Trump’s 2019 Missile Defense Budget: Choosing Capacity over Capability

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On February 12, the Department of Defense (DoD) released its budget request for FY 2019, which included a total of $12.9 billion for missile defense-related activities. The proposed topline for the Missile Defense Agency comes in at $9.9 billion, comprising $2.4 billion for procurement, $6.8 billion for research, development, test, and evaluation (RDT&E), $500 million for operations and maintenance (O&M), and $206 million for military construction (MILCON). The $9.9 billion request is a 26 percent increase from the FY 2018 budget request of $7.9 billion. Funding for ballistic missile defense within the services includes about $3 billion, largely for the procurement of Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) and Standard Missile-6 (SM-6) interceptors.

Overall, the budget reflects a near-term focus on capacity of existing programs, even at the expense of capability improvements. In its current form, the request boosts funding for all four families of interceptors. For homeland missile defense, this includes the continued improvements to the capacity and reliability of the Ground-based Midcourse Defense (GMD) system by continuing to deploy an additional 20 interceptors, several testing spares, and a new missile field at Fort Greely, Alaska. The request also deepens the magazines for Terminal High Altitude Area Defense (THAAD), Aegis, and Patriot interceptors, continuing a procurement-heavy trend from last year.¹

 The focus on capacity does not answer the question, however, how missile defense efforts will be adapted to the new reality of great power competition described by the National Security Strategy and the National Defense Strategy.²

One of the few new muscle movements in the entire budget is the addition of two radars in the Pacific for discriminating long-range missile threats to the homeland. The idea of a discrimination radar for Hawaii had been publicly floated over the past two years, and had previously been part of the yet-unpassed appropriations marks from the House and Senate appropriations committees. The Hawaii radar is scheduled for a 2023 deployment, with an additional radar deployed by 2024 at a yet-undisclosed location. The two radars will cost approximately $2.5 billion over the course of the Future Years Defense Program (FYDP).

The inadequacy of the request lies not with the top line, but rather with the capabilities and strategy that the top line fails to prioritize.

Although these radars would be useful to close the near-term Pacific midcourse gap against limited ballistic missile threats to the homeland, such funds must be weighed against the opportunity cost for larger improvements in capability provided by a space-based sensor layer that could provide substantially more capable birth-to-death tracking and discrimination on a more global scale and against a wider diversity of threats. The choice for capacity over capability reflects a near-term time horizon, but further delay in more advanced technologies will carry costs at a later time.

In sum, the administration’s budget request for FY 2019 prioritizes near-term readiness against limited but growing ballistic missile threats from sources such as North Korea. This choice, however, falls short of connecting missile defense efforts to the reality of renewed great power competition as articulated in the National Defense Strategy. The inadequacy of the request lies not with the top line, but rather with the capabilities and strategy that the top line fails to prioritize. The 2019 request’s modesty of ambition is manifested by low funding for more advanced programs, such as boost-phase intercept, space-based sensors, and volume kill.

Should the forthcoming Missile Defense Review address some of these issues and recommend programmatic changes, their implementation may have to wait until the 2020 budget, unless a budget amendment of some kind prioritizes them for the coming fiscal year.

The 2019 Top Line in Context

The FY 2019 request comes shortly after a congressional deal to raise Budget Control Act (BCA) caps on defense and nondefense spending negotiated as part of a continuing resolution (CR) on February 8.³ The congressional agreement both clears the way for a forthcoming FY 2018 appropriations bill that would hew closer to the higher numbers of the 2018 National Defense Authorization Act (NDAA) and Senate Appropriations Defense Subcommittee (SAC-D) markup, and provides relief from BCA caps for FY 2019.⁴

Under the terms of the current 2018 CR, MDA would receive $10.5 billion, which would be MDA’s highest appropriation since 2005 (in constant dollars). This level of funding for MDA came about due to an additional $2 billion approved in an emergency supplemental bill for missile defense and defeat programs passed in December 2017.⁵ Should pending Senate appropriations bills serve as the baseline, the final FY 2018 appropriation could grow to approximately $11.3 billion.⁶

The 2019 request for the FYDP projects a gradual decline over the next few years. Admittedly, FYDP projections are often poor predictors of actual spending. Nevertheless, the content of the 2019 request would seem to project that the current spike in missile defense spending may be short-lived. A more constant FYDP projection could be necessary for the current emphasis on capacity building to be succeeded by an emphasis on capability building.

Continued Procurement Growth

One recent trend that continues into the 2019 request is the growth of MDA’s procurement account, both in real terms and relative to the topline. The 2018 emergency supplemental emphasized short-term operational needs, expanding the number of Ground-based Interceptors (GBIs) from 44 to 64, and procuring additional SM-3, THAAD, and PAC-3 MSE interceptors. Under the current CR for 2018, some 27.3 percent of MDA’s topline goes to procurement. Part of the recent spike is due, however, to GMD dollars having only recently been included in the formal procurement account. Prior to 2017, not a single dollar for GMD had been colored as procurement, but instead as RDT&E.⁷

The request of $2.4 billion for procurement would represent about a quarter of MDA’s 2019 topline. Although the current FYPD suggests that the relative percent of procurement will decline, that downslope presupposes that no additional GMD procurement will occur after 2021, and that THAAD and Aegis procurement will slow down considerably, which may or may not hold up. As noted in a 2016 CSIS study, the growth of MDA procurement accounts has the potential to squeeze its RDT&E efforts as the accounts compete for funds within a limited top line.⁸ The 2019 request, for instance, includes over $1 billion less RDT&E funding than the FY18 SAC-D proposal. The falling toplines in the FYDP are offset by the projected decline in procurement dollars, however, resulting in a steady rate of projected RDT&E spending for MDA over the next five years, between $6.7 and $6.9 billion in unadjusted dollars.

Because the new Memorandum of Understanding with Israel takes effect this year, this is the first presidential budget request to include the higher amount of $500 million for Israel, rather than the typical sum of about $150 million, which Congress would annually increase. Israeli programs continue the post-2012 trend to figure in the procurement as well as the RDT&E accounts for MDA. Indeed, Israeli programs represent three out of nine procurement lines for MDA (Arrow, David’s Sling, and Iron Dome).

In short, the presidential request largely continues the current program of record at higher levels of spending, with a special emphasis on procuring additional interceptors. This emphasis on procurement for ballistic missile defense interceptors is not matched, however, by comparable emphasis on research and development of more advanced technologies.

Major Program Movements

Because the Missile Defense Review has not yet been released, the 2019 budget request could be subject to revision either in the coming months or in subsequent years. Pentagon officials have previously indicated that the administration’s priorities will be more fully reflected in the 2020 submission.⁹

One of the stated objects of the review from presidential direction is to look at the relative balance between homeland and regional missile defense programs. Although the new submission shows a noticeable uptick in spending for homeland missile defense programs, regional missile defense has also grown significantly. THAAD and Aegis modernization funding, for instance, exceeds that for homeland missile defense funding, but the proportion levels out over the FYDP. Another stated object of the forthcoming review, at congressional direction, is to explore the cruise missile threats to the homeland, hypersonic threats, and offense-defense integration to more comprehensively defeat rather than merely intercept missile threats. It remains to be seen how the forthcoming policy review will address the more complete spectrum of challenges.

Many programmatic priorities remain roughly constant from 2018 for both homeland and regional missile defense programs. In terms of homeland defense, the 2019 request allocates $524 million to continue the procurement of an additional 20 GBIs and the construction of a new missile field, Missile Field 4, at Fort Greely. The base GMD account for RDT&E is $926 million, which is $108 million less than its 2017 appropriations level, but $296 million more than the 2018 budget had projected for 2019.

Presumably reflecting the desire to recover some modest delays in the recent past, the request expands funding to develop the Redesigned Kill Vehicle (RKV) and a modified booster by some $64 million relative to 2018’s projection for 2019. Funding for the Improved Homeland Defense Interceptors (which includes RKV) grows significantly in 2022–2023, suggesting this is when MDA plans to procure the new kill vehicles. The 2019 request also includes MILCON funding for two new silos in Fort Greely’s Missile Field 1. Due to safety restrictions during construction, the additional silos will create flexibility and simplify interceptor emplacement, thereby helping ensure that additional GBI emplacements do not result in fewer than 64 operational interceptors at any given time.¹⁰

The 2019 request for Aegis BMD falls just short of the projections from the 2018 budget, with $593 million for procurement and $768 million for its base RDT&E account, a reduction of $39 million and $38 million respectively. The most notable element for Aegis this cycle concerns the decision to procure six additional Standard Missile-3 Block IIA (SM-3 IIA) interceptors in FY 2019, in addition to the funding for 16 SM-3 IIAs missiles from the FY 2018 emergency supplemental, despite a failure of the missile during a January 2018 test.¹¹ The IIA missile is destined for U.S. Navy ships, the two NATO Aegis Ashore sites, and Japan’s own Aegis defenses, both afloat and ashore. In briefing the FY 2019 budget, MDA Director of Operations Gary Pennett noted that although the test failure is not expected to affect the overall SM-3 IIA timeline, MDA does not intend to procure those missiles until the cause of the failure is identified and remedied.¹²

THAAD receives a noticeable uptick in procurement spending for 2019, rising from $441 million in the 2018 budget projection to $874 million in this year’s request. The 2018 emergency supplemental had likewise added an additional $509 million for THAAD atop the prior request. But while doubling down on more THAAD interceptors, the latest budget request drops previous plans for some kind of qualitative evolution with a THAAD follow-on program. Another notable element for the THAAD program is the plans under its testing budget to conduct an operational flight test with the intent to demonstrate its capability to interoperate with both Aegis and Patriot.¹³ THAAD has previously demonstrated an ability to network with Aegis through the Command and Control, Battle Management, and Communications (C2BMC) network, but Patriot will be added into a 2019 test.¹⁴

The heavy emphasis on near-term procurement and terrestrial radars further underscores how the 2019 budget increase focuses on short-term urgent needs at the expense of longer-term research and development necessary to outpace the threat. MDA’s work on developing more advanced missile defense technologies apparently fails to inflect upwards in any meaningful way.

The most discussed of these programs is MDA’s attempt to deploy a boost-phase directed-energy weapon on a high-altitude unmanned aerial vehicle (UAV), an effort known as the Low Power Laser Demonstrator. This program will receive $61 million of the $148.8 million Technology Maturation Initiatives program, with an additional $5 million going to the efforts to scale down the size of the laser to fit on the high-altitude UAV.¹⁵

MDA also requested $189.8 million for the Common Kill Vehicle (CKV) program as a precursor effort to develop a Multi Object Kill Vehicle (MOKV), although previous requests for the program have been trimmed by defense appropriations committees in Congress. MDA currently projects the bulk of MOKV funding in FY 2022 and 2023, suggesting that is when it envisions the CKV technology to develop.

The current request does include some modest investments in new sensor technology, but the programs remain stuck in the study stage. In particular, MDA had previously requested funding to study sensors to detect and track hypersonic missile threats, but because it was a new program in the FY 2018 request, it has not yet been able to begin due to Congress’s continued reliance upon a CR rather than a full-year appropriation. Over this year’s FYDP, the Hypersonic Defense program is slated for $657 million.

The 2019 PB adds a new program to build two new discriminating radars in the Pacific. These include a medium-range discrimination radar for Hawaii, scheduled for deployment in 2023, and an additional radar with similar features to be deployed the following year to a yet-undetermined site in the Pacific. Including MILCON, MDA projects to spend about $2.5 billion building the radars over the course of the FYDP. MDA’s director of operations explained the need for such capability, saying, “one of the things that we need to do is maintain custody of the threat from birth to death and so with terrestrial based radars we have to put them in locations that we can maintain custody.”¹⁶ The location of the Pacific radar has not been identified, but one option might be in Hokkaido, Japan, or perhaps somewhere in southern Japan, with at least one face oriented to the east.

Pennett further stated during the budget rollout that these new radars would mirror the capabilities of the LRDR in Alaska, which would be sufficient to meet today’s threat but would fail to adequately address the emerging and evolving advanced threat, including quasi-ballistic boost glide vehicles. Here again we see a focus on near-term capacity over capability. Instead of replicating LRDR, these radars might be seen as an opportunity to leverage the evolving digital transformation of sensor technologies and potentially pave the way to subsequent space sensors.

Failure to Advance a Space Sensor Layer

As practically the only new activity in MDA’s budget, the addition of the Pacific radars currently serves to highlight the overall capability modesty of the current request. To be sure, terrestrial radars will remain essential for missile defense, but the 2019 budget request’s most striking shortfall is its failure to more substantially invest in a space-based sensor layer. In missile defense circles, the observation is frequently made that there are “only so many islands in the Pacific” upon which to put such radars, but even an archipelago of radars would remain limited by the curvature of the earth. Within the first few minutes of his budget briefing, Pennett himself had articulated why terrestrial radars are inadequate, noting that the hypersonic threat really “demands a globally present and persistent space sensor network to track it from birth to death.”¹⁷

The 2019 budget request continues to kick the can on space sensors.

Unfortunately, the 2019 budget does not do this. Each of the last five administrations have had on paper some sort of space-based sensor layer for tracking and discrimination—but each has failed to deploy an operational constellation. The 2019 budget request continues to kick the can on space sensors. Absent a course correction, the Trump administration may become the sixth successive administration committed to these paper satellites.

Three lines within MDA’s budget relate to a future space sensor layer, but none of them begin the development and deployment of such a capability. Within its Technology Maturation Initiatives program, MDA is working to integrate a multispectral targeting system sensor onto a UAV as part of a test bed that could, in principle, form the basis for a future space sensor layer.¹⁸ Other MDA space-related funding includes the two Space Tracking and Surveillance System (STSS) demonstrators, but this merely sustains the satellites as test assets. The proposed funding for the Space-based Kill Assessment (SKA) payload also remains constant, as the program has delayed its launch from 2017 to 2018.¹⁹Although space sensor-related funding could in principle be hidden in MDA’s classified Special Programs line, it seems unlikely that it would be more fully developed, let alone fielded, from within that line.

The failure to more aggressively pursue more advanced capabilities is consistent with the 2019 request’s overall choice to prioritize near-term capacity, but nevertheless represents a major shortcoming.

The failure to more aggressively pursue more advanced capabilities is consistent with the 2019 request’s overall choice to prioritize near term capacity, but nevertheless represents a major shortcoming.

Non-MDA Programs

Outside of MDA, the Army’s Patriot missile defense program received a particular boost from last year’s emergency supplemental and continues to receive significant procurement funding in the 2019 request. Indeed, the growth for Patriot and related interceptors constitutes the majority of growth in non-MDA missile defense accounts. The emergency supplemental included $814 million for both procurement of additional PAC-3 MSE interceptors, as well as modifications to existing Patriot missiles and systems. The 2019 request for Patriot includes over $1.5 billion requested for overall Patriot and interceptor modernization, but a full $1.1 billion of this increase goes to MSE procurement.

Navy programs for procurement and RDT&E relating to the Standard Missile-6 (SM-6) and Air and Missile Defense Radar (AMDR) also see growth in the FY 2019 request. The U.S. Navy plans to procure 125 SM-6 missiles in 2019 and has also proposed a multiyear procurement plan to purchase 625 missiles between FY 2019–2023. The U.S. Navy also plans to buy three AMDRs for future Flight III Arleigh Burke-class destroyers within its modernization and shipbuilding plans. The first AMDR-equipped Flight III destroyer, the USS Jack Lucas (DDG-125), is scheduled to begin construction this year, with a projected delivery date of April 2023.²⁰

Inadequate to the Threat

The Trump administration’s 2019 budget request includes a high level of investment to increase the capacity of current missile defense programs, but the objects of those investments fall short of outpacing the threat for both ballistic and nonballistic missile attack. Despite recent congressional expressions of interest in more advanced capabilities, the only new start program in the 2019 request is the modest addition of two additional radars in the Pacific to help fill the midcourse discrimination gap against limited North Korean ballistic missile threats to the homeland.

Capacity building is necessary, but insufficient. Prioritizing short-term defensive needs for North Korea is understandable, but the budget’s proposed activities are inadequate for more advanced threats and to the return of great power competition articulated in the recent National Defense Strategy. The 2019 request gives short shrift to longer-term investments in capabilities such as a space-based sensor layer, boost-phase intercept, directed energy, and multi-object kill vehicles.

It now falls to Congress and to decisions after the forthcoming Missile Defense Review to identify and prioritize capability enhancements as well, either with an amendment for this year or in the development of the 2020 budget. Failure to do so will constitute a missed opportunity.