Effects on the Government Budget
Gas and fuel prices have increased significantly over the past several months due to a confluence of factors centered around the war in the Ukraine. On June 13th, the House Appropriations Committee released its Draft 2023 Defense funding bill, which among things like additional aid for Ukraine, money to combat climate change and additional pay for service members, there is also a significant fuel expense spending increase. The House Armed Services Committee $37 Billion dollars for the National Defense Authorization Act (NDAA), with $2.5 Billion of that going towards offsetting the fuel costs of the United States Armed Forces impacted by rising costs. In terms of raw cash money, this gas budget increase equates to the cost of two new Arleigh Burke DDG-51 Destroyers, so while the Navy was intending to procure three this year, that has changed to just a single destroyer.
Spending Increases for US Military
Additionally in the bill, there is $3.5 billion for facility construction inflation costs and $1.7 billion for renovations to Naval shipyards and facilities. New planes, ships and pay increases and bonuses for U.S. Military personnel are also included, as well as $500 Million in aid for Ukraine. Representative Jared Golden (D-ME) sponsored the amendment, and Rep. Elaine Luria (D-VE) seconded it. The overall 2023 NDAA is sponsored by Representative Adam Smith (D-WA).
Impact on Year End Spend
We may see an impact on year end spending with this new gas hike acrost the entire government. When the fiscal year ends on September 30th, government agencies either must have used their appropriated funding or return it to the Treasury. Most agencies want to spend every dollar they are appropriated to avoid the appearance of overfunding and the threat of budget cuts in the next fiscal year and appropriations bills. These high gas prices may cut significantly into any extra non-allocated funding near the end of the fiscal year. On the other hand, it is also possible to see a stash of extra funds which agencies had been saving for the increased fuel costs being hurriedly allocated to other projects if the high fuel prices are more temporary.
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