Trump Chalks Out Fiscal 2019 Budget Plan: 5 Defense Picks

On Feb 12, the Pentagon unveiled the fiscal 2019 budget proposal outlined by President Trump, intended at rebuilding the U.S. military into a more capable, lethal, and geared up Joint Force. Notably, the budget proposal aims at spending $716 billion on national security.

Naturally, the budget presentation sent defense stock rallying higher. Notably, the Dow Jones U.S. Aerospace and S&P 500 Aerospace & Defense (Industry) indices rose 7.2% since the revelation of the budget proposal. 

Highlights of the Budget Plan

Of the total, $686.1 billion is being kept as funding for the Pentagon, reflecting a 5% real growth over the initial FY 2018 President’s budget and 10% real growth over the current Continuing Resolution (CR). The budget includes $617.1 billion as base budget, highlighting a 17.8% increase from the 2018 current CR level and $69 billion for Overseas Contingency Operations.

Notably, the fiscal 2019 budget raises the end strength for the Army, Navy and Air Force by 25,900 (24,100 in active components and 1,800 in reserve components) over the fiscal 2018 budget. The latest budget’s major war fighting investments include spending plans of $21.7 billion on Aircraft, $18.3 billion on Shipbuilding and $5.8 billion on Ground Systems.

Moreover, in the wake of North Korea’s ballistic missile threats, the budget proposal includes an investment plan of $6 billion for varied missile programs.

The budget requests for increased investment worth $10.5 billion on facilities, reflecting a 7% rise over the fiscal 2018 base budget request. The funds will be used for fortifying military infrastructure to increase force lethality and minimize the cost of maintaining unneeded capacity. Also, the budget plan targets continued savings from reforms such as defense travel modernization as well as headquarters reduction by 25%.

Interestingly, the fiscal 2019 budget is the second full budget request from the President, initiating the rebuilding process for the U.S. military that Trump has been consistently emphasizing on. The rebuilding process will involve additional investments in near-term readiness, thereby providing impetus to the programs that suffered due to years of budget cuts.