U.S. Army FY26 Unfunded Priorities: Budget Gaps in Defense Systems, Small Drones & Artillery Munitions

In July 2025, U.S. Army Chief of Staff Gen. Randy George submitted a $4.3 billion unfunded priorities list to Congress, outlining areas where additional resources could bolster the Army’s capabilities beyond the formal fiscal year 2026 (FY26) budget request. This document, often referred to as a “wish list,” highlights perceived shortfalls in funding for munitions, air defense systems, and small drone technologies. The submission reflects the Army’s ongoing efforts to adapt to evolving threats and technological advancements in modern warfare.

army.mil

One of the most prominent items on the list is a proposed $581 million allocation for small drones and counter-unmanned aerial systems (C-UAS). According to Gen. George, these technologies are “changing faster than our budget can react,” suggesting that traditional budget cycles may be too slow to keep pace with rapid innovation in unmanned systems. The emphasis on drones and C-UAS aligns with broader Department of Defense trends, where unmanned platforms are increasingly viewed as essential for reconnaissance, surveillance, and tactical operations.

In addition to drone-related funding, the Army is seeking $324 million to expand the Precision Strike Missile (PrSM) program and $300 million to modernize the Patriot Advanced Capability-3 (PAC-3) missile line. These requests indicate a continued focus on long-range precision fires and integrated air and missile defense, both of which have gained prominence in recent strategic planning documents. The PrSM program, in particular, is seen as a key component of the Army’s modernization strategy, aiming to replace older missile systems with more capable and flexible alternatives.

The wish list also includes $46 million for advanced manufacturing initiatives, such as 3D printing. This funding is intended to reduce reliance on vulnerable supply chains and improve the Army’s overall security posture. The inclusion of advanced manufacturing reflects a growing recognition of the need for resilient logistics and the ability to produce critical components domestically, especially in times of geopolitical uncertainty.

Beyond hardware, the Army is also investing in artificial intelligence (AI) and autonomy. A separate budget document obtained reveals a request for $21.6 million in Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding. These funds would support five AI-related projects, including a robotic artillery repair system, natural language processing for intelligence data, counter-adversarial AI capabilities, signals intelligence algorithms, and enhancements to the Army’s AI development pipeline. These initiatives suggest a strategic interest in leveraging emerging technologies to improve operational efficiency and decision-making.

The broader context of this unfunded priorities list includes concerns about munitions stockpiles. The Army has faced delays in meeting production targets for 155mm artillery shells, a key component of its conventional firepower. Although the goal was to produce 100,000 rounds per month by October 2025, current output remains at approximately 40,000 rounds monthly, with expectations to reach the target by spring 2026. Factors contributing to the delay include supply chain disruptions and challenges in coordinating production across multiple facilities.

The Army’s request for additional funding comes amid broader debates about defense spending and strategic priorities. While the FY26 President’s Budget includes $197.4 billion for the Army, Gen. George’s submission underscores areas where he believes further investment is necessary to maintain readiness and technological superiority. The document does not elaborate on how increased funding for PrSM and PAC-3 would directly impact readiness, but it implies that bolstering these programs could enhance the Army’s ability to respond to emerging threats.

This annual process of submitting unfunded priorities lists is a legally mandated opportunity for military services to communicate their needs beyond the constraints of the formal budget. It allows Congress to consider supplemental funding for programs that may not have been fully addressed in the initial budget request. The Army’s FY26 list reflects a strategic pivot toward agility, innovation, and resilience in the face of rapidly changing warfare dynamics.

The Army’s $4.3 billion unfunded priorities list for FY26 highlights a range of initiatives aimed at enhancing capabilities in drones, munitions, air defense, advanced manufacturing, and artificial intelligence. These requests illustrate the service’s efforts to adapt to technological change and operational demands, while navigating the complexities of defense budgeting and procurement.