Defense Financial Highlights

Appropriations Watch: FY 2017

Friday, January 6th, 2017

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The government is being funded by a continuing resolution, which was passed in December 2016, and goes through April 28, 2017. The Senate voted to proceed to debate on a fiscal year (FY) 2017 budget resolution on 4 January 2017. To read the full article and the latest updates please visit the Committee for a Responsible Federal Budget’s blog posting here.

Read the Senate’s budget resolution for FY 2017.

GSA lowers federal mileage reimbursable rates for 2017

Saturday, December 31st, 2016

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The General Services Administration (GSA) announced that mileage reimbursement rate for federal employees using privately –owned vehicles during official travel will decrease slightly to 53.5 cents from the current level of 54 cents.  The new rate will go into effect on January 1, 2017. 

Mileage reimbursable rates also decreased for official airplane travel (to $1.15 from $1.17) and motorcycles (to 50.5 cents from 51 cents).

Rates declined due to lower fuel prices that were offset somewhat by increasing insurance and maintenance costs.

GSA annually reviews mileage reimbursement rates for federal employees.  GSA rates cannot exceed the rate set by the Internal Revenue Service (IRS) for calculating business mileage expenses on tax returns.  

President authorizes a 2.1 percent pay raise for federal civilian employees

Tuesday, December 13th, 2016

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Federal civilian employees will get a pay raise equal to that approved for military personnel.

After the House and Senate agreed on a 2.1 percent military pay raise in the FY2017 Defense Authorization bill, the president was urged by some in Congress and federal labor groups to provide the same raise for federal civilian employees.

President Obama responded by notifying Congress that he intended to reverse the alternative pay plan he announced in August that the combined civilian across-the-board pay raise and locality pay should not exceed 1.6 percent. 

Because the Congress decided to give military personnel a 2.1 percent pay raise, the president told Congress he was changing his original plan.  Under his revised alternative pay plan for federal civilian employees, the combined raise includes a 1.0 across-the-board pay raise and varying locality pay increases that will equal 2.1 percent of basic payroll.

Each year the president is required under Title 5 U.S.C., sections 5303(b) and 5304a, to present an alternative pay plan for across-the-board pay and locality pay adjustments. Because Congress did not act to counteract the president’s alternative proposal, the 2.1 percent pay raise will go into effect automatically in January

Congress extends the FY2017 CR until April 28, 2017

Saturday, December 10th, 2016

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Final action on the 11 remaining FY2017 appropriations bills must wait until the new Congress and the new administration take office in January.

With the Dec 9 expiration date for the current continuing resolution (CR) looming, the House voted (326-96) and the Senate went along (63-36) to approve an extension of the CR (H.R. 2028) until April 28, 2016.

There was a bit of late-night drama in the Senate as Sen. Joe Manchin (D-WVA) and other Senators from coal-producing states threatened to block passage of the bill unless health care benefits for miners were funded for the entire year.  Realizing they did not have the votes to block the bill and not wanting to shut down the government, Sen. Manchin and his supporters relented, vowing to continue the fight in the new Congress.

Commenting on the bill, House Appropriations Committee (HAC) chairman Rep. Hal Rogers (R-KY) called the CR a “band aid that will give the next Congress the time to complete the annual Appropriations process, and in the meantime take care of immediate national funding needs.”

Sen. Thad Cochran (R-MS), chairman of the Senate Appropriations Committee (SAC) agreed.  “This continuing resolution is not a substitute for full-year appropriations, but it is necessary to sustain the operations of the federal government until we can complete consideration of the remaining FY2017 appropriations bills,”

Rogers cautioned against the idea of using a CR to fund the government for the full year.  “This type of short-term spending should not be the answer to funding the federal government for the year,” he said.  He urged the next Congress to compete work on all remaining FY2017 appropriations bills “to ensure the proper and responsible use of tax dollars, to provide necessary resources for important programs and services, and to hold federal agencies accountable to the American people.”

The CR essentially allows agencies to fund FY2017 programs at the FY2016 level ($1.07 trillion for the total government) for almost five months.  During the CR period an additional $5.8 billion is provided to the Department of Defense (DoD) and $4.3 billion to the State Department of the Agency for International Development (AID) “to support  military and diplomatic efforts to fight ISIS and terror around the globe.”

The bill also includes $4.1 billion for disaster relief needed to respond to Hurricane Matthew, floods, droughts, and other weather-related events.  Of this amount, the Army Corps of Engineers will use $1.025 billion for flood and coastal protection projects and the Federal Highway Emergency Relief program will apply $1 billion for repair of damaged highways.  Community Development Block Grants in the amount of $1.8 billion will be used for recovery and rebuilding efforts for individual home damage caused by severe storms and hurricanes.

An additional $872 million is provided in the bill for “critical medical research, drug approval, and drug abuse efforts. Of this amount, $500 million is provided to states response to the opioid abuse crisis.  The bill also provides $170 million to communities (e.g., Flint, Michigan) affected by drinking water contamination.

In DoD-related activities, the CR includes provisions that allow funding to be used for the Ohio Class Submarine Replacement program, Apache Attack Helicopter and Black Hawk Helicopter multiyear procurements, and the KC-46A Tanker program.

The CR includes provisions preventing a pay increase for Members of Congress, providing $45 million (fully offset) for retired miners covered under the United Mine Workers Association 1993 Benefits Plan, and allowing funding for NASA’s Deep Space Exploration Program.

The bill also provides for an expedited process in the Senate next year for language that would allow retired Marine Corps Gen. James Mattis to be considered for the post of Secretary of Defense.  Mattis, who has been named the as prospective nominee for Secretary of Defense, retired from active service three years ago.  Because current law prohibits such service until a retired officer has been out of the service for seven year, the senate would have to pass a waiver for his nomination to be considered,

President Obama is expected to sing the bill.

Congress approves compromise FY2017 Defense Authorization bill

Friday, December 9th, 2016

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The Senate passed the final FY2017 Defense Authorization bill yesterday with broad bipartisan support, 92-7.  The bill, which had been worked out by House and Senate committee negotiators, overwhelmingly passed the House (375-34) last week.

The bill authorizes force levels, programs, and policies (including military pay raises) for Department of Defense (DoD) budgets and the programs and policies for the Department of Energy (DoE) nuclear weapons program.  Appropriations bills provide actual funding.

House Armed Services Committee Chair Rep. Mac Thornberry (R-TX) said the bill “focuses on our troops, America’s most important national defense resource.  It provides them a full pay raise for the first time in four years, it stops layoffs of our military personnel and actually increases the end strength of our Armed Forces.”

The compromise bill authorizes a total of $619 billion, including $532 billion for the FY2017 DoD base budget and $19 billion for in discretionary budget authority for the Department of Energy (DoE) nuclear weapons program.  The bill authorizes an additional $8 billion in mandatory spending and about $60 billion for Overseas Contingency Operations (OCO).

The legislation authorizes funding to support a 2.1 percent military pay raise, higher than the 1.6 percent raise proposed by the president.  The bill does not make any changes to out-of-pocket expenses by servicemembers or military retirees and makes no changes to the Basic Allowance for Housing (BAH).

The bill provides two TRICARE options—managed care option and no-referral network option—for servicemembers (and families) and retires, and extends the hours for care at Military Treatment Facilities (MTF) primary care clinics.

The bill does not require women to register for the draft, but directs the preparation of a study of the utility of the Selective Service.

The bill rejects the administration’s plan to draw down troop levels and adds 16,000 Army end strength and 3,000 Marine Corps end strength in 2017.

The conference committee also rejects an administration proposal for another Base Realignment and Closure Commission (BRAC) round.

The bill includes major reforms of the Department of Defense (DoD) organization.  The role of the Chairman of the Joint Chiefs of Staff (JCS) as the principal, independent military advisor to the president is preserved and the roles of the Combatant Commanders are clarified.  The size of the National Security Council (NSC) staff is capped at 200 under the bill.

In addition, the bill replaces the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L) with an Under Secretary of Defense for Research and Engineering (R&E) and an Under Secretary of Defense of Management and Support and creates a new Assistant Secretary of Defense for Acquisition Policy and Oversight to set defense-wide acquisition and industrial base policy.

The bill now goes to the president for signature.  The president had earlier threatened to veto the bill, but the White House has given no indication of the president’s intent now that the bill has passed.

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