Defense Financial Highlights

Congress can’t break impasse on FY2015 Homeland Security Appropriations bill, agrees to one-week CR

Saturday, February 28th, 2015

ShareThis

The House and Senate, unable to break the stalemate over passage of the FY2015 Homeland Security Appropriations bill, decided to give themselves another week to try to reach agreement.

Approaching the midnight hour when the Continuing Resolution (CR) keeping the Department of Homeland Security open would run out, the House agreed to a CR until March 6 that was passed by the Senate earlier in the evening. This action continued the impasse on a funding bill for Homeland Security that began late last year.

In December, Congress approved a FY2015 Omnibus Appropriations bill that contained 11 of the 12 FY2015 appropriations bills. However, the Homeland Security Appropriations bill, which was subject to intense debate after the president announced executive action on immigration, was funded under a Continuing Resolution (CR) through February 27, 20175

Last month the House passed a bill that would fund Homeland Security for the entire FY2015, but included provisions that block implementation of the president’s executive action on immigration. This bill immediately brought a veto threat from the White House and made it highly unlikely that the Senate would be able to pass it over objections by Senate Democrats.

The Republican-controlled Senate repeatedly attempted to pass the House version of the FY2015 Homeland Security Appropriations bill, but Senate Democrats kept the bill from coming to a vote. A Democrat-proposed a bill that stripped out the House immigration provisions also failed to make headway.

However, yesterday Senate Majority Leader Sen. Mitch McConnell (R-KY) allowed a “clean” appropriations bill (devoid on immigration provisions) to move forward long with a separate bill to defund actions to implement the president’s executive order on immigration. After passing a procedural hurdle that allowed the FY2015 Homeland Security appropriations bill to come up for a vote, the full Senate approved the bill 68-31. The separate bill to prohibit funds to implement the president’s action on immigration failed to achieve the required 60 votes to proceed to a final vote.

With the Midnight tonight expiration of the current CR deadline looming and the Department of Homeland Security beginning to prepare for a shutdown (which could involve the furloughing 30,000 employees), the House considered a stopgap measure (H.J. Res 35) that would keep the Department of Homeland Security operating for three weeks until March 19. However, with 52 Republicans opposing and only 12 Democrats supporting it, the three-week CR was defeated 203-224.

The Senate, seeing that the House could not pass “clean” version before or a three-week CR before the deadline, approved by a voice vote a one-week measure keeping the Department of Homeland Security running until March 6. And, as the eleventh hour approached, the House, perhaps reflecting increasing frustration and political anxiety with the lack of progress, overwhelmingly approved the one-week measure 357-60, with 55 Republicans and 5 Democrats in opposition.

The short-term CR gives both chambers a little more time to reach on how to break the impasse. However, with a group of House Republicans continuing their refusal to support a bill that doesn't’t defund the president’s executive action on immigration and the Democrat’s and the president’s staunch opposition to such a bill, one week seems precious little time to reach an agreement.  

Carter, sworn in as Secretary of Defense, sets priorities

Wednesday, February 18th, 2015

ShareThis

Ashton Carter was sworn in as the 25th secretary of defense yesterday. Last week Carter was confirmed by the U.S. Senate 93-5.

Vice President Joe Biden administered the oath of office in a ceremony at the White House. Biden characterized Carter as “a genuine expert on the acquisition and technical capabilities that are going to help guarantee the U.S. military is second to none in the world.”

Carter called becoming secretary of defense “the highest honor” and thanked President Obama and Vice President Biden for their trust and confidence.

In a letter to all DoD personnel, Secretary Carter laid out his three main priorities as secretary of defense: 1) making the best possible security decisions; 2) ensuring the strength and health of the men and women who serve the department; and 3) building the force of the future.

Carter promised to give the president his “most candid advice” as he addresses the security challenges in today’s “continuing turmoil.” He said that he would count on the experience and expertise of DoD’s personnel as he prepares his advice for the president.

He said he will ensure the strength and health of “our soldiers, sailors, airmen, Marines, civilians, and contractors around the world” by “focusing on the well-being, safety, and dignity of each of you and your families.” Carter assured DoD personnel that they would have the best equipment and training and he would make decisions about the commitment of forces “with the greatest reflection and utmost care.”

Carter warned that DoD will have to “steer through the turmoil of sequestration.” Which he called a “risk to our nation’s defense.” He called for a balance in all parts of the budget to ensure that DoD remains “well-trained and well-equipped to execute our critical mission” and continues to attract “the best people.” Making the best use of available resources requires a “leaner organization, less overhead, and reforming our business and acquisition practice,” he said.

He cautioned that DoD must be “open to change” to be effective in the dynamic security environment. By embracing change DoD will be able to “keep pace with advances in technology and to attract new generations of talented and dedicated Americans to our calling.”

Carter confirmed as Secretary of Defense

Friday, February 13th, 2015

ShareThis

Yesterday, the Senate voted 93-5 to confirm Ashton Carter as the 25th Secretary of Defense. President Obama nominated Carter in December and the Senate Armed Services Committee cleared Carter’s nomination earlier this week 26-0.

Carter succeeds Chuck Hagel who announced his resignation in November, but has continued in service until a new secretary is confirmed and installed.

Carter served as Deputy Secretary of Defense from December 2011 to December 2013. Prior to becoming Deputy Secretary, he was Under Secretary of Defense for Acquisition, Technology, and Logistics, a post he held from 2009 to 2011. Carter also served in the Clinton administration as Assistant Secretary of Defense for international Security Policy from 1993 until 1996. 

During his Senate confirmation hearing (held February 4), Carter’s nomination was generally applauded by members of the Senate Armed Services Committee (SASC). SASC chairman Sen. John McCain (R-AZ) called him “one of America’s most respected and experienced defense professionals.” Ranking SASC member Sen. Jack Reed (D-RI) said Carter was “uniquely qualified to lead the Department of Defense.”

President Obama praised Carter’s confirmation in a statement from the White House. “With his decades of experience, Ash will help keep our military strong as we continue the fight against terrorist networks, modernize our alliances, and invest in new capabilities to keep our armed forces prepared for long-term threats, Obama said.

Carter is expected to be sworn in next week.

Proposed Senate legislation would penalize DoD for failure to achieve audit readiness by 2017

Thursday, February 12th, 2015

ShareThis

A bill proposed by four Senators would impose penalties on the Department of Defense if the department does not meet its goal of being audit ready by the end of 2017.

The Audit the Pentagon Act of 2015 (S. 327) was introduced by Sen. Joe Manchin (D-WVA), Sen. Ron Wyden (D-OR), Sen. Ted Cruz (R-TX) and Sen. Rand Paul (R-KY) last week.

In a press release, Sen. Manchin said “it is simply unacceptable that the Department of Defense is the only major federal agency that has not completed a financial audit. Our bill will help to solve that problem.” Noting that DoD has consistently expressed its commitment to achieving a full audit, Manchin said “Congress should hold them to that.” A similar press release was issued by Sen. Wyden.

Both Manchin and Wyden expressed frustration that the Government Accountability Office (GAO) continues to label “the Department of Defense “High Risk” for waste, fraud abuse and mismanagement due to the agency’s inability to adequately manage its funds.”

Under the proposed bill, if DoD does not meet its audit goal in 2017, congress will increase its oversight every year thereafter leading to the termination of reprogramming a transfer authority of funds. However, If DoD achieves an unqualified audit “which analyzes both the internal systems of control and the details in the agency’s financial records,” the department will get additional transfer authority to use in the following year.

The bill would also require that any individual nominated to serve as DoD Comptroller or as a military department Assistant Secretary for Financial Management must have served as the chief financial officer, or the equivalent, of a federal or state agency or a public company that has received an unqualified audit opinion.

In addition, if DoD does not achieve an unqualified audit by December 31, 2018, the bill would require the Defense Accounting and Finance Service (DFAS) to be transferred from the Department of Defense to the Department of the Treasury on April 1, 2019.

DoD leaders have stressed that the department is on track to meet the 2017 goal. The FY2016 DoD budget overview emphasizes that “DoD Leadership is committed to achieving audit ready financial statements by the end of FY 2017.” The overview provides a detailed description of the various programs in place to ensure the department meets that goal. A press release on the FY21016 budget stated that “during 2015, 90 percent of Defense resources have budget statements under audit.”

The bill was referred to the Senate Armed Services Committee (SASC) where it will be considered in conjunction with the FY2016 Defense Authorization bill.

Coast Guard FY2016 budget request totals $10 billion

Friday, February 6th, 2015

ShareThis

The FY2016 Coast Guard budget request (included in the Department of Homeland Security budget) totals $9.96 billion. This is $.2 billion less than the FY2015 president’s budget request (excluding Overseas Contingency Operations supplemental funding).

Congress has yet to enact the FY2015 Homeland Security budget due to the ongoing efforts by House Republicans to overturn the president’s immigration executive action. The House-passed Homeland Security appropriations bill included a provision prohibiting funds to be spent to implement the president’s immigration executive order. The Senate failed to move the bill forward as Democrat’s and three Republicans voted to deny a vote on a bill that included such a funding restriction. The current FY2015 Continuing Resolution (CR), which is funding Homeland Security appropriations (including the Coast Guard), expires on February 27.

The FY2016 budget request “preserves Coast Guard operations and continues recapitalization efforts for the cutters, boats, aircraft, systems and infrastructure,” according the Coast Guard budget overview.

The request includes $8.14 billion in discretionary funding (to be appropriated by Congress) and $1.82 billion in mandatory funding (including retired pay).

Operating expenses account for $6.82 billion of the FY 2016 discretionary budget request, slightly higher than the FY2015 request ($6.75 billion). These amounts fund Coast Guard operational activities worldwide, including personnel costs.

The acquisition, construction, and Improvements discretionary request of $1.02 billion ($0.1 billion lower than the FY2015 request) finances the acquisition of new assets and construction of new facilities and improvements to existing facilities.

The FY2016 Coast Guard budget request supports three priorities: Invest in the 21st century; sustain mission excellence; and maximize service to the nation.

The budget funds the purchase of six Fast Response Cutters (to replace the aging 110-foot patrol boat fleet), pre-acquisition review, analysis, and design for an Offshore Patrol Cutter (to replace the Medium Endurance Cutter classes), and projects for two Icebreaking Tugs and a Seagoing Buoy Tender. The budget also funds ongoing activities associated with the HC-27J Asset Project Office, spare parts for the HC-144A Ocean Sentry aircraft, and modernization and sustainment of the HH-65 (converting to MH-65 Short Range Recovery (SRR) helicopters). Acquisition funding will support design, development, and upgrades for the C4ISR systems and the Coast Guard unified logistics management system.

To sustain mission excellence, the FY2016 Coast Guard budget makes risk-based reductions, while pursuing critical recapitalization efforts, according to budget documents The Coast Guard plans to decommission two Island Class Patrol Boats, which will be replaced with Fast Response Cutters, and retire three HC-130Hs (to be reconditioned by DoD and transferred to the U.S. Forest Service). The budget also makes $60.9 million in operational adjustments, including a $45 million cut to professional services contracts (to be redirected to higher priorities), and a $5 million cut to headquarters overhead.

The budget preserves parity with the Department of Defense (DoD) in military pay (1.3 percent pay increase) and allowances, health care, and civilian pay (1.3 percent pay increase). The budget also includes $96 million for the operation of new assets and infrastructure.

Additional detail on the FY2016 Coast Guard budget request is available in the congressional justification material.

Nonprofit Website Design Custom Web Design