Spending muscle fueled by emergency funding.

• Author: Erwin, Sandra I.
• Position: ARMY

A COMBINATION OF BIGGER procurement accounts in this year's budget and war-emergency appropriations puts the Army on course to receive some of the largest levels of funding it has seen in decades.

The upshot will be at least $28 billion for Army equipment buys for the fiscal year that ends September 30, 2006, and a projection of even larger sums in fiscal year 2007.

The Army requested $11.8 billion for procurement in 2006. Two emergency funding requests--one in 2005 and the most recent one in February, 2006--bolstered the Army's procurement accounts by nearly $17 billion. In 2005, a $10.4 billion procurement budget rose to $24.6 billion also via supplemental appropriations.

The service safely can expect that its 2007 procurement request of $16.8 billion will climb by several billion dollars in supplemental funds that the administration likely will seek later this year or in early 2007, analysts say. The most recent budget proposal is indicative of a continuing trend that points to substantial procurement spending included in supplemental requests.

"The supplementals--that's where the real money is coming from," says defense industry, consultant James A. McAleese.

Soaring equipment expenditures, to a great extent, are the consequence of three years of fighting in Iraq with more than 100,000 soldiers on the ground. But much of the new hardware, Army officials note, also is needed to make up shortages that started after the end of the Cold War. By the Army's own account, the shortfalls add up to a staggering $100 billion.

"We had almost $100 billion in under-resourcing in the decade prior to 2011 in investment accounts," says Army Chief of Staff Gen. Peter Schoomaker. "That was part of that peace dividend everybody talked about. The dearth in actual modernization that was occurring ... hurt us as we were preparing to go into this [Iraq war]," Schoomaker tells reporters.

War supplementals have changed the traditional dynamics of military budgeting and spending. For the Army, which has shouldered the lion's share of the deployment duties in Iraq and Afghanistan, the additional appropriations have allowed unprecedented flexibility in balancing its resources. A case in point is a decision in 2007 to reduce personnel spending in order to boost procurement.

"The Army leadership chose to cut force structure instead of procurement," says McAleese. The Army proposed a $2 billion cut in personnel by reducing the total number of active combat brigades...