The FY2015 federal budget deficit will be $128 billion lower than the previous administration estimate, according to the Office of Management and Budget (OMB).
In its annual Mid-Session Review of the Budget, OMB now expects the FY2015 deficit to be $455 billion compared to $583 billion projection made when the FY2016 budget was released in February. The deficit for FY2016 is also expected to decline by $45 billion, from $474 billion projected in February to $429 billion.
Measured as percentage of Gross Domestic Product (GDP), the deficit is expected to decline from 2.8 percent in FY2014 to 2.6 percent in FY2015. The deficit share of GDP will further decline to 2.3 percent in FY2016 and hold at around 2.5 percent through FY2020. Between FY2021 and FY2025 OMB projects the deficit share of GDP to remain steady at 2.7 percent.
Increased receipts (+72 billion) account for more than half the improvement in the FY2015 deficit. Estimated higher individual (+$69 billion) and corporate (+$20 billion) income tax receipts are slightly offset by lower economic assumptions (-$22 billion) affecting receipts. Also contributing to the deficit improvement in FY2015 are lower than expected discretionary (-$23 billion) and mandatory (-$13 billion) spending. Defense outlays in FY2015 are projected to be $5 billion less due to lower than expected spending patterns in investment accounts.
While the FY2015-17 deficit estimates are down from OMB’s previous projections, deficits for FY2018-25 are now estimated to be $209 billion higher than OMB’s February projections. This adjustment is due primarily to lower revenue (-$556 billion) as revised economic forecasts show lower economic growth that will lead to lower individual and corporate income tax receipts. Partly offsetting the projected decline in receipts are lower than previously expected expenditures (-$374 billion) driven by lower interest payments (-$303 billion) due to revised economic assumptions. Discretionary spending is expected to show little increase (about $18 billion, almost all defense) over the eight-year 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 5.3 percent in 2015 (down from 6.2 percent in 2014) and is projected to decline to 4.6 percent by 2017. The unemployment rate will rise again to 4.9 percent by 2021 and stay at that level through 2025. OMB expects the annual change in consumer prices (CPI-U) to be only 0.2 percent in 2015, but increase to 1.9 percent in 2016 and level off at 2.3 percent by 2020.
Last week, the House Appropriations Committee (HAC) approved FY2016 appropriations for the Coast Guard, which are included in the Department of Homeland Security appropriations bill.
This marks the 12th and final FY2016 appropriations bill approved by the House Appropriations Committee (HAC).
HAC chairman Harold Rogers (R-KY) said, “all committee work on funding measures [for FY2016] –the first time this has happened since 2009.” The full House has passed six bills, (Commerce/Justice/State, DoD, Energy and Water, Legislative, Military Construction/Veterans Affairs, and Transportation/HUD).
The HAC approved $8.5 billion in FY2016 discretionary appropriations (to be appropriated by Congress) for the Coast Guard, $361 million more than the budget request. The bill also identifies $1.6 billion in Coast Guard mandatory spending, including retired pay. The HAC bill does not include Coast Guard funding for Overseas Contingency Operations (OCO).
Operating expenses totaling $6.9 billion are funded in the bill, about $77 million higher than the request. The bill fully funds a military pay raise, but does not contain funding for a civilian pay raise. Funding would be increased by $14 million for critical enlistment and extension bonuses and $55 million for critical depot maintenance programs.
The bill would increase the request for acquisition, construction, and improvements by $284 million to $1.3 billion. The bill fully funds the request for six Fast Response Cutters (to replace the aging 110-foot patrol boat fleet) and adds $70.5 million for design and construction of the Offshore Patrol Cutter (OSP), a high acquisition priority. An Additional $95 million is included to buy the 13th HC-130J, $82.7 million for Shore Facilities construction (aviation facilities +$31 million, ship lift facility +$20 million, and training center +$31.7 million), and $21 million for Coast Guard housing.
The HAC also proposes $20 million in rescissions from prior-year programs.
The Senate Appropriations Committee (SAC) approved its version of the FY2016 Homeland Security Appropriations bill last month. The SAC bill provides $8.7 billion for Coast Guard discretionary appropriations, $570 million above the request. The bill also includes OCO funding of $160 million for the Coast Guard.
Last week the Army announced its plan to further reduce force structure in 2016 and 2017 and cut troop strength by another 40,000 by 2018. The plan would also involve the reduction of 17,000 army civilian employees.
Force structure cuts “will best posture a smaller Army to meet global commitments,” according to a press release. These cuts will involve reductions in headquarters, cuts to brigade combat teams and enabler and generating forces, changes to operational force designs, and changes as a result of the Aviation Restructure Initiative.
Headquarters reductions will focus on headquarters commanded at the two-star and above level. The number of Army Brigade Combat Teams (BCTs), about 4,000 soldiers each, will drop to 30 in FY2017 down from a wartime high of 45. Two BCTs (Fort Benning, GA and Joint-Base Elmendorf-Richardson, Alaska) will convert into maneuver battalion task forces (about 1,050 soldiers each) by 2017.
Active Army troop strength will fall from 490,000 to 450,000 by the end of FY2018 (15,000 in FY2016, 15,000 in FY2017, and 10,000 in FY2018) under the plan. In FY2012, the Army’s active strength was 570,000. Previously, the Army had announced a cut of 80,000 from that level to be achieved in FY2017.
Although the Army’s plan will affect 30 installations, much of the Army’s troop strength cuts will be at six installations: Fort Benning, GA, -3,402; Fort Hood, TX, -3,350; Joint Base Elmendorf-Richardson, AK -2,631; Joint Base Lewis-McChord, WA -1,251; Schofield Barracks, HI -1,214; and Fort Bliss, TX -1,219
The previous 80,000 cut was to be achieved, for the most part, by eliminating temporary increases and reductions in Europe. To meet the additional 40,000 cut, the Army hopes to use attrition as much as possible, but will also use continuing officer and enlisted involuntary separations and early retirement boards.
The Army will also reduce civilian strength by 17,000 during FY2016 and FY2017. This reduction comes on top of 8,000 civilian cuts previously made. The Army hopes to achieve the 17,000 civilian reduction “through attrition and not filling currently unfilled positions.”
These decisions are being forced by ongoing budget constraints, according to Lt. Gen Joseph Anderson, Army Deputy Chief of Staff for operations and plans. “In the end, we had to make decisions based on a number of strategic factors, to include readiness impacts, mission command and cost,” he said.
However, if sequestration is not resolved before the automatic cuts go into effect in FY2016, the Army stresses that it could be forced to cut troop strength by another 30,000 (to 420,000) by the end of FY2019. This would produce a 26 percent reduction (-150,000) over seven years. If this should occur, the Army warns that the force “would be incapable of simultaneously meeting current deployment requirements and responding to the overseas contingency requirements of the combatant commands.”
The Joint Chiefs of Staff (JCS) has released the 2015 National Military Strategy describing how the U.S. will use its Joint Force to meet current and future security challenges presented in an increasingly complex global security environment.
Describing the current security environment, Gen. Martin Dempsey, Chairman of the Joint Chiefs of Staff (JCS), said “we now face multiple, simultaneous security challenges from traditional state actors and transregional networks of sub-state groups—all taking advantage of rapid technological change.” Dempsey stressed that conflicts will come faster, last longer, and increasingly have implications for the U.S. at home.
In a press conference, Dempsey said while the United States still has the most powerful military force, other countries continue large investments in military capabilities and the gap is closing. The military strategy calls for “greater agility, innovation, and integration’ and reinforces the need for the U.S. to stay globally involved. Just as important, Dempsey said, the strategy “renews our professional commitment to develop leaders who will bring this strategy to life.”
In describing the strategic environment, the Strategy identifies Russia, Iran, North Korea, and China as countries that “pose serious security concerns” to the U.S. and its allies.
Security contributions by Russia in counternarcotics and counterterrorism are noted, but the Strategy charges that “Russia’s military actions are undermining regional security directly and through proxy forces.” It lists a number of agreements (e.g., UN Charter, Helsinki Accords, and Intermediate-Range Nuclear Forces Treaty) Russia has signed, but has violated by these actions.
Iran‘s pursuit of nuclear and missile delivery technologies and its support for terrorism “has undermined stability in many nations, including Israel, Lebanon, Iraq, Syria, and Yemen,” the report charges. North Korea’s pursuit of nuclear weapons and ballistic missile technology in the face of demands to cease such activity is a direct threat to the Republic of Korea and Japan, according to the report.
China could pose a threat to the United States because of its actions in the Asia-Pacific region, the report stresses. However, the report also encourages Chine to “become a partner for greater International security” by settling regional issues “without coercion.”
Under the U.S. military strategy, the military supports activities that advance the security of U.S citizens, allies, and partners, a strong economy, respect for universal values, and a “rules-based international order” that fosters peace, security, and opportunity. To ensure the survival of the nation and prevent a catastrophic attack on U.S. territory, the military seeks to: deter, deny, and defeat state adversaries; disrupt, deny, and defeat violent extremist organizations (VEO), and strengthen allies and partners.
The Strategy calls for a “Joint Force capable of swift and decisive force protection around the world.” This Joint Force’s globally integrated operations includes: Maintain a Secure Nuclear and Effective Deterrent by keeping strategic forces at a high state of readiness; Provide a Global, Stabilizing Presence around the world; Combat Terrorism with “sustained pressure using local forces augmented by specialized U.S. and coalition military strengths; Counter Weapons of Mass Destruction; Deny an Adversary’s Objectives with “highly-ready, forward-deployed forces, [and] well-trained and equipped surge forces at home;” Respond to Crises and Conduct Limited Contingency Operations; Conduct Stability and Counterinsurgency Operations “working with interagency, coalition, and host-nation forces;” Provide Support to Civil Authorities to work with civilian first-responders to deal with natural disasters and other domestics events; and Conduct Humanitarian Assistance and Disaster Response to deliver “life-sustaining aid to desperate people all around the world.”
The Strategy emphasizes innovation and efficiency to meet U.S. strategic objectives. This includes “promoting greater interoperability with joint, interagency, and international partners while encouraging action through decentralized execution.” The Strategy notes the existence of a resource-constrained environment t requires achieving savings through a more effective acquisition process (Better Buying Power 3.0) and reducing unneeded overhead and streamlining operations.
The cost of U.S. military operations in Iraq and Syria (Operation Inherent Resolve) against the Islamic State of Iraq and the Levant (ISIL) reached $2.91 billion in June 2015, the Department of Defense (DoD) reports.
This averages out to $9.2 million a day since August 8, 2014, up slightly from last month’s report.
DoD reports that $5.0 million of the daily average is for flying OPTEMPO, $2.1 million for munitions, $2.1 million for mission support, and $0.1 million for ship OPTEMPO. Air Force costs are averaging $6.1 million per day, while the Navy is spending $1.4 million daily and the Army $0.9 billion a day. Special Operations Command (SOCOM) costs are averaging $0.7 million daily.
According to DoD, 6,981 close air support, escort, and interdiction air sorties under OIR were conducted in 2014 and 9,183 such sorties have been carried out in 2015 as of May 31.
Through June 22, DoD reports that, U.S. and partner nations have damaged or destroyed 7,655 targets. This includes 2,045 buildings, 1,859 fighting positions, and over 400 tanks and vehicles.
Nations partnering with the U.S in conducting airstrikes against ISIL include Australia, Bahrain, Belgium, Canada, Denmark, France, Jordan, the Netherlands, Saudi Arabia, the United Arab Emirates and the United Kingdom.
DoD costs are being funded from the Overseas Contingency Operations (OCO) approved by Congress. The administration requested $3.4 billion for Operation Inherent Resolve (OIR) in FY2015. For FY2016, the OCO request includes $4 billion to support OIR plus another $1.3 billion to train Iraqi forces (including Kurdish forces) and moderate Syrian opposition.
Senate Democrats moved last week to block consideration of the Senate Appropriations Committee-approved FY2016 DoD Appropriations bill on the Senate floor. A vote to proceed on the bill failed to gain the necessary 60 votes as 49 Republicans and only one Democrat, Sen. Donnelly (D-IN), voted yes. All 45 other voting Democrats voted against the motion to proceed.
Senate Democrat leaders have been urging Republicans for weeks to begin negotiating a new budget deal that changes sequestration (automatic across-the-board cuts). With no progress toward budget discussions, Democrats vowed to block action to proceed on any appropriations bill in the Senate until budget talks begin. The Defense bill was the first FY2016 appropriations bill to move forward in the Senate.
Democrats are responding to defense authorization and appropriations bills passed in the House and passed (defense authorization) or proposed (DoD appropriations) in the Senate that add about $38 billion in FY2016 defense base budget requirements to funding for Overseas Contingency Operations (OCO). Republicans employed this mechanism to increase defense funding and get around defense funding caps set in the Budget Control Act.
Under these bills, sequestration levels would not change, resulting in probable cuts to nondefense budgets. Democrats and the White House are against any action that increases defense at the expense of nondefense programs. They want a long-term solution to sequestration, rather than a short-term increase in defense funding, with no such increase for nondefense programs.
“To have a sound, secure homeland, we have to make sure that we take care not only of the Pentagon’s needs but the needs of the American people,” Senate Majority Leader Sen. Harry Reid (D-NV) told the Senate during debate.
Senate Majority Leader Sen. Mitch McConnell (R-KY) has vowed to bring the defense appropriations bill again, but has not set a time for doing so. To move the bill forward, But, McConnell would have to get at least six Democrats to vote for proceeding on the bill.
Meanwhile, the White House issued a strong rebuke of the proposed Senate FY2016 Defense Appropriations bill. In a Statement of Administration Policy (SAP). The Office of Management and Budget (OMB) said the president’s senior advisors would recommend a presidential veto if presented a bill that mirrored the Senate bill.
The SAP stated that using OCO funding to get around the budget caps “fails to provide a stable, multi-year budget on which defense planning and fiscal policy are based” and “ignores the long-term connection between national security and economic security and fails to account for vital national security functions carried out at non-defense agencies.”
The SAP also criticizes the bill for failing to approve “many of the needed force structure and weapons system reforms included in the President’s budget, and undermines a new Base Realignment and Closure (BRAC) round.” The administration also strongly opposes provisions in the Senate appropriations bill that set “unwarranted restrictions regarding detainees at Guantanamo Bay.”
Last week the Senate passed the FY2016 Defense Authorization bill 71-25. Forty-nine Republicans and twenty-two Democrats voted for the bill. Two Republicans (Sen. Ted Cruz and Sen. Rand Paul) joined twenty-three Democrats voting against the bill.
The House passed its version of the defense authorization bill in May 269-51.
The annual Defense Authorization bill authorizes force levels, programs, and policies (including military pay raises) for DoD budgets. Appropriations bills provide actual funding (appropriations) for DoD.
Senate Armed Services Committee (SASC) chairman Sen, John McCain (R-AZ) said “the Senate’s overwhelming, bipartisan vote reflects the vital importance of this legislation to our men and women in uniform, especially at a time of growing threats to our national security.”
The Senate bill authorizes a total of $612 billion, including about $485 billion for the Department of Defense (DoD) base budget and $89 billion for Overseas Contingency Operations (OCO). A provision in the bill would allow DoD to transfer $38 billion from OCO to the base budget if defense and nondefense funding caps are revised in legislation.
Senate Democrats had threatened to block a final vote on the bill because it includes additional base budget funding in OCO to get around defense funding caps (set in the Budget Control Act) that could lead to cuts to nondefense programs. They are pushing for a long-term solution to sequestration, rather than a short-term increase in defense funding with no such increase for nondefense programs. However, a vote to cut off debate and move to final passage passed easily.
Both the White House and DoD have been highly critical of using OCO funding to increase defense. The White House has threatened to veto a final defense authorization bill that increases defense funding at the expense of nondefense programs or includes. Defense secretary Ash Carter told the Senate Armed Services Committee that this approach is “a road to nowhere” that risks the incremental funding approach for OCO.
The Senate bill approves the president’s request for a 1.3 percent military pay raise, lower than the 2.3 percent military raise included in the House-passed bill.
Like the House, the Senate bill rejects administration proposals to set enrollment fees for TRICARE for Life beneficiaries or consolidate the TRICARE program, retire the A-10 attack jet fleet, and to initiate another Base Realignment and Closure (BRAC) round.
But, unlike the House, the Senate approves the president’s request to reduce the Basic Allowance for Housing (BAH) and to use commissary surcharge funds to purchase operating supplies.
The FY2016 Defense Authorization bill now goes to a House-Senate conference to resolve the differences in the two bills.
Sen. McCain and House Armed Services Committee (HASC) chair Rep Mac Thornberry have said they would move quickly to conference the bill and get it to the president.
“I look forward to working closely with Chairman Mac Thornberry (R-TX) as we proceed to conference. We share a commitment to defense reform, and there are broad areas of agreement and consensus in our two bills. I am hopeful we will be able to complete our work sometime next month, and send a good bill to the President’s desk,” McCain said.
McCain stressed that if passed this would be the 53rd consecutive defense authorization bill approved by Congress.
The Air Force announced the third round of civilian workforce shaping actions to meet the staffing reduction and headquarters organization goals.
These actions were planned “to eliminate redundant activities, improve efficiencies, and satisfy previous secretary of Defense direction to reduce management headquarters costs and staff levels by 20 percent,” according to an Air Force press release.
Debra Warner, director of the Air Force’s Civilian Force Policy, said “the Air Force is committed to sustaining excellence, meeting fiscal requirements and minimizing negative impacts on our current permanent civilian workforce and their families.”
The Air Force will rely on Voluntary Early Retirement Authority (VERA) and Voluntary Separation Pay (VSIP) in this latest round that started June 15. The first round was initiated in December 2013 and the second round in March 2014.
Last week employees began receiving VERA/VSIP interest surveys. Their responses are due by June 26. Employees selected for VERA/VSIP programs will have to separate by September 30, 2015.
Warner stressed that although “the Air Force is committed to using voluntary separation programs as much as possible,” reduction-in-force (RIF) may have to be used to meet reduction goals.
RIF procedures are used to “determine overage employee priority placement rights into position, as well as providing flexibility to waive qualifications and provide retained grade and pay if placed in a lower graded position,” according to the Air Force. Bases are set to begin their requests for approval to use FIR procedures if needed.
Last week, the House passed the FY2016 DoD Appropriations bill, 278-149. The final vote included 43 Democrats voting for the bill and only 5 Republicans voting against passage.
The House bill would provide $490.2 billion for the DoD base budget (excluding military construction) and $88.4 billion for Overseas Contingency Operations (OCO) in FY2016. The president requested $50.9 billion for OCO.
The House Appropriations Committee earlier said the House OCO funding level, including $38 billion from the base budget, is for ”preparation and operation of our forces in the field, including funding for personnel requirements, operational needs, the purchase of new aircraft to replace combat losses, combat vehicle safety modifications, additional intelligence, Surveillance and Reconnaissance (ISR) assets, and maintenance of facilities and equipment.”
The White House and many Democrats argue that including the additional base budget funding in OCO to get around defense funding caps (set in the Budget Control Act) could lead to cuts to nondefense programs and is bad defense budgeting. The White House has threatened a presidential veto of any bill that increases defense funding at the expense of nondefense programs.
House Appropriations Committee (HAC) chairman Rep. Hal Rogers (R-KY) said the House bill “fulfills our responsibilities to properly fund programs for our warfighters, our military families, our national security, and for the success of our missions both now and in the future.”
The House bill would fund a 2.3 percent military pay raise that is authorized in the House-passed FY2016 Defense Authorization bill. The president’s budget requests a 1.3 percent pay raise for military personnel.
The bill rejects the administration’s proposal to reduce the Basic Allowance for Housing (BAH) and restores $400 million. The bill also would deny the administration proposal to increase commissary prices to pay for operating costs and restores funding for the proposed cut.
The bill rejects DoD’s proposal to retire the A-10 Warthog aircraft and includes $453 million in the FY2016 OCO account to maintain the current A-10 force.
Procurement funding in the bill includes funds to buy 9 ships, 65 F-35 aircraft and 12 KC-46 tanker aircraft, 7 EA-18G Growlers, 5 FA-18 E/F Super Hornets, and 64 AH-64 and 102 UH-60 helicopters.
Major programs receiving R&D funding include: the new Air Force bomber; next generation JSTARS, Navy’s Future Unmanned Carrier-based Strike System; the Ohio-class submarine replacement; and STYKER lethality.
The House rejected a floor amendment by HAC Ranking Democrat Rep. Adam Schiff (D-WA) that would have required Congress to vote by March 31 on an authorization to use force to combat ISIL militants. The Congress and the White House have been discussing such an authorization for months without making any progress. Meanwhile, U.S. and allied air forces continue to conduct bombing raids on ISIL forces citing a previous “war powers” authorization and the president has recently ordered an addition 450 U.S. troops to bolster training of Iraqi and other forces.
The House has now passed six of the 12 FY2016 appropriations bills (Commerce/Justice/Science, Defense, Energy and Water, Legislative, Military Construction/VA, and Transportation/HUD) and three more bills (Financial Services, Interior and Environment, and State/Foreign Operations) have cleared the House appropriations committee.
To date, the Senate has yet to consider any appropriations bill, although the DoD bill may go the Senate floor after action is completed on the FY2016 Defense Authorization bill this week. The Senate Appropriations Committee has cleared five bills for floor action (Commerce/Justice/Science, Energy and Water, Homeland Security, Legislative, and Military Construction/VA).
The 2014 National President’s Award is presented to the Honorable Robert M. Speer, Assistant Secretary of Army (Financial Management and Comptroller) and Chief Financial Officer Department of Defense for outstanding leadership, innovation and excellence while serving as the Army’s Senior Financial Manager and principal advisor to the Secretary of the Army on financial management functions and operations for the Department of the Army.
Since his Congressional appointments, first as the Principal Deputy, Assistant Secretary of the Army (Financial Management and Comptroller) in October 2009 and then as the Assistant Secretary of the Army (Financial Management and Comptroller) in December 2014, Mr. Speer provided exceptional leadership in the transformation and improvement of Army Financial Management. In the spirit of innovation, accountability, and best use of limited resources, Mr. Speer’s leadership, expertise, and contributions will provide a lasting legacy within the Department of the Army and the Department of Defense financial management communities.
Yesterday, the Senate Appropriations Committee (SAC) approved the FY2016 Department of Defense (DoD) Appropriations bill by a vote of 27-3. The SAC bill would provide $489.1 billion for the DoD base budget (excluding military construction).
The bill also provides $86.8 billion for Overseas Contingency Operations (OCO) in FY2016. The president requested $50.9 billion for OCO. The SAC bill amount includes a transfer of $36.5 billion from the DoD base budget for operations and maintenance. The committee press release says the transfer is made “to meet the overall defense funding levels requested by the President while avoiding sequestration by breaching the Budget Control Act caps.”
The White House and many Democrats have argued that including the additional base budget funding in OCO to get around defense funding caps (set in the Budget Control Act) is bad budgeting for defense and could lead to cuts to nondefense programs. The White House has threatened a presidential veto of any bill that increases defense funding at the expense of nondefense programs.
Committee chairman Sen. Thad Cochran (R-MS) said the bill “provides the resources that the President and our military leaders say they need to defend our country and its national security interests.”
The House Appropriations Committee (HAC) bill, approved last week, provides $490 billion for the base DoD budget and $88 billion for OCO.
The SAC bill would fund a 1.3 percent military pay raise as proposed by the president and recommended by the Senate Armed Services Committee (SASC). The HAC bill funds a 2.3 percent military pay raise as authorized in the House-passed FY2016 Defense Authorization bill. The SAC also approves the administration request to allow for slower Basic Housing Allowance (BAH) growth.
The bill also funds a 1.3 percent civilian pay raise requested by the president.
The SAC bill would fund the Defense Health Program (DHP) at $32.5 billion ($400 million below the request), essentially the same level as the House-passed bill.
The bill includes funds to buy 10 ships: two Virginia class submarines; two DDG-51s; three Littoral Combat ships (LCS); an LPD 28 amphibious transport dock; one Joint High Speed Vessel; and one T-AO Fleet Replenishment Oiler. The bill also approves incremental funding for one Arleigh Burke-class destroyer as authorized in the SASC bill.
The SAC bill also provides funding for six additional F-35 aircraft for the Marine Corps and four more F-35s for the Air Force, 12 more FA-18 E/F Super Hornets, and 8 additional MQ-9 UAV Reaper aircraft.
The Committee voted to limit the transfer of National Guard Apache helicopters to 36 in FY2016 until 60 days after a report is submitted by the Commission on the Future of the Army. Final disposition of this issue will be settled in the enacted FY2016 Defense Authorization bill.
Research and development funding additions in the SAC bill include: $143.6 million to develop a new U.S.-made engine for the Atlas V launch vehicle (as an alternative to the Russian-made RD-180 engine); $350 million for development of the Unmanned Carrier Launched Airborne Surveillance and Strike (UCLASS) air vehicle; $200 million to complete cyber vulnerability assessments; and $228.5 million for basic non-medical research by the Military Services.
To reallocate funding to higher priorities identified by the Military Services as unfunded requirements and authorized in the SASC FY2016 Defense Authorization bill, the SAC made reductions to 486 programs. These cuts are based on schedule changes, cost growth, and poor budget justification.
The timing of Senate floor action on the bill is uncertain. Some Senate Democrats, led by Defense Appropriations Subcommittee Ranking Democrat Sen. Dick Durbin (D-IL) have threatened to oppose Senate floor action on the FY2016 DoD appropriations bill until an agreement is reached to change the sequestration caps. Democrats could use a procedural move to keep the bill from coming to the floor. Although there is some reluctance among the Democrat rank and file to take such action on a defense appropriations bill, Democrats are considering action to keep the FY2016 Defense Authorization bill (now being considered on the Senate floor) from a final vote.
LTG (R) James F. McCall Award ($3,000)
- Dixon Stone, Great River
- Hank deGlee, CNY Leatherstocking Chapter
- Emma Downing, Central Missouri
- Cameron Horn, Central Missouri
- Meghan Rice, Buckeye
- Chelsea Murray, Land of Lincoln
- Katelyn Peroulis, Mile High
- Nicholas Sample, Jersey Devil
- Stephanie Ward, Pikes Peak
The ASMC wishes these bright students the best of luck in their academic endeavors.
This week, the full House Appropriations Committee (HAC) approved the FY2016 Department of Defense (DoD) Appropriations bill. The HAC bill would provide $490 billion for the DoD base budget (excluding military construction).
The bill also provides $88 billion for Overseas Contingency Operations (OCO) in FY2016. The president requested $50.9 billion for OCO.
Committee chairman Rep. Hal Rogers (R-KY) said the bill “makes responsible use of every tax dollar to give our armed forces the resources needed to stay safe, prepared, and in peak fighting form.”
The additional funding for OCO in the House bill is for requirements from the base bill. The Committee press release stated that the OCO funding is for “preparation and operation of our forces in the field, including funding for personnel requirements, operational needs, the purchase of new aircraft to replace combat losses, combat vehicle safety modifications, additional intelligence, Surveillance and Reconnaissance (ISR) assets, and maintenance of facilities and equipment.”
The White House and many Democrats have argued that including the additional base budget funding in OCO to get around defense funding caps (set in the Budget Control Act) could lead to cuts to nondefense programs. The White House has threatened a presidential veto of any bill that increases defense funding at the expense of nondefense programs.
OMB Director Shaun Donovan sent a letter to Rogers expressing the administration’s concerns about the committee’s use of OCO to fund defense base budget requirements. The bill’s “deliberate relabeling of non-war costs as OCO clearly violates OCO funding purposes,” Donovan wrote. While stating these and other White House concerns about the bill, Donovan’s letter did not directly threaten a veto. Rather, he said the administration wants to work with Congress to reverse sequestration.
The HAC bill would fund a 2.3 percent military pay raise that is authorized in the House-passed FY2016 Defense Authorization bill. The president’s budget requests a 1.3 percent pay raise for military personnel. The bill rejects the administration’s proposal to reduce the Basic Allowance for Housing (BAH) and adds $400 million to pay for restoring that cut. The bill also would deny an administration proposal to increase commissary prices to pay for operating costs and restored funding for proposed cuts.
The bill would fund the Defense Health Program (DHP) at $31.4 billion, $800 million below the request
Funding in the HAC bill for Operations and Maintenance (O&M) programs would total $162.3 billion for the base budget and $56.5 billion for OCO, about $2.6 billion above the total O&M request. OCO O&M funding includes $14 billion for base requirements and another $2.5 billion for readiness needs.
The bill would provide $116.7 billion in total for procurement programs. Base budget procurement in the bill would be $98.6 billion ($8 billion below the request), with another $18.1 billion in OCO ($11 billion above the request). Included in the bill’s total procurement account are funds to buy 9 ships, 65 F-35 aircraft and 12 KC-46 tanker aircraft, 7 EA-18G Growlers, 5 FA-18 E/F Super Hornets, and 64 AH-64 and 102 UH-60 helicopters.
The committee report appears to agree that the administration has a case to retire the A-10 Warthog aircraft stating that “divestment of the A–10 is the least unattractive option in the long run if the Air Force is to meet all of its national security responsibilities.” However, the committee also stated that “ongoing conflicts and contingency operations, a security environment that senior military leaders have described as highly uncertain, and continuing overseas deployments of A–10 squadrons raise questions of overall combat air forces capacity and whether it is prudent to proceed immediately with A–10 divestment.” So, the committee included $453 million in the FY2016 OCO account to maintain the current A-10 force.
Total Research and development (R&D) in the bill would be $67.9 billion, $66.2 billion in the base budget ($3.6 billion less than the request) and $1.7 billion in OCO ($1.5 billion above the request). Major programs receiving R&D funding include: the new Air Force bomber; next generation JSTARS, Navy’s Future Unmanned Carrier-based Strike System; the Ohio-class submarine replacement; and STRYKER lethality
No date has been set for House floor action on the FY2016 DoD appropriations bill.
Be sure to catch up on Wednesday's PDI happenings here.
The Department of Defense (DoD) will operate under an expanded standard information technology (IT) service management concept according to guidance issued by DoD Chief Information Officer (CIO) Terry Halvorsen.
The guidance, Defense Enterprise Services Management Framework (DESMF) Edition II, “provides a set of standards for managing IT services and establishes clear service management requirements for the acquisition and contracting of IT services across the Department for the quality delivery of IT services to the DoD customer,” Halvorsen said in a memo.
The guidance flows on from Defense Information Systems Agency (DISA) ESMF Edition I (May 2013). It will be the basis for DoD CIO oversight of all DoD IT services and capabilities, Halvorsen stressed.
The stated goal off the guidance is “to provide a framework to successfully align delivery of IT services with the mission of the department.”
DESMF Edition II is “Service Oriented” and focuses on managing IT services throughout the service lifecycle, according to the guidance. “It aligns and integrates processes for service management and defines processes at a high level, describing the what, not the how.” The guidance applies to all IT services and capabilities that DoD provides and the processes that support those services.
The purpose of the DESMF is to: 1) define best practices that drive implementation; 2) define the overall structure including Domains and processes throughout the service lifecycle; 3) describe the scope, benefits, roles, and responsibilities of the processes involved; 4) define a controls framework; 5) define interfaces between Domains and processes; and 6) recommend milestones for process implementation.
Halvorsen emphasized that “the efficient and effective management of information technology services is a critical component of the Chief Information Officer Enterprise Strategy and Roadmap and well as the success of the Joint Information Environment (JIE).” The long-term goal is to adjust DESMF “based on input and lessons learned from DoD Component ITSM implementation experiences,” he said.
Last week the Senate Armed Services Committee (SASC) approved the FY2016 Defense Authorization bill by a vote of 22-4. Four Democrats, including Ranking Member Sen. Jack Reed (D-RI), voted against the bill. The House passed its version of the bill this week.
The bill authorizes force levels, programs, and policies (including military pay raises) for DoD budgets and the programs and policies for the Department of Energy (DoE) nuclear weapons program. Appropriations bills provide actual funding.
The SASC bill authorizes a total of $612 billion, including about $485 billion for the Department of Defense (DoD) base budget and $89 billion for Overseas Contingency Operations (OCO). A provision in the bill would allow DoD to transfer $38 billion from OCO to the base budget if defense and nondefense funding caps are revised in legislation.
Sen. Reed, and other Senate Democrats are concerned that including the additional base budget funding in OCO to get around defense funding caps (set in the Budget Control Act) could lead to cuts to nondefense programs. They are pushing for a deal to revise these caps. The White House has threatened a presidential veto of any bill that increases defense funding at the expense of nondefense programs.
Secretary of Defense Ash Carter also criticized this mechanism telling a Senate Committee that this approach is “a road to nowhere” that risks the incremental funding approach for OCO.
Sen. John McCain (R-AZ) SASC chairman, called the bill a “reform bill.” “It tackles acquisition reform, military retirement reform, personnel reform, headquarters and management reform,” he said. He stressed the reforms in the bill will yield savings that can be reinvested in military capabilities.
The SASC bill proposes a “multi-year effort” to improve DoD acquisition system’s structure and process. The SASC proposal is framed in five objectives: 1) establish effective accountability by streamlining decision making and giving a larger role to the service chiefs under performance agreements; 2) develop alternative acquisition pathways including “rapid prototyping and rapid fielding within five years; 3) improve access to non-traditional and commercial contractors by making it easier for such firms to do business with DoD; 4) deregulate and streamline processes by reducing unneeded requirements, reports, and certification; and 5) improve the acquisition workforce by reauthorizing the “Defense Acquisition Workforce Development Fund,” establishing direct hire authorities, and creating enhanced dual-track career paths.
The bill (similar to the House-passed bill) includes a recommendation from the Military Compensation and Retirement Modernization Commission calling for a “blended” military retirement system. Under the bill, new service members would be automatically enrolled in the Thrift Savings Plan (TSP) with a matching contribution from DoD that could go to 5 percent, starting in FY2018. Current servicemembers could choose to join the plan.
The bill also proposes a management reform plan that would “focus limited resources on operations rather than administration.” The proposal would cut funding for “headquarters and administrative functions” DoD-wide by 7.5 percent each year for four years, saving $1.7 billion in FY2016 and reaching annual savings of $6.8 billion by the fourth year. The bill directs the Secretary of Defense to conduct a “comprehensive review of the management, headquarters, and organization of the Department of Defense” and directs the DoD Inspector General to “perform financial statement audits by contracting with independent external auditors.”
The SASC bill approves the president’s request for a 1.3 percent military pay raise, lower than the 2.3 percent military raise included in the House-passed bill.
Like the House, the SASC bill rejects administration proposals to set enrollment fees for TRICARE for Life beneficiaries or consolidate the TRICARE program, retire the A-10 attack jet fleet, and to initiate another Base Realignment and Closure (BRAC) round.
Unlike the House-passed bill, the SASC bill approves the president’s request to reduce the Basic Allowance for Housing (BAH) and to use commissary surcharge funds to purchase operating supplies.
Agreeing with the House, the bill also funds 12 more F/A-18E/F Hornet aircraft for the Navy (+$1.2 billion) and 6 more F-35B aircraft for the Marine Corps (+$1 billion), which were identified by the Services as unfunded priorities.
The full Senate is expected to take up the bill in June after returning from the Memorial Day recess.
The House passed its version of the FY2016 Defense Authorization bill, 269-151 last week. The vote was primarily along party lines as 228 Republicans were joined by 41 Democrats in voting for the bill. Only 8 Republicans voted against the bill.
The House bill authorizes $515 billion for the Department of Defense (DoD) and the Department of Energy (DoE) nuclear weapons program. The authorized amount for the base DoD budget is about $496 billion.
The bill also authorizes $89 billion for FY2016 Overseas Contingency Operations (OCO) funding. The president requested $50.9 billion for OCO. The additional $38.3 billion in the House bill is for O&M requirements from the base bill.
Including base funding in the OCO account (considered emergency and not counted against the budget caps) allows the House to authorize $585 billion ($496 billion in base funds and $89 billion in OCO) for DoD in FY2016. This is essentially the same as the president’s request for total DoD funding ($534 billion in base funding and $51 billion in OCO).
Most Democrats strongly disapprove of this approach because they say it could lead to large cuts in nondefense spending. They call for a solution to sequestration that would increase nondefense as well as defense funding.
Defense Secretary Ash Carter also decried the use of this method of increasing defense finding. In his testimony before the Senate Appropriations Committee Carter said “while this approach clearly recognizes that the budget total we’ve requested is needed, the avenue it takes is just as clearly a road to nowhere.” Carter further said the House proposal “risks undermining support for a mechanism – OCO – meant to fund incremental costs of overseas conflicts in Afghanistan, Iraq, and elsewhere.”
The White House reacted strongly to the House bill issuing a Statement of Administration Policy (SAP) that threatened a presidential veto. The SAP expressed strong concerns that “shifting base budget resources into OCO…fails to provide a stable, multi-year budget on which defense planning is based.”
The House FY2016 Defense Authorization bill would provide military personnel with a 2.3 percent pay raise by allowing the current pay raise calculation procedures to go into effect, unless the president recommends an alternative. The president has requested a 1.3 percent military pay raise for FY2016.
The bill also rejects administration proposals to increase commissary prices to pay for operating costs, raise TRICARE fees, and lower the Basic Allowance for Housing (BAH). The bill denies the administration’s plan to retire the A-10 attack jet fleet and rejects a proposal to initiate another Base Realignment and Closure (BRAC) round.
The House bill includes a recommendation from the Military Compensation and Retirement Modernization Commission that called for a “blended” military retirement system. Under the bill, new service members would be automatically enrolled in the Thrift Savings Plan (TSP) with a matching contribution from DoD starting in FY2018. The servicemember’s contribution (3 percent initially) would be matched by a 1 percent contribution by DoD (that could go up to 5 percent).
The bill also puts forward the first components of a plan to reform defense acquisition. The bill calls for streamlining the acquisition process, reducing the number of legal certifications, giving acquisition program managers greater flexibility to address programmatic risk, providing a “Defense Acquisition Workforce Development Fund,” and authorizing expedited authorities for hiring and training the acquisition workforce.
The bill also adds funds 12 more F/A 18-F Hornet aircraft for the Navy (+$1.2 billion) and 6 more F-35B aircraft for the Marine Corps (+$1 billion), which were identified by the services as unfunded priorities.
The full House considered more than 135 floor amendments approving all but a few. The House approved a floor amendment that would require the secretary of defense to certify that Army Active end strength levels below 490,000 will support the security strategy. Of broader interest to policymakers, the House rejected a Committee provision allowing children of illegal immigrants to serve in the armed forces in the future.