The Treasury Department and the Office of Management and Budget (OMB) announced that the final FY2016 federal budget deficit was $587 billion, up $148 billion from FY2015 ($439 billion). The administration had estimated in the annual Mid-Session Review in July that the FY2016 deficit would be $616 billion.
This is the first increase in the deficit in five years.
The increase in the deficit came as higher government expenditures (+$166 billion) more than offset a small increase in revenues (+$18 billion). The administration does point out that part of the increase in outlays was due to the timing of benefit payments. Because October 1 fell on a weekend, benefit payments were made in September.
Data on government expenditures and receipts and the deficit are reported in the Monthly Statement of Receipts and Outlays of the United States Government (MTS) prepared by the Treasury Department.
When measured as a percent of Gross Domestic Product (GDP), the FY2016 deficit increased to 3.2 percent (from 2,5 percent in FY2015), about the average for the past 40 years. During the period FY2009 to FY2012 the deficit’s share of GDP averaged about 8.5 percent.
The modest revenue growth (+$18 billion) in 2016 was led by a 4.7 percent increase in social insurance and retirement receipts (+$49.8 billion). Miscellaneous receipts increased by 5.8 percent (+$8.4 billion), estate and gift taxes rose by 11 percent increase (+$2.1 billion), and individual income tax receipts increased by a very small 0.3 percent (+$5.3 billion). However, these increases were partially offset by an almost 13 percent decline in corporate income tax receipts (-$44.2 billion), a 3.3 percent decrease in excise taxes (-$3.2 billion), and a 0.6 percent drop in customs duties (-$0.2 billion).
Spending on health programs and Medicare increased by $77.5 billion in FY2016 (+7.5 percent). Social Security outlays rose $28.3 billion (+3.2 percent), and spending for veterans benefits and services rose by $14,8 billion (9.3 percent). Outlays for net interest payments increased by $17.4 billion (+7.8 percent). Spending on national defense increased by only $3.9 billion in FY2016 (0.7 percent).
Looking ahead, OMB projected in its Mid-Session Review that the FY2017 deficit would be $441 billion. However, both OMB and the Congressional Budget Office expect deficits to rise again by 2020.
Federal civilian retirees are set to receive a 0.3 percent cost-of-living adjustment (COLA) in 2017. Retirees covered under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) will see the increase reflected in their January 2017 payment.
This small increase results from continuing low inflation throughout the year, primarily due to the decline in gasoline prices. The annual retiree COLA is calculated as the change in the average Consumer Price Index for Wage Earners and Clerical Workers (CPI-W)—published by the Bureau of Labor Statistics (BLS)—from the third quarter of the previous year to the third quarter of the current year.
This is the same calculation for the Social Security COLA. Social Security recipients will also receive a 0.3 COLA in 2017.
Federal retirees received no COLA in 2016. The COLA was 1.7 percent in 2015. 1.5 percent in 2014, 1,7 percent in 2013 and 3.6 percent in 2012. No adjustment was paid to retirees in 201 and 2010.
In late August President Obama notified Congress that federal civilian employees should receive a 1.6 percent pay raise in 2017. The 1.6 percent pay raise is a combination of a 1.0 percent across-the-board raise announced in the letter and an increase in locality pay the president said he will announce by November 30, 2016. If Congress takes no action on the pay raise when it completes the FY2017 appropriations bills, the president can issue an executive order implementing the raise.
Thank you for your support of the American Society of Military Comptrollers and for your service to our nation. We are grateful for the opportunity to serve you and to support the advancement of the military comptrollership profession.
Over the past 68 years ASMC has provided resources and opportunities, enhancing the development and career progression of our membership. With over 35,000 financial managers achieving their DoD FM Certification, ASMC’s local chapter and national professional development opportunities provide added value to the Department and to our membership in providing opportunities to obtain Continuing Education and Training (CET) units, in meeting requirements to earn 40, 60, or 80 CETs every two years to maintain their DFMCP certification at Levels 1, 2, or 3. While maintaining a modest level of dues, we continue to focus on providing value to its members. In fact, while operating costs have increased year after year, ASMC has not increased its individual membership rates over the past 11 years.
Membership dues are a vital source of funding our operations toward achieving our strategic goals and initiatives. After careful consideration, the ASMC National Executive Committee (NEC) approved a recommendation from the Executive Director to increase membership dues as a means of maintaining our high-quality offerings, delivering important benefits, and supporting our strategic initiatives. This decision to ask for your additional support was carefully weighed and is a critical step in the growth of ASMC. Factors considered by the NEC included comparison of membership dues in other professional associations; the current costs of seminars, conferences, and individual college or university courses; and the timing and amount of past increases in membership dues.
To continue providing you with the level of quality service you expect and deserve, and to strengthen and expand the programs ASMC provides, effective 1 January 2017 annual membership dues will increase from $26 to $40 and three-year membership dues will increase from $75 to $114. If you recently joined ASMC or renewed your membership (for one or three years), your dues will not increase until your membership “paid thru” date. However, from now through the end of 31 December 2016, current members (as of 5 October 2016) may elect to purchase (at the current dues rate) a “one time” renewal of membership (for either one or three years), thus extending your membership paid thru date for 12 or 36 months. Prior to 1 January 2017, “non-members” of ASMC may join our Society for one or three years at current fees. Even with this increase in annual dues, ASMC will continue to have the lowest membership fees among professional associations that provide training, education, and certification programs.
Current Membership Value and Enhancements
We believe our members receive great value at the current dues rate and will continue to receive great value at the new rate. ASMC provides national, regional, and local chapter professional development and education offerings; CDFM (with Acquisition specialty) certification program; Defense News Highlights; quarterly Armed Forces Comptroller journal; and the National PDI (for those approved by their organizations to participate). We are currently working with a test developer to complete the CDFM and CDFM-A exam updates and we will also be revising the associated textbooks. We are redesigning and updating our ASMC National Website. As a member, you will continue to receive special registration rates for the National PDI and member rates for CDFM Program enrollment, textbooks, and recertification. To see the full list of member benefits, please visit www.asmconline.org/membership/benefits.
ASMC continues to further increase the value of membership. Members can look forward to the following enhancements that will provide additional value:
- ASMC member groups will be able to communicate, ask questions, and share best practices via a collaboration platform called “Engage.” We will establish groups (budgeteers, accountants, auditors, cost analysts, etc) wherein members of each group can share resources and collaborate on subjects of interest.
- From an internal perspective, we will establish groups (including Chapter Presidents; Treasurers; and Chairs of Programs, Membership, and Certification to better enable chapters to communicate internally and to connect with other chapters. Engage will enable chapters to share best practices in areas such as conducting Regional or Mini-PDIs, programs, growth and development, and certification.
- ASMC will have an Early Careerist group and we will fund some chapter-level early careerist engagement and outreach activities.
- Chapter Websites. As part of our Website redesign project, we will provide a new website template, enabling chapters that do not have a website to develop one.
- Association Management System (AMS). Originally installed in 2007, our AMS needs to be updated. Over the next few years, ASMC will conduct an analysis of alternatives, data cleansing, and upgrade or migration to a new AMS. The new system is essential to ASMC's future – not only from an operational standpoint in providing tools and functionality needed to more efficiently manage the organization, but most importantly, to support our ability to provide the best customer service possible for our members in the years ahead. With this major upgrade, members will have access to better membership renewal and recertification platforms, as well as an improved member profile function. The new system will also help us automate to serve members more effectively without sacrificing “personal” service.
- We thank our current and past chapter presidents and officers for your dedication and service to the profession of defense financial management. Chapter rebates for membership joins and renewals after 1 January 2017 will increase to 20 percent from current 19% and 16% levels for annual and three-year memberships, thus providing increased funding to enable chapters to provide additional benefits to members.
- ASMC will explore methods to expand its educational offerings and provide additional professional development opportunities and learning resources to our membership.
We greatly value your loyalty to ASMC and trust you appreciate the value of your membership. If you have any questions or comments, please don’t hesitate to reply. You may also visit www.asmconline.org/dues-increase-faq to view info regarding membership fees.
To renew your membership now, please visit www.asmconline.org/membership/renew.
I am confident you will find stronger value in the changes we are making and I look forward to your continuing loyalty and support of ASMC.
Al Runnels, CDFM-A
Executive Director, ASMC
Beginning in November, the probationary period for new civilian hires will be two years instead of one year, the Department of Defense announced this week.
In a memorandum to DoD human resources directors, Acting Assistant Secretary for Civilian Personnel Policy Julie Blanks said the change would affect personnel appointed to permanent positions in competitive service and SES appointments from November 26, 2015 forward. The change was required in Sec. 1105 of the FY2016 National Defense Authorization Act.
The policy change is necessary, DoD said, because one year may not be enough time to judge the performance of new employees, in the “increasingly complex nature” of DoD’s work. “The longer probationary period offers employees a greater opportunity to showcase their talents and for supervisor’s to properly asses their capabilities,” a DoD spokesperson said.
The new policy does not apply to personnel appointed prior to November 26, 2105 and those appointed in excepted service, a DOD spokesperson said.
The policy memorandum notes that DoD and the military services do have the discretion to extend a probationary period beyond two years. The policy for this discretionary extension is being prepared.
The two-year probationary period policy does not change the one-year probationary period for supervisors, DoD said. New employees appointed to a supervisory period will serve the one-year probationary period and the one-year supervisory probationary period concurrently.
A person transferring from another agency to DoD who has completed a probationary period in competitive service (and has full appeal rights under the Merit Systems Protection Board) does not have to serve another probationary period, DoD said. However, a person who transfers from another government agency and receives a career SES appointment in DoD after November 26, 2015 will serve a two-year probationary period.
A person who transfers from another agency into DoD who has not completed a probationary period could be required to complete a new probationary period, with possible credit for receive credit for prior probationary service.
Health Insurance premiums for employees covered under the Federal Employees Health Benefits (FEHB) Program will increase an overall average of 4.4 percent in 2016, the Office of Personnel Management (OPM) announced this week.
The increase is lower than the 6.4 percent increase registered in 2016, but higher than the increases in 2015 (3.2 percent), 2014 (3.7 percent) and 2013 (3.4 percent).
The FEHB program covers about 85 percent of all federal employees and 90 percent of federal retirees. According to OPM, FEHB is the largest employer-sponsored health benefits program in the United States. The federal government pays an average of 70 percent of total premium cost. Premiums for specific health plans and dental and vision plans are shown on the OPM website.
OPM announced that “all plans will offer clinically appropriate and medically necessary treatment for children diagnosed with Autism Spectrum Disorder in 2017.”
The Open Season for health, dental and vision, and tax-deferred Flexible Spending Accounts (federal employees only) will start on November 14, 2016 and end on December 12, 2016. Open season allows federal employees and retirees to make changes to their plans and eligible employees to enroll in the plan of their choice.
Yesterday, Congress approved a Continuing Resolution (CR) that will keep the government running until December 9, 2016. The House passed the CR (H.R. 5325) by a bipartisan vote of 342-85 as 170 Republicans and 172 Democrats voted for passage. Earlier in the day, the Senate passed the CR 72-26. The president is expected to sign the bill before the fiscal year begins on Saturday.
Final negotiations on the CR were stalled because Senate Democrats would not let the bill proceed without funding for the water contamination crisis in Flint, Michigan. They argued that just as the proposed CR includes assistance for flood damage in Louisiana and other states, the bill should also include assistance for Flint.
With the Senate deadlock continuing, and the possibility of a government shutdown rising as the Friday midnight deadline approached, House Democrat and Republican leaders agreed to a deal that would provide assistance to Flint. House Speaker Paul Ryan (R-WI) and Minority Leader Nancy Pelosi (D-CA) agreed to include funding for Flint assistance in the Water Resources Development Act. Flint assistance is already in the Senate version of the water resources bill. Senate leaders accepted the deal and the Senate and House passed the CR.
Commenting on the bill, House Appropriations Committee Chair Rep. Hal Rogers (R-KY) said “a continuing resolution is a last resort. But, it is what we must do to fulfill our congressional responsibility to keep the lights on in our government.” Senate Appropriations Committee chair Sen. Thad Cochran (R-MS) called the CR “a short-term fix that will allow the Senate and the House to complete work on the FY2017 appropriations bills later this year.”
The CR is included in the FY2017 Military Construction/Veterans Affairs appropriations bill, which funds DoD military construction and Veterans Affairs appropriations for the full year.
The CR essentially allows agencies to fund FY2017 programs at the FY2016 level ($1.067 trillion for the total government and $74.1 billion for Overseas Contingency Operations (OCO)) until December 9. During the CR period, no new starts are permitted nor are programs allowed to increase production rates above the FY2016 rate
The bill also includes $1.1 billion in emergency funding for preventing the spread of the Zika virus, funding to address the opioid crisis, and $500 million in rebuilding and recovery grants to families and communities affected by recent flooding.
Congress will be in recess until after the November elections, returning for a “lame duck” session beginning on November 14. They will work to pass 11 individual FY2017 appropriations bills, a series of “mini-buses that include some individual appropriations, or more likely an omnibus appropriations bill containing the 11 remaining appropriations bills.
Department of Defense (DoD) Secretary Ashton Carter urged Congress to end budget gridlock and achieve budget stability through bipartisanship.
Testifying before the Senate Armed Services Committee yesterday, Carter said budget stability is “critical in order for DoD and our people to address all the national security challenges we face.”
Carter identified three areas in the congressional review process that are of great concern to DoD: 1) budget gridlock and instability; 2) micromanagement; and 3) over-regulation. But at this hearing, he concentrated on budget stability saying he would work with congress on micromanagement and over-regulation when Congress finalizes the FY2017 National Defense Authorization bill. Congress is not expected to complete action on the FY2017 Defense Authorization bill until after the election.
Carter told the committee that budget instability is “one of the biggest strategic risks” to DoD’s enterprise. Such instability undercuts budget planning for warfighters and commanders, “baffles our friends and emboldens foes,” he said.
The inability for Congress to complete action on defense budget bills in a consistent, timely manner is “managerially and strategically unsound” and inhibits industry partners from operating efficiently on technology’s cutting edge, he stressed.
Carter lamented the ongoing use of continuing resolutions to fund defense damages readiness and modernization, as the Joint Chiefs told the committee last week. “Even a short-term CR slows our shipbuilding program,” Carter cited as an example.
He argued that and the possible return to sequestration would devastate military readiness and modernization efforts. Carter warned that the use of budget gimmickry, such as using Overseas Contingency Operations (OCO) funding to fund base budget requirements, could make the return to sequestration more likely. Not only that, Carter said, it “harms readiness of our troops in order to buy more force structure than we can afford.”
The House version of the FY2017 DoD Appropriations bill would provide only $42.9 billion through April 2017 and use $16 billion in OCO funding for base budget requirements. The Senate Appropriations Committee bill would provide the full requested amount ($58.6 billion) for OCO.
Carter also rejected congressional proposals that would cut DoD investment priorities to fund programs that were unrequested or of lower priority. These proposals could “seriously imperil our future strength,” he said.
With a little over a week remaining until the beginning of FY2017, Carter pressed Congress to complete action on the FY2017 defense budget and avoid a lengthy continuing resolution. Unless Congress acts, he said FY2017 will begin with another CR for the eighth year in a row. Carter decried this as “a deplorable state of affairs.”
Military leaders tell Congress budget uncertainty and funding constraints threaten readiness and modernization
Continuing budget uncertainty, constrained funding levels, and the threat of sequestration are threatening the military’s ability to achieve and sustain readiness levels necessary to meet current mission demands and build the forces capable of meeting future security threats, military leaders told Congress this week.
Testifying before the Senate Armed Services Committee (SASC), Gen. Mark A. Milley, Army Chief of Staff, Adm. John M. Richardson, Chief of Naval Operations, Gen. Robert B. Neller, Commandant of the Marine Corps, and Gen. Gen. David L. Goldfein, Air Force Chief of Staff, said budget caps and annual continuing resolutions are worsening already difficult readiness and modernization challenges.
Gen. Milley warned that the Army will not be able to meet its readiness needs or “build the Army our Nation needs in the future” if sequestration (automatic cuts) returns. The Army continues to make readiness its number one priority and has balanced competing needs to meet requirements, Milley said. However, he stressed years of reduced funding levels are beginning to have a serious impact on Army units and installations. The key to improving readiness is sustained, predictable funding levels, he said. “Predictable and consistent funding is absolutely essential for the Army to build and sustain current readiness and progress toward a modern, capable future force,” Milley told the committee. Without such funding the Army will have to “reduce funding future readiness in modernization and infrastructure maintenance, and continue programmed end-strength reductions.”
Adm. Richardson told the committee his main concern is that “the gap between the demands the Navy is facing and the solutions available to address them is growing.” The funding limitations established in the Budget Control Act (BCA) and the continuing threat of possible sequestration cuts are making it more difficult to balance current readiness and preparations for the future, he said. These funding cuts are occurring when mission demands are increasing Richardson said. The situation is worsened by continuing uncertainty caused by recurring continuing resolutions, he stated. “Our ability to achieve true effectiveness and efficiency has been undermined by budget instability, workforce limitation, and eight—now likely nine—straight years of budget uncertainty and continuing resolutions, he said. The result, he added, is “increased wear and tear on ships, aircraft, and people.”
Gen. Neller stressed that funding cuts and budget instability have had a negative effect on the Marine Corps’ current and future readiness. “As resources have diminished, the Marine Corps has protected the near-term operational readiness of its deployed and next-to-deploy units in order to meet operational readiness,” he said. However, he warned this action has come at the cost of increased operational risk. Continued constrained funding constraints are stretching the Marine Corps, he said. And, he stressed, “unstable fiscal environments prevent the deliberately planned, sustained effort needed to recover current readiness of our legacy equipment in the near term, and to modernize in the longer term.” The “harmful effects of ‘sequestration’ are well known and will continue to harm the Marine Corps if they continue,” he cautioned. “Without consistent sustained funding we cannot rebuild and capitalize our readiness, he said.
Gen. Goldfein warned that “the technology and capability gaps between America and our adversaries are closing dangerously fast,” and stressed that significant investment and sustained funding is required to ensure that forces remain “ready and credible” in the future. In the current fiscal environment, the Air Force is striving to balance the needs of current readiness and ongoing modernization with limited and uncertain resources. But, Goldfein stressed, “the Air Force will be challenged to sustain legacy fleets and simultaneously invest in developing and procuring systems required to counter threats in FY2018 and beyond.” Unstable funding levels “make it difficult to deliberately balance investments to modernize, recover readiness, right-size the force, win today’s fight, and fully execute the Defense Strategic Guidance,” Goldfein said. Predictable funding levels and an end to sequestration “is absolutely critical to rebuilding Air Force capability, capacity, and readiness,” he emphasized.
Congress returns this week (after a seven-week recess) with less than four weeks until the end of the fiscal year and nine weeks until the November elections.
Facing this time constraint on FY2017 funding and the desire by members to get back out on the campaign trail, House and Senate leaders will meet this week to decide on their strategy to address legislative priorities before recessing again in early October. Most of the discussions and negotiations will center around funding to fight the Zika virus and dealing with FY2017 appropriations to avoid a government shutdown. The FY2017 Defense Authorization bill (passed by both the House and Senate and now in conference) is also seen as pressing legislation, but the limited schedule and disagreement on defense funding levels makes movement doubtful at this time.
Zika virus funding. The House passed legislation providing $1.1 billion in funding to combat the Zika virus. However, Democrats blocked consideration of the bill in the Senate because of attached legislation that prohibited Zika funding from going to Planned Parenthood and weakened some environmental regulations. Senate Republican leaders look to bring up this funding bill again, but Democrats are determined to block another vote.
Continuing stalemate in the Senate could push consideration of Zika funding into the debate on the CR or a possible omnibus appropriations bill. Complicating the politics of this issue, the Center for Disease Control (CDC) has said that funding for Zika programs could run out by the end of the month. Nevertheless, supporters of Zika funding on both sides of the aisle are confident that the funding issue will be settled before congress adjourns.
FY2017 Appropriations. With only three and a half weeks left before the start of FY2017, the House and Senate will be forced to come up with a Continuing Resolution (CR) to keep the government from shutting down; an outcome that both Republicans and Democrats want to avoid. A CR is necessary because to date no FY2017 appropriations bills have been signed into law. The House has passed only six FY2017 appropriations bills (Defense, Energy and Water, Financial Services, Interior and Environment, Legislative, and Military Construction/Veterans Affairs) and the Senate has only passed three appropriations bills (Energy and Water, Military Construction/Veterans Affairs, and Transportation/HUD). The Senate Republican leadership will again try to pass the FY2017 DoD Appropriations bill (already passed in the House), but Democrat leaders will move to block action, just as they did in July.
Debate on a CR will be over content (whether the CR will be clean or will include legislation to address particular concerns) and time frame (short-or long term). Republicans and Democrats often push for legislation on their interests in a CR and the White House will surely weigh in as well. For example, Republicans will press for increased defense funding and restrictions on nondefense spending and Democrats will advocate for stronger environmental legislation, gun control, and health and safety issues. Zika funding could be included in a CR if an agreement is not reached and emergency funding for flood damage resulting from recent storms could be addressed. But, final decisions on what is in a CR or what will be included in an omnibus appropriations bill will not be made until the length of the CR is settled.
Conservative Republicans in the House are arguing for a six-month CR that would carry over into next year when a new president and congress are in place. They are concerned that a short-term CR will lead to an omnibus FY2017 appropriations bill in a lame duck session that will result in higher spending. Certainly supporters of higher defense funding (including Republicans and Democrats) see a time-pressed omnibus appropriations bill as the leverage for higher defense appropriations in FY2017. This is also true for other high interest issues on both sides of the aisle.
Democrats want a short-term CR, possibly up to mid-December, followed by an omnibus appropriations bill. Senate Democrat Leader Sen. Harry Reid (D-NV) has stated flatly the Democrats will not agree to a six-month CR, warning that any push for a long-term CR could lead to a government shutdown. Both Republican and Democrat leaders have expressed a strong desire to avoid a shutdown and the blame that would come with it right before the elections. And, House Republican leaders might see a short-term CR as the way to maintain control of the process in a lame duck session, especially if it appears that Democrats could control the Senate in the new Congress.
Survey of Defense FM Professionals Closes 9 September 2016
Many thanks to those of you that have completed this year’s survey of defense financial management professionals. If you’ve not had a chance to do so, I encourage you to take the time to provide your opinions. The survey closes on Friday, 9 September 2016. It only takes about 5 minutes to complete, and the results provide important information concerning the collective opinions of DoD FMers regarding status and trends in the defense financial management environment. ASMC values your opinion very much and encourages our member and non-member FMers to take the time to ensure their views are included in the results. ASMC HQ will award $300, $200, and $100 to the ASMC Chapters that have the highest, second highest, and third highest survey response rates, respectively, among their members. You may access the survey HERE.
The CDFM remains a prestigious credential, as only 14% of the 54,000 defense financial managers currently possess it; only 3% also possess the CDFM-A (Acquisition) credential. For those of you considering pursuit of the CDFM, I urge you to take the steps to achieve this goal now! The demands of the fiscal environment over the past few years certainly indicate that knowledge and analytical skills across the range of FM disciplines is beneficial. The CDFM certification is fundamental to establishing a broad set of financial management skills. It also enables DoD and USCG leaders to be confident in hiring CDFMs or CDFM-As, knowing they have demonstrated initiative and drive in achieving a certification focused upon knowledge and skills directly applicable to requirements of positions within our profession.
Now that the DoD FM Certification Program (DFMCP) has reached its first major milestone and over 32,000 FMers have achieved it, the shift from earning to maintaining the certification has begun. As a reminder, the DFMCP “recommends” and “strongly recommends” that FMers at Level 2 and Level 3 respectively, also obtain a “test-based” certification. The CDFM is among the group of test-based certifications recognized by the DFMCP, and, obviously it is the certification most closely related to the profession of defense financial management. Achieving a test-based certification and maintaining mandatory CPEs, are keystones of demonstrating professionalism and commitment to high standards.
Whether you are at the journeyman level or an experienced defense financial manager, the CDFM Certification Program offers the type of recognized and prestigious credential that remains relevant, provides a solid foundation supporting professional development, identifies you as an individual with the initiative to enhance your skills, distinguishes you as a respected professional with knowledge across all areas of defense financial management, and increases your employment opportunities within the public and private sector.
Organizational Email Domains Issue
Your agency may have changed email domains in the past 18 months. (For example, email@example.com may now be firstname.lastname@example.org, and email@example.com may now be firstname.lastname@example.org.) Until recently, you may not have been affected, but when your agency stops forwarding email from your old address, you may suddenly lose contact with us. Please be sure to log in to your member profile TODAY at www.asmconline.org/login to ensure your email address on file with ASMC is correct. Also, if you have moved from one location to another, you can update your chapter designation to that of the nearest chapter to your new location – no longer necessary to send a note to HQ asking us to change your chapter designation. Lastly, using your personal email address in your profile avoids lapses in ASMC HQ commo with you in the event you change jobs and your work email address changes. We also encourage you to update your address so you continue to receive the Armed Forces Comptroller, if you opt for the hard copy edition.
ASMC National PDI 2017 will be conducted May 31 – June 2, 2017 in San Diego! Many thanks to the San Diego and supporting chapters, who are assisting ASMC HQ in preparation for this great training event. We’re thinking “Catching the Wave: Audit Ready” will be the theme. Our Professional Development Committee is gearing up to meet on 4 October to start developing the program. We expect to open registration NLT March 2017.
Any questions – contact Brian Gresham, our Associate Director for Communications and Public Affairs at email@example.com.
President Obama notified Congress this week that he has determined federal civilian employees should receive a 1.6 percent across-the-board pay raise in 2017. This is the same civilian and military pay raises the president included in the FY2017 federal budget request in February.
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. Unless Congress acts the president’s alternative proposal automatically will go into effect in January 2017.
The 1.6 percent pay raise is a combination of a 1.0 percent across-the-board raise announced in the letter and an increase in locality pay the president said he will announce by November 30, 2016. “The alternative plan for locality payments will be limited so that the total combined cost of the 1.0 percent across-the-board base pay increase and the locality pay increases will be 1.6 percent of the basic payroll,” the president said in his letter.
In a separate letter to Congress, the president determined that members of the uniformed services should also receive a 1.6 percent pay raise in 2017. The president proposed a 1.6 percent military pay raise in his FY2017 budget request. The president acknowledged the contributions made by military personnel “over more than a decade of war,” but said the need to “keep our nation on a sustainable fiscal course…requires tough choices, especially in light of budget constraints.”
To date, Congress has expressed general support for a 1.6 percent civilian pay raise. The House-passed FY2017 Financia
Services and General Government Appropriations bill was silent on the pay raise, which indicates passive support for the president’s 1.6 percent pay raise proposal in that it does not reject it. The Senate has not completed action on its version of the bill.
The 2017 military pay raise will be at least 1.6 percent as proposed by the president. The House-passed FY2017 DoD Appropriations bill funds a 2.1 percent military pay raise that is authorized in the House-passed FY2017 Defense Authorization bill. However, the Senate-passed Defense Authorization bill would approve the president’s 1.6 percent military pay raise request and the Senate Appropriations Committee supports the president’s military pay raise proposal in its bill. The full Senate has not yet acted on the committee-recommended bill. A House-Senate conference on the bill will determine Congress’s final, position on the military pay raise.
The Department of Defense (DoD) reported 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) totaled $8.7 billion as of July 31, 2016.
Flying operations accounted for 43 percent ($3.7 billion) of total costs, while mission support costs were 34 percent ($3.0 billion) and munitions were 23 percent (2.0 billion) of total costs.
The average daily cost is $12.1 million, up $.9 million reported at the end of 2015. DoD reports that $5.2 million of the daily average is for flying OPTEMPO, $2.7 million for munitions, $2.1 million for logistical support, $1.9 million for operational support, and $0.2 million for other costs.
The Air Force continues to bear the lion’s share of total costs at 65 percent ($5.7 billion). The Army share is 16 percent ($1.4 billion) and the Navy share is 11 percent (almost $1 billion). Special Operations Command (SOCCOM) costs at $700 million are 8 percent of the total.
Air Force costs are averaging $7.8 million per day, while the Army daily costs are averaging $1.9 million and Navy costs are $1.3 million a day. Special Operations Command (SOCOM) costs are averaging $1 million daily.
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
Through June 30, DoD reports that coalition forces conducted 10,615 close air support, escort, and interdiction air sorties in 2016. In 2014 (August through December) coalition forces conducted 6,591 such sorties and in 2015 (January through December) they carried out 21,113 sorties.
The General Services Administration (GSA) announced this month that federal employees will receive slightly higher daily Per Diem reimbursement rates for official travel in FY2017.
Per Diem rates are the maximum amounts a federal employee can receive as reimbursement for allowable expenses while on official duty travel. GSA sets per diem rates for locations in CONUS.
Per Diem rates in Standard areas in the Continental nited States (CONUS) for lodging will be $91 in FY2017, up from $89 in FY2017. The Standard area rate covers most of the continental CONUS 2,600 counties.
Per Diem rates for lodging at some 350 Non-Standard areas (NSAs) will vary depending on local conditions.
Daily rates for meals and incidental expenses (M&IE) in Standard areas will be unchanged at $51 in FY2017. The MI&E rates for Standard areas are based on the change in the Consumer Price Index for “Food Away from Home.”
The M&IE rate for NSAs (divided into six tiers) will continue to range from $54 to $74. Travelers receive 75 percent of the appropriate MIE rate on the first and the last days of travel. M&IE rates for NSAs are based on surveys of local restaurants.
Federal Travel Regulations still allow federal travelers to be reimbursed for actual expenses if per diem rates do not meet necessary expenses.
According to the GSA Per Diem Bulletin FTR 17-01 there are no new NSAs in FY2017. However, GSA announced that three NSA locations will become Standard areas: Lexington Park/Leonardtown/Lusby, MD; New Bern, NC; and Minot, ND.
The new Per Diem rates go into effect on Oct. 1, 2016.
Federal agencies have received guidance on providing performance awards to members of the Senior Executive Services (SES) and to Senior Level (SL) and Senior Professional and Scientific (ST) employees in FY2017.
This guidance was required in Executive Order 13714, “Strengthening the Senior Executive Service (SES), issued by President Obama Dec. 15, 2015.
A memo containing this guidance was issued to agency heads by Beth Colbert, Director of the Office of Personnel Management (OPM) and Shaun Donovan, Director of the Office of Management and Budget (OMB). The memo implements limits for total agency spending on individual performance awards as directed by the Executive Order.
For individual rating-based performance awards agencies may spend up to 7.5 percent of the aggregate salaries of their career executives for SES and SL/St employees.
For individual contribution awards (e.g. special act, suggestion, and invention awards), agencies may spend up to 7.5 percent of the aggregate salaries of their career executives for SES and SL/St employees.
Before 2010 there was no agency spending limit on awards to SL/ST employees and the spending limit for SES employee awards was 10 percent for each agency.
A freeze on discretionary awards, bonuses, and similar payments to political employees, set in 2010, will remain in effect.
The OMB/OPM guidance advises agencies to the maintain integrity of its awards programs by allocating awards “in a manner that provides meaningfully greater awards to top performers.” Specifically, the guidance encourages agencies “to use these awards to recognize those senior leaders who take on the most challenging assignments, use exemplary innovative and collaborative methods, take on challenging rotational assignments, and/or have the greatest impact on agency priorities and mission imperatives.”
The guidance also encourages agencies to award time-off and individual contribution awards to recognize accomplishments throughout the year. These awards can be granted even if an employee “is not rated at the highest rating levels.”
The ASMC 2016 Survey of Defense Financial Professionals is now available on-line! It only takes about 5 minutes to complete. Your participation will provide important information on the collective opinions of defense financial managers, about status and trends in the defense FM environment. We value your opinion very much, and encourage ASMC member and non-member FMers to take the time to ensure your views are included in the survey results. Also, ASMC HQ will award $300, $200, and $100 respectively to the ASMC Chapters that have the highest, second highest, and third highest survey response rates among their members. To access the survey enter the following url in your browser: http://www.surveygizmo.com/s3/2940120/2016-ASMC-Online-Questionnaire
The Summer Edition of our Armed Forces Comptroller, “New Heights of Financial Management – A PDI 2016 Retrospective,” is Out! This issue is brought to life with articles focusing on Financial Management and ASMC’s 2016 PDI. Thanks much to those of you who help us save costs by electing to receive only the digital edition of our journal, accessible at http://bit.ly/ASMCpublications. Those of you receiving the print edition should have it in your mailbox shortly. Our contractor advised us the 10-question digital assessment for this edition will be available on our LMS NLT the end of this week. As a reminder, after reading the journal, ASMC members may sign in and take the assessment to receive two CPEs/CETs.
Consider submitting an article for an upcoming issue; find out themes of upcoming issues by visiting the AFC Journal Home Page http://bit.ly/ASMCjournal.
We thank Cotton & Company, Kearney & Company, Management Concepts, PenFed Credit Union, and Sehlke Consulting for advertising in this issue.
Enjoy our summer edition and, after you’ve read it, take it to the office to share with a friend!
Update your member profile at http://bit.ly/ASMCmemberprofile to provide us your current contact info, especially if you have recently relocated, so you continue to receive the Armed Forces Comptroller. Also, you can update your chapter designation when you move to a new location and associate with the chapter there – no longer necessary to send a note to HQ asking us to change your chapter designation. Lastly, updating to your personal email address in your profile avoids lapses in ASMC HQ commo with you in the event you change jobs and your work email address changes.
CDFM Module 1, 2, and 3 Refresher Courses are conveniently conducted year-round. All CDFM Refresher Courses offered are aligned with the DoD FM Certification Program (DFMCP), so in addition to CETs, you can receive “direct credit” toward meeting DFMCP requirements. Sessions are continuously updated at http://bit.ly/CDFMMod123Refresh. For those eligible to take advantage of the 5-day, government-funded Enhanced Defense Financial Management Training Course (EDFMTC), the schedule for FY2017 is posted on our website and you may use the EDFMTC Automated Registration tool to register for this course at http://bit.ly/ASMCedfmtc. Additionally, ASMC-licensed vendors offer open enrollment EDFMTC, Acquisition Business Management, and Fiscal Law courses, and can also deliver these courses at your chapter or organization. Learn more about open enrollment training offerings at http://bit.ly/ASMCclassroomtraining or write firstname.lastname@example.org for vendor contact information.
ASMC National PDI 2017 will be conducted May 31 – June 2, 2017 in San Diego! We expect to have registration available NLT mid-March 2017.
PDI 2016, based upon feedback we received, was a terrific success! Special thanks to everyone who worked so well together to make it happen! Tremendous teamwork!
As a reminder, Virtual PDI 2016 is online at http://bit.ly/ASMCvpdi2016
PDI 2016 slides are also available online at http://bit.ly/ASMC_PDI2016slides
Any questions – contact Brian Gresham, our Associate Director for Communications and Public Affairs at email@example.com.
The 2016 ASMC Survey of defense financial managers is now available on-line! The survey only takes about 5 minutes to complete and the results provide important information concerning the collective opinions of defense financial managers regarding their views of status and trends in the defense financial management environment. We value your opinion very much and encourage you to take the time to ensure your views are included in the survey results. ASMC member and non-member FMers are encouraged to participate in the survey. ASMC will award $300 to the ASMC Chapter that has the highest response rate for this survey, $200 for the second highest response rate, and $100 for third highest response rate. To access the survey click HERE.
Secretary of Defense Ash Carter swore in Gen. Joseph Lengyel as Chief of the National Guard Bureau (NGB) at the Pentagon.
Lengyel succeeds Army Gen. Frank Grass who is retiring. Grass had been the first NGB Chief to be on the Joint Chiefs of Staff (JCS). Secretary of Defense Ash Carter thanked Gen. Grass for his strong leadership as the National Guard chief.
Secretary of Defense Ash Carter called Gen, Lengyel a “proven strategic thinker” who “will lead this force with certainty, clearly and the full confidence and trust of myself and the president.”
Gen. Lengyel has been the Vice Chief of the National Guard Bureau since August 2012. Prior to that he was the Chief of the Office of Military Cooperation and Defense Attaché, U.S. Central Command, Cairo, Egypt. He has also served as: Vice-Commander. 1st Air Force (Air Forces Northern) Tyndall AFB (July 2010-June 2011); Deputy Chief of Staff for Strategic Plans and Programs, HQ, USAF (June 2010-July 2010); Commander, Air National Guard Readiness Center, Andrews AFB (September 2006-September 2008); Commander, 455th Expeditionary Operations Group, Bagram Air Base, Afghanistan (June 2004-September 2004).
Lengyel was commissioned through Reserve Officer Training Corp Program in 1981. His Air Force operational and staff assignments include: Commander, 149th Operations Group, Kelly AFB (September 1996-June 1997); Commander 182nd Fighter Squadron, Kelly AFB (October 1998-October 1999); and Commander, 149th Operations Group, Lackland AFB (October 1999-February 2002)
Gen Lengyel is the 28th Chief of the National Guard Bureau and will lead over 450,000 Army and Air National Guard personnel.
The Office of Management and Budget (OMB) has issued a new Federal Cybersecurity Workforce Strategy to address the government’s shortfall in cybersecurity professionals,
OMB sent a memo to all Departments and Agencies identifying workforce needs and laying out a strategy to recruit, train, develop, and retain and sustain “a capable and competent workforce in key functional areas” of a cybersecurity workforce. The memo was signed by OMB Director Shaun Donovan, Office of Personnel Management (OPM) Acting Director Beth Colbert, and the Federal Chief Information Officer (CIO) Tony Scott.
The strategy seeks to respond to what OMB calls “increasingly sophisticated and persistent cyber threats that pose strategic, economic, and security challenges” to the United States. These threats, according to OMB, require a “Federal cybersecurity workforce with the necessary knowledge, skills, and abilities to use those tools to enhance the security of the Federal digital infrastructure and improve the ability to detect and respond to cyber incidents when they occur.”
Development of the Strategy was directed by OMB Memorandum M-16-04, Cybersecurity Strategy and Implementation Plan (CSIP) for the Federal Government, issued October, 2015. OMB coordinated the actions of four teams composed of experts from government, the private sector, and academia, that reviewed “existing and forward-leaning strategies for recruiting, developing, and retaining Cybersecurity professionals.” OMB, along, with OPM, used this work to prepare the workforce strategy.
The National Cybersecurity Workforce Framework (issued last year) outlines how agencies should look at cybersecurity work and the workforce requirements and establish training and development programs. Agencies should examine cyber work roles and determine skill gaps when filling vacancies, according to the memo. The Framework directs agencies to improve cybersecurity workforce requirements by: 1) educating Human Resources and Chief Information Officer staff on the tools available from the Workforce Framework; 2) expanding cybersecurity position coding to align with vacancies; and 3) working with the private sector to look at future workforce needs.
The Strategy provides guidance on how agencies should expand the cybersecurity talent pipeline, recruit and hire skilled talent; and retain and develop that talent. The appendix to the memo sets deadlines from 3 months to one year for completion of the requirements in each of these areas.
To expand the cybersecurity talent pipeline, the government should make long-term investments in cybersecurity education to establish “a sustainable cybersecurity workforce.” Government initiatives, such as “Computer Science for All” (aimed at P-12 students), can be used to stimulate interest in cyber-related fields. The government should also develop a cybersecurity core curriculum and agencies should work with academic institutions to identify and address skill gaps, according to the Strategy.
To recruit and hire skilled cybersecurity talent, the Strategy directs agencies to “engage in strategic recruitment and awareness campaigns” and go after talented students who may not seek out government careers. The Department of Homeland Security (DHS) will stand up a “Cybersecurity Surge Corps” that will send experts to help agencies with “incident response, systems engineering, and enterprise security.” Agencies are also directed to recruit diverse talent from veterans and current civil servants and develop a program of rotational assignments for private sector employees to share expose them to federal service and share their skills with federal staff. The Strategy also states that the government should also explore the use of existing compensation flexibilities new pay program opportunities.
To retain cybersecurity talent, OMB, OPM, DHS, and other agencies are directed to) focus on retaining top performers; 2) develop a government-wide cybersecurity orientation program; 3) develop and promote career paths, rotational assignments, and mentoring and coaching programs; 4) develop and utilize existing cybersecurity training programs in related career fields; 5) develop and utilize existing competitions and credentialing programs to assist employees in qualifying for pay increases or promotions; and 6) develop a common program for training in specific professional categories of employment.
The FY2016 federal budget deficit will be only $16 billion lower than the administration estimated in February, according to the Office of Management and Budget (OMB).
In its annual Mid-Session Review of the Budget, OMB now expects the FY2016 deficit to be $600 billion compared to $616 billion, the projection made when the FY2017 budget was released in February. The deficit for FY2017 is expected to be $441 billion, $63 billion lower than OMB’s earlier estimate of $503 billion.
Measured as percentage of Gross Domestic Product (GDP), the deficit is expected to be 3.3 percent in FY2016, unchanged from OMB’s previous projection. OMB expects the deficit’s share of GDP to begin declining in FY2017 (2.3 percent) and even further to 1.7 percent in FY2018. That share will hover around 2 percent from FY2019 to 2021 and stay in the 2.4 percent to 2.6 ercent range from FY2022 to 2026, according to OMB.
A $59 billion expected decline in receipts for FY2016 (-1.7 percent) is more than offset by a $75 billion decrease (1.8 percent) in expected expenditures. The lower estimate in revenue is primarily due to technical adjustments based on new tax collection data. Decreased estimates of both discretionary (spending from appropriations) and mandatory spending in FY2016 also reflect economic changes and technical re-estimates.
While OMB now expects cumulative deficits through 2026 to be 14 percent ($880 billion) lower than their February projections, annual deficits will still rise to $731 billion in 2026 from $600 billion in FY2016, totaling $5.2 trillion. Almost 60 percent of the revised total expenditure estimates (-$1.3 trillion) through 2026 are due to expected lower interest payments (-$770 billion), based on revised economic assumptions. OMB expects mandatory expenditures to decline by $597 billion during 2017-2026. Discretionary spending will increase by only $48 billion during the period.
The OMB projections are based on the administration’s economic assumptions and its proposed spending and revenue proposals. The unemployment rate is expected to average 4.8 percent in 2016 (down from 5.3 percent in 2015) and is projected to decline slightly to 4.7 percent in 2017. OMB expects the unemployment rate to stay in the 4.6 to 4.9 percent range through 2026. OMB estimates the annual change in consumer prices (CPI-U) to rise to 2.2 percent in 2017 from 1.2 percent in 2017, and level off at 2.3 percent by 2019.
CBO warns unchecked long-term spending and revenue imbalance could lead to growing deficits and record high debt levels
The Congressional Budget Office (CBO) warned this week that unless policymakers make significant changes in government policies on taxes and spending (particularly for Social Security and Medicare), the federal budget deficit and debt would grow steadily over the next 30 years, with potentially significant negative effects on the federal budget and the U.S. economy.
According to CBO’s analysis, future spending growth will outpace modest increases in revenue over the next 30 years. Much higher spending on Social Security and Medicare will reflect the aging U.S. population. By 2046, programs for the 65 and over age group will account for almost half of all federal spending, excluding interest payments. CBO states that health care costs will increase due to the aging population and new medical technologies and high personal income.
CBO presents it analysis primarily in terms of the budget deficit and federal debt share of the Gross Domestic Product (GDP).
In the absence of action to reduce the government’s spending and revenue imbalance, federal deficits as a share of GDP will rise significantly, CBO’s study shows. In 2016, the deficit measured as a share of GDP will be about 3 percent (down from its high of almost 9 percent in 2009). For the 2017-2026 period, the deficit’s annual average share of GDP would rise to 3,9 percent. And, unless policy changes on spending and taxes are put in place, CBO estimates that the ratio would increase dramatically to over eight percent in 2037-2046.
At the end of 2007, the federal debt accounted for 35 percent of GDP. Since then, that share as skyrocketed. By the end of 2015, the federal debt reached 74 percent of GDP, the highest since World War II. Between 2017 and 2016, CBO estimates that the average annual debt to GDP share will rise to 86 percent. The average debt to GDP ratio will jump to 110 percent in 2027-2036 (exceeding the previous high of 106 in 1946) and reach 141 percent in 2037-2046.
While higher deficits resulting from this spending/revenue imbalance might boost demand and increase output in the short term, CBO warns that resulting high debt levels over the long term would have negative consequences on the budget and the economy.
Growing deficits and large debt levels would limit the government’s options on how to deal with domestic and foreign policy problems. High deficits and debt levels would restrict the government’s ability to borrow money and constrain spending needed to address exigencies. In addition, higher deficits and long-term debt levels could have significant negative effects on the economy. Lower national savings and income, constrained domestic investment, and increased interest costs could increase the chances of fiscal crises, according to CBO.