Trump's Spending Plan Could Fire Up Defense ETFs

Cesar Mills
February 15, 2018

The Pentagon requested $617 billion and an additional $69 billion to fund ongoing wars, a total of $74 billion more than a year ago, to cover its annual budget.

Anti-Islamic State operations in Iraq and Syria get a $2.3 billion boost over fiscal year 2018, even as ISIS has lost almost 100 percent of the territory it once controlled there.

However, the exorbitant defense package could come across many hurdles in Congress as officials debate the finer details of the proposed spending plan.

In December, President Donald Trump by executive order approved a 2.4 percent military pay increase for fiscal 2018.

"Great power competition, not terrorism, has emerged as the central challenge to USA security and prosperity", said David Norquist, the Defense Department comptroller.

It means the Pentagon needs more money, especially after operating through the current fiscal year under a continuing resolution, a stop-gap funding measure that appropriates money to the Pentagon at fiscal year 2017 levels - about $611 billion for the year, Norquist said.

The request aligns perfectly with a two-year budget deal that Congress struck and the president signed last week that clears the way for the $716 billion for national defense spending.

The fiscal year 2019 budget seeks to procure 10 new naval warships, along with growing the Air Force from 55 combat squadrons to 58 by fiscal year 2024.

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It marks the second request under Trump, far surpassing the $639.1 billion his administration asked for a year ago, which drew criticism from Capitol Hill defense hawks who called for higher military spending.

It calls for the procurement of 37 Standard Block 1B missile for the Navy's Aegis missile defense ships and sites on shore.

"While this is not a record increase, it comes on top of a budget that was already higher than the peak of the Reagan buildup when adjusted for inflation", Harrison said. Norquist said Monday the proposed budget takes the initial steps to "restore and rebuild" the USA military, as President Donald Trump has pledged. The real beneficiaries in the military spending spree are the big weapons corporations, including Lockheed Martin, Boeing and General Dynamics.

The deal Congress approved early Friday also sets the Pentagon's 2019 budget at $716 billion, giving Mattis the financial stability he's been demanding. But upon raising spending caps to the Pentagon's desired levels, the White House shifted $20 billion from the OCO request to the base request.

"Modernizing the nation's nuclear delivery systems is the department's number one priority, and these programs are fully funded in the [fiscal] 2019 budget", the Pentagon's budget proposal reads.

That included $12.3 billion for the Pentagon's Missile Defense Agency and ordered a more rapid buildup of the nation's missile defenses as North Korea has refused to back away from developing nuclear missiles capable of striking the United States. The Pentagon also plans to spend $2 billion for 24 F-18 Super Hornet jets, up from 14 in 2018.

Russian Federation already looking to interfere in 2018 midterms Dems pick up deep-red legislative seat in Missouri Speier on Trump's desire for military parade: "We have a Napoleon in the making" MORE has often spoken about modernizing and bulking up the USA nuclear arsenal, saying in his State of the Union last month that it needs to be made "so strong and so powerful that it will deter any acts of aggression by any other nation".

Other reports by GizPress

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