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.
Today, July 12, 2016, ASMC HQ is temporarily unable to respond to phone calls, as there is a major phone service outage in our area. This is unexpected for us all and we apologize for any inconvenience. Please stand by while we work on figuring out the problem and restoring service.
The Department of Defense (DoD) is now set to begin accepting eligible civilian employees into the phased retirement program. Under the program, eligible federal employees approaching retirement are able continue working part time, while beginning retirement.
Implementation of the Phased Retirement Program has taken longer than expected to implement in the federal government. The program was approved by Congress in July of 2012 and the Office of Management and Budget (OMB) issued implementation rules in 2014. To date less than 100 employees, government wide, are participating.
For DoD, Acting DoD Under Secretary for Personnel and Readiness Peter Levine issued a memorandum on June 21st that describes the policy, responsibilities, and procedures under which eligible employees can apply for and be accepted into the program.
Levine said the DoD program “is designed to assist DoD Components with the transfer of knowledge and continuity of operations on a short-term basis.” The program is voluntary and participation requires the approval of both the employee and an authorized Component official. Components can limit the number of employees as necessary. Levine said.
To be eligible for the program employees must have been in full employment status for the previous three years and be eligible for immediate retirement under either the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). Employees subject to mandatory retirement, such as law-enforcement officers, firefighters, air traffic controllers, or nuclear materials couriers are not eligible for DoD’s phased retirement program.
The eligible employee receives income from a combination of part-time salary (50%) and partial annuity payments (50%). The phased retiree also accrues future retirement benefits proportional to the time they work. Phased retirees are expected to spend 20 percent of their time mentoring other employees.
The DoD directive-type memorandum requires DoD Components to have “written criteria in place that will be used to approve or deny applications for phased retirement before approving or denying such applications.” Employees that are eligible for phased retirement will complete Standard Form 3116 “Phased Employment/Phased Retirement Status Elections.”
Applications must be improved in writing and the phased retirement time period must be established in accordance with DD Form 3018 “Phased Retirement Request and Agreement.”
The Assistant Secretary of Defense for Manpower and Reserve Affairs (ASD(M&RA)) has overall policy responsibility for the DoD program and Component heads have approval authority.
Lei Lily Tam, Aloha
- Nicholas Amore, Buckeye
- Lanie Beard, Central Missouri
- Brandon Morales, High Desert
- Jaquelyn Oelrich, Land of Lincoln
- Hollee Akers, Central MIssouri
- Hannah Donovan, Montgomery
- Madison Garcia, Aloha
- Richard Joseph, Land of Lincoln
Previous winners have also qualified for a renewal of their scholarships:
- Julie Crouch, Central Missouri, $1,500
- Dixon Stone, Great River, $1,500
- Meghan Rice, Buckeye, $1,000
The ASMC wishes these bright students the best of luck in their academic endeavors.
With deepest sympathies, ASMC mourns the passing on June 23, 2016 of,
mso-fareast-font-family:"Times New Roman";color:#003F80;mso-ansi-language:EN-US;
mso-fareast-language:EN-US;mso-bidi-language:AR-SA”>Colonel Jerry D. Heard, US Army, Retired, 75 Hokes Bluff, Alabama. Using words of many of his friends, Jerry was "a great Soldier, an inspirational leader, a wonderful mentor, and the epitome of professionalism – may the “Commandant” rest peacefully and we thank you for teaching all of us how best 'To Support and Serve.’” Our sincerest condolences to his family and friends. (Full Obituary)
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The Department of Defense (DoD) is making sound progress toward meeting full audit accountability and DoD's leaders expect to meet the goal of full financial statement audit readiness by FY2018, according to DoD's Comptroller Mike McCord.
Testifying before the House Armed Services Committee, McCord told the committee achieving auditability is a key element of Secretary Ash Carter's goal of reforming how DoD does business. He said Secretary Carter and the senior leaders of the Military Departments were committed to “achieving and sustaining auditable financial statements.”
McCord stressed that the successes experienced to date demonstrate that DoD is on track to meet its audit goals. “Our focus on the audit has yielded substantial and measurable results over the past couple of years,” he said. He pointed out that the Military Departments audited their budgets for FY2015 and there have been “successful recurring audits” by other DoD components, e.g., the Defense Finance and Accounting Service (DFAS) and Defense Commissary Agency, and Defense Contract Audit Agency (DCAA).
While McCord noted that the Military Department audits did not receive a clean audit statement, “we learned a great deal from our initial effort.” He said “we are making progress, and are fully committed to getting it done.” DoD has a good audit readiness plan and will stick to it, McCord said.
Appearing with McCord were: Robert M. Speer, Assistant Secretary of the Army (Financial Management and Comptroller), Susan J. Rabern, Assistant Secretary of the Navy (Financial Management and Comptroller), and Rocardo A. Aguilera, Assistant Secretary of the Air Force (Financial Management and Comptroller).
In a joint statement the witnesses told the committee that audit readiness is a top priority for the Military Departments. The Army has been using results from its audits to prepare “corrective action plans to focus efforts and resources on remediating deficiencies.” Navy plans “emphasize sustainable, standardized, efficient business processes, improved controls over business processes, and consolidation of information technology (IT) systems.” The Air Force is working closely with auditors “to prioritize findings and recommendations from the audit and implement cost-effective corrective actions.”
The witnesses emphasized that it takes time for an audit infrastructure to be set in place and to “mature.” For example, it took Homeland Security 10 years to get an unmodified opinion on its financial statements for budget resources totaling $89 billion. DoD has about $1 trillion in budgetary resources.
Nevertheless, they stressed that DOD and the Military Departments remain committed to the goals and benefits from achieving clean financial audits.
Last week, the House passed the FY2017 Department of Defense (DoD) Appropriations bill (H.R. 5293),278-149. Forty three Democrats joined 235 Republicans voting for passage.
House Appropriations Committee chair Rep. Hal Rogers (R-KY) said the bill provides for the defense needs of the country by “funding those military needs that must be addressed now, planning and preparing for the future, and respecting the taxpayer by making commonsense budgeting decisions.”
The House bill would provide $517 billion for the DoD base budget (excluding military construction). The House followed the House-passed FY2017 Defense Authorization bill's plan for funding Overseas Contingency Operations (OCO) by providing only $42.9 billion through April 2017. The president requested $58.6 billion to fund OCO for the entire year. In addition, the House would use $15.7 billion in OCO funding for base budget requirements, increasing total base budget funding to $533 billion.
The House action on OCO funding has drawn a veto threat from the White House. In a Statement of Administration Policy (SAP), the Office of Management and Budget (OMB) called the redirection of OCO funding to the base budget “dangerous and wasteful.” The SAP also complained that this funding approach gambles with warfighting funds and “risks the safety of our men and women fighting to keep America safe, [and] “undercuts stable planning and efficient use of taxpayer dollars.”
The House bill includes an additional $340 million to fund a 2.1 percent military pay raise (the president requested a 1,6 percent raise) that is authorized in the House-passed FY2017 Defense Authorization bill. House bill also would fund the higher active duty (+27,000) and guard and reserve (+25,000) strength levels that would be authorized by the House.
Procurement funding in the bill would buy 15 ships (including three Littoral Combat Ships), 74 F-35 aircraft, 16 F/A-18E/F planes, 72 UH-60 helicopters, 15 KC-46 tanker aircraft, and 123 Stryker upgrades.
With only a few weeks remaining before Congress adjourns for an extended recess for the party conventions, both House and Senate have passed only three FY2017 appropriations bills each. The House has passed the DoD, Legislative, and Military Construction/VA bills and the Senate has passed the Energy & Water, Transportation/HUD, and Military Construction/VA bills. The Military Construction/VA bill, having passed both chambers is now in conference to reconcile the differenced.
Six bills await floor action in the House (Agriculture, Commerce/Justice/Science, Energy & Water, Financial Services, Interior & Environment, and Transportation/HUD) while eight are ready for the floor in the Senate (Agriculture, Commerce/Justice/Science, DoD, Financial Services, Homeland Security, Interior & Environment, Labor/HHS/Education, Legislative).
The House full appropriations committee has not taken action on three bills (Homeland Security, Labor/HHS/Education, and State/Foreign Operations. In the Senate only the State/Foreign Operations bill has not been completed by the Senate Appropriations Committee.
The ASMC National President’s Award is presented to an individual within the defense financial management community who has demonstrated excellence in leadership and in contributions in defense financial management. This year’s ASMC President’s Award is presented to Ms. Marilyn M. Thomas, who currently serves as the Deputy Under Secretary (Management) and Deputy Chief Management Officer of the United States Air Force.
As DoD continues to adjust to new fiscal challenges, Ms. Thomas steered the financial management headquarters review, facilitating the Air Force’s plan to identify a 20% reduction in headquarters positions and funding though streamlining of operations and process improvement. The management headquarters improvement enabled the Air Force to apply savings to protect the Air Force’s top acquisition priorities. Additionally, Ms. Thomas facilitated a more adaptive, agile programming and budgeting process that closed the seams between resource programming and current year execution.
Formerly serving as the Acting Assistant Secretary of the Air Force (Financial Management and Comptroller), she oversaw $110 billion in resources and provided oversight of budgeting, cost estimation, and financial operations in support of Air Force priorities. She served as President of ASMC for two years from July 2012 through June 2014. Ms. Thomas was recently selected as a 2015 Presidential Rank Award recipient.
This week the Senate passed the FY2017 Defense Authorization bill by a large majority.
The bill authorizes force levels, programs, and policies (including military pay raises) for Department of Defense (DoD) budgets and the programs and policies for the Department of Energy (DoE) nuclear weapons program. Appropriations bills provide actual funding.
Senate Armed Services Committee (SASC) chair Sen. John McCain (R-AZ) praised the bipartisan support for the bill saying “I’m very proud that the Senate passed the National Defense Authorization Act for Fiscal Year 2017 with an overwhelming bipartisan vote of 85-13.” Forty-eight Republicans, thirty-six Democrats, and one Independent voted for the bill.
The House passed its version of the defense authorization bill in May 277-147.
The Senate bill would authorize a total of $602 billion, including $543 billion for the FY2017 DoD base budget. The bill also would provide $59 billion for Overseas Contingency Operations (OCO) costs in FY2017, the same amount requested by the president for OCO.
The House bill also authorizes $543 billion for DoD, but provides another $23.1 billion in OCO funding to be used for base budget requirements. The House bill authorizes only $36 billion for OCO through April 2017.
The Senate failed (56-42) to garner the 60 votes needed to approve an amendment by Sen. McCain that would have added another $18 billion to the Senate bill. A proposal by Sen. Jack Reed (D-RI) to add $18 billion to nondefense budgets also failed.
The Senate bill would approve the president’s request for a 1.6 percent military pay raise, rather than the 2.1 percent military raise included in the House bill. The Senate also did not follow the House increases to the authorized active duty and reserve strength levels. Proposals to match the House bill's military pay raise and higher military end-strength levels failed on the Senate floor.
The Senate bill also differs fro the House bill in changes to TRICARE. The Senate would authorize three new TRICARE health plans—TRICARE Prime, TRICARE Choice, and TRICARE Supplemental, while the House bill provides two TRICARE options—TRICARE Prime and TRICARE Preferred.
The Senate bill would require the registration of women for the draft. The House Rules Committee did not allow House consideration of a narrowly approved (32-30) House Armed Services Committee proposal that supported draft registration for women.
The Senate did join the House in rejecting the administration's call for another Base Realignment and Closure (BRAC) round.
Sen. McCain emphasized the bill's support for DoD organization and acquisition reform, calling the bill “the most significant piece of defense reform legislation passed by the Senate in 30 years.”
The Senate bill would reset “the roles and missions of the senior officials in DoD, as well as their relationships with each other.” Legislation would limit the National Security Council (NSC) staff to 150, clarify the role of the Chairman of the Joint Chiefs of Staff (CJCS), and clarify the primary duties of the Combatant Commanders (COCOMs). The Senate would establish a Combatant Commanders Council (COCOMs, Chairman and Vice Chairman of the JCS, and the Secretary of Defense) to assist in the execution of strategy
The bill would lower the number of general and flag officers by 25 percent, reduce the number of authorized four-star billets from the current 41 to 27, cut the number of Senior Executive Service (SES) civilian employees by 25 percent, and reduce spending on contractors by 25 percent by January 2019 from a FY2016 baseline.
The Senate bill's acquisition reforms focus on accountability, new sources of innovation, and an improved acquisition workforce.
The bill would replace the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L) with an Under Secretary of Defense for Research and Engineering (R&E) and an Under Secretary of Defense of Management and Support and create a new Assistant Secretary of Defense for Acquisition Policy and Oversight to set defense-wide acquisition and industrial base policy.
The bill would streamline the regulation of commercial items and off the-shelf commercial items and establish preferences for commercial services and fixed-price contracts.
The Senate would authorize more flexible hiring and compensation practices, improve the Defense Acquisition Workforce Development Fund, and establish competitively-selected senior military acquisition advisors in the Defense Acquisition Corps.
The White House, like it did with the House bill, issued a Statement of Administration Policy (SAP) threatening a veto of the Senate bill as passed. The SAP expressed strong objections to the bill's organizational changes, rejection of another BRAC, prescription of contractual methods, and the restrictions regarding detainees at Guantanamo Bay.
House and Senate conferees will now have to adjudicate the differences in the two bills to try to achieve a bill the president will sign.
Secretary of Defense Ash Carter announced new initiatives intended to improve the officer promotion system and enhance the civilian recruiting and retention program.
Speaking to an all-hands meeting at the Pentagon, Carter cited the security challenges and the demographic, economic, and social changes facing the U.S. He said his job was “to make sure that amid all this change DoD continues to recruit, develop, and retain the most talented men and women America has to offer.”
Carter billed the new initiatives for the military promotion system as fixes to a rigid “one size fits all” system that works most of the time, but “most of the time isn’t good enough for the Force of the Future.” Carter said the current “up-or-out” policy can be too rigid and “can limit the ability of our services to achieve the right force mix they need.” Often the system inhibits officers from specializing or deviating from a career path even if such a move would benefit the service and the individual, he said.
Carter identified four changes to the Department Officer Personnel Management Act (DOPMA) to improve the effectiveness of the force by bringing the 100-year old system into the 21st century.
To incentivize the best performers, the secretaries of the Military Departments could adjust the so-called lineal numbers (based on seniority) of officers that are selected for promotion in order to recognize superior performance. Currently, when officers are selected for promotion, they are promoted in order of seniority based on when the officer was commissioned. Carter called this change a “key part of good talent management.”
Under another proposal, the Military Departments could approve an officer’s request to “opt out” of the promotions cycle to pursue opportunities to broaden their experience without hurting chance of promotion. This change would enhance retention objectives and bring new skills and ideas into the management pool, according to Carter.
To enhance the recruitment of experts in critical fields (e.g., cyber and scientific fields), civilians with such skills would be able to join at a mid-career level, as is the case for civilian doctors. This authority would “fill critical gaps in our force” and “make us more effective,” Carter said.
In order to be able to respond to future needs in critical career fields, the Military Departments would be allowed (if approved by the Secretary of Defense) “to waive select DOPMA constraints to very quickly build up expertise in a critical career field.” This authority will enable the services the flexibility to tailor their response to future capability needs within the current system, Carter said.
Carter also identified specific changes to civilian personnel management DoD is pursuing to “make sure our future civilian force is just as great as it is today.”
To improve the department’s ability to hire the “best and brightest” in colleges and universities, the department is requesting authority to directly hire students and recent college graduates into the DoD civilian workforce. This non-competitive authority would allow candidates to circumvent the current processes and be given a tentative job offer “on-the-spot.” Carter called this a “game changer” in civilian recruiting.
DoD would also establish a public-private talent exchange program. Under this program, DoD and innovative private sector companies would temporarily exchange employees for a minimum of three months and a maximum of four years. Carter said that this program could benefit both DoD and the private sector and will “help DoD stay on the cutting edge, and be more efficient and effective.”
To enhance employee retention, DoD is requesting the authority to provide six weeks of paid parental leave for civilian employees. Currently, military personnel receive paid parental leave. Cater said this authority would bring DoD’s parental leave policy for military and civilians in line and would be very effective in retaining experienced civilian employees.
Both the military and civilian personnel management initiatives require congressional approval of new legislative authorities. Carter said he would continue working with the House and Senate Armed Services committees to complete this work.
These new initiatives are the latest in a series of proposals to reform the rules and regulations on how DoD recruits, develops, and retains personnel for the future. Previous initiatives, or “Links” as Carter calls them, involved “building and expanding on-ramps and off-ramps for talent flow between DoD and the technology sector” and promoting retention by “expanding maternity and paternity leave, extending childcare hours on bases, and giving families some geographic flexibility;” In addition, Carter said DoD had opened all combat jobs to women, and was working with Congress to make joint duty requirements more flexible.
Last week, the Senate Appropriations Committee (SAC) approved FY2017 appropriations for the Coast Guard, which are included in the FY2017 Department of Homeland Security appropriations bill. The SAC approved the FY2017 Homeland Security Appropriations bill 30-0.
The SAC approved $8.7 billion in discretionary appropriations (to be appropriated by Congress) for the Coast Guard, $129 million more than the budget request. The bill also identifies $1.7 billion in Coast Guard mandatory spending for retired pay. The SAC bill includes in the base Coast Guard budget $162 million for Overseas Contingency Operations (OCO).
Operating expenses totaling $7.1 billion are funded in the bill, $153 million higher than the request. The bill fully funds a 1.6 percent military pay raise, requested by the president. Coast Guard OCO operations costs ($162 million) that were requested in the Navy budget are provided directly to the Coast Guard budget.
The bill would increase the FY2017 request for acquisition, construction, and improvements by $120 million to $1.257 billion. The SAC would fund $95 million for long-lead time materials for the 10th National Security Cutter (NSC) and an additional $30 million for Structural Enhancement Dry-dock Availability for work on two NSCs. An additional $85 million will allow for the purchase of two more (total six) Fast Response Cutter (FRC) hulls. With $1 billion included in the SAC-approved FY2017 Department of Defense Appropriations bill, $133 million is cut from the president’s Coast Guard request for Polar Icebreaker Recapitalization Project, leaving about $18 million for management and support costs. Another $15 million in the bill would provide In-Service vessel sustainment. The bill would also add $22 million to the request for shore-side and waterfront planning for future operations in Kodiak.
The SAC would double the Coast Guard research, development, test, and evaluation (RDT&E) request to $36.8 million. The bill would add $18 million to test the use of ultra-long endurance Unmanned Aircraft System (UAS) for intelligence, surveillance, and reconnaissance (ISR) in source and transit zones.
Last week, the Senate Appropriations Committee (SAC) approved the FY2017 Department of Defense Appropriations bill by a vote of 30-0.
SAC Chairman Sen. Thad Cochran (R-MS) said the bill “has broad bipartisan support” and “sustains a strong U.S. force structure, and it makes significant investments in readiness, shipbuilding programs, aircraft procurement, and missile defense.”
The SAC bill would provide $515.9 billion for the DoD base budget (excluding military construction), almost $2 billion less than the request, and $58.6 billion for Overseas Contingency Operations (OCO), the same amount as requested. The House Appropriations Committee (HAC) approved its version of the bill last month.
Unlike the HAC bill the SAC funded OCO for the entire year (rather than through April 2017) and did not use OCO funding for base budget requirements. The HAC bill used $15.7 billion in OCO for unrequested base requirements. To provide additional funding for committee priorities and unfunded needs identified by the military services, the SAC made over 450 specific cuts totaling $15.1 billion.
The SAC bill would fund a 1.6 percent military pay raise as proposed by the president and recommended by the Senate Armed Services Committee (SASC). The HAC bill would fund a 2.1 percent military pay raise as authorized in the House-passed FY2017 Defense Authorization bill.
The SAC would fund the Defense Health Program (DHP) at $34 billion (and includes over $900 million more for defense medical research.
The bill includes funds to buy 10 ships: two Virginia class submarines; three DDG-51 destroyers; three Littoral Combat ships (LCS); an LHA amphibious assault ship; and a Polar Icebreaker. The committee noted that the last U.S. icebreaker was funded in the FY1990 DoD Appropriation bill. The Obama administration has planned to start icebreaker production ion 2020, according to the committee But the SAC bill includes $1 billion in FY2017 for the first ship in the Polar Icebreaker Recapitalization Project due to “the strategic importance of polar operations to the nation’s future security.”
The SAC bill would make significant increases to the administration’s request for aircraft, including: 12 F-18’s; four F-35’s (including two vertical take-off F-35s for the Marine Corps); 15 Blackhawk and 28 Lakota helicopters for the Army; two Air Force C-130J’s; and two Marine Corps MV-22 helicopters.
The committee would also add $454 million to the request for Israeli missile defense programs, for a total of $601 million.
No announcement was made regarding the timing of full Senate consideration of the FY2017 DoD Appropriations bill.
Colonel (Ret.) Vaughn Caudill, Alamo City Chapter
Debra Delmar, Washington Chapter
Aaron Parker, Land of Lincoln Chapter
Richard "Lance" Haycock, Utah Chapter
Pushing an aggressive appropriations schedule, the Senate passes the FY2017 Transportation/HUD and Military Construction/
The Senate continues its aggressive effort to move FY2017 appropriations bills to completion.
Last week the Senate passed the second and third appropriations bills for FY2017: Transportation/HUD bill and Military Construction/Veterans Affairs (MilCon/VA). The two bills were combined in a single bill and passed the Senate by a significant majority, 89-8. The Senate passed its first FY2017 appropriations bill, Energy & Water on May 12.
In addition to providing appropriations for military construction spending in the Department of Defense (DoD), the VA, the Departments of Transportation and Housing and Urban Development, the bill also would make available $1.1 billion “for medical and public health preparedness and response capabilities related to the Zika virus.”
Touting the Senate’s progress on FY2017 appropriations bills, Senate Appropriations Committee (SAC) Chairman Sen. Thad Cochran (R-MS) said, “Senators have now worked through three appropriations bills and I look forward to additional cooperation as other FY2017 bills are brought to the [Senate] floor.”
The SAC has approved another five bills (Agriculture, Commerce/Justice/Science, DoD, Homeland Security, and Legislative), which are now ready for full Senate action.
The House also has proceeded apace on FY2017 appropriations bills. To date, the full House has passed one FY2017 appropriations bill (Military Construction/VA), while another (Energy and Water) failed to achieve enough votes to pass. The House Appropriations Committee (HAC) has approved another five bills (Agriculture, Commerce/Justice/Science, DoD, Legislative, and Transportation/HD) that await final action by the full House.
The Military Construction portion of the Senate MilCon/VA bill would provide $7.9 billion for military construction projects, family housing, Base Realignment and Closure (BRAC), and the NATO Security Investment Program. This is $486 million above the FY2017 request.
The House-passed FY2017 MilCon/VA bill provides $250 million more than the request.
The Senate bill would provide $5.9 billion for active and reserve military construction projects: $5.2 billion for active components construction ($170 million above the request) and $673 million for guard and reserve components construction (the requested level). Funding in the bill for Family Housing totals $1.320 billion, the requested amount.
The bill would fund the requested amounts for the North Atlantic Treaty Organization Security Investment Program (NSIP), $187 million and Base Realignment and Closure (BRAC), $200 million
The Senate-passed bill includes another $515 million to be used by the military services for projects identified on the service’s unfunded priority list provided to Congress.
Funding totaling $200 million would be rescinded from prior-year programs if the bill became law.
This year's winners are:
- Kimberly Cyr, Hampton Roads Chapter (A1)
- Lawrence Leffler, Washington Chapter (A1)
- Elodie Hicks, Middle Georgia Chapter (A)
- Christina Diana Crisostomo, Land of Lincoln Chapter (A)
- Beverly Hysmith, Greater Jacksonville Chapter (B)
- Hiep Mai, West Central Louisiana Chapter (C)
Yesterday, the House passed its version of the FY2017 Defense Authorization bill, (H.R.4909) 277-147. In the final vote, 40 Democrats joined 237 Republicans in the affirmative, while only five Republicans along with 142 Democrats voted against passage,
House Armed Services Committee Chairman Rep Mac Thornberry (R-TX) said the bill protects U.S. national security by “beginning to correct shortfalls in our military readiness, reversing troop cuts, increasing investments in training and maintenance programs, and rebuilding crumbling facilities.”
During its two-day consideration of the bill, the House considered 180 floor amendments of which 170 were approved. Earlier, the House Rules Committee struck a provision from the House Armed Services Committee-approved bill that would have required women to register for the draft.
The House bill authorizes $543.4 billion for the Department of Defense (DoD) and the Department of Energy (DoE) nuclear weapons program. The authorized amount for the base DoD budget would be $523.6 billion, essentially the same as the president's request.
The bill authorizes $35.7 billion for Overseas Contingency Operations (OCO) available until April 2017. After that the new Administration would, if needed, have to request additional OCO funds for FY2017. The president's request included $58.8 billion for OCO in FY2017.
The House bill would also authorize another $23.1 billion in OCO funding to be used for base budget requirements. The administration request assumes that only $5 million of OCO funds will be used to pay for additional troops and readiness funding not included in the president’s budget request.
This approach to funding OCO caused the White House to issue a veto threat. The Statement of Administration Policy (SAP) called it “dangerous” and “wasteful.” “By gambling with warfighting funds, the bill risks the safety of our men and women fighting to keep American safe, [and] undercuts stable planning,” according to the SAP. Secretary of Defense Ash Carter called the proposal a “raid on war funding that risks stability.”
The White House also takes strong issue with the bill’s restrictions on detainees at Guantanamo Bay, failure to adopt a proposal to begin another Base Realignment and Closure (BRAC) round, and rejection of reform proposals for military compensation and health care.
The House bill provides military personnel with a 2.1 percent pay raise, 0.5 percentage points higher than the administration's 1.6 percent request. The bill also would increase active duty strength by 27,000 over the president's budget request and set total Army Guard and Reserve strength levels 25,000 higher than the request.
The bill adds funding for 14 more F/A-18's, 11 F-35s, three C-130J, and two MV-22 aircraft. The bill also funds additional Army AH-64 and UH-60M helicopters and two more ships (one LCS and one DDG-51). The bill rejects the administration’s proposal to retire the A-10 fleet and replace it with F-35’s.
Yesterday, the House Appropriations Committee (HAC) approved the FY2017 Department of Defense (DoD) Appropriations bill. The HAC bill would provide $517 billion for the DoD base budget (excluding military construction).
Committee chairman Rep. Hal Rogers (R-KY) said the bill “provides the resources needed to keep our military trained and well equipped, to ensure success in our missions now and in the future.”
The HAC followed the House Armed Services Committee’s (HASC) plan for funding Overseas Contingency Operations (OCO) only through April 2017 and using some requested OCO funding for base budget requirements. The HAC bill would appropriate $42.9 billion for OCO requirements and another $15.7 billion to be used to meet base budget requirements. This total for OCO matches the president’s $58.6 billion OCO request.
The HASC plan for funding OCO was one of the reasons the administration’s Statement of Administration’s Policy (SAP) cited for a potential veto of the HASC bill and will probably draw a veto threat on the HAC bill. Secretary of Defense Ash Carter called the proposal a “raid on war funding that risks stability and gambles with war funding.”
The HAC bill includes an additional $340 million to fund a 2.1 percent military pay raise that is authorized in the HASC-approved bill. The president’s budget requests a 1.6 percent pay raise for military personnel. The HAC also would fund the higher active duty (+27,000) and guard and reserve (+25,000) strength levels that would be authorized in the HASC bill.
The base budget bill would fund the Defense Health Program (DHP) at $33.4 billion, $100 million above the request, but another $450 million for base requirements in funded in the HAC OCO account.
Funding in the HAC bill for Operations and Maintenance (O&M) programs would total $179.3 billion for the base budget, about $2.4 billion above the total O&M request. OCO O&M funding of $30 billion includes $5.6 billion for base requirements. The increase in the base bill funding includes $6.4 billion more than requested for readiness, $1.6 billion more for facility, sustainment, restoration, and modernization programs and another $750 million for depot maintenance.
The HAC bill would provide $104.2 billion for base budget procurement programs ($2.3 billion above the request). OCO procurement funding totals $16.6 billion, with $7.3 billion for base requirements (including $3.1 billion for shipbuilding and conversion). The bill would fund the procurement of 15 ships (including three Littoral Combat Ships), 74 F-35 aircraft, 16 F/A-18E/F planes, 72 UH-60 helicopters, 15 KC-46 tanker aircraft, and 123 Stryker upgrades.
Research and development (R&D) funding in the base budget would be $70.3 billion ($1.1 billion less than the request) with another $163 million for base requirements in OCO funding. Major programs receiving R&D base budget funding include: the new Air Force bomber; a next generation JSTARS aircraft; RQ-4 Triton Unmanned Aerial Vehicle; the Ohio-class submarine replacement; and STRYKER lethality.
The bill rescinds $1.95 billion from prior-year programs in the base bill and $669 million in in prior-year rescissions from OCO funding. The HAC also would achieve savings of $1.5 billion from lower fuel costs, and almost $600 million because of more favorable economic conditions.
The bill is now ready for consideration by the full House.
Senate committee approves the FY2017 Defense Authorization bill with major organizational and acquisition reforms
Yesterday, the Senate Armed Services Committee (SASC) approved (23-3) its version of the FY2017 Defense Authorization bill.
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.
SASC Chair Sen, John McCain (R-AZ) praised the “collaborative, bipartisan process” that led to the committee’s approval. He called the bill one of reform and innovation saying the bill “contains the most sweeping reforms of the organization of the Department of Defense in a generation” and” refocuses Pentagon leadership on preserving America’s military technological advantage and advances reforms to the defense acquisition system to harness American innovation.”
The SASC bill authorizes total of $602 billion, including $543 billion for the FY2017 DoD base budget and the DOE nuclear weapons program and $59 billion for Overseas Contingency Operations (OCO) costs in FY2017, the same amount requested by the president for OCO. The House Armed Services Committee’s (HASC) bill provides only $36 billion for OCO through April 2017. The White House and DoD Secretary Ash Carter have been highly critical of the HASC approach to funding OCO for only part of FY2017.
The SASC approves the president’s request for a 1.6 percent military pay raise, rather than the 2.1 percent military raise included in the House Armed Services Committee (HASC) bill. The SASC also did not follow the HASC in increasing the authorized active duty and reserve strength levels. In another difference with the HASC, the SASC would authorize three new TRICARE health plans—TRICARE Prime, TRICARE Choice, and TRICARE Supplemental. The HASC bill provides two TRICARE options—TRICARE Prime and TRICARE Preferred.
Citing the significant changes in the “strategic landscape” since the Goldwater Nichols Act was passed 30 years ago, the SASC bill seeks to recalibrate “the roles and missions of the senior officials in DoD, as well as their relationships with each other.” The bill limits the National Security Council (NSC) staff of “permanently assigned professional staff and detailees from DoD and other U.S. departments and agencies” to 150. The SASC also clarified the role of the Chairman of the Joint Chiefs of Staff (CJCS) emphasizing joint readiness and leadership.
The bill would clarify the primary duties of the Combatant Commanders (COCOMs) “to execute the national defense strategy in consultation with the Chairman of the Joint Chiefs of Staff, to prepare and plan for conflict, to take necessary actions to deter conflict, and command U.S. armed forces in combat.” The SASC would establish a Combatant Commanders Council (COCOMs, Chairman and Vice Chairman of the JCS, and the Secretary of Defense) to assist in the execution of strategy and the global integration of military activities. The Secretary of Defense would convene the council and set the agenda.
The bill would reduce by 25 percent the number of general and flag officers and cut the number of authorized four-star billets from the current 41 to 27. The committee believes that the general and flag officer corps “has become increasingly out of balance with the size of the force it leads.” The bill also would reduce the number of Senior Executive Service (SES) civilian employees by 25 percent. In keeping with these reductions the bill would reduce spending on contractors by 25 percent by January 2019 from a FY2016 baseline.
The SASC bill continues the committee’s acquisition reform efforts by focusing on improving acquisition outcomes. The bill establishes accountability, assesses new sources of innovation, removes unnecessary processes and requirements., adopts best business practices, and improves the acquisition workforce.
The bill would replace the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L) with an Under Secretary of Defense for Research and Engineering (R&E) and an Under Secretary of Defense of Management and Support. The bill would also create a new Assistant Secretary of Defense for Acquisition Policy and Oversight to set defense-wide acquisition and industrial base policy eliminate four Assistant Secretaries and three Deputy Assistant Secretaries.
To improve access to commercial and global innovation, the bill includes provisions “to improve rapid acquisition authority and rapid prototyping and rapid field processes.” Regulation of commercial items and off the-shelf commercial items is streamlined under the bill. The SASC would also establish a preference for commercial services.
The bill would establish a preference for fixed-price contracts. To curb the use of cost-type contracts, the bill would assess military department and agency heads a penalty for using of some cost-type contracts awarded over the next five years.
To improve the acquisition workforce, the bill would authorize more flexible hiring and compensation practices, improve the Defense Acquisition Workforce Development Fund, and establish competitively-selected senior military acquisition advisors in the Defense Acquisition Corps.
Senate leaders have not announced a schedule for full Senate consideration of the SASC bill.
Kearney & Company, P.C. - Distinguished Winner
Established in 1985, Kearney & Company, P.C. (Kearney) is currently the largest Certified Public Accounting (CPA) firm dedicated exclusively to Federal financial management (FM). Approximately half of Kearney’s business consists of work within the Department of Defense (DoD) and the United States Coast Guard (USCG). Our success relies heavily on supporting ASMC’s mission to provide education, training, development and advancement of the profession of military comptrollership in our staff and in the military. In keeping with this mission, Kearney actively participates in offering professional development programs to ensure our team is informed and well-prepared, encouraging team members to join ASMC and recognizing those who obtain their CDFM. They actively participate in ASMC chapters, sponsor and exhibit at the National PDI, and personnel play key roles is ASMC committees.