets. With likely conflict zones such as the Baltic states and Taiwan located thousands of miles away, the USA needs a way to quickly respond.

“Air forces are optimised versus ground forces, which are going to take many weeks to deploy to the theatre, marry up with your equipment and move to the battlespace – and by that time the war is over,” says Gunzinger.

That bodes well for the B-21 stealth bomber, which will fly long distances and penetrate enemy air defences. The USAF has said it wants to buy at least 100 examples of the aircraft. Moreover, while the service’s Ground Based Strategic Deterrent ballistic missile is only intended to deliver nuclear weapons, the B-21 can carry nuclear and conventional weapons, making it more versatile, says Aboulafia.

Long-range cruise missiles also appear to be likely future winners. Last September, the DoD increased potential long-term production quantities of the Lockheed AGM-158 Joint Air-to-Surface Standoff Missile from a possible maximum of 4,900 to a potential 10,000 units.

“All of the visions about great power conflict include long-range precision munitions,” says Cancian. “And long range [is important] because you don’t want to try to fight your way inside their defensive bubble.”

A need to peer into an adversary’s territory could also be good news for space-based intelligence, surveillance and reconnaissance (ISR) technologies. “Large constellations of synthetic aperture radar satellites in low-Earth orbit, they could cover any place 24/7, regardless of weather, and see deep into an adversary’s territory, see moving targets on the ground, on the sea,” says Harrison.

But, notes, Aboulafia: “Space isn’t a panacea. Whether it’s ease of re-targeting and reprioritisation or all-weather applicability, inner-atmospheric platforms have their advantages.”

Ultimately, while the US defence budget is likely to shrink, the number of regions around the world where the USA might be drawn into conflict continues to grow. That is also likely to fuel demand for ISR technology. “Whether you believe in a hard line or a more diplomatic line, you can’t get enough information,” says Aboulafia. “Distance and range, all those other things also argue for information. It is a very big potential battlespace.”

Global defence budgets special