U.S. Air Force, Space Force make ‘explicit shift’ in RDT&E funding, experts say
The U.S. Air Force and Space Force would shift their research and development funding away from early-stage work and toward the end of the development pipeline under the fiscal 2027 budget request released this month.
The Pentagon groups its research, development, test and evaluation, or RDT&E, funding into categories based on the type of work involved. New technologies generally move through six stages: basic research, applied research, advanced technology development, advanced component development and prototypes, system development and demonstration and, finally, operational system development.
“The normal approach to RDT&E funding is you’ve got a mix of funding spread across the different stages,” said Todd Harrison, a senior analyst at the American Enterprise Institute. But “most funding is concentrated towards [advanced component development and prototypes] and [system development and demonstration] funding. That’s for things that are in the thick of development.”
However, for fiscal 2027, the Air Force and Space Force have proposed reduced funding for the first four stages of RDT&E when compared to fiscal 2026. In the Air Force, the largest year-over-year reduction would be in applied research, with a proposed cut of $338 million. In the Space Force, the largest reduction would be in advanced component development and prototypes, with a proposed cut of just over $1 billion.
At the other end of the RDT&E pipeline, the Air Force and Space Force proposed the largest year-over-year increases in operational system development: $13.6 billion and $16.3 billion, respectively.
“It’s an explicit shift and investment towards fielding, not necessarily research and discovery,” said Carlton Haelig, an analyst with the Center for a New American Security.
The change is “not just in dollar terms, but also as a percentage of the total budget,” said Travis Sharp, a senior analyst with the Center for Strategic and Budgetary Assessments.
The Air Force responded to questions about this topic by saying its proposed budget doesn’t decrease overall RDT&E funding. The budget documents released so far do not offer a reason for the proposed funding shifts.
Budget analysts see two potential explanations: the maturity level of various technologies or the White House’s approach to securing funding.
According to Haelig, “most of our next-generation programs are at the stage now where [the Air Force] can start having more of an emphasis on moving them towards operational use.” He pointed to the Family of Affordable Mass Missiles initiative, the Collaborative Combat Aircraft program and the various low-Earth orbit missile warning programs as examples.
Doug Birkey, executive director of the Mitchell Institute for Aerospace Studies, said the funding shift stems from the Air Force needing “new capabilities on ramp and an operational capability at scale very fast. There are a lot of programs that are kind of on the threshold of doing that.”
For the Space Force, Birkey attributed the funding shift to the service “having to very rapidly iterate and get stuff up operationally.”
But that technology-driven approach, according to Sharp, “kind of treats the Air Force’s RDT&E portfolio as if it has a batch of programs that need to be brought to maturity versus a continuous stream of programs.”
Harrison offered an alternative explanation, linking the proposed RDT&E shift to the budget’s overall structure. The Pentagon’s fiscal 2027 budget requests nearly $1.5 trillion, $1.1 trillion through the normal appropriations process and an additional $350 billion through a planned reconciliation package.
“I think it is because of the reconciliation funding that they’re basically trying to find places where they can put this extra funding,” Harrison said. “This was a budget-driven budget, not a strategy-driven budget.”
Sharp said the change in RDT&E funding could be “reflecting that the Pentagon needs to try to deal responsibly with this large influx of new funding, and within the R&D account, the place that you’re best able to do that is in terms of operational system development-type activities.”
However, this “would at least be an argument for holding steady for basic research,” he added. Basic research “can’t grow that fast, but that doesn’t mean it’s got to be reduced — but actually it is being reduced” in the fiscal 2027 budget.
“That’s surprising,” Sharp said. “I wouldn’t have expected that. When the defense budget goes up, it often lifts all boats — all programs, all activities. Everybody gets more money. There’s so much money available in this budget request; it is really surprising that there are areas that are left out.”
