Anti-Imperialism/Foreign Policy

Defense Firms Sound Inflation Alarm as Congress Mulls 2023 Budget

Trade groups representing defense companies large and small are pushing lawmakers to add tens of billions of dollars to the Pentagon’s budget to make up for months of high inflation that is only now starting to level off.

One group, the National Defense Industrial Association, estimates that inflation will cost the Pentagon $110 billion in lost “buying power” between fiscal years 2021 and 2023.

“This loss comes at a dangerous time,” NDIA said in a new white paper that it began circulating on Tuesday. “DoD faces the challenge of keeping pace with China while the defense industrial base (DIB) it depends on still suffers from COVID-19, supply chain, and workforce challenges.”

NDIA, the Aerospace Industries Association, and the Professional Services Council urged lawmakers to take inflation into account when reviewing the Pentagon’s fiscal 2023 budget request—and particularly if they pass a stopgap spending measure in the absence of a full-year appropriations bill.

“To protect readiness, maintain critical acquisition and [research-and-development] schedules, and avoid waste, we request that Congress consider inflation when setting the topline for a continuing resolution,” the associations wrote in a Monday letter to Senate and House appropriations leaders.

NDIA said the Pentagon needs $815 billion, a $42 billion increase, to keep pace with inflation in 2023.

“If the shortfall is left unaddressed, we should expect to see over time growing maintenance backlogs, lower readiness ratings, delays in modernization efforts, cost overruns in weapon and construction programs, and further disruptions to recruiting and retention,” NDIA said.

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