Title: What are DOD's Unfunded Priorities? Description: The U.S.'s defense budget makes up about half of all federal discretionary spending. But even so, there are billions of dollars in "unfunded priorities" that could impact the military's mission and combat readiness. We'll learn more about these priorities from GAO's Rashmi Agarwal and Mona Sehgal. Related work: GAO-25-107581, Defense Budget: DOD Should Address All Statutory Elements of Unfunded Priorities Released: September 2025 [ START ] {Music intro} [ Rashmi Agarwal: ] The amounts of unfunded priorities has increased over the years, even as individual budget requests have increased. [ Holly Hobbs: ] Hi and welcome to GAO's Watchdog Report, your source for fact-based, nonpartisan news and information from the U.S. Government Accountability Office. I'm your host, Holly Hobbs. The U.S. defense budget is very large. It makes up about half of all federal discretionary spending. But even so, there are billions of dollars in "unfunded priorities" that could impact the military's mission and combat readiness. We'll learn more about this issue from GAO's Rashmi Agarwal and Mona Sehgal, who led work for a new report on this topic. Thanks for joining us! [ Rashmi Agarwal: ] Thanks for having me. [ Mona Sehgal: ] Happy to be here. [ Holly Hobbs: ] Mona, maybe you can start us off with what is an unfunded priority. What does that mean? [ Mona Sehgal: ] Yeah. So, all federal agencies submit an annual budget to Congress. This is under the president's budget request. DOD has a unique role in that Congress asks DOD components to provide their priority of things that did not make it into that president's budget. So unfunded priority list is basically these various components communicating to Congress, 'Here are some additional things that are not in the president's budget that we think are priorities for us.' [ Holly Hobbs: ] Rashmi, could you give us an example of what some of these unfunded priorities might be? [ Rashmi Agarwal: ] Sure. You know, unfunded priorities, they really can cover a range of items. For example, when we review previous unfunded priority submissions, the Navy had identified needs, for example, for shipbuilding as well as procurement of aircraft. We also found in previous submissions that the Air Force had identified needs for F-35s. So, these are highly advanced fighter jets. We also found that sometimes it was for general items. So, the Marine Corps had identified needs for recruiting as well as advertising. In many cases these unfunded priorities are known needs. And the individual DOD components are simply asking for funds sooner rather than later. [ Holly Hobbs: ] Mona, we looked at several years' worth of unfunded priorities, right? [ Mona Sehgal: ] Yeah. So we looked at 6 years from fiscal 2020 to fiscal '25. During this period, DOD components had almost $135 billion in unfunded priority requests. Sounds like a lot. But when you look at the overall DOD budget during this time, which was about $4.5 trillion, it's only 3%. [ Holly Hobbs: ] And was there an area or even a service branch that had more unfunded priorities? [ Mona Sehgal: ] The services--Army, Navy, Air Force, Marine Corps, Space Force--comprise the bulk of this request. So about 70% is what the services requested. But you also have other DOD components like the combatant commands. And most recently, the U.S. Indo-Pacific Command requested the largest amount in unfunded priorities for fiscal '25. So there is variation. Navy top in terms of services that requested. Over the 6-year period, the U.S. Indo-Pacific Command top just in the last year because they just took a big increase in what they were requesting the Congress. [ Holly Hobbs: ] Rashmi, are there priorities within the unfunded priorities? [ Rashmi Agarwal: ] Yes. The DOD components are actually required by law to make priorities within the list that they submit. So when we looked at the most recent FY 25 submissions, we found, for example, that the Marine Corps had prioritized quality of life projects. So this included, for example, improving and modernizing barracks. Each of the components can have various priorities within the lists that they submit. [ Holly Hobbs: ] Mona, as we looked at several fiscal years-worth of unfunded priorities, was there any change or trend in that time? [ Mona Sehgal: ] Absolutely. So unfunded priorities have been going up. When we looked at fiscal 2020, the DOD components requested about $15 billion. In fiscal 25, this had doubled to $30 billion. So there has been a steady increase in the overall amounts that DOD components are requesting. Interestingly, this increase is happening not because we're seeing a decline in DOD budget. DOD to budget is also increasing. So you're seeing an increase in both the overall DOD ask, as well as what the components are saying they need more of to keep up with, you know, the urgent, needs that they're establishing. The one other interesting trend is that, as I mentioned, the services typically request the most. But in fiscal 2025, you actually had a combatant command, U.S. Indo-Pacific command, that actually requested more than any other service or command. So that is an interesting switch that we saw in the data. [ Holly Hobbs: ] So the dollar amount for the unfunded requests doubled. Do we know why? [ Mona Sehgal: ] Yeah. So as I mentioned a few different reasons. One, the new leadership determining that, 'Hey this is where we need to prioritize what kind of equipment and materials we need.' So leadership is really key in how these are developed. Some of the processes changed. They're better able to identify and define, in terms of dollars, how much money's needed for the equipment they need. And that theater really is a key focus for DOD. So it's not surprising that INDOPACOM is requesting more than any other command. [ Holly Hobbs: ] I'm gonna put you on the spot. [ Mona Sehgal: ] Yeah. [ Holly Hobbs: ] We are not at war anymore. So you would think the cost would come down? [ Mona Sehgal: ] Yeah. We are not at war. But for the U.S., deterrence is the best form of safety. And in the Indo-Pacific region, with China really kind of developing much more sophisticated systems, DOD has determined that that's where they want to focus in terms of preparedness. [ Holly Hobbs: ] And Rashmi, What's the impact of all of this? [ Rashmi Agarwal: ] So, Congress has set requirements in law of specific information that they need in order to make funding decisions should there be any money available for these unfunded priorities. But what we found is that the individual DOD components weren't consistently providing all the required information so that Congress could make these informed decisions. And it was notably in two areas. The first was why weren't these unfunded priorities originally in the president's budget request? What was the reason behind that? And then second, what would be the effects on future budget planning should these unfunded priorities be funded sooner rather than later? {Music} [ Holly Hobbs: ] So DOD components can request funding from Congress for things not covered by the defense budget. But components may not be providing Congress with the best information--for example, on why these priorities weren't including in the budget in the first place. Rashmi, what more do we think the components should be doing? [ Rashmi Agarwal: ] So I want to go back to a little part of the conversation that we had, you know, earlier, and that the Secretary of Defense really doesn't have a role in developing and submitting these unfunded priorities. It's really up to the discretion of each of the individual DOD components. So there's no overarching DOD guidance in how you submit these lists. So the individual components, as long as they're including all of the required information per statute, that's really what they need to do. And that's where our recommendations actually are focused on--is saying to these individual components you need to consistently provide all of the required information so that Congress can make informed decisions. That might require the individual components to include more data fields or data requests in order to capture all the information, or that might also require changes in internal processes or greater communication in order to capture all of the information. [ Holly Hobbs: ] Mona, are we asking Congress to take any action? [ Mona Sehgal: ] Yes. One of the things that we found was there is a degree of confusion among the components about what and what format to use in providing this information. So we saw some components have one list which includes military construction and nonmilitary construction priorities. There are other components that split it. They send up two lists. So given all that, we have a matter for Congress to consider clarifying the statute so that the components know exactly what type of information the Congress is looking for. [ Holly Hobbs: ] Rashmi, I'll ask you the last question, what's the bottom line of our report? [ Rashmi Agarwal: ] So really the bottom line is at the recommendations that we're making, which is each of the DOD components need to consistently provide all of the required information per statute so that Congress can make an informed decision as they consider the budgetary needs of the department to support the warfighter, as well as the readiness needs of each of the individual components. And we think this is really important because we've seen that, the amounts of unfunded priorities has increased over the years, even, as individual budget requests have increased. [ Holly Hobbs: ] That was Rashmi Agarwal and Mona Sehgal talking about DOD unfunded priorities. Thanks for your time, ladies. [ Mona Sehgal: ] Happy to be here. [ Rashmi Agarwal: ] Thanks so much. [ Holly Hobbs: ] And thank you for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple Podcasts, Spotify or wherever you listen. And make sure to leave a rating and review to let others know about the work we're doing. For more from the congressional watchdog, the U.S. Government Accountability Office, visit us at GAO.gov. [ END ]