New Priorities, Familiar Challenges: Defense Trends in Budgets, Appropriations, and Contract Obligations

Abstract

The Department of Defense (DoD) and its industry partners face an uncertain fiscal environment that includes constraints from continuing resolutions (CRs), the absence of a 2-year budget agreement, and budgetary pressure from program growth, inflation, and other cost increases. Also, administration priorities include many initiatives (such as supply chain resiliency, Made in America, diversity and inclusion, and climate actions) that can impact DoD requirements and contracting. In addition, the defense industrial base needs to invest and prepare for new ways to support its DoD customers. In this paper, the PSC Foundation describes recent trends in DoD funding and contract obligations and explores how those trends link to current challenges and new priorities. A panel of top defense experts with experience in both government and industry will then discuss the impacts of limited defense budgets and the constraints of CRs on defense acquisition of products and services and the defense industrial base. They will also discuss the impact of the Biden–Harris administration’s stated priorities on defense spending as reflected in the FY2023 President’s Budget Request and Future Years Defense Program and ways that the defense industry can plan and prepare to help address and support those priorities.