FY24 Department of Defense Emergency Supplemental

On April 24, President Biden signed into law P.L. 118-50, a $95 billion emergency supplemental that includes $67.3 billion for the Department of Defense (DOD) for activities beyond its base budget. The Act has three Divisions that provide DOD funding for operations and resupply of equipment in Ukraine, Israel, and the Indonesia/Pacific region. The Biden administration requested an emergency supplemental package of $92 billion last October for many of these activities (plus border-related funding) and the Senate passed a $95 billion version in February (without border funding). The House did not act until April when it passed a slimmed down version of the request which was subsequently passed by the Senate and signed into law by the President.

While the predominance of the DOD funding ($41 billion) is for Operation and Maintenance (O&M) (see Chart I below), much of that funding is available for transfer or directed to be made available for the procurement of specific programs. A smaller amount ($238 million) is available to the Military Personnel accounts and the Research, Development, Test, and Evaluation (RDT&E) accounts ($640 million). While this Act increases DOD spending by nearly 8% above the base FY24 $843 billion appropriation, the increase is for ongoing operations primarily in Israel, the Ukraine, and Taiwan. There is a big $3.3 billion exception for the Navy to improve the submarine industrial base.

The Department has long used emergency supplemental funding to help pay for the incremental cost of increased operational tempo and has, at times, used the supplemental process to help make it whole. Presidents typically come into office with disdain for the use of supplementals, and leave having made use of them because the Department’s base budget does not fund contingencies. At a time when the Department is attempting to move away from a post 9/11 counter-terror mindset to focus on deterring a pacing challenge from China, emergency supplemental funding is critical to addressing the realities our adversaries pose. Without the supplemental, DOD would be forced to take money from RDT&E and procurement programs to cover O&M costs. The supplemental offers DOD the flexibility it needs to move funds towards its priorities without starving the investment accounts.

Division A – Israeli Security Supplemental Appropriations:

This appropriation provides $13 billion to the Department of Defense. Most of the funds are for the purchase of weapons and weapon systems. Although there is $4.4 billion made available to the O&M Defense-Wide account, those funds are transferrable to other accounts for either new procurement or repair and replacement of existing equipment. There is $6.2 billion for procurement with all but a billion of that going to the Defense-Wide account. The Act directs the $5.2 billion in the Defense-Wide procurement to be transferred to the Government of Israel for Iron Dome and David’s Sling air defense systems ($4 billion) and the remaining $1.2 billion for the Iron Beam defense system to counter short-range rocket attacks. The Army receives just over

$800 million for the procurement of ammunition and the Defense Production Act Purchases account receives just under $200 million. There is also a general provision for $2.4 billion that is available for transfer to other accounts (Military Personnel, O&M, Procurement, RDT&E, and Defense Working Capital) for US operations, force protection, deterrence, and the replacement of combat expenditures by U.S. Central Command.

Division B – Ukraine Security Supplemental Appropriations:

The preponderance of the Act’s spending is in this Division and DOD receives $48.4 billion with $34.3 billion being for O&M. The Defense-Wide account receives nearly $28 billion in O&M funding of which $13.8 billion is for the Ukraine Security Assistance Initiative and up to $13.4 billion may be transferred to other accounts (O&M, Procurement, and Revolving and Management) for replacement or repair of existing unserviceable equipment and for reimbursement to DOD for defense services provided to the government of Ukraine. The Act also provides $238 million in Military Personnel funding to the services and just over $13 billion in Procurement funding primarily to the Army and Air Force. Finally, $633 million is made available for RDT&E of which $407 million is directed to the Air Force.

Division C – Indo-Pacific Security Appropriation:

This Division provides a total of $5.9 billion of which just over half ($3.3 billion) is for improvements to the submarine industrial base. Those funds are made available to the Navy in its O&M account ($558 million), its Shipbuilding and Conversion account ($2.2 billion), its Other Procurement account ($294 million), and its Military Construction account ($282 million). The shipbuilding funding is advanced procurement funding for the Columbia class ballistic missile submarine ($1.955 billion) and the Virginia attack submarine program ($200 million). The O&M Defense-Wide account receives $1.9 billion to respond to the situation in Taiwan. These funds are transferrable to other accounts (O&M, Procurement, Revolving and Management) for the replacement and repair of existing unserviceable equipment and for defense services provided to Taiwan. There is a General Provision which provides the Department $542 million that may be transferred into O&M, Procurement, or RDT&E accounts for unfunded priorities in the Indo-Pacific Command (INDOPACOM).

Chart 1. Source: P.L. 118-50

This Act provides the Department a robust amount of transfer authority which will enable it to move funds where most needed to address circumstances on the ground. Because the Act was passed well into the second half of the fiscal year, this flexibility should be welcomed by the Department which received a less-than-inflation increase in non-emergency spending in its regular appropriation. In addition to the transfer authority offered in this bill, we should expect to see a reprogramming request from the Department prior to June 30 for up to $6 billion, consistent with its FY24 General Transfer Authority.