American Society of Military Comptrollers

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Yesterday, the House Armed Services Committee (HASC) approved (56Y-5N) the FY2014 Defense Authorization Bill. The HASC bill authorizes $552 billion for the Department of Defense (DoD) and Department of Energy (DoE) funding for the nuclear weapons program.  The bill also authorizes $85.8 billion for Overseas Contingency Operations (OCO) in FY2014.

HASC chairman Rep Buck McKeon (R-CA) emphasized that the FY2014 Defense Authorization bill would be the 52nd consecutive Defense Authorization bill passed by the Congress.

According to a committee summary, the HASC bill provides military personnel with a 1.8 percent pay raise, almost twice the 1 percent raise requested in the president’s budget. The bill rejects DoD’s proposed increases to TRICARE Prime enrollment fees, pharmacy co-pays, and an enrollment fee for TRICARE for Life and TRICARE Standard. In the FY2013 Defense Authorization bill, Congress approved a small increase in the TRICARE pharmacy co-pay, but rejected most of DoD’s proposals to reduce TRICARE costs by increasing fees.

The bill reflects strong opposition in the Congress to another Base Realignment and Closure (BRAC) round. It would prohibit DoD from planning or initiating another BRAC round in 2015. In the FY2013 budget, DoD proposed a BRAC round for 2014, but backed away from that proposal in the face of strong congressional objections. At that time then DoD Secretary Leon Panetta said DoD was not abandoning the push for closing unneeded installations and would probably revive a BRAC request in the future.

The bill also rejects the Navy’s plan to retire seven cruisers and two amphibious ships, providing modernization funding to keep them in the fleet, and prevents the retirement of Global Hawk block 30 unmanned aircraft.

The committee does support much of the administration’s budget request for major weapons programs.  The bill supports requested funding for the nuclear aircraft carrier (CVN-78) and multiyear procurement of the E-2D Hawkeye and C-130J Super Hercules. The bill also supports funding for the KC-46 Tanker, the Long Range Bomber (LRS-B) and modernization of the C-130H aircraft for the Guard and Reserves.

The bill includes additional funding for National Guard and Reserve equipment, advance procurement for the F/A-18E/F and Amphibious Combat Vehicle, and the MQ-9 Reaper. The bill would also address what it considers unfunded Air Force requirements for F-15E and F-16 Engines.

The HASC bill would reject a cap on individual salaries when calculating allowable private sector compensation on DoD contracts. Instead, it would exclude the salaries of some contractors’ top five earners from allowable expenses and freeze the baseline for current employee compensation. Future adjustments in the baseline would be made using the economic cost index.

The full House is expected to begin consideration of the bill next week.

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Yesterday, the House Appropriations Defense Subcommittee (HAC-D) approved the FY2014 Department of Defense (DoD) Appropriations bill.  According to a committee press release, the HAC-D bill would provide $512.5 billion for the DoD base budget (excluding military construction), almost $3.4 billion below the president’s request.

The HAC-D bill would also provide $85.8 billion for Overseas Contingency Operations (OCO) in FY2014. The president originally included an $88.5 billion OCO placeholder in the FY2014 budget request. However, last month he sent Congress a budget amendment that replaced the placeholder with a detailed $79.4 billion OCO budget request.

In a statement that accompanied the committee release, HAC-D chairman Rep. Bill Young (R-FL) said the bill provides “the resources needed to maintain and modernize the best equipped and most capable military in the world,” without adversely affecting military readiness.

The Subcommittee action was held in a closed session so the full details are not yet available. But, the committee press release highlights some components of the subcommittee mark.

The HAC-D bill would fund a 1.8 percent military pay raise that would be authorized in the proposed FY2014 Defense Authorization bill, approved by the House Armed Services Committee (HASC). The president’s budget requests a 1 percent pay raise for military personnel.

The bill proposes to fund the Defense Health Program (DHP) at $33.6 billion, $519 million above the request. Increases are primarily for medical research and medical facility upgrades.

Funding in the HAC-D bill for Operations and Maintenance (O&M) programs would total $175 billion, -$124 million below the request. The bill includes a $922 million increase for facility sustainment and modernization and $536 million more to cover a shortfall in fuel funding.

The bill would provide $98.4 billion for procurement programs, $750 million less than the request.  Included in the bill’s approved procurement level are funds to build 8 new ships (including two SSN-774 Attack Submarines), buy 29 F-35 (Joint Strike Fighter) and 21 EA-18G aircraft, 73 H-60 Blackhawk and 37 MH-60S/R helicopters. The bill also proposes $1.5 billion for Guard and Reserve equipment, not requested by DoD.

Funding in the bill for research and development would be $66.4 billion, $1.1 billion below the president’s request.

To offset the HAC-D proposed increases, the bill includes cuts of $1 billion for what the subcommittee calls excess program funding, $437 million for a rejected civilian 1 percent civilian pay raise, and $2.1 billion in recessions of prior-year program funding.

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Yesterday, the House passed the FY2014 Military Construction/Veterans Affairs Appropriations bill (H.R. 2216), the first of 12 appropriations bills to be considered in Congress.

The Military Construction portion of the bill provides $9.9 billion for military construction projects, family housing, Base Realignment and Closure (BRAC), the NATO Security Investment Program (NSIP), and Chemical Demilitarization construction.  This is $1.1 billion less than the FY2014 request and about $650 million below the FY2013 enacted level.

The House-passed bill reduces the request for military construction projects by $428 million and for NSIP by $40 million, but fully funds the request for Family Housing, Chemical Demilitarization and BRAC.  The bill rescinds prior-year project funding by $584 million. The House adopted a floor amendment that would prohibit any funding for a new Base Realignment and Closure (BRAC) round.

The overwhelming approval vote (241-4) came in the wake of a veto threat by the White House earlier this week in a Statement of Administration Policy (SAP) on both the FY2014 MilCon/VA and Homeland Security bills.

This veto threat was not in response to what is contained in the House bills. While the SAPs do object to a number of House actions in the bills, notably the lack of funding for the president’s proposed 1 percent civilian employee pay raise, no specific objection receives a veto threat.

Rather, the veto threat is directed at the House Appropriations Committee’s distribution of total FY2014 funding to its 12 subcommittees, the so-called 302(b) allocations. These allocations make significant reductions to most nondefense bills, but safeguards funding for the DoD, Homeland Security, and Military Construction/VA bills.

The administration strongly objects to what it considers a rearrangement of federal budget and urges the House and Senate to agree on an overall budget framework that “enables sufficient investments in education, infrastructure, innovation, and national security” before it acts on any appropriations bill. Until such an agreement is reached, the SAPs state that the president’s senior advisors would recommend a veto of any bill that implements the House budgetary proposals.

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Before leaving for the Memorial Day recess, the subcommittees of the House Armed Services Committee (HASC) finished marking up the FY2014 Defense Authorization bill.

While full details of the subcommittees’ actions have not been released, each subcommittee issued a press release that identifies legislative proposals included in the marks. Many of these proposals reject administration plans in the budget request that would save billions of dollars, according to DoD justification.

The Military Personnel Subcommittee proposes to provide military personnel with a 1.8 percent pay raise, almost twice the 1 percent raise requested in the president’s budget. The subcommittee would reject DoD’s proposal to increase TRICARE Prime enrollment fees, pharmacy co-pays, and set an enrollment fee for TRICARE for Life and TRICARE Standard. Last year, Congress rejected most of DoD’s FY2013 proposals to reduce TRICARE costs by increasing fees.

The Readiness Subcommittee markup proposes to prohibit DoD from planning or initiating another Base Closure and Realignment (BRAC) round in 2015. In the FY2013 budget DoD proposed a BRAC round for 2014, but backed away from that proposal in the face of strong congressional objections. The subcommittee also proposes to reject the Navy’s plan to retire seven cruisers and two amphibious ships.

The Tactical Air and Land Forces Subcommittee markup proposes to stop DoD from retiring Global Hawk block 30 unmanned aircraft. Subcommittee legislative language would require the Air Force to maintain operational capability through 2016. The mark would also prohibit the Army from funding the next development stage of the Ground Combat Vehicle until Congress receives a status report on the program.

The Seapower and Projection Forces Subcommittee would authorize funding to modernize seven cruisers and two amphibious ships to keep them in the fleet.

The full committee is scheduled to take up the complete FY2014 Defense Authorization bill on June 5.