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Outlook 2017Military Division

May 22, 2017

AGENDA

How We Got Here

DoD Overview

Army Overview

Thoughts On Future Directions For The Army

How To Find And View Budget Documents

Questions and Discussion

HOW WE GOT HERE

• Change in administration

• Alphabet Soup• BCA• BBA• CR• Base• OCO

• Evolving Geopolitical Crises and Response

From There To Here

DoD Overview

0

February 9, 2016

The FY 2017 Budget: Key Points

• Adheres to the Bipartisan Budget Act of 2015 (Dollars in Billions)

– Base budget request $523.9

– Overseas Contingency Operations (OCO) budget request $58.8

– Total budget request $582.7

• Funds a joint force with the capacity and capability to:

– Defend the homeland

– Respond to five challenges

o Russia

o China

o North Korea

o Iran

o Global counter-terrorism

– Respond to aggression from two different adversaries with overlapping timelines

• DoD requires funding above the BCA levels after FY 2017 to properly support

this strategy

Secretary Carter’s Priorities for This Budget

• Given the current level of budget resources ($800B in Budget Control Act cuts), we

can’t reduce all risk. Instead, the Department must:

– Prioritize conventional deterrence against our most advanced adversaries

– Focus more on the shape than the size of the force

o Seek the best balance between force structure (size), modernization (capability) and

readiness

o Emphasize lethality and capability of the force rather than size

o Emphasize posture rather than presence

– Emphasize innovation

o Attracting, retaining, and managing talent (Force of the Future)

o Update war plans and operational concepts

o Pursue “offset” technologies

o Institutional efficiency and reform

“Today’s security environment is dramatically different … and it

requires new ways of thinking and new ways of acting”

Secretary Carter, February 2, 2016

(Quantities/Dollars in Billions)

• Aircraft FY 2017 FYDPF-35 Joint Strike Fighter (USAF, USMC, USN) 63/$10.1 404/$56.3

F/A-18 (Navy) 2/$0.4 16/$2.2

KC-46 Tanker Replacement (Air Force) 15/$3.1 75/$15.7

AH-64E Apache helicopters (Army) 52/$1.1 275/$5.6

MQ-9 Reaper 24/$1.1 24/$3.9

• Shipbuilding

Virginia Class submarines (Navy) 2/$5.2 9/$29.4

DDG-51 AEGIS Destroyers (Navy) 2/$3.4 10/$18.3

Littoral Combat ships (Navy) 2/$1.3 7/$5.6

• Space

Evolved Expendable Launch Vehicle (Air Force) 5/$1.8 23/$9.4Global Positioning System (Air Force) --/$0.8 10/$5.6

Major Investments in the FY 2017 Budget

Requires Funding in 5-Year Plan + FY 2017 OCO

*Includes Base + OCO Procurement and RDT&E Funding

$100

$0

$200

$300

$400

$500

$600

$700

$800

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

DoD Funding from 9/11 Through FY 2017 Request

FY12 FY13 FY14 FY15 FY16 FY17

Numbers may not add due to rounding

DoD Topline, FY 2001 – FY 2017(Current Dollars in Billions)

Base Budget OCO/Other Budget

(Discretionary BudgetAuthority)

580 583

437468 479

534

601

666 666691 687

645

29

17

560578

345316

581

169

7391

79

124

187 153163

159115

82 85 6359 59

287 328 365 377 400 411 431 479 513 528 528 530 495 496 497 522 524

FY 2017 Total Base and OCO Funding

Army

$148.0

Navy

$164.8

Air Force$166.9

Defense Wide

$102.9

By Appropriation Title By Military Department

RDT&E,

$71.7

Military Construction

and Family Housing,

$7.6

Military

Personnel,

$138.5

Procurement,

$112.0

O&M,

$250.9

FY 2017 Request: $582.7 billion

Cuts to hit the lower FY 2017 Topline

• We will procure fewer weapons systems than planned:

– 9 AH-64 Apache helicopters(Army)

– 24 UH-60 Blackhawk helicopters (Army)

– 5 F-35 A Joint StrikeFighters

– 2 V-22 aircraft (Navy)

– 3 C-130J aircraft (Air Force)

– 4 LCAC Service Life Extension Programs (Navy)

– 77 Joint Light Tactical Vehicles (Marine Corps)

• Aircraft procurement accounts reduced $4.4 billion

• Shipbuilding reduced $1.75 billion

• Other procurement accounts reduced $2.6 billion

• Reduce plans for new military construction projects by $1.1 billion

Comparison to FY 2016 PB Plan for FY 2017

FY 2017 Force Structure

• Force structure assessed sufficient to execute the strategy

• Major elements include:

– 14 SSBNs, 450 ICBMs

– 96 Operational Bombers (154 total)

– 287-ship Navy with 11 Carriers in FY 2017

• (Building to a 308-ship Navy)

– 54+1 Tactical fighter squadrons

– 990k Army Total End Strength (460k Active)

• (30 Active BCTs in FY 2017)

– 221k Marine Corps Total End Strength (182k Active)

FY 2017 Force Structure Sufficient to Execute Strategy

• Operation INHERENT RESOLVE (Iraq and Syria) $7.5- Supports slightly increased activities

- Includes training and equipping of Iraqi security forces and vetted moderate Syrian

opposition ($0.9 billion)

• European Reassurance Initiative

• Counterterrorism Partnerships Fund

• Increases counterterrorism activities in Africa

• Base-to-OCO requirements

$3.4

$1.0

$0.2

$5.0- Consistent with enacted BBA OCO level of $58.8B

- Supports other readiness and readiness support requirements

- Includes preferred munitions

FY 2017 Overseas Contingency Operations (OCO)

OCO funding crucial to trans-regional counterterrorismefforts

(Dollars in Billions)

• Operation FREEDOM’S SENTINEL (Afghanistan) and Theater Posture $41.7

- Continues responsible transition of in-country presence

- Includes training and equipping of Afghan security forces ($3.4 billion)

- Includes other theater-wide support requirements and costs

- Includes Coalition Support ($1.4B)

Joint Force Readiness

• PB17 funds Service efforts to enhance readiness

• Focus is on recovering full spectrum readiness to meet current demands and

to ensure our Joint Force is ready for future contingencies

• Resources are not the dominant factor in readiness recovery; OPTEMPO,

training, maintenance throughput, and other factors may delay readiness

recovery

• Joint Force dependent on OCO funding for current operational demandsand

future reset requirements

PB17 allows Services to continue readiness recovery –

but gains are fragile and dependent on continued adequate

and predictable resources

• Provide a summary of what is included in the $30 billion March

request for additional appropriations

(Dollars in Billions)

– Base budget request

– Overseas Contingency Operations (OCO) budget request

– Total budget request

$+24.9

+5.1

$+30.0

• Request the Congress pass a full year Defense Appropriations bill

that includes this request for additional appropriations

• Under a CR,

– There is a tremendous mismatch of appropriations compared to the

request - not enough operating funds, too much procurement funds

– Inability to increase rate productions hampers planned programs; may

result in increased unit costs

– No new start restrictions affect planned deliveries of equipment to the

warfighter

– DoD could be limited in its ability to counter the Islamic State of Iraq and

Syria (ISIS)

Additional Budget Request in March 2017

What the FY 2017 Additional Request Would Buy

• Execute the President’s direction to:

– Conduct a 30-day Readiness Review

– Develop a Military Readiness request for additional resources based

on the results of the review

– Develop a plan to accelerate the campaign to defeat ISIS and other

worldwide violent extremists organizations

• Require additional funding to:

– Improve near-term readiness (i.e., maintenance, spare parts, training

time, peacetime flying hours, munitions, etc.)

– Fund “must pay” bills (e.g., pay raise increase to 2.1%, denied

healthcare reforms, storm damage to military facilities, NDAA added

end strength)

– Avoid 4th quarter reprogramming actions especially in the operating

accounts

– Invest in items to begin improving mid-term and long-term readiness

$0

$100

$200

$300

$400

$500

$600

$700

$800

FY01 FY02 FY03 FY04 FY14 FY15 FY16

O T T

DoD Funding from 9/11 Through FY 2018 Request

Numbers may not add due to rounding

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

DoD Topline, FY 2001 – FY 2018(Current Dollars in Billions)

Base Budget OCO/Other Budget

(Discretionary Budget Authority)

580 589

437468 479

534

601

666 666691 687

645

29

17

560578

345316

581

169

73 9179

124

187 153163

159115

82 85 6359 65

287 328 365 377 400 411 431 479 513 528 528 530 495 496 497 522 524 549 574

619

70

639

65

Note: FY 2017 reflects enacted funding provided in division A of P.L. 114-223 for the Military Constructions Bill appropriations and

division B of P.L. 114-254 (Security Assistance Appropriations Act, 2017) for the Defense Bill appropriations

March Request for FY 2017

Base = $+25B

OCO = +5B

Total = $+30B

FY17 FY17 FY18Request Amend

*Reflects enacted division A of P.L. 114-223 except it excludes $307.663 million of prior year rescissions

Changes to Original FY17 Base Budget Request by Title

(Do

llars

inB

illi

on

s)

$+24.9B

FY07FY07*

Procurement

$+13.5B

+13.0%O&M/WCF

$+8.2B

+3.9%

FY17Request

Military Personnel

$+1.0B

+0.7%

+4.8%

FY17Request for

Additional

Appropriations

Changes to Feb 2016 Budget Request

Military Construction/Family

Housing*

$+0.2B

+3.5%

RDT&E

$+2.0B

+2.9%$524 $549

Request Supports Future Capabilities

MQ-1 UAV +13/$+130

AH-64 Apaches +20/$+708

UH-60

RQ-7 UAV Mods

+17/$+376

$+248

MSE Missiles +60/$+279

Javelin +591/$+104

Guided MLRS+1188/$+155

Patriot Mods $+228

Abrams Upgrade+27/$+330

$+214

$+304

Bradley Mods

Ammunition

Ammo Industrial

Facility

I3MP

$+182

$+195

$+15.5B*

Investments Improve Near-term and Mid-term Warfighter Readiness

Navy

$+5.8B

Air Force

$+4.1B

Army

$+4.6B

Defense-Wide

$+1.0B

F/A-18E/F

V-22

V-22 Mods

P-8

C-40A

+24/$+2,320

+2/$+171

$+99

+6/$+920

+2/$+208

Aircraft Spares

Tomahawks

$+302

+96/$+85

$+43

$+433

Standard Missile

DDG-51

Ship-to-ShoreConnector

Javelin

G/ATOR

+3/$+190

+515/$+77

+3/$+125

I3MP = Installation Info Infrastructure Mod Program

G/ATOR = Ground/Air Task Oriented Radar

F-35

HC/MC-130

F-16 Mods

C-130 Mods

Bombs

Vehicles

+5/$+596

+5/$+500

$+160

$+137

$+60

$+361

Physical Security

Eq

EOD Eq

$+145

$+221

EOD = Explosive Disposal Ordinance

MDA = Missile Defense Agency

THAAD

USSOCOM

ACWA

+12/$+151

$+198

$+127

THAAD = Terminal High Altitude Area Defense

ACWA = Assembled Chemical Weapons Alternatives

(Base Budget)(Dollars in Millions)

*Includes procurement and RDT&E funding

Army Overview

Velocity of Instability

The US Army contributes troops to train, advise and assist Iraqi Security to destroy ISIL

The US Army is working with allies to deter Russian aggression and assure European nations

DESTROY ISIL

DETER RUSSIAThe US Army remains committed to training Afghanforces, and supporting counterterrorism operationsagainst the remnants of al Qaeda

The instability throughout the world has a direct impact on the number and size of US Army’s missions and operations and its ability to keep pace with the global security environment.

ENGAGE ASIA / DETER NORTH KOREA

The US Army contributes to Asia Pacific regional security and stability to deter North Korean aggression and assure Pacific partners

BUILD AFGHAN FORCES

Budget Trends

$99 $100

$67

$50$36

$28$21 $23

$243 $240

$205

$177

$162$151 $148 $148

FY 2010 – FY 2017($B)

$3.1 $.1.1 $2.7 $2.0

$144 $140 $138 $127 $126 $123 $127 $125$123

Base

$122

Base

$124

Base

$123

Base

Actuals Enacted Request

FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17Numbers may not add due to rounding

Global instability in the face of continued fiscal pressures requires leveraging OCO flexibility to meet requirements

Source: DoD Comptroller Information System

Overseas Contingency Funding (OCO)

FY14: $3.10B Base-to-OCO Transfer

FY15: $0.85B Base-to-OCO Transfer;

$.27B OCO Readiness Add

FY16: $2.20B Base-to-OCO Transfer;

$.49B OCO Readiness Add

Base Actuals/Enacted

FY17: $2.02B included in OCO request

to comply with BBA15

FY17 Base Request

(Base Funding Program)

$116.8 $117.3

$120.5$121.1

$138.4

$127.4$126.2

$122.7

$126.5$125.1

$123.1

$121.9

$124.3 $123.1

$115

$125

$135

2014 2015 2016 2017

$ B

illio

ns

2012 2013

Base-to-OCO Transfer

FY12-15 Actuals

BBA Relief - Base

FY16 Enacted

BCA Levels

FY17 PB Request

FY14: $3.1B Base-to-OCO Transfer FY15: $.85B Base-to-OCO Transfer

FY16: $2.2B Base-to-OCO TransferFY17: $2.0B included in OCO request to comply with BBA15

Army Topline(Base Funding Program)

❖ BBA15 repeats the seesaw funding of BBA13 extending the time

necessary to restore balance between readiness, end strength and

modernization.

❖ OCO funding is an essential funding source for incremental wartime

costs, but its continued use as a supplement for shortfalls to base

funding requirements comes at the detriment of prudent long-term

planning and erosion of the Army’s Base Funding program.

❖ The two-year Bipartisan Budget Acts of 2013 (BBA13) and 2015

(BBA15) provided limited predictability but did not eliminate future BCA

budget spending caps which, barring new legislation, return in FY18.

❖ BBA15 funding levels for FY17 required the Army to prioritize near-term

operational requirements and readiness at the expense of end strength,

sustainment and modernization to meet competing current and future

demands

Operational Testing

Trust Your Product!?

FY 2017 Budget Request(Base Funding Program)

Base Request

Other Base: Chemical Agent and Munitions Destruction, Army Working Capital Fund, Arlington National Cemetery 1: Includes Environmental Restoration Account (ERA) funding 2: Includes $3.1B Base-to-OCO Transfer3: Includes $.85B Base-to-OCO Transfer; $.3B Readiness Add 4: Includes $2.2B Base-to-OCO Transfer; $.5B Readiness Add 5: Includes $2.0B in OCO request to comply with BBA15

MILPERS,$55.3

O&M,$45.2

RDA,$22.6

MILCON,$1.3

Other,$0.7❖ FY17 request is $1.4B less than FY16

enacted, protecting current readiness at

the expense of future modernization and

end strength

❖ Funding levels and distribution represent

reductions required to meet the BBA15

funding toplines.

$125.1B

44%

36%

18%

Request ($B)FY14

Actuals

FY15Actuals

FY16Enacted

FY17Request

Military Personnel 56.4 56.1 56.2 55.3

Operation and Maintenance 1 44.72 43.13 43.84 45.25

Procurement/RDTE 21.2 20.6 23.9 22.6

Military Const/Family Housing/BRAC 2.6 1.8 1.6 1.3

Other Base (CAMD/AWCF/ANC) 1.3 1.1 1.0 0.7

Totals 126.22 122.73 126.54 125.15

Procurement Summary $15.1 BCapability Portfolio*

Numbers may not sum due to rounding

1: Includes OCO request to comply with BBA15: Missiles $150M and Other Procurement $162M

❖ Prioritizes modernization of Apache, Black Hawk,

and Chinook helicopter fleets in support of the

Total Force

❖ Prioritizes modernization of Abrams and Bradley Mods, Stryker (Double V Hull & Lethality),

Paladin Integrated Management, and Joint Light Tactical Vehicle in support of the Combat

Vehicle Modernization Strategy

❖ Modernizes the Mission Command Network to enable Soldiers with information and

protected connectivity across all tactical echelons for Unified Land Operations in support of

the Joint Force and our multiple partners* Small amount of FY17 S&T procurement not reflected in pie chart

Ensure formations possess the appropriate balance of lethality, mobility, situational awareness and protection

Request ($B)

FY14

Actuals

FY15

Actual

FY16

Enacted

FY17

Request

Procurement Total 14.1 13.9 16.4 15.1 1

Aircraft 4.8 5.2 5.9 3.6

Missiles 1.5 1.2 1.6 1.7

WTCV 1.6 1.7 2.0 2.3

Ammunition 1.4 1.0 1.2 1.5

Other Procurement 4.7 4.7 5.7 6.0

Overseas Contingency Operations

1: MILPERS account does not include $63M in FY17 OCO request to comply with BBA152: O&M account does not include Base-to-OCO Transfers: FY14: $3,100M; FY 15: $850M; FY16: $2,200M. Does not include $1,650M in FY17 OCO request to comply with BBA153: RDA account does not include $312M in FY17 OCO request to comply with BBA154: The Joint Improvised Explosive Device Defeat mission has been assumed by a new DOD organization for FY17 and beyond. Partial FY16 and FY17 JIEDDF funding information can be found in the DOD Budget Materials.

Request ($M)FY14

Actuals

FY15

Actuals

FY16

Enacted

FY17

Request

Military Personnel (MILPERS) 5,593 3,190 2,037 2,2281

Operation & Maintenance (O&M) 23,6362 17,1352 12,2722 13,8262

Research, Development, & Acquisition(RDA) 1,802 1,676 2,084 2,5633

Military Construction, Army (MCA) - 37 - 19

Working Capital Fund(AWCF) 45 - - 47

Army Total 31,076 22,038 16,393 18,682

Passthrough / Transfer Accounts

Afghan Security Forces Fund 3,962 4,109 3,652 3,449

Iraq Train & Equip Fund - 1,618 715 630

Syria Train & Equip Fund - - - 250

Joint Improvised Explosive Device Defeat Fund 879 445 350 - 4

Afghanistan Infrastructure Fund 199 - - -

All Army Appropriations 36,116 28,209 21,110 23,011

❖ Operation FREEDOM’S SENTINEL (Afghanistan; Horn

of Africa) includes Operation Spartan Shield

(CENTCOM)

❖ Operation INHERENT RESOLVE (Iraq)

❖ European Reassurance Initiative (Europe)

❖ Training for Moderate Syrian Opposition (Levant)

O&M, 62%$15,476

Pass-Through, 17%$4,329

MILPERS,9%$2,291

RDA,11%$2,875

OCORequest$25.0B5

MCA/AWCF,$66

5: $25B OCO requestincludes $2B in OCO to comply with BBA15

OCO-European Reassurance Initiative

U.S. Army AH-64 helicopter crew, assigned to 12th Combat Aviation Brigade, provides over watch for a Danish Leopard 2 battle tank moving into initial battle position on the live-fire range during Operation White Sword at the Oksbol Training Area, Denmark, Dec. 10, 2015

❖ Extends Presidential initiative beyond initial two

year period

❖ Continues Brigade Combat Team rotations to

Europe

❖ Increases warfighting capacity on the continent

through increased prepositioned equipment stocks

❖ Continues to provide rotational aviation capability

to the European Command Area of Responsibility

Initiative ($M)

FY15

Actual

FY16

Enacted

FY17

Request

Increased Presence $ 266 $ 320 $ 727

Build Partner Capacity $ 3 $ 38 $ 50

Additional Bilateral & Multilateral

Exercises & Training $ 15 $ 61 $ 89

Setting Conditions $ 161 $ 91 $ 1,959

Total $ 444 $ 509 $ 2,825

The Army is key to the EUCOM effort to demonstrate US resolve to assure our European

Allies and deter any aggression that could threaten European security

FY 2017 Amended Budget Request(Base Funding Program)

Other Base: Chemical Agent and Munitions Destruction, Army Working Capital Fund, Arlington National Cemetery 1: Includes Environmental Restoration Account (ERA) funding2: Includes $2.0B transfer of Base requirements to OCO to comply with BBA15

O&M,$47.3

RDA,$27.1

MILCON,$1.4

Other,$0.7

❖ FY17 total request is $7.19B more than FY17 PB Request, enhancing current readiness while providing a more balanced funding program across all appropriations

$132.3B

42%MILPERS,

$55.7

36%

20%

Request ($B)FY17

Request

FY17Amend’t

FY17Total

MilitaryPersonnel 55.3 0.4 55.7

Operation andMaintenance1 45.22 2.1 47.3

Procurement/RDTE 22.6 4.5 27.1

Military Const/Family Housing/BRAC 1.3 0.1 1.4

Other Base(CHMD/AWCF/ANC) 0.7 0.1 0.8

Totals 125.12 7.2 132.3

New Paradigms (?)

1: Includes $312M in OCO request tocomply with BBA15

Modernization S1 ummary (Base) $22.6 B

Capability Portfolios

Request ($B)

FY14

Actuals

FY15

Actuals

FY16

Enacted

FY17

Request

Procurement Total

RDT&E Total

14.1

7.1

13.9

6.7

16.4

7.6

15.11

7.5

RDA Total 21.2 20.6 24.0 22.6

❖ Slows the pace of near-term development and

accepts risk in reduced operational overmatch

in the mid-term

❖ Protects Science and Technology (S&T)

funding to support the Army of 2025 guided

by the Army Operating Concept

❖ Continues to develop and incrementally improve existing

fleet systems to enhance survivability, mobility, and lethality

Balanced portfolio, fiscally constrained by current operational/readiness priorities

RDT&E Summary

Numbers may not sum due to rounding

Request ($B)

FY14

Actuals

FY15

Actuals

FY16

Enacted

FY17

Request

RDT&E Total 7.1 6.7 7.6 7.5

Basic Research 0.4 0.5 0.5 0.4

Applied Research 0.9 1.0 1.1 0.9

Advanced Technology Dev. 1.0 1.1 1.1 0.9

Demonstration/Validation 0.4 0.3 0.5 0.5

Engineering Manufacturing Dev. 1.9 1.6 2.1 2.3

Testing & Management Support 1.3 1.0 1.1 1.2

Operational System Development 1.0 1.2 1.2 1.4

$7.5 B

Capability Portfolio

❖ Invests in key S&T efforts to include Combat Vehicle & Automotive

Technology, Joint Multi-Role Helicopter, and High Energy Lasers

❖ Major engineering and developmental efforts include: CombatVehicle,

Air & Missile Defense, and Aircraft Improvement Programs; Assured Position,

Navigation & Timing; and CyberspaceOperations

❖ Starts Ground Mobility Vehicle and Mobile Protected Firepower to increase

Brigade Combat Team mobility and lethality in support of the Combat Vehicle Modernization Strategy

Continue to invest in military-unique revolutionary and evolutionary technologies to solve future capability gaps