The tense 2½-hour hearing before the Senate Armed Services Committee demonstrated how the political grenades Trump has thrown at the Defense Department threaten to undermine the ability of its top officials to secure stable funding for a vast reshaping of the American military.

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Nowhere was the risk of politicizing the military budget more apparent than in exchanges over the border wall.

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Shanahan, who is hoping to receive Trump’s nomination to serve in his post on a permanent basis, sought to placate Democratic lawmakers who fumed at the Pentagon’s failure to indicate what military construction projects could be delayed to free up money for the wall.

“The question is, should a president be able to declare a nonmilitary emergency — that’s what the military has testified — and then ransack the Pentagon budget for $6.1 billion dollars?” Sen. Tim Kaine (D-Va.) said, accusing Shanahan of sandbagging senators by failing to produce a list of projects that could be affected. “I think we’re entitled to know where the money might come from.”

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Shanahan said there had been no deliberate attempt to withhold information from senators, and promised to deliver a list by the end of the day. Moments later, in a rebuke to the White House, the Senate voted to reject Trump’s emergency declaration, but not with sufficient numbers to override a presidential veto.

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The exchange with Kaine showed how the decision to tap funds from the Defense Department for the wall had put a military budget usually hammered out with bipartisan comity squarely in the political crosshairs. It was one of many in which Shanahan found himself on the back foot over decisions and comments that originated not with the Pentagon but with the White House.

Shanahan’s predecessor, Jim Mattis, enjoyed relative freedom to craft budgets and get them passed after Trump struck a two-year deal with Congress on overall funding levels for defense and nonmilitary spending. Now, with that deal expired, the White House has declined to negotiate to lift congressional budget caps that run for two more years, instead attempting to increase military spending by getting around the caps and keep nonmilitary spending restricted. Democrats reject the approach.

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To get around the restrictions, the White House instructed the Pentagon to place a chunk of its military budget proposal in a war-fighting account that funds operations in Afghanistan, Iraq and Syria and isn’t subject to the caps, even though the money isn’t going to those war efforts.

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Democrats criticized Shanahan for that decision. The top Democrat on the committee, Sen. Jack Reed (D-R.I.) warned that the strategy would probably lead to delays and stopgap funding resolutions that would undermine certainty for the military. Sen. Elizabeth Warren (D-Mass.) accused Shanahan of trying to establish a slush fund to secure “more, more, more for the military.”

“Senator, we have provided in our justification books 100-percent transparency. There is no slush fund,” Shanahan responded. “We can take the money and tie it back to the national defense strategy and what we need to defend America.”

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The difficulties the budget faces create a challenge for Shanahan, a businessman and engineer who has spent nearly two years at the Pentagon helping craft a strategy to reshape the military and developing a budget to execute that plan. The budget request the Pentagon rolled out Tuesday showed the results of that work.

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Shanahan hoped to explain how he would execute the vast overhaul of a military that for nearly two decades has focused on counterinsurgency in Iraq and Afghanistan. He stressed the bipartisan nature of support for defense in the past, noted the increasing threats from China and Russia, and said the wall would have no effect on the plan.

“Military construction on the border will not come at the expense of our people, our readiness or our modernization,” Shanahan told lawmakers at the outset of his testimony.

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But time and again, questions came back to Trump.

Shanahan said the Pentagon would not demand that countries with U.S. troops stationed on their territory pay the full cost of hosting those forces, plus 50 percent more for the privilege, a formula that Trump had floated in private discussions with aides.

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The acting defense secretary said reports that the administration was taking that approach were erroneous, a statement that could bring relief to allies such as Germany, Japan and South Korea, which host significant contingents of U.S. troops.

“We won’t do cost plus 50 percent,” Shanahan said.

“So those reports in the press, all over the press, are incorrect?” Sen. Dan Sullivan (R-Alaska) asked.

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“They’re erroneous,” Shanahan answered. “We’re not going to run a business, and we’re not going to run a charity. The important part is that people pay their fair share, and payment comes in lots of different forms . . . but it is not about cost plus 50 percent.”

U.S. officials have mentioned Trump’s “cost plus 50” formulation to at least one country in a formal negotiation setting, according to people familiar with the matter, and one of Shanahan’s subordinates said in testimony this week that although it had not come up in Pentagon discussions with European allies, the “rhetoric came from conversations from the Pacific.”

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Lawmakers grilled Shanahan on a report in the New York Times saying the Pentagon was pushing for weaker standards on chemicals used at military bases contaminating drinking water. He said he had not read the report but promised to get back to them on the matter.

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The senators also asked him to guarantee that Trump’s decision to cancel high-level military exercises with South Korea to help advance disarmament talks with North Korea wouldn’t erode the ability of U.S. forces to respond to threats from Pyongyang with allies.

“I can assure you there will not be degradation,” he said. “We will have the capability we need.”



The former Boeing executive also faced pushback from both sides of the aisle on one of the harder choices he made in the budget: the decision to take money for a planned “midlife refueling” for the USS Harry S. Truman aircraft carrier and instead use the funds to develop unmanned Navy vessels that could help fight China.

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Shanahan, who spent years overseeing commercial aircraft at Boeing, also answered questions about the Boeing 737 Max 8. He said he had neither spoken to anyone in the administration regarding the aircraft’s recent accidents nor been briefed on the problems.