SIMI VALLEY, CALIF. — Propose a defense-spending hike at the Reagan National Defense Forum, and you’ll draw nods of approval from the lawmakers, defense executives, Wall Street bankers, consultants, and lobbyists who have gathered here annually for five years to talk about ways to strengthen the military. It’s a bit like preaching to the choir — but this year, the choir was working hard to make sure their message was heard some three thousand miles away in the White House and on Capitol Hill.
Speakers at the forum called for improving the military’s readiness, creating some type of all-encompassing defense strategy and — most importantly — removing the budget caps that have restricted Pentagon spending since 2013. Todd Harrison, a budget analyst at the Center for Strategic and International Studies, joked that if there was a vote in Congress for each time a panelist called for repealing the Budget Control Act, there would be enough support to repeal the law.
The forum took aim at President Trump’s television screens by partnering with Fox News, widely known as his favorite media outlet. Fox provided wall-to-wall coverage of the daylong event, airing some of its events live on Fox News Channel and Fox Business. Some of the panels were moderated by high-profile Fox network personalities. And Fox News Sunday broadcast from the Reagan Presidential Library, on a set backdropped by the former president’s Air Force One jet.
Why the urgency? With yet another government shutdown looming and Trump and Republican lawmakers focused on a tax bill that will increase the federal deficit by an estimated $1.5 trillion over the next decade, optimism for large defense-spending increases is starting to wane, attendees here said.
Much of the day’s discussion revolved around the president. The flow of information to and from Trump was a topic of intense interest, with discussions of the president’s tweeting habits and a surprisingly detailed description of the daily intelligence briefing process from CIA Director Mike Pompeo.
There was also talk about how to counter Russia, with which Trump has sought closer ties and ways to work together.
Jack Keane, a retired U.S. Army general who is now executive chairman of Humvee-maker AM General, warned of Russia’s desire to influence Middle Eastern nations, noting its arms deals with Arab states and support for the Assad regime in Syria.
“I don’t think we’re doing enough to counter this Russian intervention,” Keane said. “Nor are we doing what we should to deal with the Iranians and how significant their advance has been in Syria despite our eliminating ISIS.”
“Russia is changing the contours of its geopolitical relationships based on their ambitions and their strategic interests in the Middle East. As of [this] date, I don’t see a strategy to deal with it.”
Trump has pushed for more U.S. manufacturing jobs, but one attendee warned that some components of American weapons and defense gear would always be made abroad. “[W]hether we like it or not, the world’s supply chain is a global supply chain,” said Mike McNamara, CEO of Flex, a technology and electronics manufacturer.
McNamara said that moving certain aspects of supply chains would only inflate the price for the consumer.
“We just have to make sure we’re balancing the America First agenda with sensible policies,” he said.
Budget ‘Disaster’ Looms
Last year, the defense hawks came here bullish that a Republican president and GOP-controlled Congress would repeal federal spending caps and begin the massive military buildup promised by Trump. Now one year later, that optimism has subsided as the same hurdles that blocked the repeal of budget caps remain. And no one has a solution.
“In order to get to that number, Congress has to vote to change the Budget Control Act,” Rep. Adam Smith, D-Wash., the ranking member of the House Armed Services Committee, said at forum. “If we were so hell-bent to do that, if this was such a priority, why are we sitting here in December and we haven’t done it? We haven’t done it because there is this massive inconsistency in the way we look at the budget.”
Congress has passed defense policy bills authorizing nearly $700 billion in military spending in fiscal 2018. But, the Pentagon budget for fiscal 2018 is legally capped at $549 billion, meaning about $77 billion would get sliced if the Budget Control Act is not amended or repealed. The remaining $66 billion is in war funding, which is not subject to the spending caps.
Americans want a balanced budget, don’t want their taxes to increase and no one wants to cut popular programs, Smith said. “That cannot be done,” the congressman bluntly said. “It is mathematically impossible, but that is what the public expects.”
And an “utter disaster” is looming on Friday, the day the current federal spending measure expires. Without a deal, or a continuing resolution (a temporary budget measure the funds the government at the prior year’s spending levels), the federal government will shut down.
“Anyone who thinks we’re close to a deal on the appropriations bills is not paying attention,” Smith said.
But House Majority Leader Kevin McCarthy, R-Calif., countered saying that lawmakers would pass a two-week continuing resolution and then a more long-term appropriations bill.
“It will be a two-week CR so we can stop having CRs for the future,” McCarthy said. “The only reason we’re going into a two-week CR is because we’re in negotiations on the caps.”
While Republicans and Democrats widely support increasing defense spending, the same gridlock in Congress that has led to seemingly annual continuing resolutions and even a government shutdown remain. Republicans want to offset defense increases with cuts to social programs. If defense gets a plus-up, Democrats want equal increases to those domestic programs.
After nearly 11 hours of speeches and panel discussions, no one offered a pathway to repeal in any detail — let alone one that might draw the necessary bipartisan support.
Congress’ time of late has been consumed largely with passing a tax reform bill that would give give President Trump a legislative win before Christmas. But some here would rather Pentagon spending get a higher priority.
“I would rather vote on an increased defense budget than the tax cut,” said Michael Strianese, chairman and CEO of L3 Technologies.
“If there’s not growth in the budget, where are we going to invest it and get a reasonable return?” Strianese said. “That’s why I would advocate more for a certain level of growth and stability in the defense budget.”
One thing hasn’t changed since last year, or the previous one: the cries for budgetary help from top officials at the Pentagon:
“I don’t have the amount of funds that I need for the requirements that are being heaped on me,” Navy Secretary Richard Spencer said. “I need to increase my capabilities in every single aspect where I do business.”