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This picture taken December 26, 2011 shows the Pentagon building in Washington, DC.(Staff/AFP via Getty Images/TNS)

This picture taken December 26, 2011 shows the Pentagon building in Washington, DC.(Staff/AFP via Getty Images/TNS) (Staff/AFP via Getty Images/TNS)

The Pentagon has received the key number it needs to plan its budget for fiscal 2023: a target figure from the White House budget office that incorporates revised inflation estimates, according to officials familiar with the process.

The fiscal 2023 estimate -- covering Oct. 1, 2022 through September, 2023 -- is closer to 4% than the 2.6% placeholder assumption that the Office of Management and Budget originally gave the Pentagon for its planning purposes, according to the officials, who declined to disclose the target number that was issued last Friday.

Back-and-forth talks between the Defense Department and OMB normally wrap up in December but took longer as defense officials advanced their concern that the fastest inflation in a generation will erode Pentagon purchasing power as it did in the 1970s. The Pentagon didn’t submit its desired budget package until mid-January.

The Pentagon budget of more than $700 billion accounts for about half of U.S. government discretionary spending. While OMB acting Director Shalanda Young signaled at a Feb. 1 hearing that the full federal budget would be released around March 1, officials following defense budget deliberations say they don’t expect that number to come out before mid-March at the earliest.

With a budget that covers everything from service member salaries to F-35 jets, the Pentagon’s inflation estimate is typically calculated using different indexes than the civilian sector. The current year’s budget was based on 2.2% inflation, according to OMB figures.


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