STAFF: Good morning. I'm Christopher Sherwood, OSD Public Affairs.

Today's briefing is on the Department of Defense's Fiscal Year 2024 Budget Request. Speaking with you today are the undersecretary of defense comptroller chief financial officer, Michael J. McCord, and director of force structure, resource and assessment with Joint Staff, Vice Admiral Sara A. Joyner. They will provide opening remarks and take a few questions. Attribution is on the record.

Prior to asking your question, please state your name and your affiliation. Please limit your questions to one and one follow-up. I will let you know when we're nearing the end and there's time for one last question.

With that, it's my pleasure to introduce the Honorable Mike McCord and Vice Admiral Sara Joyner.

Sir?

UNDER SECRETARY OF DEFENSE (COMPTROLLER) MICHAEL J. MCCORD: Thank you, Chris, and thanks, everyone, for being here today. Vice Admiral Joyner and I will be -- giving overview, and then after that, we'll take questions.

So before I talk about the contents of the budget, I just want to take a minute to thank the people who made it the high-quality product that it is. I want to start by thanking the secretary and the deputy secretary for their leadership, and Secretary Hicks in particular, and Admiral Grady for their leadership of the very comprehensive department-wide review process that we go through over a period of months. I think you just got a flavor from the deputy's remarks of the vision and the drive that she has in leading our construction of this budget.

I also want to thank CAPE Director Susanna Bloom, who is a superb integrator and thought leader. Throughout this process, she has been a partner to Admiral Joyner and I every step of the way. She is ill today and not with us here today, but she has been ably assisted by Joe Nogueira, who just retired, Mike Payne and the whole CAPE team. On my team, nobody works harder or longer to get a quality budget across the finish line than our deputy comptroller, Anne McAndrew, who leads my team and is sitting right there. So -- and there's also many others in the services, in the combatant commands across DOD who contribute, some of whom I see all the time, and you'll see them follow us today here on the -- in this room, and some of whom I will never meet out in the field. So it takes a real team to do this.

So with that, let me get to the budget. I want to make three main points before I go into any slides.

First, to me, one of the big themes of this budget is continuity. This is our third budget of this administration. It's based on the same National Defense Strategy we submitted 11 months ago, so there's no big surprises in here, I don't think. Everything we cared about and funded in last year's budget, which was -- was released contemporaneously with the NDS, is funded and we care about still in this budget.

Second, the thing that is newest and biggest -- and you've already heard about this a little bit -- is probably munitions. This is is new in the sense of the emphasis in this budget, but we've been talking with our committees about it, and I think we've been talking with some of you about it for at least six months, so -- Ukraine has really informed and highlighted the need to up our game here, so we'll talk about that as we go through. We are, for the first time ever, expanding the multiyear procurement authority which has been in law for decades, of what -- beyond platforms like ships, airplanes and helicopters, into the munitions and missile space, following up on the authorities we were given in this area in the National Defense Authorization Act last -- late last year.

Third main point, as in the -- as was the case with last year's budget, the focus here is making our military more capable, not making it larger. You won't see a lot of force structure changes in this budget.

And finally, Ukraine support above the pre-conflict levels is not in this budget. The situation remains too fluid. The way we're handling this is the way we've handled every emerging operation in the last 50 years, and that is supplementals, so that is what we're doing in '23. That would be the plan for '24.

So with that, let me go to the first slide on the strategy.

Vice chairman kind of touched on this. The strategy, as Secretary Austin says, is our North Star. The point of this budget is to expand our implementation of the NDS and go further in the same direction, not go in new directions. So we've been working actively to implement this strategy. A big part of that is linking the strategy and the resources. That's what our review is all about. You've heard about that from the deputy secretary and the vice chairman. You're going to continue to hear it from us.

I won't read this to you. I think you all are familiar with this. Again, this -- the strategy remains focused on the PRC. What happened in Ukraine has not changed that. So the four priorities the vice chairman noted remain important to us.

And let me next turn to the budget itself. The top line broken out by our major military department components. The budget is driven by and vital to the execution of our strategy and the -- both the National Security Strategy and the NDS. We -- was built in a thoughtful way to align those two. The secretary, that is his top priority with us, is making sure that we are implementing his strategy, not doing anything else in this budget.

The top line itself, $842 billion, is $26 billion, or 3.2 percent more than what Congress enacted last year. It's closer to nine percent more than what we requested last year, and it's basically $100 billion higher than what we had just two years ago.

This budget represents a 0.8 percent real growth, so just under one percent real growth, over F.Y. '23 enacted level, which included, as you recall, a fairly substantial congressional increase of $43 billion to our top line, so it is higher than that still by $26 billion.

When I give you that real growth calculation, that ensumes a -- assumes a GDP inflation rate for F.Y. '24, next year, compared to this year of 2.4 percent as directed by OMB. This applies to the goods and services we buy. We can talk about this later, but pay raises and other items such as housing costs are adjusted by separate factors. The 2.4 doesn't literally apply to everything in this budget.

I will also just make a note that there's a footnote there you probably can't read from here, that the CHIPS Act, which is a -- a big a congressional action last year, is technically a different kind of funding than the regular discretionary budget. It -- it's a small amount of money, $400 million, but important, and it is additive to these numbers.

Let me turn next to this chart, which kind of sketches out what our plan is over the next five years.

Over the next five years, F.Y. '24 through '28, our FYDP years for this budget, we are at $297 billion, so we could perhaps round to $300 billion higher on the top line than we were just a year ago in the plan that we submitted to Congress last year. For the out-years, as I said, the -- for this year, the budget is a increase of 3.2 percent over what Congress enacted last year. For the out-years, that increase grows at the rate of inflation as predicted -- as projected by OMB.

So that's why that out-year profile has a steady slope. It's -- it's the OMB assumptions that drive that.

So, over the last two years going from the -- this administration's first budget, F.Y. '22, to where we are now, the president has agreed to give us $100 billion per year additional resources to implement the NDS with urgency. So, we are putting our money where our strategy is. And our efforts together with support of Congress are really moving the needle.

I -- you know, as the deputy said, outputs are what matter, $100 billion a year, however, is real progress. The budget alone does not deter anyone, but you get that returns from capability, capacity, will, alliances, many other factors. But without the capacity and capability that is funded in a budget, it's hard to make things real.

So, the budget is an important contributor to the outputs that the deputy was talking about. Again, as she said, if we get the funding on time. As she noted, we've lost 51 months, if you're counting, and I do, stuck in C.R.s over the last 13 years, over four years. So that effectively has shrunk the fiscal year in a sense from 12 months to 8 months over the last decade plus. And that is something -- a path that we don't want to continue on. We do like the path on that chart, but we don't like the path of the timing that kind of underlies it.

So, let me now -- next chart, just to give you a little bit of a rundown on how the top line has looked over the last dozen or so years. Mainly the Budget Control Act there, which it kind of spans the whole middle of that chart. You can see how it dropped down and has come back up.

You can see also that, again, the old concept of OCO funding, which was phased out at the start of this administration, is the red bars on top. We are past that now, although those activities in Central Command, of course, are continued now, have been moved into the base budget.

And again, you can see, kind of, how the Budget Control Act impacted us. We're certainly in a better place now, as evidenced by the way the top line has -- and the support has grown in the last couple years. Given our security challenges, we think that's appropriate. And I for one certainly hope we don't see a revival of the approach of arbitrary funding cuts that we experienced during my first tour here.

Next, this goes back to my earlier comment that our end-strength remains largely stable and consistent with what was anticipated a year ago and what was authorized. We have a slight increase, about 12,000, about 9,000 in the active side, mostly Navy, Air Force, about 3,000 on the Reserve side. The Army end-strength, what you see there, this is something I’ve discussed directly with Secretary Warmouth is this is what SECARMY and Chief of Staff believe is realistic for the next twelve months. This stability in endstrength, as you know, kind of, has two aspects. There's the recruiting challenges, which many of you are aware of, and the incredibly strong retention.

Granted, those two are not perfect substitutes for each other, so you -- they are separate things that have to be looked at separately. I will say, on the recruiting side, I think you already probably know this, but these are the lowest unemployment rates in the 50-year history of the all-volunteer force. There has always been a correlation, an inverse correlation, between the job market on the outside and our ability to recruit.

Last year, calendar year '22, 3.6 percent, again, the lowest unemployment rate in over 50 years. And it stayed that -- it's staying that low in the first parts of this calendar year. So that remains a tough environment. Nevertheless, retention is strong.

Again, we can talk about some of the specifics as the services, the military departments come along later today to talk about how their end-strength increase is tied to particular programs, whether on the soldier side or on the platform side, such as realigning KC-10s to KC-46s, but overall a fairly stable picture on the size of the military. Again, we're about capability in this budget.

With that, let me turn it over to Admiral Joyner to talk about some of those capability increases.

VICE ADMIRAL SARA A. JOYNER: Thank you, Mr. McCord.

Good morning. The budget request aligns with the strategic guidance and balances department priorities to maintain a ready, lethal and combat-credible joint force.

It represents the largest procurement and R&D levels ever for the DOD. We will invest over $61 billion to develop, modernize and procure lethal air forces. Our request includes 83 Joint Strike Fighters, 24 F-15 EXs and 15 KC-46 tankers.

Additionally, the budget continues next-generation air dominance and future vertical-lift platform developmental efforts.

The department's $48.1 billion request in seapower funds key investments critical to our national defense, including one Columbia class submarine, two Virginia class submarines, two Arleigh Burke destroyers, two Constellation class frigates that bring greater capability to our maritime forces.

The F.Y. '24 request also incrementally funds Ford class nuclear aircraft carriers and future Columbia class ballistic submarines.

Finally, the $13.9 billion request for land power funds procurement of 80 amphibious combat vehicles for the Marine Corps, 91 armored multi-purpose vehicles for the Army, and also invests nearly $1 billion in R&D efforts for the optionally manned fighting vehicle, which is the replacement for the Bradley fighting vehicle.

All together, our historical investments in platforms and systems across the air, sea and land domains will increase the lethality of our joint force, enhance our ability -- and enhance our ability to deter threats well into the future.

Nuclear weapons continue to provide foundational strategic deterrent effects that our nation and our allies and partners have relied on for decades. The F.Y. '24 budget requests increases funding for modernization and recapitalization of all three legs of the nuclear triad.

For example, this budget includes $5.3 billion to continue development and procurement of the B-21 program; $6.2 billion for the production of the second Columbia class ballistic submarine. Also, F.Y. '24 is the first year of advanced procurement funding for the Sentinel missile program to obtain long-lead items for initial production launch.

As Mr. McCord mentioned, the national defense strategy and our national leadership make clear that our highest defense priority is to protect the homeland and deter attack on the United States.

China and Russia are fielding conventional long-range and hypersonic weapons with the capability to threaten our allies, partners and U.S. forces from extended standoff ranges. Therefore the F.Y. 24 budget invests $29.8 billion to enhance U.S. missile defense capabilities to defend the homeland, deployed forces and allies and partners against an increasingly complex adversarial threat.

The budget increases investments in missile defense sensors to enhance domain awareness, regional missile defense networks, hypersonic weapons and defenses, space-based systems and additional short-range air defense battalions.

And then, finally, the F.Y. '24 budget request includes additional investments for the defense of the United States and territories, including all domain situational awareness capabilities for the Continental United States, Alaska and Hawaii.

Our F.Y. 24 budget request includes $11 billion to develop and procure the proper mix of highly lethal, precision weapons. This budget continues the development, testing and procurement of hypersonic missiles and other long-range fires. Extensive hypersonic prototyping and testing efforts have helped the department overcome technological challenges prior to fielding hypersonic weapons.

Additionally, this budget maximizes Joint Air-to-Surface Standoff Missile, JASSM, and Long Range Anti-Ship, or LRASM, and Standard Missile, also known as SM-6, capacity through multi-year procurements.

Enhancements to the munitions industrial base will grow future production capacity and result in savings for the department. These substantial investments will grow the department's advance offensive fires capability and field multi-domain hypersonic capabilities from air, land and sea platforms, beginning in the mid-2020s, in order to achieve maximum deterrent effect against a peer adversary.

Space capabilities are a critical component of U.S. military power projection and integrated deterrence. China and Russia continue to feel weapons -- field weapons that could deny or destroy our space capabilities. To meet these potential threats, the budget invests over $33 billion to accelerate space capabilities that can be protected, survive attack, degrade gracefully under attack and be reconstituted in a reasonable time when required.

The budget also builds capabilities that can defeat adversary space systems, especially those that target our joint force. Our budget improves missile warning capabilities to detect advance threats by investing $5 billion to develop a multi-layer space-based missile warning and tracking architecture, along with resilient next-generation ground control segment.

This request also invests $4 billion to develop secure, survivable and jam-resistant satellite communication capabilities for joint and allied forces.

Finally, the budget includes almost $3 billion for 15 space vehicle -- launch vehicles, to provide assured access to space and funds infrastructure projects that will help modernize our space launch ranges to support increased commercial and government launches.

The F.Y. '24 budget request reaffirms the department's enduring cyberspace missions, defend the DOD information network, defend the nation and prepare to fight and win the nation's wars. With this budget request, we will continue to modernize network defense capabilities to build a secure and resilient cyber architecture.

Specifically, this budget invests $13.5 billion to fund programs and activities that advance cybersecurity, cyberspace operations and advance cyber research and development activities. The request provides commander of U.S. CYBERCOM with enhanced authority, direction and control of a $3 billion budget to organize, train and equip the joint cyber force, joint cyberspace war-fighting architecture infrastructure and joint cyberspace operational capabilities.

The budget request also includes increases in funding for additional cyber mission force teams who are engaged in day-to-day campaigning to disrupt adversary actions, demonstrate capability and resolve, shape adversary perceptions and gain a war-fighting advantage should deterrence fail.

Strategic readiness is the department's ability to build, maintain and balance war-fighting forces, capabilities and competitive advantages to assure we can achieve strategic objectives across threats and time horizons.

Our F.Y. '24 budget request invests nearly $150 billion to ensure our Joint Force is ready to respond to any strategic challenge. The department's Strategic Readiness Framework ensures that competing demands of the present are carefully balanced when preparing for the future.

Mr. McCord?

MR. MCCORD: Thanks. Readiness, by the way, that -- that Admiral Joyner just talked about, I know is hard to write about, especially in the input side, but I -- it's a very high interest item with our committees and I -- we -- it's something I know we're going to talk a lot as we go to -- to brief them.

Something that is, I think, a little more high profile perhaps in that -- in that frame, in -- the campaigning, which is the second of the ways of our -- and of -- we implement the NDS, Indo-Pacific and European theaters, the so-called Pacific Deterrence Initiative and the -- and the longer standing European Deterrence Initiative, we continue to use those categories in these budget.

These are not funds, these are not accounts, these are what we sometimes call tagging exercises. In particular, in the Pacific theater, these are -- these are the way Congress wants them to be categorized. They are far from the sum of all that we do in either theater, by the way, just to remind on that, but within the categories of Pacific deterrence, the $9 billion is a significant increase over last year's level, about 40 percent increase in fact. Those of you who follow this may also know that there is a report required, it's called the 1254 report this year, that is a different number and a different categorization, in some cases.

On the European side, this is a little bit harder to do apples and apples now, given everything that's going on because of Ukraine. What we have in the European Deterrence Initiative had included the Ukraine Security Assistance Initiative of $300 million to year ?. We've moved that out of this category just because there's now such a large number in '23 through supplementals that it -- it's really an apple and an orange. So we've moved that out to kind of keep Ukraine entirely out of the European Deterrence Initiative discussion.

In addition, there are things that are informed by Ukraine but broader than that that were agreed at last year's NATO Summit to increase our military contribution, to increase the whole NATO military budget, including the infrastructure budget. The U.S. share of that is increasing in both cases. We have also left that out because that is new and different.

So we could think about the European Deterrence Initiative number, it's about $3.6 billion, but when you add some of these other things in, we're closer to $5 billion, still less than the Pacific, again, in recognizing our -- our primary focus being on the Pacific theater, and again, a -- Ukraine is really not, in any way, other than that $300 million, in this budget. That's the pre-war existing level.

Moving to the third of our ways (inaudible) in the strategy, the first being integrated deterrence, the second being campaigning, third -- building enduring advantages, which has two primary legs of it. One is on the people side, taking care of people. The other is on on the industrial base and -- and the -- and the industry ecosystem that we depend on of innovation.

On the people side, the Secretary, as you know, put out a memorandum last -- mid-to-late September on this and had a couple of initiatives in there, including making sure that the commissary price differential remained visible and substantial for our service members, also to provide additional enhancements for when people move, given the -- that moving expenses when fuel prices were high, in particular, were -- were an irritant for folks. So temporary lodging and dislocation allowances, extending those.

The big -- the big number -- of course, the big number financially and probably in terms of visibility is the pay raise -- 5.2 percent for the military. That is exactly in keeping with what the statutory formula would tell you should be done.

On the civilian side, the statutory formula, as I recall, is half a percent lower than that, but President Biden has, in all three of his budgets, opted for pay raise parity. That remains the policy of the administration again this year. So we have the same pay raise, 5.2 percent, for both. As I think you've probably have heard from OMB on Thursday, that would be the largest pay raise in over two decades on the military side, the largest in four decades on the civilian side.

Moving next to some of the other areas, again, this remains a focus of the Secretary's and our colleagues in the personnel and readiness front. Family support has always been important to the Biden family, both to the President and the First Lady -- enhanced investments in education and childcare.

We're going to universal pre-K now at our DODEA schools, both here and overseas. We are upping our and trying to standardize our employee discounts to incentivize people to work in our childcare centers, to give them a discount if they do so.

Also, continuing to focus on suicide prevention, and as the -- Secretary Hicks mentioned, implementing the recommendations that were already laid down by the Sexual Assault Prevention Independent Review Commission.

So that, we got our first substantial tranche of funding last year, about three months ago now I guess, from Congress enacted to allow us to -- to move out, continuing all -- again, that's a good example of continuing along the same pathway. We're not deviating or altering course on that but we're trying to get farther along that pathway.

Second path -- second leg then or second branch of enduring advantages is on more of the industry innovation side. Here, we have, again, the largest R&D budget ever, four percent increase over last year. As Secretary Hicks noted, we also have the largest procurement budget ever, and that is really about putting capability in the field, but we continue to look to the future because, as you recall her saying, we're about deterrence today, tomorrow, in the future. So we don't want to stop with -- with today's investments.

Healthy science and technology budget, investing in artificial intelligence. JADC2 is, as the Vice Chairman mentioned, not the biggest number in the budget but a very central organizing concept of how we're trying to link information together.

Of the Deputy Secretary, one of her key initiatives, the Rapid Defense Experimentation Reserve, trying to be more agile, more joint on how we do experiments and then feed those into a feedback loop back into what we're doing.

And finally, a relatively small number but -- but an initiative that the Secretary cares a lot about also, Office of Strategic Capital. This is trying to connect us better with the venture capital world to get their ideas and their capabilities into our system. It's not connecting us to the Silicon Valley Bank but it is connecting us to that world.

On the industrial base and supply chain, this is a good example of what I said earlier, that everything we cared about last year and funded last year, we've -- continuing this year. The five things you see on the top of this slide are things that we cared about and funded last year -- microelectronics, including but not limited to the CHIPS Act. In fact, largely on top of the CHIPS Act, what's listed on this slide -- casting and forging batteries, energetics that power munitions, stockpiling strategic and critical materials.

In addition, we continue to focus on the submarine industrial base. Strong support from Congress on that. That was true last year, that's true this year. That investment includes some -- what I would call precursor, for lack of a better word, support for the AUKUS agreement, but in -- in general, AUKUS is in front of us, it's not particularly a big theme of this budget. That effort really is getting started with the President's announcement today. But there is -- the work we've been doing on submarine industrial base is definitely supportive of that direction as well.

Also, multi-year procurements, as we've talked about, trying to increase capacity. We'll talk more about that in a second -- actually, we'll talk more about that right now because I'm going to pivot to our munitions slide again.

Again, this is what we consider the biggest new thing in our budget or new emphasis. And very much informed by what's happening in Ukraine.

But if you notice what's on these slides, these are not the kind of missiles that are key to the Ukraine fight. These are key to Indo-Pacific deterrence. What we're trying to do here, what the deputy has been pushing us to do is to think about lessons that we're learning today and apply them to the future, apply them to other scenarios and think about where would -- what would I have liked to have done four years ago if I'd had a crystal ball about Ukraine. Let's try and do some of those things now about things that could be coming.

So again, we are moving into the multi-year space on munitions in a way that we have not done before. In the past, I think, we considered it. It was often considered that you buy munitions in much higher quantities generally than airplanes and ships so that multi-years weren't necessary and weren't done. But we have still found the industrial base is not where it needs to be on this front.

So, we are trying to bring forward a concept that my team has been working on for a couple years called large-lab procurement that is not just a multi-year for A and a multi-year for B and a multi-year for C, but thinking about them as a package. How they work together trying to increase capacity and efficiency and do the upfront ordering of common components that are often part of multi-years.

The deputy put it really well. This is sort of step process where you have a max capacity today. You want to get that max capacity today and we do that on a number of these missiles. But if that mass capacity is not enough you need to do things to expand that capacity so that tomorrow you can keep climbing up that ladder. That is something that my colleague, Bill LaPlante has been working on.

On the Ukraine side, on the ground side, this is something I -- Bill LaPlante and his team have also been working on, is to take that next step and broaden that out. So, this is probably the biggest news or and a Ukraine-informed part of budget, even if it's not Ukraine-specific.

Pivoting just a little bit more to the Enduring Advantages side, to the question about how we are trying to make this place run as efficiently as possible. Many different aspects of that, divestment which is, again, an example of something that we cared about last year, had in our budget last year. We're going to ask Congress to support us on some of those same things.

We've been making some progress, not as fast as we would like. But some of those things will be back in there. Some of the older LCSs, moving out -- away from the A-10, things like that. In addition, we have process reforms. We have -- we have other transformational efforts. You've heard the deputy talk about the CDAO, a better use of AI to get data and analytics more widely diffused throughout the department.

Something else I just want to mention here that is probably of high interest inside our department, maybe more so even than outside our department, is the last bullet on here, investing in buying down technical debt. For those of you who remember the thread that was going around on Twitter, fix our computers. That really resonated. I don't think we had more support of any -- at any particular meeting than on investing in that.

So that, and investing in cloud, enhancing our cloud-computing efforts, really glad that we are beyond all of the years of protest on that, to move forward on both those fronts. Those are examples of some of the ways we're trying to get better inside our house here.

Take a moment to talk about climate and that area. Again, we have about $5 billion, again, this is something that we had in the budget last year, continue to have a focus on this year. Installations are the big ones. Also, how we can be more agile and cut our logistic footprint.

And finally, very important in all this area is moving in tandem with where industry's going. So, we are trying to buy what they're -- what they're making now, what they're going to be making next. And we're not sort of planting our flag over here while everybody's moving on. So there's an industrial part, a logistics part and an actual, you know, helping ourselves withstand extreme weather part. There's multiple aspects of why this makes sense.

Moving sort of toward the end here, we have, on the facility side, a very large, by our standards, military construction increase -- military construction budget both for readiness, for European deterrence, specific deterrence and dispersal in the Pacific, for the Navy Shipyard Optimization Program, you've probably heard as the second use -- DOD use of the acronym SYOP, for those of you who remember the original one. Some very large projects there. In particular, the Hawaii project had over $1 billion. Continuing to invest in housing quality of life. And on the -- in the operating budget, $19 billion for facilities, SRM, repairing facilities that we already have in place without building new ones. So we have both those fronts in this budget.

So in summary, just want to say we are continuing, notwithstanding what -- what -- the importance of Ukraine, the amount of time that we're spending on it, the strategy remains aligned to the more comprehensive challenge -- and this is true both of DOD and the interagency -- presented by the People's Republic of China, across the diplomatic, economic and military space. And we're going to continue to follow the secretary's strategy and trying to get ourselves in the best possible position there.

And with that, we're happy to take some questions.

STAFF: Okay, thank you, sir. We'll start with Tara Copp with the Associated Press.

Q: Hi. Thank you for doing this.

On the slide that had the space capabilities, you mentioned the need to develop more anti-jamming capability, and then this is, I think, the -- the most breakout we've seen in the hypersonics. Are these two being driven specifically by what you saw from Russia in the last year in Ukraine?

And then secondly, when we saw the growth chart, the growth spending chart, it looks like you're anticipating $919 billion, you know, by F.Y. '28, and a budget almost a trillion dollars. But we will still see that it's not enough to do all the ships, to do all of the aircraft. Same question I kind of asked in the earlier session: How come that's not enough? What -- what more needs to be done for the Defense Department's budget to be where it needs to be?

MR. MCCORD: Okay, let me start -- pivot to Admiral Joyner, and then come back. Let me -- just -- I'll just say on the space and the anti-jam, my quick answer would be no, it's not particularly informed by Ukraine. But if you want to go a little deeper on that, and then I'll come back to the other part.

ADM. JOYNER: So space is a -- a background of the U.S. military, as we all know. We are -- look, we have been working towards enhancing our anti-jam, our SATCOM capabilities, building resilient and robust space architecture. It -- it predates well before what we're seeing in regards to Russia, and it is a backbone to our operations as we -- as we look for longer-range type of weapons. and to be able to see around the globe and be able to monitor from space. We know that our adversaries can target some of those -- those assets, so resiliency has been a huge effort by the Joint Force at this point. I think some of the innovations that the department is taking right now are not necessarily driven by anything other than a urgency to make sure that we have the right architecture airborne.

MR. MCCORD: Just back on the sufficiency of the top line, I would say the secretary believes this is a good -- a good number. He's happy with this number. It is -- doesn't buy everything that we would've liked to do. We had some other good ideas as a -- as a collective DOD group that we -- that we could not get in at this level, but we got our highest priorities in, and we're happy with that. There are things that, in a perfect world, we'd like to be buying that are not producible. I know there's been some interest, like for example, last year in buying three DDGs -- DDGs a year. We would love to live in a world where the yards could make three a year, or three submarines a year, but we don't live in that world. So there are things that we could do that are not feasible and not good -- good -- not good ways to invest money.

In terms of the top line in general, again, the -- the -- the existence of unfunded priority list does not prove that our budget's insufficient, I don't think. It -- there are always things that we could be doing more of. But again, if you -- if you want to think of the budget representing our top 10,000 priorities, the unfunded list start at 10,001. That doesn't mean that they're not good things to do, whether they're amphibious ships or anything else. But we are happy with the way we prioritized what is in this budget.

And just on -- on the point that you made with the deputy secretary, just do the math. The budget will hit $1 trillion probably before this end -- even -- even if it only grew three percent a year, when the numbers are what they are, it's inevitable, and I think that might -- maybe that's going to be a psychological big watershed moment for -- for many of us, or -- or some of us. But it is inevitable, and it just reflects the growth of the economy, among other things.

When I was -- when I was born, we were -- we, the United States, were at nine percent of GDP on defense. Ronald Reagan was considered high at six percent. We're now at three. So it's a big number, but in other contexts, you know, you could look at it another way.

STAFF: Okay, we'll go with Meghann.

Q: Hi. Meghann Myers from Military Times. I wanted to ask about the end-strength numbers. You'd mentioned, based on last year's projection, or this current year's projection, next year's request, that shows a -- a -- an increase. But based on last year's authorized and the request for -- for 2024, it's actually a little bit of a dip. It's almost an equal dip. Is this reflective of a -- a march toward a smaller overall end strength, or is it more about trying to find a sweet spot between what you guys want, what the services want, and what they are able to accomplish?

MR. MCCORD: I would say it's more the latter. In particular, the Army believes that they can come back up in a couple years, say, from $452-, which is what's on the paper in front of you. If you looked at a couple years, it would go $456-, $460-. So they believe they can come back up, but they believe that based on what they're seeing now, that the -- that, you know, that -- that end goal is not achievable in the next year.

Again, recruiting is -- it -- recruiting at any time in my lifetime would have been tough at this kind of unemployment level, where people have so many other -- other opportunities, especially the people that we want, right? We want talented people, people -- people with drive, people with high school degrees, et cetera, people with technical skills. So that -- that's going to be a challenge, and that is sort of reflected here. Again, the services recognize that, and it is something that we're -- of course, there are initiatives here to address the recruiting side. The retention is already on -- in a pretty good place.

But yes, I think it is more informed by what -- what seems realistic. There is not a good reason to put something that you could hope for, but is not really achievable in here and consume resources on an end strength that you can't hit any more than there would be to put a third DDG in if -- if people can't build them at that rate.

Q: Sure. I mean, the Army's request here is pretty flat with what they were able to actually achieve last year. It's actually the other services that showed a little bit of a projection shortfall from what they were allowed to have, but that they -- but maybe that they would like to be able to get back a little bit to where they had originally wanted to be. Is it -- would you say it's only the Army's having that -- that struggle, or it looks like, you know, for at least part of the year, the Navy was well over 10,000 (inaudible) --

MR. MCCORD: No, I -- I -- I would not say the Army is the only one. They tend to be the most sensitive to this, but -- but as our -- as our colleagues come up and follow us today, I'm sure each of them could talk a little more specificity than I'd be able to about their own particular picture. But no, the -- everybody has some of the same concerns and -- and has gone into their delayed entry pool, for example. I think that's correct. All of them probably have?

ADM. JOYNER: I think that -- so I do know that there's some significant work by the services in the coming year to -- for their recruiting, how they're going to get at those recruiting goals. So I know they're going to be able to expand on -- on significant programs that they're putting in place in order to address recruiting challenges that they have, especially in light of the aftermath of COVID and not being able to get into some key places.

STAFF: Okay, thank you. And we'll go to Tony please.

Q: Tony Bertuca, InsideDefense. Back to the topline, you said that the overall growth -- real growth in this budget is 0.8 percent. That still represents a loss of buying power at the department in -- in the billions, even though nominally the -- the numbers are very big. The Deputy Secretary said there's no such thing as a -- as a risk-free budget.

So first of all, why is that level of less than one percent growth appropriate risk to take, given the lost buying power you're taking on? And also, it seems like the message to Congress is "give us an on time budget rather than fight it for three months and then give us more money with a late budget." Could you unpack why that is significant? Thank you.

MR. MCCORD: Okay, let me -- let me take the second part first. Yeah, the -- as the Deputy said, you can't buy back time with money. This is something I've -- I've observed has been a frequent phenomenon over -- over my 38th or 39th year in this business now, is that the thing that Congress can do for us and does do for us, right, is -- is provide resources, but -- but writing a check doesn't address every problem. And so the time that you lose, you cannot -- you cannot make up with more money. It's just -- it's just a fact. And there -- there are things you can address with more money but there are also things that you can't.

Why is the topline sufficient? Again, this is -- as you say, it is not a phenomenal growth rate over last year, but again, last year, Congress added $43 billion for things that I would argue were, in many cases, lower priorities and that did not get at the heart of our strategy the way that the first $773 billion we put in is.

So we think the content of this is -- is quite strong. Going over the content that we had last year, about a nine percent increase. Again, it is -- it is a smaller increase over what -- the $43 billion Congress added but it is still an increase.

It is not lost buying power if the inflation assumptions are correct, which who can tell at this point? We're -- we're talking about a period that starts six or seven months from now and -- and goes on another year beyond that.

And just last point I would make is that, as I said, this is $100 billion more than was -- we were projecting to have just two years ago at this time. So depending on what your starting point is, it's a small increase or a fairly substantial one.

STAFF: Okay, we'll go to Sam.

Q: Hi. Sam LaGrone from USNI News. Just a couple points of clarification from Admiral Grady. Earlier, he talked about a new amphibious study looking at the -- the amphibious forces. We understand that's a capabilities-based assessment. Is that foreseeing some kind of, you know, JRAC acquisition process? How much was OSD and CAPE involved in that moving forward on this?

And then second question is -- is how do you all know shipbuilders can't build three DDGs a year?

MR. MCCORD: Let me answer the second one and turn to Admiral Joyner for the first one. She's much more cognizant on the -- on the first point about -- about the studies.

On the second one, I'm just going by the evidence of what has happened the last X number of years, is the amount of money that goes in equals two a year and the amount of ships that come out is less than two, it's about one and a half. It -- it's different for the submarines and the DDGs but in neither case does it equal two. So I'm just going on track record here.

ADM. JOYNER: And as far as the amphib studies, with the new NDS that came out in '22, the thought is -- is that what we have right now is sufficient for what we need in order for near term requirements for amphibs but the chance to redirect and take another look was something that was valued and that -- so the Department of the Navy is moving forward with that study and it will be their study that they will bring forward, is -- is -- is -- to my knowledge, is how that will -- will occur.

Q: Is that (OSD-directed ?), ma'am?

ADM. JOYNER: I -- yeah, I --

MR. MCCORD: Many of the studies are congressionally directed. I -- I -- I'm -- I may have -- not had this one binned correctly in my mind, of whether this is a congressionally mandated study or a Navy study.

STAFF: All right, we'll move on. If we can go over to Mike Stone please?

Q: Mike Stone from Reuters, thanks. Can you put a dollar figure on exactly how much AUKUS money is in this budget?

And for Ukraine, have you -- how long's it take to put together a supplemental and have you started?

MR. MCCORD: Again, I will follow my pattern of answering the second question first. We have not started putting together a Ukraine supplemental for '24, nor have we started putting together any additional supplementals for '23. The -- the spring, for lack of a -- you know, offensives are really not far enough along for us to draw any conclusions on that.

Last year, you might remember that we did four supplementals in less than 12 months. So we can do them quickly if -- especially if we're doing them for relatively short windows where we're not trying to prognosticate a whole year in advance.

Last year, obviously on average, if we had four in less than a year, none of them were -- were very long windows, although the most-- the last one was -- was the longest -- I'm sorry, I'm talking in calendar year, we did four covering two fiscal years.

Remind me, the first question was?

Q: How much is --

MR. MCCORD: AUKUS. I would say probably only about $50 million is sort of directly AUKUS -- AUKUS-focused but the whole several hundred million dollars -- I think it's over $350 in industrial base funding, if not larger -- submarine industrial base investments, both in -- on the capacity side and the workforce side, are all an important foundation for that.

Again, AUKUS is really mostly about something that -- it's going to -- in the future, this -- this budget was not really -- you know, we knew it was coming but it was not really an AUKUS program of any great definition in this budget.

STAFF: Okay, and we have time for one last question. Tony Capaccio?

Q: I had a question on the -- the overall -- the budget. The superlatives that reporters and the public should use on this thing, it's been described in various ways, like the New York Yankees -- the largest, the best, the biggest. Is this the largest defense budget in recent years, exclusive of the late 2000s Iraq-Afghanistan War efforts?

And Admiral, I hate to ask this but I -- a month ago, the world was transfixed with the balloon. Is there anything in -- that was added or shifted into all-domain security awareness because of the balloon shoot down -- the detection and shoot down?

MR. MCCORD: Yeah, let me start. First of all, if you will describe me -- like, compare me to Aaron Judge, then I will be happy to say that this is the largest budget ever --

Q: -- (inaudible) Reggie Jackson --

MR. MCCORD: Reggie Jackson -- you mean in terms of age --

Q: Yeah.

MR. MCCORD: -- you're talking about? Okay.

(Laughter.)

It is the -- it is the largest in nominal terms, as -- as the Deputy said. In real terms, no, it is not as large as that peak of when -- where the Iraq surge was still in place and the Afghanistan surge was coming. You might remember, at that time, which was about 2008 and '9, we had supplementals in 2008 dollars that -- over $150 billion of supplemental funding, on top, which was a -- almost like a one-third expansion of the -- of the base defense budget of that time.

So in real dollars, that was larger than this. That was north of $900 billion in today's budget. But going back prior to that, this would basically, I think, put you in the largest range in sort of the post-Vietnam, all volunteer force era, excluding war-type supplementals. We had the one-year peak for Desert Storm, you might remember, and then the Iraq, kind of, Afghanistan surge. But in terms of basic, you know, baseline defense budget, this is the largest. And again, there is no Ukraine at this time to compare to.

On the balloon, we did add some funding late in the process. Of course, the events occurred late in the process. Late in the process of our build. Specifically on what I would call sensing and analysis in that particular set of altitudes and phenomenology. We already had, and the admiral can speak to this, domain awareness I think is -- I think you used the correct term, much broader aperture, right? And cruise missiles are the things we care about probably the most in that space of looking at our air space. So, in that broader category I don't have a number off the top -- tip of my tongue of the larger amount that we spend. But we -- on this particular niche, if you will, we did add some funding to try and refine some capabilities on the back end.

Q: One of the largest defense budgets.

ADM. JOYNER: Yes.

Q: You need to put that caveat in there, exclusive of war spending (inaudible).

MR. MCCORD: Right. And in terms of largest ever, I will just go to the way back machine, prior to Reggie Jackson or myself, World War II we were spending about a third of our GDP on defense.

ADM. JOYNER: And just to go back to the balloon, there's significant investments and I think the comptroller did a good job of sort of characterizing those. About $90 million going into the budget. But I would tell you that the sensors that we have today are capable of seeing the high-altitude balloons. They're capable of tracking them. It's a matter of tuning and optimizing those systems to try to get out -- after all forms of intrusions into our airspace. So, we've been very focused on hypersonics and those -- cruise missiles, those types of things that we think were on the high-end, fast-moving threats and tuning for something that's much slower, like a balloon. That's part of what all this will go into.

We've got over the horizon radars that have been invested in. Four of those will be fielded in the -- in the near future. And so, you know, those investments are ongoing in order to enhance our overall defense of the homelands, which is extremely important and is it number one NDS priority. But also it flows throughout this budget. I think you can see those investments coming online. Thank you.

MR. MCCORD: All right, thank you. That concludes our briefing.