Five months into the fiscal year, which began Oct. 1, lawmakers have yet to pass a full FY24 budget. The uncertainty has raised concerns in the Pentagon that Congress may put the department on a one-year continuing resolution with a 1% sequester.

Without an FY24 defense budget, the Pentagon remains unable to implement new modernization programs and cannot take new steps to expand the defense-industrial base amid wars in Europe and the Middle East.

“The lack of full-year funding has put key government programs in purgatory, wasted taxpayer money on outdated budgets and hindered forward progress that will make the country more secure, push us to the next levels of technological advancement and support American competitiveness in key industries like aerospace,” Aerospace Industries Association chief executive Eric Fanning said in a statement.

The House voted 320-99 to pass its fourth temporary spending measure, and the Senate followed suit shortly thereafter in a 77-13 vote. Under the latest stopgap spending bill, funds appropriated for Veterans Affairs and military construction will expire on March 8, two weeks before Defense Department funding runs out.

Congress is expected to vote on the FY24 Veterans Affairs and military construction spending bill next week. But lawmakers have yet to finalize the FY24 Pentagon spending bill.

The right-wing House Freedom Caucus has insisted on several policy riders in the appropriations bill that Democrats have ruled out as poison pills, including bans on the Pentagon’s abortion travel leave policy and medical care for transgender troops.

Last year’s debt ceiling deal caps FY24 defense spending at $886 billion. If Congress does not pass a full FY24 federal budget by April 30, the debt ceiling agreement puts government funding on a one-year continuing resolution that would cut spending at the Pentagon and all other federal agencies by 1%.

Pentagon sounds the alarm

The undersecretaries of the Navy, Army and Air Force told reporters Wednesday a one-year stopgap funding measure at FY23 levels would result in billions of dollars in “misaligned” funds at the Defense Department.

To cope with a one-year stopgap measure, they said the Defense Department would first have to prioritize current operations in places like Europe and the Middle East, followed by personnel, then acquisition and modernization.

Navy Under Secretary Erik Raven noted this would result in the military submitting “unprecedented” reprogramming requests to Congress. The Navy, for instance, would need Congress to approve a $13 billion reprogramming request to address $26 billion in misaligned funds.

It would also result in a $2 billion shortfall for the Virginia-class attack submarine program and another $800 million shortfall for amphibious ship spending. Congress has provided a $2.2 billion carveout for the Navy to continue work on the Columbia-class ballistic submarine program, most at risk of falling behind schedule.

Other services would not be able to begin new initiatives either, including a highly prioritized munitions ramp-up following the influx of arms the U.S. has sent to Ukraine and Israel with more due for Taiwan.

“These are production rate increases, new starts — both in programs for acquisition as well as military construction projects — that we cannot start,” said Army Under Secretary Gabe Camarillo.

Congress has still not funded the multiyear munitions procurement plans it authorized for FY23 and FY24, and Camarillo noted those funds are needed “to give industry the incentive to be able to facilitize, invest in a workforce and be able to do those extra shifts that we know that we need in order to restore our munitions.”

The $95 billion foreign aid bill for Ukraine, Israel and Taiwan also includes considerable funding to ramp up the munitions-industrial base. But House Speaker Mike Johnson, R-La., has so far refused to put it on the floor for a vote after the Senate passed it 70-29 earlier this month.

For its part, the Air Force warned earlier this month a 1% sequester would reduce its buying power by $13 billion and put $2.8 billion in space modernization projects on hold.

Turkey has sought to lock down the sale, which includes 40 new F-16s made by Lockheed Martin as well as modernization kits for 79 fighter jets in its current fleet, for several years. The State Department finally approved the sale when Turkey ratified Sweden’s NATO membership after stalling for more than a year.

Sen Rand Paul, R-Ky., on Thursday forced the vote on the resolution to block the sale, citing “significant human rights issues, arbitrary killings, suspicious deaths of person in custody, torture, arbitrary arrests and continued detention of tens of thousands of persons.”

“I also remain deeply concerned about the negative strategic implications of this proposed sale, given Turkey’s reckless military actions in recent years,” Paul said on the Senate floor ahead of the vote.

Paul noted that a U.S. F-16 shot down a Turkish drone in October in northeast Syria, where American troops back Kurdish-majority forces Ankara considers a terrorist organization. He also pointed to Turkey’s deployment of F-16s to Azerbaijan in 2020 during its war with Armenia over the disputed Nagorno-Karabakh region.

Senate Foreign Relations Chairman Ben Cardin, D-Md., defended the sale on the floor after greenlighting it last month.

“I consulted closely with the highest levels of the Biden administration about this transaction over several months,” said Cardin. “I believe they share my concerns, and I believe we are making progress.”

Cardin argued Russia’s invasion of Ukraine presented a strategic imperative for Sweden’s NATO accession as well as the need to modernize Turkey’s capabilities within the alliance. He said the sale would upgrade Turkey’s “aging F-16 fleet to a more capable model, a model that is compatible with the United States.”

“Turkey is key to the defense of the southern flank of NATO,” said Cardin. “It is host to a major U.S. military presence, and Turkey’s F-16 fleet contributes to NATO, including in the Black Sea, which is critical to our national security.”

The State Department also approved an $8.6 billion sale of F-35 stealth fighter jets to Greece last month at the same time it greenlit Turkey’s F-16 purchase.

The U.S. expelled Turkey from the F-35 co-production program in 2019 over Ankara’s purchase of the S-400 missile defense system due to fears Moscow could use its advanced radar system to spy on the stealth fighter jets.

A full-year continuing resolution that would keep fiscal 2023 spending levels through the rest of 2024 means the U.S. Army, for instance, would run out of operations and maintenance funding in the European theater as it trains Ukrainian soldiers to defend against Russia’s ongoing invasion of the country, which has entered its third year.

The financial strain is compounded by the lack of certainty over whether Congress will pass a supplemental funding package that would reimburse the Army for expenses incurred so far in bankrolling support to Ukraine.

The Army already spent $500 million in the European theater in operations and maintenance, and “we were counting on a supplemental to be able to sort of replenish us for that,” Army Secretary Christine Wormuth said at a Feb. 27 Defense Writers Group event. “What that means is probably by late spring, summer, we would have to make some difficult choices about other [NATO] exercises, for example, that our forces participate in.”

Additionally, the Army has been funding support to Israel to include deployments of units to the Middle East in the event they are needed, she added.

Army Under Secretary Gabe Camarillo told reporters Feb. 28 at the Pentagon that the service spent $100 million in U.S. Central Command’s area of operations as well as another $500 million to support the U.S. Southwest border security mission.

“I do worry. Our budget has been flat for the last couple years. We don’t have a lot of cash under the sofa cushions, and if we don’t get a budget and we don’t get a supplemental, we’re going to probably have to cancel some things,” Wormuth said.

The Army is prioritizing current operations, Camarillo said, which means it is “going to have to look to other areas of O&M spending where they “can potentially take some risk,” including “exercises and the degree to which we participate in some around the globe. We might have to scale some of that back in the absence of an appropriation this year.”

For the Air Force, Kristyn Jones, who is performing the duties of the service’s undersecretary, told reporters alongside Camarillo that in order to pay its personnel, training exercises would take the hit.

“Anything that’s already on a [Foreign Military Sales] case won’t have a dramatic impact, but all of the replenishment that we’re expecting in the supplemental is currently impacted. And even things like F-35 [fighter jet] training that we’re planning … with our allies and partners, that’s impacted by not having this appropriation as well.”

The Air Force is focused on trying to ensure flight hours are maintained, but it’s also important, Jones noted, that pilots receive training.

Despite the military’s experience in warfare, “we’re in a different strategic environment and we need to do the exercises, often joint and allied, to prepare for that environment. And the lack of our ability to do that doesn’t allow us to, again, to test the new techniques, the new military tactics that we’d like to have primarily for an Indo-Pacific fight,” Jones said. “That’s really where we need to stretch our muscles a little bit more.”

Learning from sequestration

With a possible extended or full-year continuing resolution, the service undersecretaries said the last time the military felt such a painful budget crunch was during the 2013 sequestration, where the services were required by law to make percentage cuts evenly across spending lines.

One of the fallouts of the 2013 sequestration was a rise in aviation mishaps because vital training flight hours were cut. Military Times and Defense News took a deep dive into aviation mishaps from FY11 through FY18 and uncovered the trend.

“Safety is always going to come first,” said Navy Under Secretary Erik Raven, “but we did look at the lessons of 2013 and sequestration, where we spread risk around the enterprise, and I think the concerns about maintaining ready and trained forces are part of the lessons that we’re using to inform if we get into this worst-case scenario where we don’t have our ’24 budget enacted and we are under a CR.”

“We’re not going to repeat that same peanut butter spread,” he added.

But trade-offs will be inevitable, he acknowledged, and “we’ll have to look across the board to see how to maintain the focus on current operations.”

Paparo’s confirmation was advanced by a voice vote without any objections late Wednesday evening, alongside 25 other senior military promotions. The chamber also confirmed Aprille Joy Ericsson as assistant secretary of defense within the Department of Defense’s research office in a voice vote.

Paparo will replace Adm. John Aquilino, who has served in the INDOPACOM role since April 2021. Paparo currently serves as commander of U.S. Pacific Fleet, and was nominated for the new role last August.

How Adm. Paparo will lead the US military in the Indo-Pacific

During his confirmation hearing before the Senate Armed Services Committee on Feb. 1, Paparo listed China, Russia and North Korea as the most pressing threats to U.S. military interests in the Pacific.

“If confirmed, I will ensure that we maintain the overmatch that preserves stability today, tomorrow, next week and for the decades to come,” he said.

Paparo is the son of an enlisted Marine and the grandson of an enlisted sailor who fought in World War II, according to his command biography. The Pennsylvania native has served in a variety of leadership roles during his 37-year military career.

A TOPGUN graduate, Paparo has logged more than 6,000 hours flying the F-14 Tomcat, the F-15 Eagle and the F/A-18 Super Hornet and has 1,100 carrier landings under his belt. As a fighter pilot, he took out a surface-to-air missile site in Kandahar during the invasion of Afghanistan in October 2001.

He was one of hundreds of military leaders whose promotions and confirmations were held up for months last year after Sen. Tommy Tuberville, R-Ala., staged a protest over the Defense Department’s abortion access policies.

Tuberville dropped those holds in December, but Paparo’s confirmation took several more weeks because of lingering background work by the Senate committee.

INDOPACOM oversees more than 380,000 American servicemembers stationed overseas and is responsible for all U.S. military activities in 36 nations.

One stopgap option would transfer additional weapons from U.S. stocks without funding to replenish that equipment. Another option uses the Excess Defense Articles program to send U.S. equipment to third-party countries that then send older weapons to Kyiv.

The European Union is also stepping up its assistance. It passed $54 billion in economic support for Ukraine after Hungary dropped its opposition.

But none of these stopgap measures to staunch the bleeding come close to the influx of arms for Kyiv that Congress could unlock if it passes the $95 billion foreign aid bill for Ukraine, Israel and Taiwan.

“The consequence of not doing so is likely Ukraine’s defeat,” Sen. Chris Murphy, D-Conn., told Defense News last week after returning from a congressional delegation to Europe. “There is not a plan B there. There’s certainly more that Europe could do, but there are certain weapons systems that only the United States can provide and maintain. And there is a hard limit to the amount of resources Europe can put in if the United States chooses to leave the coalition.”

Ukrainian officials also attributed Russia’s recent conquest of Avdiivka to the lack of available weaponry when Senate Majority Leader Chuck Schumer, D-N.Y., led a congressional delegation to the war-torn country last week.

House Speaker Mike Johnson, R-La., has refused to hold a vote on the foreign aid bill, which includes $48.3 billion in additional military assistance for Ukraine. The Senate passed the bill 70-29 earlier this month over objections from former President Donald Trump, the likely Republican presidential nominee.

Congress passed a cumulative $113 billion in military and economic aid for Ukraine after Russia’s full-scale invasion in February 2022, but has not provided additional funding since December 2022.

Biden hosted congressional leaders at the White House on Tuesday, where he joined Democrats and outgoing Senate Minority Leader Mitch McConnell, R-Ky., in pushing Johnson to pass the bill.

In the meantime, the Pentagon is weighing whether it should use roughly $4 billion left of drawdown authority to continue arming Ukraine from U.S. weapons stockpiles, even though it does not have the money to replenish those inventories without the foreign aid bill, CNN reported Wednesday.

The Pentagon did not directly address deliberations about transferring additional weapons without replenishment funding.

“The [Defense Department] continues to urge Congress to pass a supplemental to support Ukraine in its time of need and to replenish our stocks,” Pentagon spokesman Lt. Col. Garron Garn told Defense News in a statement.

The Pentagon used its last $1 billion in Ukraine replenishment funding to backfill U.S. stockpiles in December, with the White House noting that would be the last remaining assistance, absent congressional action.

“At issue here again is the question of impacting our own readiness, as a nation, and the responsibilities that we have,” Pentagon press secretary Gen. Patrick Ryder said last month. “While we do have that $4.2 billion in authority, we don’t have the funds available to replenish those stocks, should we expend that. And with no timeline in sight, we have to make those hard decisions.”

The remaining $4.2 billion in Ukraine transfer authority stems from an accounting error the Pentagon made last year. The error prompted Pentagon Inspector General Robert Storch to announce an audit of the valuation of weapons sent to Ukraine.

Excess Defense Articles

Another, more limited option involves third-party countries transferring Soviet-era equipment to Ukraine in exchange for more U.S. weapons through the Pentagon’s Excess Defense Articles program. The program also allows the U.S. to send equipment that helps countries transition away from Russian arms.

“The United States is providing security assistance to partners such as Ecuador and Zambia to help them transition off Russian equipment, but there’s more we can and must do,” the assistant secretary of state for political-military affairs, Jessica Lewis, said in December.

Ecuadorian President Daniel Noboa said in January that the U.S. would send $200 million in refurbished weapons to help fight cartels in exchange for “scrap” equipment. But Noboa backtracked last week after Russia imposed a ban on Ecuadorian banana and clove imports.

“To our surprise, the United States has publicly stated that this equipment will be used in the armed conflict in Ukraine, and we do not want to be part of it,” Noboa said.

The Greek newspaper Kathimerini reported in January that the U.S. is providing Greece with equipment through the Excess Defense Articles program, including two C-130H aircraft, three Protector-class ships and 60 Bradley armored fighting vehicles.

“Greece has provided substantial military assistance to Ukraine, including Soviet-era BMP infantry fighting vehicles, artillery and small arms,” the U.S. State Department told Defense News. “We thank the government of Greece for its generosity and encourage additional donations, in the future.”

The Defense Security Cooperation Agency, which oversees the Excess Defense Articles program, has not updated the public list of transfers since 2020, despite a congressional requirement that it do so. As such, it’s unclear what other countries are receiving U.S. weapons through the program.

The agency told Defense News it expects to update the list within “several weeks” but did not explain why updates stopped in 2020.

Noah Robertson contributed to this report.

The U.S. military may run out of personnel funds before the end of the year, be forced to scale back operations and see ongoing modernization efforts harmed if Congress fails to pass a defense spending bill by the end of next week, service leaders warned Tuesday.

The undersecretaries of the Army, Navy and Air Force said they’d have billions of dollars in “misaligned” funds — money that exists but not in the right budget lines to support their current spending needs — if they’re stuck with a full-year continuing resolution that keeps fiscal 2023 spending levels through the rest of 2024.

They agree that they’d have to prioritize current operations first, then people and then acquisition and modernization in a CR.

“You see sailors and Marines across the globe today, performing important missions: the Red Sea is an excellent example of how current operations take precedence,” Navy Under Secretary Erik Raven told reporters at the Pentagon.

Without sufficient funds, he said, “we have to make tough choices. But between the ability to fight tonight and be ready for all the threats, versus preparing for the future and modernizing our forces — it is a tough decision, but we have to lay our chips somewhere, and that’s on the ability to perform our missions today.”

Raven said the Navy’s ability to make that prioritization, though, would require Congress to grant the services some “unprecedented flexibilities” in the form of massive reprogrammings, or moving money from one line item into another.

The Navy, for example, would have $26 billion in the wrong places, and would need Congress to approve $13 billion in formal reprogrammings — more than twice the money Congress approves for the entire Defense Department in a typical year, he said.

But the reprogramming frenzy would be vital to mitigate the risk the services would take in their modernization efforts and industry would face if contracts are delayed or nixed altogether.

The Army is facing a similar misalignment in funds, to the tune of $6 billion.

“These are production rate increases, new starts — both in programs for acquisition as well as military construction projects that we cannot start,” Army Under Secretary Gabe Camarillo said.

The Air Force’s misalignment in funds equates to over $13 billion and “impacts are particularly challenging in the Space Force, who has seen their budgets rising over the last couple of years,” Air Force Under Secretary Jones said.

‘Burning hotter’

Further complicating funding this fiscal year is the fact that Congress has yet to pass a sweeping supplemental request, which the Pentagon hoped would supply weapons to Ukraine and Israel in support of ongoing wars for both countries and would also fund the Southwest border mission. The lack of supplemental funding compounds the impact of a long-term CR, Camarillo said.

The Army is spending $500 million out of its base budget for operations costs in the European theater, another $100 million in the U.S. Central Command area of operations and another $500 million for the operations along the U.S. Southwest border.

“At one point in time, there was a thought that all of this could be funded through a supplemental, and it is now currently, today, in FY24, being funded 100% out of the Army’s base budget,” Camarillo said.

“We are just burning hotter than we normally would across all of our appropriations accounts,” he said. “[U.S. Army Europe and Africa] in Germany has explained that … they will run out of money this summer in the absence of extraordinary relief, aka a reprogramming.”

This will be a problem across the board, he added, to include running out of funds in the Army’s military personnel account.

Industry impacts

The services planned to ramp up munitions spending in FY24, to bolster their own stockpiles as a hedge against a future fight and to replenish allies’ and partners’ stocks.

A year-long CR puts that industry ramp-up in peril.

Camarillo said he was “particularly concerned” the CR would not allow the services to “send that strong signal to give industry the incentive to be able to facilitize, invest in a workforce and be able to do those extra shifts that we know that we need in order to restore our munitions.”

Camarillo said the Army intended to kick off a multiyear procurement effort for the Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) interceptors in FY24. Under a full-year CR, it would be $1.2 billion short to reach the production rates needed to achieve the economic order quantities and savings associated with the multiyear procurement deal.

Lockheed Martin has invested significantly in the PAC-3 MSE line to grow production from 550 missiles per year to 650. The Army requested in its FY24 budget $775 million to ramp up that production. The company intends to grow production beyond 650 in the following year, as demand increases due to the war in Ukraine and conflict in the Middle East.

Camarillo added the Army could not begin to field its Mid Range Capability missile to the first unit, which is important to its Pacific deterrence, due to new programs not being allowed to start under continuing resolutions. Nor could it increase production levels for the Guided Multiple Launch Rocket System, Javelin missile, and 155mm munitions.

“I will just say that we have always said our goal was to get on 155 artillery 100,000 per month rounds by the end of calendar year ‘25. We cannot get there unless we get both the appropriation and we get the supplemental,” Camarillo said.

“It’s very challenging, because we’re asking industry to lean as far forward as they possibly can and to make investments both in additional personnel, unique tooling and machining that’s required to ramp up production capacity,” Camarillo said.

And the Army planned to buy 225 Coyote counter-unmanned aerial system interceptors – a spending need that hits home, he said, due to the recent deaths of three soldiers in Jordan who were killed by a drone strike from Iran-backed militants — but those, too, could not be purchased in a year-long CR.

For the Navy, Raven said the sea service wanted to double its Standard Missile 6 spending — something particularly timely, as Navy ships are expending the older SM-2 missiles almost daily in the Red Sea, shooting down Houthi missiles and drones — but that cannot happen under the full-year CR.

After the Navy just last week awarded a maintenance contract to HII’s Newport News Shipbuilding to overhaul the attack submarine Boise – which has languished at the pier since 2015 and has been unable to undergo repairs at either a public or private repair yard – Raven said a full-year CR would render the Navy unable to actually fund and execute that contract this year due to a $600 million shortfall in the submarine maintenance funds.

It would also see a $800 million shortfall in amphibious ship spending that could put at risk America-class amphibious assault ship construction, a $2 billion shortfall in submarine construction spending that would threaten the Virginia-class attack sub program, and more.

For the Air Force, Kristyn Jones, who is performing the duties of the under secretary of the Air Force, said the service has five contractors onboard for its collaborative combat aircraft effort, but that wouldn’t be able to move forward.

The full-year CR would also hamper production increases on the Joint Strike Missile and the F-35A Joint Strike Fighter, both of which the Air Force says it needs for a high-end fight, as well as spending on the Joint Air-to-Surface Standoff Missile for facilitization to support future production increases.

“We hear over and over: the industry wants that solid demand signal so they know how to invest, they can support the facilitization — and by having this uncertainty, it really has negative impacts across the defense industrial base,” Jones said.

There is, however, a way Washington could help hold Ukraine over until Congress gets its act together. While the administration has declared it’s “out of money” for Ukraine aid, it retains the authority to give Kyiv over $4 billion worth of materiel from U.S. stocks. The administration has declined to tap this authority because it’s out of funding to replace the donated equipment. But there are key weapons America could send now without compromising U.S. military readiness.

Ukraine is suffering from a shortage of men and materiel, particularly artillery ammunition. Congress’ monthslong delay in passing supplemental aid funding has exacerbated this challenge. Yet after rejecting an aid bill passed by the Senate earlier this month, House Speaker Mike Johnson appears to be in no rush to tackle the issue. It could be months before a bill reaches the president’s desk. Ukraine can’t afford to wait that long.

Comparing Russian, Ukrainian forces two years into war

Since Russia’s February 2022 invasion, Washington has relied on presidential drawdown authority, or PDA, as its primary vehicle for Ukraine aid. PDA allows the administration to give foreign partners weapons taken from existing U.S. stocks, expediting delivery. Through PDA, the United States has provided Kyiv with regular shipments of artillery ammunition, air defense interceptors and other critical capabilities.

Normally, the Pentagon replaces equipment donated under PDA by procuring new systems or munitions, which the military receives within months or at most a year or two. In 2022 and 2023, Congress provided both additional PDA for Ukraine as well as funding to replace the donated equipment.

However, the PDA packages for Ukraine ground to a halt in late December. The issue isn’t a lack of PDA itself; the administration can still donate around $4.2 billion worth of weapons. Rather, as the Office of Management and Budget’s director explained, the administration made a “very tough decision” to forgo the remaining PDA because the Pentagon has run out of money to buy replacement equipment.

The Defense Department presumably worries, despite its $850 billion-plus annual budgets, that continued donations within this $4 billion limit could jeopardize U.S. military readiness, absent assured replacement funding.

The administration is obviously right to prioritize American warfighters. But the U.S. military’s vast inventories contain plenty of things that wouldn’t be missed by American troops but would be a godsend to Ukraine. The Pentagon could afford to wait to replace these items — if it bothers to replace them at all.

Most notably, the United States could probably spare some more cluster munitions for Ukraine’s Western-made artillery systems. Known as dual-purpose improved conventional munitions, or DPICM, these rounds release dozens of smaller sub-munitions, increasing lethality. The Biden administration first provided 155mm DPICM rounds to Ukraine last summer as Western stocks of standard shells ran low. Ukrainian forces have since employed these munitions to great effect.

While it’s unclear how many DPICM rounds Kyiv has already received, the United States probably has a lot left. America’s DPICM inventory reportedly totaled nearly 3 million rounds as of spring 2023. Some of those munitions may be expired or otherwise unsuitable for Ukraine, but a considerable portion is probably still available.

It’s doubtful sending Ukraine more now would harm U.S. readiness. Pentagon policy discourages U.S. commanders from using DPICMs, particularly those with a dud rate greater than 1%, which are supposed to be retired from service.

In addition to shells, Ukraine needs more protected mobility. Even outdated vehicles like the humble M113 armored personnel carrier could offer significant value if provided in sufficient quantities. M113s play a key role in evacuating wounded Ukrainian soldiers and moving forces around the battlefield, but Kyiv needs more of these vehicles. Absent enough armored vehicles, Ukrainian troops must rely on civilian alternatives that provide little protection against Russian artillery and other threats.

The U.S. Army has thousands of M113s in long-term storage and is actively replacing those still in service. Sending a significant number of them to Ukraine would prevent avoidable casualties. That’s especially important at a time when Kyiv needs to husband its scarce manpower.

To be clear, this stopgap solution would not obviate the need for Congress to pass additional security assistance funding. It would merely buy time. U.S. assistance for Ukraine will not be sustainable without that funding, and there’s a limit to what America should provide without assured replacements.

Administration officials may chafe at having to explain how they’re able to resume aid despite being “out of money.” They may also fear weakening — if only slightly — the pressure on House Republicans to pass the supplemental. But those are poor reasons not to take a simple step that would save Ukrainian lives.

Ukrainian troops are fighting not only for their freedom but also vital U.S. interests. America cannot afford to leave them out to dry indefinitely.

John Hardie is deputy director of the Russia Program at the Foundation for Defense of Democracies think tank, where retired Rear Adm. Mark Montgomery is a senior fellow.

At risk are a set of agreements dubbed Compacts of Free Association, or COFA, under which the U.S. provides aid and other services to three island states: Palau, Micronesia and the Marshall Islands. In return, those countries allow America exclusive military access to their territory, which in total is larger than the continental United States when including their surrounding waters.

Last year, after months of negotiation, the three states signed an updated agreement for $7 billion in U.S. support over 20 years. But that funding has not yet passed in Congress. In the meantime two of the three islands’ current pacts have expired and are now tied to the temporary spending bills that have kept the U.S. government open since late last year.

Palau’s agreement lapses at the end of this fiscal year, but the government there is facing budget shortfalls.

“We’re already late in getting this done,” Jedidiah Royal, the Pentagon’s deputy for Indo-Pacific policy, said in an interview with Defense News.

At stake for the Pentagon are three core security concerns.

The first is competition with China. The islands — collectively referred to as the Freely Associated States — sit near the U.S. territories of Guam and the Northern Mariana Islands and American partners such as Papau New Guinea and Australia. Defense officials consider it indispensable territory.

“They’ve been able to rely on that assumption of presence and access for all of their planning,” said Kathryn Paik, who until last year led the National Security Council’s portfolio for the region. “Every contingency you can imagine in the Pacific — Korea, Taiwan — everything depends on [those] assumptions of defense access.”

Right now, the U.S. has exclusive access to the three islands’ territory, meaning American ships can enter their waters and American planes can fly through their airspace. At the same time, America can also deny the same access to U.S. adversaries, in particular China.

That is crucial to maintaining deterrence in an increasingly competitive region, Siddharth Mohandas, then-deputy assistant secretary of defense for East Asia, said in testimony before Congress last year.

Another security concern involves the United States’ existing defense sites on the islands. The Marshall Islands are home to the Ronald Reagan Ballistic Missile Defense Test Site, and the U.S. is building a radar installation on Palau.

Royal said his office hasn’t studied how much it would cost to relocate these assets and therefore decline to attach a dollar figure to it. But he said that endeavor wouldn’t be cheap, and outside experts have estimated it could cost hundreds of billions of dollars.

Lastly, officials across the government are concerned about credibility. The hallmark of the Biden administration’s approach to the Indo-Pacific has been its work with allies and partners. In the last few years, the government has helped widen and deepen security ties with countries across the region, including the neighborhood affected by COFA.

In recent years, China has bolstered its influence with nearby island nations. The Solomon Islands flipped its diplomatic recognition from Taiwan to China in 2019, a win for Beijing, which considers Taiwan a renegade province and has threatened to take it back by force. Days after Taiwan’s presidential elections this year, in which a pro-independence candidate won, the island nation of Nauru also restored diplomatic relations with Beijing over Taipei.

The Freely Associated States have reminded the U.S. of their value, Royal said, but “they’re also telling us that we’re not the only game in town.”

Paik also emphasized concerns from the regional partners.

“We have been fighting against this skepticism that we’re hearing from leaders across the region: ‘Are you really here to stay this time?’” she said.

‘Working around the clock’

A bipartisan group of almost 50 House members this week wrote to the chamber’s speaker urging him to pass the agreements. And Royal’s office has increased its tempo of briefings before Congress on the issue in the last two months. He said his team hasn’t received pushback.

But the hitch involves funding trade-offs. House leadership has demanded $2.3 billion of the agreements be met with other spending cuts — against the administration’s position that the pacts shouldn’t require offsets.

COFA funding was included in the first draft of the fiscal 2024 National Defense Authorization Act, but didn’t make the final text when negotiators couldn’t agree to offsets in time. Neither did it make the most recent text of the $95 billion security supplemental that passed the Senate in February.

A congressional aide familiar with the discussions said the issue has the attention of leadership, and that representatives are asking to attach funding to the supplemental. But that bill itself has stalled.

“We’re just working around the clock to find the offset and then put it in the legislative vehicle that’s readily available,” the aide said.

In the meantime, U.S. access to the territories is up to the discretion of the countries party to COFA. Those nations can revoke that access at their discretion, and the longer it takes to fund the pacts in Congress, the more pressure their leaders will face to hedge against American dysfunction, said Arnold Palacios, governor of the Northern Mariana Islands.

“Patience is a virtue, but it also has its limits,” he told Defense News.

“We have to cannibalize some things in order to be able to keep other things alive,” Craig Martell, the Defense Department’s chief digital and AI officer, or CDAO, told reporters Feb. 22.

Congress has yet to pass a full defense budget for fiscal year 2024, which began Oct. 1, even as the Biden administration readies its fiscal 2025 spending blueprint. At least 40 continuing resolutions, or stopgap funding bills, have been enacted since 2010.

That record of funding uncertainty hurts talent and training initiatives as well as what’s known as the AI scaffolding, or the virtual infrastructure that makes models usable, accurate and relevant to the military, Martell said.

“That kind of behavior, of being agile, sitting next to the operator, building and growing and building and changing and building and iterating, is very difficult, if not impossible, to do under the conditions of a continuing resolution,” he said on the sidelines of the Defense Data and AI Symposium in Washington.

When does the continuing resolution expire, and how does it work?

The Defense Department sought $1.8 billion for AI in fiscal 2024. The department is juggling hundreds of AI-related projects, including some associated with major weapons systems such as the Joint Light Tactical Vehicle and the MQ-9 Unmanned Aerial Vehicle, the Government Accountability Office reported.

While the CDAO is relatively new — having been announced in 2021 and hitting its first full strides in 2022 — making the case for its existence and expenditures isn’t difficult, according to Martell, who previously worked on machine learning at Lyft and served as an associate chairman of computer science at the Naval Postgraduate School.

The public and private sectors are increasingly interested in AI and other pattern-recognition capabilities, and digital competition with China is steaming ahead. The Defense Department’s connectivity campaign known as Combined Joint All-Domain Command and Control hinges on data-and-analytics advancements made by the CDAO, as well.

Martell said he considers the budget struggles a normal part of the give and take in Washington.

“I don’t take the continuing resolution to be a slight against us,” he said.

The topic was consolidation. The Cold War was over, which meant America would spend less on defense. That also meant less money for the companies in the room. Officials flashed a black-and-white graph onto the wall, showing a plunge in how many contractors the Pentagon could afford. Companies would likely need to merge if they wanted to survive.

Norm Augustine — then-chief executive of Martin Marietta, which itself merged in 1995 to become Lockheed Martin — had been there, sitting beside the defense secretary. A day later, he returned to the Pentagon and grabbed a copy of that chart, expecting it to be a historic document. He still has it today.

Within a decade, the number of large prime contractors plummeted from 51 to five, creating the modern defense industry. Lockheed merged with Martin. Boeing merged with McDonnell Douglas.

“Sitting there at the Last Supper, I felt like I was sitting in a historical pivot point,” Augustine told Defense News. “They did the best [with] a bad hand, and we’re now paying the price for the bad hand.”

That price is a defense sector that can’t move as quickly as the Pentagon wants it to. America is now supplying materiel for the wars in Ukraine and Israel, which started a year and a half apart. The high demand has strained an industry that often struggled to meet needs long before Russia’s full-scale invasion of Ukraine in February 2022.

And these wars aren’t even the Defense Department’s top priority; that’s China, whose massive military buildup over the last 20 years is the pace America’s leaders say they must match. Nowhere is this clearer than in the Pentagon’s new defense-industrial strategy, which says China’s industrial might in many areas “vastly exceeds” that of the U.S. and its allies.

In response, the plan calls for “generational” investment in the industrial base. To do so, the Pentagon is now showing a new set of graphs.

Bill LaPlante, the department’s top weapons buyer, has a wall in his office covered with images plotting how long it would take to build more missiles and other munitions. His deputies are sharing these with company after company, he said — though the Pentagon isn’t making them public.

Call it a tale of two charts: In 30 years, the Pentagon went from a defense industry it considered too large to sustain, to one now too small to surge. To understand that path, Defense News spoke with analysts and industry executives as well as top industrial base policy officials dating back to the Clinton administration. They likened the sector to something of a spring-loaded door — where capacity slammed shut due to smaller budgets, changing preferences and a thinning workforce.

That door is now creaking open again as America retools its defense industry, workforce and suppliers to compete with an advanced adversary.

“It’s dusting off a lot of skills that we’ve had in this country that we haven’t used in a while,” LaPlante told reporters in December at the Reagan National Defense Forum.

Industrial base 101

Experts on America’s defense industry tend to speak about it like an intro economics course. They often note the sector doesn’t move like other markets.

Defense companies build what governments want, but rarely any more or anything different. The Pentagon’s orders, hence, have an unusual amount of sway over the shape of the companies fulfilling them.

“The defense industry is hypersensitive to and responsive to its customers,” said Steve Grundman, a senior fellow at the Atlantic Council think tank.

Grundman worked in the Pentagon in the 1990s, in the wake of the peace dividend. Military spending had surged under the Reagan administration as the U.S. competed with the Soviet Union. But when the USSR dissolved in 1991, ending the Cold War, America had no opponents left to outcompete. Defense spending fell each fiscal year from 1985 to 1998, according to the Center for Strategic and Budgetary Assessments think tank.

Specifically, the Pentagon’s spending on procurement, research, development and construction dropped 44% during that time period, CSBA found.

America needed a defense industry built for peacetime. So arrived the Last Supper, a name Augustine himself gave the 1993 dinner. Even at the time, he said, it appeared to be sound policy. Defense spending was bound to fall, leaving the Pentagon with two choices: a sprawling industry versus a smaller, more efficient one.

Defense officials encouraged the latter. Alongside the plummet of prime contractors, the number of mid-tier and small suppliers also cratered as companies merged in order to lower costs.

Eventually the government said enough was enough. In the late 1990s, it blocked Lockheed Martin’s plan to buy Northrop Grumman. The era of major consolidation was over.

Its effects were twofold: less competition and less ability to surge. The first, in many cases, has meant the Pentagon’s orders take longer, cost more and are vulnerable to brittle supply chains. The second — caused both by consolidation and more efficient manufacturing techniques — makes it harder to respond to sudden conflicts.

Heading into the 2000s, leaders in large part began to favor weapons that were more advanced but would be fewer in number. Defense Secretary Donald Rumsfeld labeled it a “transformation” that would vault the Pentagon’s arsenal a whole generation ahead.

Some of these advanced weapons — such as the Army’s Future Combat System and the Navy’s Littoral Combat Ship — did not work out as intended. And the shift toward fewer, more capable systems further encouraged companies to consolidate.

In 1998, five companies built surface ships and two made tracked combat vehicles. By 2020, those numbers had fallen to two and one respectively.

“As dumb as it sounds, given how much we spend on defense, oftentimes the volume for any single supplier isn’t enough,” said Dave Bassett, a retired Army lieutenant general, who until December ran the Defense Contract Management Agency.

‘A wake-up call’

The peace dividend did not survive America’s wars in Iraq and Afghanistan.

The 9/11 attacks followed by the two conflicts swelled the Defense Department’s budget. When adjusted for inflation and including supplemental funding, Pentagon spending rose an average of 7% from fiscal 1999 to fiscal 2008, according to CSBA.

This spending went toward a new set of threats.

As an example, Bassett and other experts interviewed by Defense News singled out a class of heavily armored vehicles developed for the wars. The mine-resistant, ambush-protected vehicle program was Defense Secretary Bob Gates’ top priority. With heavy investment, the Pentagon fielded more than 13,000 MRAP vehicles in three years.

The program has since become a talisman for some who argue the defense industry can move nimbly if given the proper resources. But it’s also a reminder of where those resources went for more than 15 years. From 2001 onward, the Pentagon needed weapons for counterinsurgencies.

Those are far from what Ukraine needs to defend itself against Russia — an industrial-age war defined by the use of artillery and small drones. Even further are the needs of defending Taiwan, an island nation threatened by a leading manufacturing powerhouse.

“If what you’re facing is an Iraqi threat, you’re probably not going to have the same capacity as when you face a Russian and the Chinese threat,” said Bill Lynn, deputy defense secretary during the Obama administration and now chief executive of Leonardo DRS.

And the change in capacity had become clear to defense officials.

Brett Lambert, who ran industrial base policy for the Pentagon while Lynn was deputy secretary, remembers a tornado in 2011 that struck Joplin, Missouri — nearly hitting a major battery supplier.

“We realized that even though the plant itself was not hit, we didn’t have a backup,” Lambert said. “That was a wake-up call to me.”

Another warning came in the form of a four-year study of major weapons programs Lambert helped lead. He found, in large part, that prime contractors didn’t understand their own supply chains.

But while the alarm went off, no one woke up, said Robert Lusardi, a former Pentagon industry official. The study’s data, he noted, largely faded into the ether.

“Nobody used it,” he said.

‘There’s never just one problem’

Eric Chewning was vacationing with his family at the Outer Banks in summer 2017.

Sitting on the North Carolina beach with his kids, Chewning — then a partner at the consulting firm McKinsey and Co. — scrolled through his phone and saw a news release about an executive order. President Donald Trump was instructing the Pentagon’s first top-down review of its defense-industrial base since the Eisenhower administration.

“I say to myself: ‘Who are they going to get to do that?’ ” Chewning told Defense News in an interview.

Later that day, he was walking back from the beach when he got a call from the Pentagon asking if he would interview for the top industrial base policy role. In October, he took the job, which meant he would be the one running the study.

“The mindset was: How do we holistically now transition ourselves from the post-9/11 wars, where there really wasn’t ever a question around our ability to generate enough material capability, to one focused on competition with an economic peer?” Chewning said.

What he found is that doing so wouldn’t be easy — in large part because of what was happening with the American workforce. By the time the defense industry consolidated in the 1990s, the U.S. was decades into a deep manufacturing slide.

From the late 1970s to 2017, the country lost 7.1 million manufacturing jobs, or 36% of the sector’s workforce, according to the study Chewning led. Such declines serve as a challenge to any attempt to quickly bulk up America’s defense industry. Even with more advanced factories that now heavily rely on robotics, weapons still need people who know how to build them.

This is part of why capacity is so difficult to add once it’s gone, said Bassett, the retired Army general. It takes years to find and train skilled workers, as companies across the country have seen in the recently tight labor market.

While leading the Defense Contract Management Agency, Bassett studied business traits that would help predict manufacturing problems. A significant one he found was the share of blue-collar employees who had been on the job for less than a year; once it reached a certain threshold, he said, quality issues were almost guaranteed.

While the 2018 study led to some reforms, it did not reverse the trend in manufacturing, which only got worse as older workers retired en masse during the COVID-19 pandemic. Like many reports in Washington, it pointed to major issues that existed alongside other difficulties, all competing for time and money.

“There’s never just one problem,” said Chewning, now a vice president at the shipbuilder HII. “The immediate problems get the most attention.”

By 2022, the problem had become immediate. Russia launched a full-scale invasion of Ukraine, and Washington continued sending weapons to aid Kyiv.

The U.S. has given Ukraine a staggering amount of security aid — more than $44 billion since February 2022. Despite that sum, one of the lessons for many in the Pentagon has been that industry was unprepared for a crisis.

Arguably, nowhere is this more obvious than in America’s supply of 155mm artillery shells.

The 155mm round — next to small drones – has defined fighting in Ukraine. For self-defense, Kyiv needs 60,000-80,000 shells per month, Michael Kofman, an analyst at the Carnegie Endowment for International Peace, told Defense News.

That rate well surpasses the pace at which Ukraine’s Western allies could resupply them. Even with an extra $1.5 billion from Congress in 2023 to increase production, America was making 28,000-30,000 shells in December, said LaPlante, who is in charge of acquisition and sustainment at the Pentagon.

The Defense Department’s goal is to reach 100,000 rounds per month by the middle of 2025. But that pace likely won’t be possible without more funding from Congress, which has stalled a security spending bill requested by the White House.

But funding hasn’t slowed down production in recent years; from FY16 to FY23, Congress added 7.3%, or $79.3 billion, to the White House’s requested Pentagon procurement fund, according to CSBA. The problem is inconsistent demand, which LaPlante illustrated with another chart last fall.

Starting with the Gulf War 30 years ago, munition orders have gone up and down in a series of peaks and valleys: A crisis breaks out, the Pentagon surges supply, it reaches the number a couple years later, then the crisis wanes and supply falls.

“That’s one of the challenges that we have now — that inability to make adjustments because of the lack of investment that we’ve made to the industrial base historically,” Justin McFarlin, who leads industrial base development for the Pentagon, told Defense News.

Munitions are often at high risk for such whiplash. Eric Fanning noticed this pattern after years of holding senior positions with the Navy, the Air Force and the Army. Much of each service’s spending power was sewed up in large systems, such as aircraft carriers and fighter jets. More inexpensive items ended up tapered to make the budget fit. And because the Pentagon’s demand affects supply, the companies fulfilling those orders trimmed capacity over time.

Now orders are up again — this time for 155mm shells and a bevy of other munitions. For some, Congress has allowed the Pentagon to issue long-term contracts that keep demand stable for years. But for others, companies are left worrying government demand won’t last, according to Fanning, now head of the Aerospace Industries Association.

“That sense of long-term commitment is still not quite there,” he said.

‘First contact with the enemy’

The Pentagon says it’s signaling future commitments in its new industrial base strategy. The document focuses on four areas: creating resilient supply chains, ensuring workforce readiness, creating business-friendly acquisition policies and bolstering the national security marketplace.

“These are not new ideas,” Halimah Najieb-Locke, acting deputy for industrial base policy, told Defense News. “But they haven’t been said with the [needed] authority.”

In a separate briefing with reporters in January, Najieb-Locke previewed the Pentagon’s goals for its defense-industrial base over the next three to five years. One is to speed up long-lead items, such as ball bearings or solid-rocket motors that slow down the production of important weapons. Others include retooling obsolete parts of the supply chain and using more funding from the Defense Production Act, which allows the Pentagon to issue national security-related grants.

“We no longer can afford to ignore [issues in the industrial base] and hope for better,” Najieb-Locke told Defense News. “We have to take decisive action.”

But there are problems outside of the Pentagon’s control.

The first is politics. As of publication, Congress had yet to pass a full defense spending bill — the latest entry in more than a decade of continuing resolutions. Defense remains a largely bipartisan issue, but there is a widening gap within the Republican Party — one reason Congress hasn’t passed additional aid for Ukraine, Israel and Taiwan.

Today’s security environment “demands a substantial, long-term increase in resources for our national defense,” Sen. Roger Wicker, R-Miss., the ranking member of the Senate Armed Services Committee, told Defense News in a statement.

Some of his colleagues in the House are more skeptical. “The American people work diligently to earn every dollar, but it seems the [Defense Department] has become a master of squandering those funds without batting an eye,” Rep. Glenn Grothman, R-Wis., told Defense News in December.

The second external problem is innovation. In decades past, the Pentagon used to be upstream of new technology — think GPS or the internet. It’s since found itself downstream, said Lynn, the former deputy defense secretary, and much of the current advances in artificial intelligence and drones are coming from the commercial sector.

Learning how to better work with these companies is one of the strategy’s goals. Doing so, said Najieb-Locke, will involve updating the Pentagon’s buying policies to better align with the commercial sector — a market that the Pentagon has less influence over.

“Because of that rapid change [in technology], a lot of our assumptions of what will be there in time of need have [proved] to be in some cases overblown,” said Najieb-Locke.

A third challenge is America’s adversaries. The Russia-Ukraine and Israel-Hamas wars are a reminder that competitors ultimately help decide how fast America’s defense industry must work, and when.

Chris Michienzi learned this lesson from her time working on the Pentagon’s industrial base policy. For about eight years she helped steer the department’s approach to industry and saw challenges evolve. When the war in Ukraine began in 2022, she was one of a few officials working on aid to Kyiv.

Many of the problems of the last 30 years were on display. A worker shortage hampered attempts to surge key munitions, she cited as an example.

“The department gets the industrial base that it pays for,” she said.

Michienzi left her post last summer. In January, when Defense News spoke with McFarlin, who leads industrial base development for the Pentagon, the interview took place in Michienzi’s old office — a small, windowless cube.

No one had filled the space, and it was instead turned into a conference room — helpful for McFarlin as he briefed companies on the government’s new strategy.

“The saying I grew up [with] was: No plan survives first contact with the enemy,” McFarlin said. “We can plan, but we also have to be able to pivot and adjust.”

But before the U.S. issues that exemption, it wants Australia to adopt export control laws similar to its own. And several Australian defense companies are unhappy about legislation pending in Australia’s parliament that would replicate a U.S.-style export control regime.

They say importing the stringent U.S. export control laws could hinder their ability to effectively collaborate and do business with non-AUKUS countries.

Australia and Britain have long sought a carveout within Washington’s International Traffic in Arms Regulation, or ITAR, export control regime. Defense companies in all three countries have argued ITAR’s rigorous restrictions on sensitive defense exports stymies a key AUKUS goal of jointly developing disruptive technology such as quantum computing, artificial intelligence and hypersonic weapons.

The U.S. Congress passed legislation in December to give Australia and Britain an ITAR exemption for AUKUS, on the condition that both countries implement similarly tough export control laws. Canada is currently the only country to enjoy a special ITAR exemption.

Before Australia and Britain receive their exemptions, Secretary of State Antony Blinken must certify they have each implemented comparable export control regimes.

Michael Biercuk, the chief executive of Q-CTRL, an Australian firm specializing in quantum technology that has offices in Sydney, Los Angeles and London, said the company is “supportive of the idea of making a control-free zone, if you will, between Australia, the U.S. and the U.K. in support of AUKUS.

However, “we don’t think the right way to do it is to bring in the totality of the system that everybody in the world says doesn’t work,” he added, noting the policy would “fundamentally limit exports outside of that AUKUS bubble, and this is not something that is helpful to the local community of vendors who are heavily reliant on export markets.”

Andreas Schwer, the chief executive of EOS, an Australian company specializing in high-tech remote weapons stations, directed energy and counter-unmanned aircraft systems, told Defense News stricter, more ITAR-like regulations in the country “will make life extremely difficult for us to export into any non-AUKUS country.” He said it can sometimes take six months to a year to get simple upgrades formally approved for NATO allies under ITAR.

“This is something which is hated by most of the western European procurement agencies,” said Schwer. “That’s the reason why they always prefer non-ITAR offers. I expect that the same will happen with Australian products. As soon as we have similar regulations in place, they will also say we don’t want to have Australian ITAR components.”

But proponents of ITAR argue it’s a crucial tool for keeping U.S. technology out of the hands of rivals such as China and Russia. Mike Burgess, director general of the Australian Security Intelligence Organisation, warned last year of an uptick in online espionage attempts aimed at the country’s defense industry since AUKUS was announced in September 2021.

U.S. Under Secretary of State for Arms Control Bonnie Jenkins told lawmakers this week the U.S. must “make sure that we protect our intellectual property.

“We know there’s countries like China who want to steal information,” she added.

Jenkins noted Britain updated its espionage laws in July 2023 as part of the National Security Act and pointed to Australia’s proposed export control overhaul pending a review in parliament.

Biercuk said the Australian proposal was “rushed” and called it “a catastrophically bad piece of legislation.”

Still, NIOA Group chief executive Rob Nioa, noted “really what the U.S. wants to do is protect U.S. [intellectual property. “If it was technology that originated in America, it was always subject to those controls,” Nioa told Defense News. “Our concern will be if that captures Australian uniquely produced intellectual property and prohibits it from going to other places.”

NIOA Group is an Australian munitions company which also owns U.S.-headquartered Barrett Firearms and has a joint venture company with Rheinmetall.

Yet, he added, a comparable Australian export control regime “might streamline” some export approval processes by allowing Canberra to administer them “instead of having to go back to the U.S. for approval.”

“Until we see how it’s implemented, I’m not going to automatically panic,” he said. “People are nervous about it though in Australia because people are nervous about the unknown.”

The latest National Security Scorecard from data analytics firm Govini revealed countless China-based firms remain deeply embedded in Defense Department supply chains across 12 critical technologies. Consider as well as that the draft version of the Pentagon’s National Defense Industrial Strategy noted that “today’s [defense-industrial base] would be challenged to provide the required capabilities at the speed and scale necessary for the U.S. military and our allies and partners to engage and prevail in a major conflict.”

This is what happens when just-in-time defense manufacturing meets dependence on Chinese companies, not to mention firms in Taiwan that Beijing could blockade during a crisis on which many, if not all, precision weapons and modern platforms depend.

The recently passed fiscal 2024 National Defense Authorization Act barely affects the timeline for eliminating the Pentagon’s dependence on selected Chinese companies and materials. The narrow scope and lengthy time frames of current government efforts to alleviate our supply chain dependencies send an unspoken message to Beijing: The DoD does not have, nor will it soon have, the supply base required to prosecute a long war against China. The message to Taiwan is that we can’t build the weapons and platforms needed to defend you in a protracted war without access to these at-risk supply chains.

Thankfully, there are solutions that the Pentagon and the administration can take to armor the Achilles’ heel of our defense supply chains.

First, they can focus on resiliency rather than independence, entailing the pursuit of multiple solutions to ensure the DoD has sufficient stocks — or access to the production — of the products, materials and services required for a long conflict. To build resiliency, the Pentagon can focus on increasing the size of its inventories, cultivating new second and near-shore sources, and redesigning munitions and platforms that are especially critical for an Indo-Pacific fight.

Resiliency requires assessing the true extent of China- and Taiwan-based dependencies, and remediating them.

Second, the Pentagon should ask Congress to invert its approach to how it defines, analyzes and addresses Pentagon supply chain vulnerabilities. To date, the government’s efforts have largely focused on inputs, as well as suppliers based in so-called covered countries like China. But if the government inverts its approach from inputs (e.g., rare earths) to outputs (e.g., an F-35 jet), it will address dependencies in a more holistic manner, forcing a review of the full supply chain.

Requiring the defense-industrial base to quickly conduct a bottom-up analysis by critical munition and platform that identifies each node in its supply chains — something it could readily by law do with commercial software — would establish a baseline for modeling different platform and munition inputs under different scenarios. These models would rapidly identify potential and growing risks as well as assist the DoD in proactively addressing them. They would also help avert a scenario where the DoD has to reactively scramble to address the collapse of a critical node far down in its supply chains.

Lastly, like the U.S. had during World War II with the War Production Board, someone or some organization should be in charge of these efforts. The Federal Acquisition Security Council may be the best organization to fill that role, as it would be well placed to roll up our supply chain dependencies, place them against requirements to create demand signals and determine how best to fill them.

These actions could be included by the Pentagon in its budget for the coming fiscal year — or given their urgency, a single, focused bill, an executive order, or a future emergency supplemental.

No one knows if or when tensions with China could spiral into armed conflict. But there’s no doubt that the world is becoming more dangerous. The U.S. must send a message to Beijing that we are prepared to prosecute a long war if needed. And the U.S. must also send a message to Taiwan that it will be able to support the island in a time of need. Without ending China’s chokehold on our defense supply chains, we will be hard-pressed to send either.

Retired U.S. Army Maj. Gen. John G. Ferrari is a senior nonresident fellow at the American Enterprise Institute think tank. Ferrari previously served as a director of program analysis and evaluation for the service. Mark Rosenblatt runs Rationalwave Capital Partners, which invests in public and private technology companies.

“We have this wonderful vision, lots of great programs that we have teed up,” Andrew Hunter told reporters at the Air and Space Forces Association’s Air Warfare Symposium here. “[We] still need that FY24 budget to make it real.”

The Pentagon is now operating under its third continuing resolution of fiscal 2024 as Congress continues to draft defense spending legislation. The latest stopgap deal, passed in January, funds the government through March 8.

Like a traditional CR, the measure pauses funding at the prior year’s levels — fiscal 2023, in this case — and prevents the Pentagon from starting new programs and increasing procurement quantities for existing efforts. While the department is accustomed to operating under a continuing resolution for at least a portion of each fiscal year, the 2023 Fiscal Responsibility Act adds a twist.

The law stipulates that all federal agencies would face a 1% cut from fiscal 2023 funding levels if the government was still operating under a CR on Jan. 1, 2024 — which it was. However, the language includes a four-month grace period, so while that initial deadline has passed, Congress has until April 30 to approve FY24 appropriations and avoid slashing the executive branch’s spending.

While lawmakers tend to reach an annual appropriations agreement by March or April each year, Air Force officials signaled a growing concern that Congress could miss the late April deadline.

During this week’s conference, the Department of the Air Force distributed a fact sheet outlining the impact a 1% cut would have on its two services, the Air Force and Space Force. The measure would reduce the service’s buying power by nearly $13 billion and put $2.8 billion in space modernization projects on hold. It would also limit production increases for key programs like the F-35 Joint Strike Fighter, Small Diameter Bomb and Joint Air-to-Surface Standoff Missile, and delay seven Space Force launches, according to the department.

Air Force Secretary Frank Kendall said in keynote speech Monday that the congressional funding standoff has caused significant delays to his vision for modernizing the service. When he took on the role in 2021, he revealed seven “operational imperatives” meant to inform Air Force and Space Force budget priorities.

Initiatives driven by those priorities, 19 of which were included in service’s FY24 budget request, have yet to be fully funded.

“It would be very disappointing to me to have been in office for an entire administration and have never received any of the needed resources to be competitive — resources that we identified in the first six months I was in office,” he said.

Key among those efforts, Kendall said, is the Air Force’s Collaborative Combat Aircraft program, which will field fleets of drones powered by autonomous software and designed to fly alongside crewed fighters.

The service hopes to narrow its pool of potential CCA providers from five companies to two or three in fiscal 2024, but that timeline depends on when funding is available.

“We’re moving ahead with a sense of urgency on CCAs,” Kendall told reporters Tuesday. “As a preamble, everything depends upon FY24 being appropriated.”

For the Space Force, which requested $30 billion in FY24, the automatic cuts have an outsized impact. The $2.8 billion in stalled modernization projects represents nearly 10% of the service’s total budget.

The Space Force’s budget has nearly doubled since it was created in 2019, and Chief of Space Operations Gen. Chance Saltzman told reporters Feb. 13 that funding delays are having “an acute effect” on the service as it continues to grow.

“Our ability to do all the missions that are required is being severely impacted by not being able to get the resources that we’ve asked for,” he said.

The legislation, which passed in the chamber 70-29, faces an uphill battle in the House amid opposition from former President Donald Trump, the leading candidate in the Republican presidential primary. House Republicans are increasingly resistant to additional assistance for Ukraine — and foreign aid more generally.

“Today we make [Russian President] Vladimir Putin regret the day he questioned America’s resolve, and we make clear to others like China’s President Xi [Jinping] not to test our determination,” Senate Majority Leader Chuck Schumer, D-N.Y., said on the floor after the vote. “And we send a clear, bipartisan message of resolve to our allies in NATO.”

But House Speaker Mike Johnson, R-La., reiterated his opposition in a statement on Monday mere hours before the Senate moved forward with its final vote.

“The mandate of national security supplemental legislation was to secure America’s own border before sending additional foreign aid around the world,” Johnson wrote in a statement. “In the absence of having received any single border policy change in the Senate, the House will have to continue to work its own will on these important matters.”

President Joe Biden’s foreign aid request stalled for two months in the Senate after Republicans held up a procedural vote in December, demanding immigration policy changes in exchange for their support. This led to two months of negotiations, only for Trump to disparage the deal after Senate Democrats agreed to immigration restrictions. Senate Republicans then backtracked on the deal and moved forward with a bill solely focused on foreign aid.

Trump also demanded Saturday on his social media network, Truth Social, that the foreign aid bill be “done as loan, not just a give away.” He said at a South Carolina rally that same day he “would encourage [Russia] to do whatever the hell they want” to NATO members who do not spend enough on defense.

The European Union earlier this month passed $54 billion in economic support for Ukraine after Hungary dropped its opposition.

The Senate bill includes another $60 billion in security and economic aid for Ukraine, $48.4 billion of which is for military support through the Pentagon.

The military support includes $19.9 billion for the Pentagon to backfill weapons sent to Ukraine through U.S. stockpiles and $13.7 billion for the Ukraine Security Assistance Initiative, allowing the Defense Department to ink longer-term contracts to send weapons to Kyiv. There’s also $1.6 billion in foreign military financing, allowing Ukraine and European countries impacted by Russia’s invasion to use the money to buy weapons from U.S. defense contractors.

Sen. Lindsey Graham, R-S.C., called on the House to implement Trump’s idea of turning “the supplemental aid package into a loan instead of a grant,” though it’s unclear how that would work for the majority of military aid in the bill, which is allocated for Pentagon contracts. Graham adamantly called for a defense spending supplemental last year to circumvent the $886 billion national security spending cap in the debt ceiling deal.

The House failed to pass a stand-alone Israel aid bill last week amid opposition from Biden and Democrats unhappy with the lack of Ukraine assistance in the package.

Meanwhile, three members of the Senate Democratic caucus voted against the foreign aid package Tuesday over concerns about the humanitarian crisis in Gaza and the high civilian death toll amid Israel’s monthslong offensive against Hamas.

“One the one hand, I strongly support aid to Ukraine,” Sen. Jeff Merkley, D-Ore., said in a statement before voting against the bill. “On the other hand, I strongly oppose sending more offensive military aid to Israel at a time when they are using American weapons in what President Biden has called an ‘indiscriminate’ campaign of bombing.”

Sens. Bernie Sanders, I-Vt., and Peter Welch, D-Vt., also voted against the Senate bill.

The bill includes $10.6 billion for the Defense Department to continue providing munitions and other weapons to Israel. That amount includes $4 billion for the Iron Dome and David’s Sling air defense systems as well as $1.2 billion to procure the Iron Beam laser system to counter short-range rocket threats. There’s also another $3.5 billion in foreign military financing for Israel to buy more military equipment with cash grants.

Another $2 billion in foreign military financing from the bill would go to Taiwan and other Indo-Pacific security partners. Additionally, the bill has $1.9 billion for the Defense Department to backfill weapons sent to Taiwan from U.S. stockpiles, providing the Pentagon’s long-requested funding that will allow it to use presidential drawdown authority to quickly transfer weapons to Taipei.

The U.S. hopes to deter a possible Chinese invasion of Taiwan in the coming years by positioning as much materiel on the island as possible.

U.S. Indo-Pacific Command would get another $542 million to respond to its fiscal 2024 unfunded priorities list. Another $2.4 billion in the bill would go to U.S. Central Command to resupply munitions it used in response to the ongoing attacks from Iran-backed proxies in the Middle East since the Israel-Hamas war began in October 2023.

The bill also includes $3.3 billion to get the submarine-industrial base on course for the AUKUS agreement with Australia and Britain.

But the White House said Friday it does not expect Biden’s executive action to result in the suspension of military aid to Israel. The executive action reiterates existing U.S. human rights laws governing arms transfers.

“There are no new standards in this memo,” White House press secretary Karine Jean-Pierre said at a Friday press conference. “Instead, we are spelling out publicly the existing standards by the international law, including the law of armed conflict.”

The executive memorandum requires any military aid recipient, including Israel and Ukraine, to submit written assurances it will comply with human rights laws or lose U.S. assistance.

All countries that receive U.S. military aid are already required to adhere to these standards under existing human rights laws. These include the Foreign Assistance Act and the Leahy laws, named after their author, former Sen. Patrick Leahy, D-Vt.

The Leahy laws cut off security aid to specific units of foreign militaries if the Pentagon and the State Department determine a country has committed a gross violation of human rights, such as shooting civilians or summarily executing prisoners.

“We did brief the Israelis on this,” said Jean-Pierre. “They reiterated their willingness to provide these types of assurances.”

Leahy, former administration officials and some lawmakers and congressional staffers say the arms transfers laws referenced in the memorandum have not been applied to Israel across multiple administrations, despite credible reports of human rights abuses.

A spokesperson for the White House National Security Council told Defense News “we have not seen any violations of the standards so have no plans to restrict assistance at this time.”

Sarah Harrison, who was the Pentagon’s lead attorney for Leahy law human rights vetting between 2017 and 2021 and now is a senior analyst at the International Crisis Group think tank, said the memorandum appears to be “another performative measure by the Biden administration to kind of stave off critics because they were getting a lot of heat from the Senate on this.”

Israel and Ukraine signed similar agreements in December 2021 pursuant to the Leahy laws stating they will not transfer U.S.-provided security assistance to an ineligible military unit if the State Department determines it’s responsible for a gross human rights violation. The State Department has given Kyiv a list of Ukrainian units that have committed human rights violations, rendering them ineligible for U.S. security assistance, but has not done the same for Israel.

Jean-Pierre noted the White House memorandum “emerged in part with our discussions with members of Congress” as lawmakers struggle to pass Biden’s $95 billion foreign aid request that includes $14 billion in additional military aid to Israel and $60 billion in more support for Ukraine.

Sens. Chris Van Hollen, D-Md., and 18 members of the Democratic caucus have introduced an amendment to the spending bill that would reinforce existing law under the Foreign Assistance Act. The provision bans military aid to countries that obstruct the delivery of U.S. humanitarian assistance. A December Human Rights Watch report found Israel is using starvation as a weapon of war in Gaza, amounting to a war crime.

Biden’s executive memorandum largely mirrors language in Van Hollen’s amendment. Van Hollen and his allies first started discussing the language with the White House in December.

The Senate is expected to vote on final passage of the $95 billion foreign aid bill over the next few days, but senators may not have opportunities to offer amendments. The bill’s fate in the House is also unclear amid substantial Republican opposition to additional Ukraine aid.

Senators voted 67-32 to clear the first procedural hurdle needed to advance the bill, which also includes additional funding for the submarine-industrial base, U.S. Central Command and U.S. Indo-Pacific Command.

“If we abandon our friends in Ukraine to [Russian President] Vladimir Putin, history will cast a shameful and permanent shadow on senators who block funding,” Senate Majority Leader Chuck Schumer, D-N.Y., said on Wednesday ahead of the vote. “It is a matter of the highest national urgency that we get this right.”

The vote came after Democrats dropped immigration policy changes from the legislation after two months of negotiations, which Senate Republicans had initially demanded as the price for unlocking the foreign aid funding. But Republicans backtracked on the deal this week as former President Donald Trump, the front-runner in the party’s presidential primary, came out against coupling foreign aid with an immigration deal.

It’s possible the Senate may vote on amendments as the foreign aid bill proceeds, providing a potential opening to alter the legislation for Republicans opposed to Ukraine assistance and Democrats who seek human rights conditions on Israel aid amid the humanitarian crisis in Gaza.

Although Ukraine aid initially enjoyed strong bipartisan support, Republican opposition to additional assistance has grown over the last several months. The Biden administration in December used its last tranche of Ukraine aid funds from previous assistance packages, while Kyiv faces artillery and ammunition shortages.

Congress has passed a cumulative $113 billion in economic and security aid for Ukraine since Russia’s full-scale invasion in February 2022. Israel receives an annual $3.8 billion per year in U.S. military aid.

The Senate bill includes another $60 billion in security and economic aid for Ukraine, $48.4 billion of which is for military support. It also includes an additional $14 billion in Israel aid.

On top of that, there’s nearly $4 billion in military aid for Taiwan and other Indo-Pacific security partners, plus $2 billion to get the submarine-industrial base on course for the AUKUS agreement with Australia and Britain. U.S. Indo-Pacific Command would get another $542 million to respond to its fiscal 2024 unfunded priorities list.

The bill also adds $2.4 billion for U.S. Central Command to resupply munitions it used in response to the ongoing attacks from Iran-backed proxies in the Middle East since the Israel-Hamas war began in October 2023.

The Republican-held House failed to pass a stand-alone Israel aid bill on Tuesday amid both opposition from most Democrats concerned about the lack of Ukraine assistance, and Republicans with the conservative Freedom Caucus unhappy with the legislation’s lack of budgetary offsets.

House Speaker Mike Johnson, R-La., previously said the key to unlocking Ukraine aid is immigration restrictions, but he also declared the Senate’s deal on the U.S southern border “dead on arrival” as soon as the text came out Sunday.

House Armed Services Chairman Mike Rogers, R-Ala., who supports Ukraine aid, told reporters Wednesday that the lower chamber may split off individual pieces of the Senate bill into separate votes — though Johnson has yet to commit to a path forward.

Rep. Rosa DeLauro of Connecticut, the top Democrat on the House Appropriations Committee, said Congress must move “with alacrity on the supplemental.”

“Whatever may be the fastest way to do it, we need to do it,” DeLauro said. “We can’t leave Israel hanging, Ukraine hanging, humanitarian assistance hanging, Indo-Pacific. That is irresponsible and frankly immoral.”

The House on Tuesday failed to pass a stand-alone $17.6 billion Israel aid bill, which President Joe Biden has threatened to veto because it does not include Ukraine aid, border security or humanitarian assistance. Meanwhile, Senate Republicans have backtracked on the immigration policy deal they struck after two months of negotiations with Democrats to unlock Ukraine aid.

“Every week, every month that passes without new aid to Ukraine means fewer artillery shells, fewer air defense systems, fewer tools for Ukraine to defend itself against its Russian onslaught, just what [President Vladimir] Putin wants,” Biden said in a White House address Tuesday.

Pro-Israel Democrats concerned about the lack of Ukraine aid banded together with Republicans from the right-wing House Freedom Caucus to vote down the Israel assistance bill introduced by defense appropriations Chairman Ken Calvert, R-Calif. The Freedom Caucus, which also opposes Ukraine aid, voted against the bill because it did not include other spending cuts to offset the $17.6 billion for Israel.

The combined opposition from Democrats and Freedom Caucus Republicans meant House Speaker Mike Johnson, R-La., had to bring the bill to the floor using a procedural mechanism that required a two-thirds majority vote for passage — a threshold which the bill failed to reach with a 250-180 vote.

The House passed another stand-alone $14 billion Israel aid bill in November, but most Democrats voted against it because it cut an equal amount from the Internal Revenue Service. While Johnson has backed off the IRS cuts, he has declared the Senate’s $118 billion foreign aid bill “dead on arrival” in the House.

“There’s an absence of leadership in the White House as President Joe Biden is attempting to dial down support for Israel,” Johnson said before a meeting with Israeli Knesset Speaker Amir Ohana and relatives of the hostages Hamas abducted in its Oct. 7 attack on Israel. “House Republicans announced a new aid package to deliver defense and military aid in Israel that is desperately needed.”

The bill hews closely to Biden’s Israel supplemental spending request, providing more funding for artillery and munitions to the U.S. ally amid its four-month bombardment of Gaza that has displaced roughly 85% of the population and killed thousands of civilians. It also includes $4 billion for the Iron Dome and David’s Sling air defense systems and another $1.2 billion to procure the Iron Beam laser system to counter short-range rocket threats.

The bill also expands Israel’s access to the pre-positioned U.S. war reserve stockpile on its soil while potentially reducing reimbursement rates. Additionally, it includes $3.5 billion in Foreign Military Financing grants for Israel while allowing the Biden administration to waive the standard congressional notification requirements.

Israel receives an annual $3.8 billion in U.S. military aid via the regular appropriations process.

‘More desperate’

The House vote came as former president Donald Trump, favored to win the Republican presidential primary, lambasted the immigration deal. Trump posted Monday on his social media network, Truth Social, that an immigration bill “should not be tied to foreign aid in any way, shape or form!”

Trump and a growing number of Republicans have opposed additional aid for Ukraine, which has received a cumulative $113 billion in economic and security aid since Russia’s 2022 invasion.

The former president’s opposition dulled Senate Republicans’ appetite for a deal, even though they blocked a previous iteration of Biden’s foreign aid request in December with a demand that it include immigration policy changes. Senate Minority Leader Mitch McConnell, R-Ky., indicated Tuesday he would now support the foreign aid legislation without the immigration provisions.

Sen. Roger Wicker of Mississippi, the top Republican on the Armed Services Committee, told Defense News he hopes “we pass all of the security parts of the supplemental.”

“The border provisions don’t have anywhere near the votes to pass, so it will need to be stripped out,” said Wicker.

Nonetheless, Democrats still intend to hold a procedural vote on the foreign aid bill with the immigration restrictions later this week.

Senate Armed Services Chairman Jack Reed, D-R.I., accused the House of “a clever political ploy.” He ruled out a stand-alone Israel assistance without Ukraine aid legislation.

Reed told Defense News “the tactical situation in Ukraine is more desperate than the current situation in the Middle East, except of course all the potential escalation, but that we’re handling with U.S. forces and air strikes.”

The Biden administration in December used its last tranche of Ukraine aid funds from previous assistance packages.

“Right now, Ukraine has just 20% ... of the ammunition and artillery it needs as Russia is advancing,” Sen. Jeanne Shaheen, D-N.H., told reporters.

The Senate bill also includes nearly $4 billion in aid for Taiwan and Indo-Pacific security partners, $2.1 billion for the submarine-industrial base and $542 million for Indo-Pacific Command’s unfunded priorities list.

The main point of contention in the Tiger Act, introduced by task force leader Rep. Mike Waltz, R-Fla., is a provision raising the dollar threshold at which the president can approve an arms transfer without notifying Congress from $14 million to $23 million. It also raises the threshold for the sale of defense articles, upgrades, related training or other services without congressional notification from $50 million to $83 million. Additionally, it paves the way for the State Department to make use of the Pentagon’s Special Defense Acquisition Fund, a revolving account used to procure weapons for foreign military sales.

“We should arm our allies and simplify the bureaucracy so they can do the fighting for our interests and less involve the United States,” Waltz said before the vote. “This is about jobs. This is about empowering our allies to fight for themselves.”

The bill is backed by the National Defense Industrial Association and the Aerospace Industries Association. Its proponents note the new numbers simply reflect inflation since 2003, when Congress last adjusted the thresholds.

But a coalition of 17 arms control and human rights groups, led by the Center for Civilians in Conflict and the Middle East Democracy Center, sent a letter to lawmakers last week arguing the bill cedes congressional oversight authority by hindering lawmakers’ ability to place holds on sales over human rights concerns.

Opponents of raising congressional notification requirements point to a 2020 State Department Inspector General report, which found the Trump administration approved 4,221 below-threshold arms transfers to Saudi Arabia and the United Arab Emirates amounting to $11.2 billion between Jan. 2017 and Aug. 2020.

The House established the foreign military sales task force last year to spearhead legislative efforts meant to expedite the unwieldy arms sale process amid a multibillion-dollar arms sale backlog across the world, from Taiwan to Saudi Arabia. The backlogs are caused by a confluence of U.S. industrial base constraints, contracting delays and lengthy review processes.

“Many of the most significant hurdles lie within the defense industry’s production constraints and inefficiencies within the executive branch,” Rep. Kathy Manning, D-N.C., said ahead of the vote. “The congressional review process is not the problem.”

Waltz noted the bill is only the task force’s first stab at expediting the arms sale process. The House is expected to consider additional foreign military sales legislation when it takes up the fiscal 2025 defense policy bill.

The arms sale task force included two Democrats, Reps. Seth Moulton of Massachusetts and Jason Crow of Colorado.

After an agreement with Moulton, the latest version of the Waltz bill includes a provision that would require a congressional notification for sales to a country once they exceed a cumulative threshold of $1 billion over three years. That threshold increases to $5 billion over three years for NATO countries and other close U.S. allies. It is unclear what other changes lawmakers made at the markup because the Foreign Affairs Committee did not publicly release the latest text of the bill before the vote.

Still, the agreement with Moulton, who sits on the Armed Services but not the Foreign Affairs Committee, was not enough to win the support of most Democrats. Crow issued a dissenting opinion to the Republican-dominated task force.

“While the task force received input from a limited number of stakeholders, the process was non-inclusive,” Crow wrote in his dissent, obtained by Defense News. “The task force did not receive needed input from leaders in civil society, arms control experts or the human rights community.”

Rep. Dina Titus, D-Nev., accused Waltz’s legislation of “parroting” the defense industry, noting that 95% of foreign military sale cases are approved within 48 hours.

“That’s not very slow,” Titus said before the vote. “It just focused its efforts on undermining congressional oversight mechanisms simply for the sake of expediency.”

“You have to produce enough explosives – either IMX-104 or TNT – to fill that many shells that fast and that production capacity does not exist in the United States by itself,” Doug Bush said during a Feb. 5 Center for Strategic and International Studies event in Washington. “We’re having to go overseas to allies. Luckily, we have many, [that are] highly capable.”

Prior to the war in Ukraine, the U.S. could build about 14,400 of the artillery shells per month. But as Ukrainian forces burn through the ammunition for howitzers sent to the country, the U.S. has taken a wide variety of steps to increase the speed and capacity of 155mm munitions production.

Bush said at CSIS that each 155mm shell contains 22 pounds of explosives. If the U.S. ramps up to 100,000 munitions a month, it would need to produce 26.4 million pounds of explosives, also known as “energetics,” per year to keep up.

The Army awarded $1.5 billion in contracts to nine companies in the fall of 2023 to companies in the U.S., Canada, India and Poland to boost global production of 155mm artillery rounds. The contracts included procuring 14.2 million pounds of bulk energetics, consisting of TNT and IMX-104 explosive.

Increasing production is also riding on Congress approving a pending supplemental budget request which aims to support Ukraine and Israel. The supplemental includes $600 million that would triple the amount of IMX-104 explosive that is made at Holsten Army Ammunition Plant in Tennessee. The plant produces roughly five million pounds a year with a plan to increase to 13 million pounds.

Another $93 million would upgrade facilities to reestablish M6 propellant production at Radford Army Ammunition Plant in southwest Virginia. That propellant is used to shoot the shells, but is no longer in production in the U.S.

An additional $14 million would cover the construction and recommissioning of a black powder – an explosive combination of sulphur, carbon and potassium nitrate – production line with a company called Goex in Minden, Louisiana.

Taking on TNT

The Army would also use $650 million to design and construct a domestic TNT production facility, which will likely be at Radford Army Ammunition Plant, Bush has said previously.

Currently there is no TNT production in the U.S. and the supplies come from allies such as Australia and India.

Poland is a major supplier, but with every country ramping up production to support Ukraine and meet their own demands, Bush noted late last year, the U.S. will need to onshore TNT production.

The Army issued a request for information in the fall of 2023 on Sam.gov for the design, construction and commissioning of a facility capable of producing five million pounds of TNT per year. Responses from industry are due Feb. 17.

The service is aiming to complete construction and open the facility no later than 48 months after awarding a contract. The RFI notes that the government is assessing multiple sites for the facility.

But it’s unclear whether the roughly $118 billion legislation can pass Congress with Speaker Mike Johnson, R-La., immediately declaring it “dead on arrival” in the House and vowing to move forward with a separate Israel aid bill that would leave Ukraine without additional U.S. assistance.

“As Ukraine runs low on ammunition to fend off [Russian President Vladimir] Putin’s brutal invasion, it is imperative we finally extend our support,” Senate Appropriations Chairwoman Patty Murray said in a statement. “Ukraine’s fate and so much more hangs in the balance — it’s time for Congress to act.”

Senate Republicans in December stalled votes on an earlier aid package, leading to two months of negotiations on unrelated immigration policy changes. Senate Majority Leader Chuck Schumer, D-N.Y., has said he will tee up a procedural vote on the new aid package as soon as Wednesday, but it’s unclear whether it will even have the 60 votes needed to pass the upper chamber.

The bill includes $60 billion in security and economic aid for Ukraine, $48.4 billion of which is for military support. That includes $13.7 billion for the Ukraine Security Assistance Initiative and $19.9 billion for the Pentagon to backfill weapons sent to Ukraine through U.S. stockpiles. There’s also $1.6 billion in Foreign Military Financing, allowing Ukraine and European countries impacted by Russia’s invasion to use the money to buy weapons from U.S. defense contractors.

The Biden administration in December used its last tranche of Ukraine aid funds from previous assistance packages.

A growing number of Republicans have become increasingly opposed to Ukraine aid, and many, including Johnson, claim the new bill’s immigration agreement “won’t come close to ending the border catastrophe.” The new aid bill is likely to lose Democratic support as well, with Sen. Alex Padilla, D-Calif., accusing it of “dismantling our asylum system” and Sen. Bernie Sanders, I-Vt., opposed to additional Israel aid.

“If we continue to fund [Prime Minister Benjamin] Netanyahu’s indiscriminate war, how can we, with a straight face, criticize Putin’s targeting of civilians and civilian infrastructure in Ukraine as a war crime?” Sanders wrote in a statement.

The bill includes $10.6 billion for the Defense Department to continue providing munitions and other weapons to Israel after a four-month bombardment of Gaza that has displaced roughly 85% of the population and killed thousands of civilians. That amount includes $4 billion for the Iron Dome and David’s Sling air defense systems and $1.2 billion to procure the Iron Beam laser system to counter short-range rocket threats.

There’s also another $3.5 billion in Foreign Military Financing for Israel and another $2 billion in the same account for Indo-Pacific security partners, including Taiwan.

Unlike the December bill, the new legislation adds another $1.9 billion specifically to backfill weapons sent to Taiwan from U.S. stockpiles, providing the Pentagon’s long-requested appropriation that will allow it to use presidential drawdown authority to quickly transfer weapons to Taipei.

The new bill adds another $2.4 billion for U.S. Central Command to continue countering a deluge of attacks from Iran-backed proxies amid the Israel-Hamas war in Gaza. The use of expensive missile systems like Tomahawks to counter Houthi attacks on commercial ships with less expensive drones and missiles has placed additional demands on U.S. munitions stockpiles.

Additionally, the bill adds $542 million for Indo-Pacific Command’s FY24 unfunded priorities list. It also retains $2.1 billion in funding for the submarine-industrial base aimed at helping the Navy meet its submarine production goals while preparing to transfer as many as five Virginia-class submarines to Australia in the 2030s as part of the AUKUS agreement.

The bill raises the dollar threshold at which the president can approve an arms transfer without notifying Congress, while requiring the drawdown of weapons from U.S. stockpiles to compensate for delayed foreign military sales. It has generated pushback among some arms control advocates who fear the legislation would chip away at a key congressional oversight mechanism used to track weapons deals with other countries.

As head of the task force established last year, Rep. Mike Waltz, R-Fla., introduced the Tiger Act in December.

“The tempo of conventional high-intensity war that we’re seeing means that countries are burning through their defense equipment much faster,” a Waltz staffer told Defense News, speaking on the condition of anonymity to discuss the bill. “That is something that we on the Hill were taken by surprise [by] in places like Ukraine: the shortage of precision munitions, the shortage of 155mm shells.”

In addition to Ukraine, the Biden administration has transferred thousands of munitions to Israel since Hamas’ Oct. 7 attacks even as it seeks to rush arms to Taiwan to deter a potential Chinese invasion.

The bill raises the threshold for which the executive branch can approve an arms sale of major defense equipment without congressional notification from $14 million to $23 million. It also raises the threshold for the sale of defense articles, upgrades, related training or other services without congressional notification from $50 million to $83 million. The staffer said the numbers were selected to reflect inflation since 2003, when Congress last adjusted the thresholds.

“Ensuring that countries have the ability to purchase some of these weapons without, as years go on, being increasingly penalized by rising inflation rates seems to be common sense,” the staffer said.

But arms control advocates argue the bill would cede congressional oversight authority.

“Notification thresholds are really at the core of Congress’ arms sale oversight regime,” John Chappell, an advocacy and legal fellow at the Washington-based Center for Civilians in Conflict, told Defense News.

“Raising the threshold would undercut Congress’ ability to be aware of the proposed arms transfer. That would mean Congress wouldn’t be able to conduct oversight, and they would lose the opportunity to ask questions about specific arms sales, to put informal holds on them and to raise concerns about issues related to civilian harm, human rights, armed conflict and other issues,” he said.

Chappell noted many U.S. arms sales to Israel since Oct. 7 have fallen below the existing notification thresholds. He also highlighted a 2020 State Department Inspector General report, which found the Trump administration approved 4,221 below-threshold arms transfers to Saudi Arabia and the United Arab Emirates amounting to $11.2 billion between Jan. 2017 and Aug. 2020.

Waltz’s legislation emerged from a bipartisan taskforce of three Republicans and two Democrats who sit on the Foreign Affairs, Armed Services and defense appropriations committees. But Rep. Gregory Meeks of New York, the top Democrat on the Foreign Affairs Committee, declined to comment on the legislation.

Drawdown authority

The Waltz bill also requires the secretary of state to use drawdown authority from U.S. stockpiles to transfer weapons to a security partner or ally if a sale has been delayed for three years or more. However, the secretary of state may waive this provision so long as he or she explains why to Congress.

“What this is saying is if there’s a long-running [foreign military sale], the secretary must explain why it can’t be prioritized,” said the Waltz staffer. “Let’s say you have the sale of Harpoons to Taiwan that have been outstanding for three years, and we have Harpoons in our arsenal.”

The staffer noted the drawdown language is still under negotiation and the legislation may change via amendments in the Foreign Affairs Committee markup next week.

Harpoon anti-ship missiles comprise part of the roughly $19 billion foreign military sale backlog to Taiwan, caused in part by contracting delays and U.S. industrial base constraints. Several other U.S. partners, including in the Middle East, have been hit with arms sales delays.

But Chappell argued the provision would make “presidential drawdown authority specifically a routine occurrence” and could be used to circumvent congressional holds on an arms transfers that top lawmakers on the foreign affairs committees sometimes place over human rights concerns.

Additionally, the bill seeks to beef up the Special Defense Acquisition Fund, a revolving account used for foreign military sale procurement that the Pentagon hopes to lean on more as it works to expedite the process. The Pentagon released the results of its own Tiger team task force to speed up arms sales last year and has a separate task force focused on Taiwan. It’s also recently established another Tiger team task force to speed up arms transfers to Israel, according to The Intercept.

The Foreign Affairs Committee will debate and vote on the legislation next week, potentially referring it to the House floor for consideration.

The Waltz staffer noted the task force seeks to make additional legislative adjustments to the foreign military sales process later this year as Congress drafts the fiscal 2025 defense policy bill.

The FY24 defense policy bill, which Congress passed in December, includes a provision authorizing each combatant commander to hire up to two acquisition specialists as part of a bid to speed Pentagon contracting of foreign military sales.

Sen. Mark Kelly, D-Ariz., and Rep. Michael Waltz, R-Fla., headed a Jan. 29 letter signed by 19 lawmakers and sent to the White House, noting China is “expanding its strategic influence over the oceans.”

“It is building a global maritime network, on which the American economy and critical maritime supply chains have become increasingly reliant,” the letter adds. “Meanwhile, the U.S. has failed to give proper attention to the elements of our national sea power.”

The lawmakers note China’s “intimidation” in the South China Sea and the Houthi attacks in the Red Sea are “recent examples of the risks we face in the maritime domain.”

The letter seeks three key changes:

• The establishment of an interagency maritime policy coordinator, who would report to the president and “synchronize national maritime policy and influence industrial base resource decisions across military, civil, and commercial dimensions.”
• A presidential determination that establishes commercial, civil, and military shipbuilding and shipping industries — along with their associated infrastructure and workforces — as “critical infrastructure sectors,” making them eligible for investments under the Defense Production Act Title III authorities.
• The development of a national strategy focused on “de-risking” the U.S. maritime domain from China and other maritime threats.

Kelly in December unveiled plans to support the U.S. maritime industry. The senator said he wanted to see incentives to build more merchant ships that would conduct private business most of the time, but could be called into military service if needed.

Additionally, he called on the Navy to commit to buying more sealift ships to support companies that build big tankers and cargo ships.

Navy Secretary Carlos Del Toro has also pushed for improvements to the commercial shipbuilding and ship repair industries, as a means of bolstering the U.S.’ overall maritime security and naval power.

In November, the secretary convened the first-ever meeting of the Government Shipbuilders Council, where the departments of Defense, Homeland Security, Transportation and Commerce could begin to align their shipbuilding and ship repair plans.

The lawmakers’ plan would elevate the work Del Toro started to the White House level.

Matthew Paxton, president of the Shipbuilders Council of America, told Defense News any future national maritime strategy should include a “holistic view” of how U.S. shipyards and companies can participate in building up a fleet of U.S. naval warships, auxiliary support ships, U.S.-made Jones Act merchant ships that can be called into service and more.

“The national maritime strategy would ideally incorporate feedback from the Government Shipbuilders Council to get a full picture on the needs of all our government customers,” so companies can design dual-use commercial ships that also meet government requirements on fuel efficiency, berthing capacity, tonnage requirements and more, he said.

Until recently, Israel was the only country with a special privilege called offshore procurement, which has allowed it to use a portion of its Foreign Military Financing, or FMF, grants to invest in its own defense-industrial base instead of purchasing weapons from U.S. defense contractors as other recipients are required to do.

Congress approved offshore procurement for Taiwan FMF more than a year ago, hoping to replicate the Israel model and help Taipei grow its on-island production lines as it seeks to deter a possible Chinese invasion. The roughly $110 billion foreign aid bill stalled in Congress would allow Israel and Taiwan to use Foreign Military Financing for offshore procurement, but it does not extend those privileges to Ukraine or eastern European allies impacted by the war.

“We need to build production capacity there; we need to build it here,” said Brad Bowman, the senior director of the Center on Military and Political Power at the hawkish Foundation for Defense of Democracies, noting offshore procurement can help friendly countries make their defense industries more self-sufficient.

“With applications to Ukraine, Israel and Taiwan, we want to make the defense-industrial base in each of those three beleaguered democracies as healthy and robust as possible in order to meet their respective military requirements while first prioritizing the U.S. defense-industrial base,” said Bowman. “But the second brush needs to be that we are doing everything we can in our defense-industrial base to create additional defense-industrial capacity to help our beleaguered democratic partners because this is a wise investment and not charity.”

Taiwan

When Congress approved up to $2 billion per year in FMF for Taiwan in the fiscal 2023 National Defense Authorization Act, it made 15% of that amount eligible for offshore procurement.

“The comparison to Israel was brought up in the policy discussions saying, ‘Look, we’ve had success with using our FMF for Israel’s domestic defense industry, we should do the same for Taiwan. We made the argument it’s even more relevant because of this need for on-island protection,” said Josh Paul, the former congressional affairs director at the State Department’s Bureau of Political-Military Affairs.

“That’s something the administration supported with the theory being that we want Taiwan to build its on-island capacity to produce munitions because in some Taiwan contingencies, you can imagine a scenario where it’s hard to get stuff to the island,” Paul told Defense News.

Most FMF grants and loans allow the recipient countries to buy weapons from U.S. defense companies via the Foreign Military Sales process. Allowing Taiwan to use FMF money on its own defense industry could help relieve the roughly $19 billion Foreign Military Sale backlog partially caused by U.S. defense-industrial base constraints.

Eric Gomez, a senior fellow at the libertarian Cato Institute, said offshore procurement is “a good idea for trying to get countries like Taiwan to develop their defense industry on their own.” Still, he pointed to discussions on Capitol Hill and the State Department about whether FMF is “appropriate” for Taipei given the island’s estimated $800 billion GDP for 2023.

Concerned about placing additional strain on the State Department’s base budget, congressional appropriators opted to fund Taiwan FMF as loans instead of grants for FY23. The State Department obligated $80 million in Taiwan FMF in August. If Congress passes the foreign aid bill, much of the $2 billion in Indo-Pacific FMF is expected to go toward Taiwan.

Israel

Roughly half of the State Department’s annual FMF budget, or $3.3 billion, goes to Israel each year. Israel had historically been allowed to use a quarter of its FMF for offshore procurement on its own defense contractors instead of U.S. companies, which FMF recipients are generally required to buy from.

The $38 billion, 10-year memorandum of understanding with Israel signed under the Obama administration gradually phases out its offshore procurement privileges through 2028. The offshore procurement privileges for Israel’s annual $3.3 billion in FMF is slated to drop from more than 20% in FY24 to less than 15% in FY25, according to the Congressional Research Service.

However, the Senate’s foreign aid bill allows Israel to spend 100% of its extra $3.8 billion in FMF on its own defense contractors instead of U.S. companies, while taking the unusual step of waiving the standard congressional notification requirements. Paul noted this push came from the White House’s Office of Management and Budget, or OMB, after Hamas’ Oct. 7 attack on Israel.

“This was a point at which we were putting together a rushed supplemental,” said Paul. “The push from OMB was not only use all the available authorities, but we need to come up with any new authorities as well just to show that we can do everything in our power to be supportive of Israel.”

Paul, who resigned to protest the civilian death toll in Gaza in October as the Biden administration assembled the supplemental, noted offshore procurement in Israel has helped it build an industrial base that sometimes competes with U.S. defense contractors.

“This has been a very major subsidy for major companies like Rafael, Elbit or IAI as they sort of invest in themselves to grow their own capabilities to the point where they’re now a top 10 global defense exporter, particularly in fields such as unmanned aerials systems, including one-way UAS and a lot of other electronic military intelligence systems,” said Paul.

Still, Bowman said “there’s no scenario where I think Israel will become fully independent in its defense-industrial base.”

Bowman argued Israel “should focus” on developing “the systems they would have problems getting in a future war with Hezbollah in Lebanon.” He noted this would reduce Israel’s dependence on Washington since some Democrats have called for conditioning its military aid amid human rights concerns.

Ukraine and Europe

There is no authorization to use offshore procurement for Ukraine FMF, and Biden’s foreign aid spending request didn’t ask for it. The current bill includes $1.7 billion in FMF for Ukraine and countries impacted by the war.

The majority of FMF appropriated in previous Ukraine aid packages has gone to European countries impacted by the war rather than Kyiv, which has received the bulk of its U.S. support from direct weapons transfers from U.S. stockpiles and longer-term assistance via the Ukraine Security Assistance Initiative.

Gomez said there’s less need to give NATO members offshore procurement because they already have appropriate defense-industrial capacity. “It’s just that they don’t spend enough money on it.”

Biden and Senate Minority Leader Mitch McConnell, R-Ky., have touted the fact that most military assistance in the foreign aid supplemental goes to U.S. defense contractors, arguing it spurs job creation.

In Ukraine, the Biden administration has sought to help Kyiv build its defense systems in-country with the Commerce Department hosting a U.S.-Ukraine defense-industrial base conference in December. Lockheed Martin and Raytheon signed a memorandum of understanding in September to produce Javelin anti-tank missiles in Ukraine.

“Another big difference between Ukraine and Taiwan is the active conflict in Ukraine,” Gomez added, noting one of the problems for offshore procurement in Ukraine is the question of whether its “defense industry can be survivable enough to produce things.”

President Volodymyr Zelenskyy has warned Ukraine could lose the war if Congress does not pass the foreign aid spending bill, and it’s unclear how Congress and the State Department will pay for FMF for Taiwan without the supplemental.

The sale of the Block 70 F-16 fighter jets from Lockheed Martin, which also includes 80 modernization kits, had been stalled for years, with the latest issue being Turkey’s nearly two-year-long blockade of Sweden’s NATO bid. Biden’s letter comes after the Turkish parliament ratified Sweden’s NATO accession 287-55 on Tuesday, though President Recep Tayyip Erdogan still needs to sign it.

A U.S. official, speaking anonymously to discuss correspondence with Congress, told Defense News the letter to lawmakers welcomed “the Turkish parliament’s ratification of Sweden’s NATO accession protocols and informing them his administration intends to formally notify Congress of the sale of F-16s to Turkey as soon as this process is complete.”

“The President urged Congress to proceed with the F-16 sale without delay,” said the U.S. official. Reuters first reported the letter.

The chairman or ranking member of either the Senate Foreign Relations or House Foreign Affairs committees can block any arms sale. Turkey scored a significant victory in September when the chief opponent of the sale, former Sen. Bob Menendez, D-N.J., lost his position as chair of the Senate Foreign Relations Committee after the Justice Department unveiled another corruption indictment against him.

But Menendez’s successor, Senate Foreign Relations Chairman Ben Cardin, D-Md., hasn’t committed to approving the sale.

“The next step for us is to get the accession documents completed,” Cardin told Defense News. “I’m working with the administration.”

Cardin noted in October Sweden’s NATO accession was a prerequisite to the Turkey F-16 sale, but he also raised concerns over human rights issues and the use of the weapons systems. Turkey has previously used F-16s on U.S.-backed, Kurdish-majority forces in northeast Syria and stationed the fighter jets in Azerbaijan during the 2020 war with Armenia over the disputed Nagorno-Karabakh region.

Lawmakers had also repeatedly voiced concerns about Turkish incursions into Greek airspace, but the two NATO allies agreed in December on a roadmap to improve their relations.

For its part, Greece is waiting on the Biden administration to approve the sale of 20 F-35As from Lockheed Martin that it requested in 2022.

Greece has also expressed interest in joining the F-35 co-production program. The U.S. expelled Turkey from the F-35 co-production program in 2019 over Ankara’s purchase of the S-400 missile defense system over fears Moscow could use its advanced radar system to spy on the stealth fighter jets.

WASHINGTON ― A growing number of bipartisan lawmakers is questioning President Joe Biden’s legal authorities to conduct strikes on Yemen’s Houthis.

Sen. Tim Kaine, D-Va., led three other senators in a Tuesday letter to Biden pushing him on the strategic and legal rationale for the recent tit-for-tat strikes against Houthi assets in Yemen without a military authorization from Congress. The objections come following reports the White House is preparing for a sustained campaign that could last several more months in response to the Iran-backed group’s attacks on commercial ships in the Red Sea.

“There is no current congressional authorization for U.S. military action against the Houthis in the Red Sea or Yemen,” Kaine told Defense News. “This has gone beyond a one-off self-defense. As soon as it’s a prediction of a back-and-forth, it’s going to escalate more. This needs Congress now.”

Sens. Chris Murphy, D-Conn., Mike Lee, R-Utah, and Todd Young, R-Ind., also signed onto the Kaine letter questioning Biden’s legal authorities under the 1973 War Powers Act.

In Biden’s notification to Congress outlining his initial Jan. 11 strikes in Yemen, he invoked his authorities as commander-in-chief under Article II of the Constitution to defend U.S. citizens, personnel and assets.

The senators in their letter noted it “could also be argued that directing military action to defend U.S. commercial shipping is within this power.” However, “most vessels transiting through the Red Sea are not U.S. ships, which raises questions about the extent to which these authorities can be exercised.”

“We support smart steps to defend U.S. personnel and assets, hold the Houthis accountable for their actions and deter additional attacks,” they wrote. “We further believe Congress must carefully deliberate before authorizing offensive military action.”

The strikes have not stopped the Houthis from attacking Red Sea ships, and the Biden administration has responded with seven additional strikes since then. Biden acknowledged last week the strikes had not deterred the Houthis, but vowed they would nevertheless continue.

Asked about the White House’s legal authorities, a National Security Council spokesperson told Defense News “we’re not going to speculate about future strikes or action since the Houthis could choose to stop their indiscriminate and unlawful attacks on U.S. and commercial ships at any time.”

Senate Foreign Relations Chairman Ben Cardin, D-Md., told Defense News “the War Powers Act is pretty specific,” noting that if the Yemen strikes trigger it “then they’re going to have to come to us.”

The top Republican on that committee, Sen. James Risch, R-Idaho, argued Biden’s Yemen strikes are already covered by his constitutional “authorities to protect American citizens and American property.”

‘In harm’s way’

The Houthis began firing at commercial ships in October, demanding an end to Israel’s bombardment of Palestinians in the Gaza Strip that began after Hamas’ Oct. 7 attack on Israelis. The Defense Department launched Operation Prosperity Guardian in December with Britain and other allies to defend commercial shipping lanes against Houthi attacks.

Brian Finucane, a former State Department legal adviser who is now a senior adviser at the International Crisis Group think tank, questioned the legality of Biden’s Yemen strikes without congressional authorization. He told Defense News that while “it’s generally accepted” the president has authority to defend U.S. forces from attacks, “in this case the president potentially put U.S. troops in harm’s way.”

“The U.S. has been involved in fighting the Houthis, countering the Houthis in the Red Sea, since Oct. 19,” said Finucane. “That’s when the Houthis launched missiles and drones towards Israel and the USS Carney shot them down.”

Congress passed a resolution in 2019 telling former President Donald Trump to end U.S. support for the Saudi-led coalition’s Yemen campaign against the Houthis, noting lawmakers had never authorized the operation. But Trump vetoed it.

The Saudi bombing campaign, from 2015 to 2022, killed nearly 15,000 civilians, according to the Armed Conflict Location and Event Data Project. There have been no reports of civilian casualties resulting from the U.S. strikes this month.

Two of the signatories on the Senate letter — Murphy and Lee — spearheaded the Yemen war powers resolution in the Senate during the Trump administration. At least two House lawmakers who sponsored the 2019 Yemen resolution, Reps. Ro Khanna, D-Calif., and Thomas Massie, R-Ky., have also criticized Biden over the lack of congressional authorization for his recent Yemen strikes.

Murphy told Defense News “it’s very likely” the Biden administration requires a congressional authorization for its strikes, but said “there would be a legitimate debate as to whether we should authorize a limited use of force.”

“What the Houthis have done does directly implicate U.S. interests,” said Murphy.

Sen. Rand Paul, R-Ky., generally a critic of foreign military intervention, also said “sustained military action” against the Houthis would require a congressional authorization and indicated he may be open to supporting one.

“In this particular instance, I do support military reprisals and military attacks to deter attacking our ships, but [the Biden administration] shouldn’t be allowed to do that without permission,” Paul told Defense News.

House Foreign Affairs Chairman Mike McCaul, R-Texas, told Defense News in October he was drafting an authorization for the Biden administration to strike Iran-backed proxies in the Middle East amid the fighting between Israel and Hamas, though he has not introduced it.

Iran-backed militias have targeted U.S. troops in Iraq and Syria at least 151 times since Oct. 7, leading to retaliatory strikes from the Biden administration. The Senate voted in December to keep U.S. troops in Syria, rejecting 13-84 a Paul resolution that would have forced Biden to withdraw them.