Defense Financial Highlights

President orders SES workforce reforms to improve recruitment and hiring

Friday, January 15th, 2016


President Obama last month ordered federal agencies to take action to improve the Senior Executive Service (SES).

Executive Order #13714 was issued to “to strengthen the recruitment, hiring, and development of the Federal Government's senior executives.”

Office of Management and Budget (OMB) Director Shaun Donovan, in an OMB blog said the action would “attract, develop and retain the best talent needed to continue moving the Federal Government forward in the 21st century.”

The administration is increasing attention on the SES workforce as it is estimated that 60 percent of SES personnel will be eligible to retire.

The action directed in the Executive Order emphasizes three areas: 1) Hiring the best talent; 2) Strengthening SES development; and 3) improving SES accountability, recognition and rewards.

To hire the best talent, agency leaders are directed to regularly track SES vacancies and recruiting efforts to ensure top management attention. OMB will evaluate agency SES selection materials and recommend changes to streamline the hiring process. Agencies will also put into place a talent and succession management process for SES, Senior Level (SL), and Senior Scientific or Professional (ST) employees.

To strengthen SES development efforts agencies are directed to prepare rotation plans based on agency needs and employee professional growth opportunities. A government-wide goal (not for each agency) is set to rotate 15 percent of SES employees for a minimum of 120 days during 2017. SES employees will be required to complete at least one professional activity each year and receive a leadership assessment every three years. The order requires each agency to prepare a formal “onboarding program” for new SES employees.

To improve SES accountability, recognition, and rewards, the administration will increase funding for agency performance rewards caps from 4.8 percent to 7.5 percent, which was the agency average in 2010 before OMB placed restrictions on rewards. OMB will provide guidance on how these rewards should be distributed and allocated. Initial pay rates for SES employees will be increased to ensure that they earn more than their General Schedule (GS) employees.

The Executive Order establishes a Subcommittee of the President's Management Council (PMC) to advise the Office of Personnel Management (OPM) and the president on implementation of the requirements in the Executive Order.

It also sets up a time line for implementation of these required actions. OPM will evaluate the the Qualification Review Board (QRB) process and issue guidance, within 90 days, to agencies on acceptable materials for QRB consideration. Within 120 days after this guidance is issued agency heads will examine their career SES hiring process and make changes to “make it more efficient, effective, and less burdensome for all participants.” By May 31, 2016 agencies with 20 or more SES positions will submit to OPM a 2-year plan to increase the number of rotating SES employees.

The department of Defense, Energy, Health and Human Services, Housing and Urban Development, and Veterans Affairs will implement reforms by September 30, 2016. The departments of Agriculture, Education, Labor, and Transportation, and the National Aeronautics and Space Administration, Environmental Protection Agency, and the Small Business Administration will implement these requirements by September 30, 2017. The departments of State Treasury, Interior, Commerce, and Homeland Security will implement these reforms by September 30, 2018.

Cost of U.S. military operations again ISIL total $5.6 billion

Thursday, January 14th, 2016


DoD reported last month that since August 8, 2014, the cost of U.S. military operations in Iraq and Syria (Operation Inherent Resolve-OIR) against the Islamic State of Iraq and the Levant (ISIL) reached $5.53 billion. That is almost twice the $2.91 billion total cost DoD reported in June 2015.

The average daily cost is $11.2 million, up from $9.2 million reported in June. DoD reports that $5.7 million of the daily average is for flying OPTEMPO, $2.6 million for munitions, $1.6 million for operational support, and $1.1 million for logistical support.

The Air Force ($3.8 billion) is bearing almost 70 percent of the total cost, while the Army share is 13 percent ($725 million) and the Navy share is 11 percent ($605 million). Special Operations Command (SOCCOM) costs at $378 million are 7 percent of the total.

Air Force costs are averaging $7.7 million per day, while the Army daily costs are averaging $1.5 million and Navy costs $1.2 billion a day. Special Operations Command (SOCOM) costs are averaging $0.8 million daily.

According to DoD, 21,113 close air support, escort, and interdiction air sorties under OIR were conducted in 2015, up significantly from the 6,591 in 2014.

Through January 10, 2016, DoD reports that U.S. and partner nations have flown over 64,000 total sorties and damaged or destroyed 20,352 targets. This includes 6,221 fighting positions, 5,418 buildings, and 1,170 oil infrastructure targets.

Nations partnering with the U.S in conducting airstrikes against ISIL include Australia, Bahrain, Belgium, Canada, Denmark, France, Jordan, the Netherlands, Saudi Arabia, Turkey, the United Arab Emirates and the United Kingdom.

President to deliver State of the Union speech on January 12

Friday, January 8th, 2016


President Obama will deliver the annual State of the Union Address before a joint session of Congress on Tuesday night, January 12th. 

This annual address fulfills the constitutional requirement in Article II, Sec 3 of the Constitution that “The President shall from time to time give to the Congress Information on the State of the Union.”  President Obama’s speech this year will mark the 227th time presidents have reported to Congress, either in person or in written form, under this requirement. 

By tradition, the president reports annually on the current condition of the nation and lays out a framework for the administration's domestic and foreign policy plans and the upcoming budget request. However, the White House has indicated that this year the president will deliver a “non-traditional” speech addressing challenges rather than only identifying new programs in the budget request.

President George Washington gave the first address on January 8, 1790.  Washington and his successor President John Adams delivered their statement in person, but President Thomas Jefferson sent his message to Congress in writing. This practice of providing only a written submission continued until President Woodrow Wilson, in 1913, decided to go before a joint session of Congress to deliver his message. 

Between 1913 and 1934 presidents held to no particular tradition, sometimes giving their statements in person and sometimes sending them to Congress only in writing.  President Roosevelt reset the oral tradition and used the term “State of the Union” for both the speech and the event, a practice that continues today.

After Roosevelt, most presidents have delivered their State of the Union address in person.  Notable exceptions have been written statements by President Eisenhower after his heart attack and by Presidents Truman, Eisenhower, and Carter in the final year of their presidency.

President Washington's “Annual Message” delivered to both houses of Congress in 1790 was 1,089 words in length, the shortest State of the Union message on record. In 1981 President Cater delivered a written message of 33,667 words, the longest message.

Since 1934, when the 20th amendment changed the end date of presidential terms to January 20th,Presidents have delivered their State of the Union messages in January or February.  Prior to 1934, Presidents delivered the message in December.

President Calvin Coolidge delivered the first State of the Union address to a national audience on radio in 1923 and President Harry Truman’s 1947 address was the first to be broadcast on television.  President George W. Bush’s message in 2002 was the first State of the Union address to be webcast live on the internet.

Since 1966, a representative of the opposition party has delivered a response to the president’s address. The first opposition response was given by Sen. Everett Dirksen (R-IL) and Rep. Gerald Ford (R-MI) in reply to President Johnson's State of the Union address. This year Governor Nikki Haley (R-SC) will deliver the Republican response. Last year Sen. Joni Ernst (R-IA) delivered the Republican response and in 2014 the response was given by Rep. Cathy McMorris (R-CA).

The CRS report “The President’s State of the Union Address: Tradition, Function, and Policy Implications” and the House Of Representatives History Art, & Archives website provide a comprehensive history of the State of the Union Address.

Final FY2016 Coast Guard appropriation totals $9.3 billion

Thursday, January 7th, 2016


A key element of the FY2016 Homeland Security Appropriations included in the FY2016 Consolidated Appropriations Act (P.L. 114-113) provides funding for the U.S. Coast Guard.

Discretionary funding (appropriated by Congress) for the Coast Guard totals $9.3 billion, $1.2 billion higher than the request. The Coast Guard budget also includes $1.6 billion in Mandatory funding for retired pay.

Coast Guard military personnel will receive 1.3 percent pay raise authorized in the FY2016 Defense Authorization bill. Coast Guard civilians will receive a 1 percent across-the-board pay increase and a .3 percent locality pay raise as Congress did not change the president's recommendations.

Operating expenses account for $7.061 billion of Coast Guard FY2016 discretionary funding, $239 million higher than the request.These amounts fund Coast Guard operational activities worldwide, including personnel costs. Two-thirds of the increase is accounted for by $160 million for Overseas Contingency Operations (OCO), in the Coast Guard budget rather than in Department of Defense account. An additional $41.8 million is provided to reduce critical depot maintenance, $8.4 million to restore operating hours, $14 million to restore cuts to military special pays and bonuses, $2,2 million for a “Bravo-0” response capability, and $899 million for increased personnel levels at Aids to Navigation sites.

FY2016 funding for Coast Guard acquisition, construction, and improvements totals $1.945 billion, $930 million higher than the request. Funding is increased by $640 million for the award and production costs of the ninth National Security Cutter. An additional $70.5 million is provided to begin Phase II of the Offshore Patrol Cutter (OSP). The bill also provides another $95 million for one fully-missionized HC-130J aircraft. Additional funding is also provided for construction of shore facilities ($80 million) and for the capitalization, improvement, and acquisition of family housing ($21 million).

Senate passes combined FY2016 spending and tax credit bills and sends to president

Friday, December 18th, 2015


Today, the Senate approved the FY2016 Omnibus Appropriations and the “Protecting Americans from Tax Hikes Act of 2015,” clearing them for the president's signature. The White House issued a Statement of Administration Policy (SAP) supporting both bill indicating the president would sign the final bill. The House passed each bill separately, but the Senate combined the bills into on before voting.

The Senate approved the combined bill 65-33. Twenty-seven Senate Republicans joined 38 Democrats voting for the combined bill, while 26 Republicans, six Democrats, and one Independent voted against final passage.

Earlier today, the House approved the FY2016 Omnibus spending bill by a wide margin 316-113 as 150 Republicans and 166 Democrats voted for the bill. Yesterday, the House passed the tax bill 318-109, as 241 Republicans and 77 Democrats voted yes.

The $1.1 trillion FY2016 Omnibus Appropriations bill, including al 12 appropriations bills, provides $548 billion for defense (DoD and defense-related spending base budgets (including Department of Defense (DoD) and the Department of Energy Energy (DoE) nuclear weapons program) and $518 billion for nondefense budgets.

House Appropriations Committee chair Harold Rogers (R-KY) said “the bill will strengthen national security and military readiness, protect against current and emerging global threats, and provide for our troops and military families.”

Funding in the bill for DoD base appropriations, less Military Construction, totals almost $514.1 billion and $58.6 billion for Overseas Contingency Operations (OCO). These amounts conform to the Bipartisan Budget Act of 2015.

The bill funds a 1.3 percent military pay raise authorized in the FY2016 Defense Authorization bill. DoD civilians will receive a 1 percent across-the-board pay increase and a .3 percent locality pay raise on January 1, 2016 as Congress did not change the president's recommendations.

Operations and Maintenance (O&M) funding in the bill totals $167.5 billion. The bill provides $609 million more than the president requested to mitigate shortfalls in readiness, training, and depot maintenance.

Procurement funding in the bill totals $111 billion. Funding is included for: 68 F-35 Joint Strike Fighters, 102 Blackhawk helicopters, 3 Littoral Combat ships, 2 attack submarines, 2 DDG-51 guided missile destroyers, 5 F-18E Super Hornets, and 12 KC-46 tankers.

Military Construction funding in the bill totals $8.2 billion for military construction projects. Family Housing funding for construction and operations of military housing totals $1.4 billion and addresses the need for more Air Force housing. The bill also includes $623 million for construction and improvement to military medical facilities and $334 million for work to be performed at DoD Education activities worldwide. Funding for Guard and Reserve facilities in the U.S. Totals $551 million.

The combined bill extends or makes permanent more about 50 expiring tax credits. Notably, the bill makes permanent the child tax credit and the earned income tax credit for low and moderate income families and permanently extends the research and development tax credit. The bill ends the ban on oil exports, extends tax breaks for renewable energy, and includes reforms to the Internal Revenue Service. The bill also includes a two-year delay on implementation of the tax on expensive health care insurance, the so-called Cadillac tax.  

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