House and Senate conferees have completed action on the FY2012 Defense Authorization bill. The conference agreement provides $530 billion for DoD’s base budget (including military construction). This is $23 billion less than the president’s request ($553 billion). The bill also includes $115.5 billion for overseas contingency operations (OCO), more than $2 billion less than the request.
The Defense Authorization bill also includes $16.9 billion for the Department of Energy’s defense activities, mainly for maintaining and modernizing the nuclear weapons stockpile and for nuclear proliferation programs.
The bill approves the 1.6 percent military pay raise proposed by the president and authorizes requested troop strength levels. The bill allows a small increase in the TRICARE Prime fee (caps future increases at no more than the retired pay cost-of-living adjustment.) and also allows an increase in pharmacy copay charges.
The bill supports DoD’s request for most major weapons programs. It authorizes building 10 ships and approves most requested funding for major aircraft procurement programs, including the next generation long-range penetrating bomber. It does, however, cut one of the 19 JSF’s requested by the Air Force
To pay for increases to the budget request and to meet the much lower funding total, the bill cuts or terminates some programs and reduces Operations and Maintenance (O&M) funding. It reduces the military construction request by $1.7 billion, including some $500 billion from incrementally-funded programs. Funds are eliminated ($540 million) for the Airborne Common Sensor/Enhanced Medium Altitude Reconnaissance and Surveillance System (EMARSS), requested funding for the Joint Tactical Radio System (JTRS) is reduced by $298 million, and $192 million is cut from Brigade Combat Team Modernization (BCTM) projects.
Reductions O&M funding include over $400 million from excess unobligated balances, $342 million for decreased operating tempo, and $605 million due to excess cash balances in the Defense Working Capital Fund (DWCF).
On defense contracting issues, conferees agreed to freeze spending on contract services at the FY2010 level. This would make the contractor services cut comparable to the freeze on the federal civilian workforce, according to the conference summary explanation. The bill also expands the $400,000 cap on defense contractor executive salaries to include all contractor employees, not just the top five highest-paid in each company, but provides an exemption for scientists and engineers
Following up on Secretary Panetta’s accelerated goal of achieving an auditable Statement of Budgetary Resources by 2014, the bill requires DoD to develop a plan that sets milestones, metrics, and strategies to meet that goal.
The bill also includes language which, for the first time, makes the Chief of the National Guard Bureau (NGB) a full member of the Joint Chiefs of Staff (JCS). Currently, the NGB chief attends JCS meetings and provides advice on national security issues.
The FY2012 Defense Authorization bill now moves to the House and Senate for a final vote. The conferees appear confident that the changes made to custody of detainees provisions will avoid a presidential veto.
