Team Trump’s 2022 budget plan; COVID canks conference; Raytheon, C3.ai team up; and more.

The lame-duck Trump administration is defying precedent by pressing ahead with a fiscal 2022 defense budget request, and could release it before President-elect Joe Biden is sworn in.

The White House Office of Management and Budget and the Pentagon are going back and forth over various items. While the incoming Biden team will likely redo parts of the budget to reflect its own priorities, large portions developed by Trump’s Pentagon team are sure to make it into Biden’s proposal, which we probably won’t see until the spring. 

So let’s go through what’s inside Trump’s fiscal 2022 request. My colleague Katie Bo Williams got a copy of the “passback” — a document sent from the White House Office of Management and Budget ordering Pentagon planners to modify their proposal. Defense officials are due to respond with objections or changes this week. A few caveats: this is just a draft, as of earlier this week, and not a finished product. Also, the draft passback document rarely says what the original proposed amounts were, just the changes OMB wants made.

The Topline

The proposed $722 billion spending plan is exactly in line with the five-year budget projections included in Trump’s 2021 proposal. It’s a 2.3 percent increase over the $705 billion requested for 2021. Top Pentagon leaders have frequently lobbied for 3 percent to 5 percent annual growth. Something else worth noting is that the Trump administration has reduced the Overseas Contingency Operations, or war, portion of the budget from $69 billion in 2021 to roughly $16 billion in 2022. The remaining $706 billion is in the base budget. As usual, the topline figure does not include the Energy Department nuclear weapons spending or various pots of national security spending in other agencies’ budgets. 

Missile Defense

The suggested Missile Defense Agency budget for 2022 is $9.3 billion (about $241 million more than planned), and $52.3 billion over five years (a plus-up of about $4.8 billion). OMB asked MDA to consider putting more money toward a proposed homeland-defense anti-missile layer based on the Aegis system. It also suggests a $1.8 billion plus-up over five years to the Next Generation Interceptor program. That money would “fund two contractors through Critical Design Review (CDR) in early FY 2026 rather than just through [preliminary design review],” the draft passback memo said. “The NGI program is already high-risk, and the best mitigation is keeping two contractors through CDR.” There’s also a recommendation for $203 million in fiscal 2022 (and $1.5 billion over five years) for countering hypersonic weapons. The 2022 money would be used “to accelerate development and testing of a hypersonic glide phase defeat weapon, associated systems engineering, and integration into Aegis ballistic missile defense weapon systems to defeat adversarial hypersonic threats.”

Missiles

OMB wants the Pentagon to spend at least $150 million in 2022 to demonstrate the “Mobile Intermediate Range Missile (MIRM) variant to maintain development and testing of a viable ballistic option for future consideration.”

Research and Development Priorities

OMB called for increases in Pentagon’s artificial intelligence and biotechnology research funding, as well as quantum information science.

F-35

The passback reveals a Pentagon proposal to reduce the planned purchase of F-35 Lightning II fighters over the next five years by 40, and use the funds to pay for other items related to the program. The “Department should fund all F-35 program cost increases from within the program by reducing the corresponding number of F-35 aircraft to be procured in the FY 2022-26 [future years defense program] to offset those program cost increases,” the memo says. The Pentagon is also proposing to cap annual F-35 purchases at 85 jets. Air Force and Navy 2021 budget documents show the Pentagon had planned to buy 85 F-35s, but then increase production to 94 jets in 2023 and 2024 and 96 jets in 2025.  “OMB directs that reductions to the planned fleet must be based on a strategic risk and capability analysis of the need for the F-35 in the most stressing contingency and that such an analysis is vital to obtain support for any proposed reductions to the fleet. The Department, therefore, shall provide to OMB a dynamic analysis of the ability and risks associated with the planned TACAIR fleet to prevail against expected threats in the Pacific theater in 2030 and 2040 with moderate risk.”

Operation & Maintenance Cuts

The White House also asked individual services to trim their proposed operation and maintenance budget: the Army by $2.3 billion to $56.4 billion; the Air Force, $2.5 billion to $52.5 billion; and the Marine Corps, $457 million to $8.8 billion.

Navy

OMB forbids the Navy to go through with its plans to decommission five cruisers over the next five years, a measure that was meant to save some $1.9 billion. It also says the Navy must keep around two fast-attack submarines it planned to decommission in fiscal 2027. The bill for that is $710 million. OMB also orders the Navy to “assess all Large Surface Combatants for maximum life extension opportunities” after 2026. 

Air Force Advanced Battle Management

OMB calls for a $137 million cut — from an undisclosed amount — in 2022 to the high-profile project known as ABMS. It also recommends a $200 million cut in 2023 and 2024. It was critical of the Air Force, citing a critical Government Accountability Office report released earlier this year.

Space

OMB says it’s “concerned about FY 2020 and FY 2021 congressional marks against the Space Development Agency,” the fast-buying satellite shop created by defense leaders less than two years ago. The Pentagon had proposed a “precipitous increase” in the organization’s funding in 2022, which OMB recommends cutting by $200 million (the document does not say how much money SDA is asking for total). It also recommended $200 million in cuts in both 2023 and 2024. 

Personnel

OMB directed the Pentagon to include a 2.7 percent pay raise for the military. That’s down from the 3 percent annual increase that the Trump administration requested for fiscal 2021.

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Related: The pandemic could cut business travel 36 percent permanently, the Wall Street Journal reports. You can thank the technology that we’ve all become more accustomed to using over the past nine months for that.

NDAA Conference Wrapped Up

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Janes Buys Avascent

The U.K.-based defense and security intelligence organization that owns the storied defense journal has purchased the defense market analysis business of D.C.-based consulting firm Avascent. “The deal between Janes and Avascent also includes a collaboration agreement through which the two firms can pursue opportunities where their joint capabilities will provide clients with unparalleled insights and advice on critical defence and security issues,” Janes said in a statement.

Lockheed Completes Acquisition of Hypersonics Firm

Lockheed Martin has completed its acquisition of Integration Innovation Inc.’s (i3) hypersonics business. “This acquisition expands Lockheed Martin's capabilities to design, develop and produce integrated hypersonic weapon systems for its customers,” Lockheed said. Former i3 CEO Mike Wicks has been named vice president of the Hypersonic Engineering & Accelerated Technologies program within the Hypersonic Strike Portfolio for Lockheed Martin Space.

Speaking of hypersonics: the U.S. and Australian militaries have announced “a bilateral effort to advance the development of air-breathing hypersonic technologies,” the Pentagon said. “The SCIFiRE effort aims to cooperatively advance air-breathing hypersonic technologies into full-size prototypes that are affordable and provide a flexible, long range capability, culminating in flight demonstrations in operationally relevant conditions. The effort will also pursue potential co-production opportunities between the two countries, and leverages U.S. and Australian collaborative hypersonic activities over the last 15 years, namely the Hypersonic International Flight Research Experimentation (HIFiRE) program.”

Raytheon and C3.ai Team on AI

The defense giant and Silicon Valley firm have formed “an alliance to develop artificial intelligence solutions for aerospace and defense missions for government customers, including the U.S. Air Force and intelligence community.” 

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