Quick Hits - What it Means
Highlights: Mark up Season is Well Underway. Finding the Loose Change in FY18.
Appropriations Process and NDAA Movement
The appropriations process is underway with multiple House appropriations subcommittees marking their versions of FY19 spending bills. While the House defense subcommittee has yet to mark, it will likely vote out of subcommittee and full committee by the end of May. The Senate appropriations defense subcommittee will mark its version of the defense appropriation during the last week of June.
On May 9-10, the House Armed Services Committee passed the FY19 defense authorization bill (the NDAA) by a 60-1 vote.
The $717 billion defense policy bill now moves to a full House vote in the coming weeks, and the Senate Armed Services Committee is scheduled to adopt its own draft of the defense policy legislation next week.
What is in the NDAA Bill:
- Troops: The bill approves nearly 16,000 additional active-duty troops across the military and implement a 2.6 percent pay raise.
- Aviation: The bill provides $39 billion for aviation upgrades and more than $25 billion for equipment maintenance. It also authorizes the purchase of 77 F-35 Joint Strike Fighters, though there is an amendment that would allow the Defense Department to buy an unspecified number of additional F-35s if it can find savings.
- Sea Power: Big additions for the Pentagon’s budget dealt with ships. Construction of a fourth Ford-class aircraft carrier was accelerated, and lawmakers provided funding for long-lead time materials for two additional Virginia-class submarines to be built in 2022 and 2023. The bill also authorized two additional Littoral Combat Ships.
- Nuclear: In line with the Trump administration’s desire for a Nuclear Posture Review, the bill authorizes $65 million for developing and producing a low-yield nuclear warhead.
Points of Opposition in HASC:
- “Fourth Estate” Cuts: House Armed Services Committee Chairman Mac Thornberry’s effort to cut more than $25 billion dollars by 2021 was met with bipartisan opposition. He walked back his attempt to reduce Pentagon bureaucracy by eliminating 7 of the 28 non-military management agencies in the Fourth Estate, giving more deference to the Pentagon on providing solutions to cut costs. Furthermore, an attempt to preserve the Defense Information Systems Agency was defeated along party lines, but an amendment to protect the Test Resource Management Center was approved.
- Checks on Trump: Many attempted amendments dealing with Trump Administration decisions did not make it into the final cut, including limits on Trump’s planned Veterans Day military parade to only ceremonial units and equipment, limits on the role of National Guard troops ordered to the U.S.-Mexico border by Trump, and prevention Department of Defense funds from going to building a border wall. In addition, an amendment that would have slowed down the groundwork for a space force was also defeated, after Trump suggested he would be in favor of creating a sixth military branch dedicated to space
The Bottom Line: Defense authorizations are on a fast track, setting the pace and laying the framework of the FY19 national security budget. As a historical point, final defense authorization bill passage hasn’t happened before the start of the new fiscal year since 2009. Could this be the year?
The race is on to find the loose change in FY18 spending. Many agencies are simply not able to obligate all of their FY18 funding as originally planned; late arrival of FY18 funds has forced agencies to request permission from Congress to move funds (if greater than $10 million), or “sweep up” unobligated funds before year end so they might be applied to programs and projects deemed “ready now.” Are you waiting on FY18 funds? If so, you should be in position to clearly understand the spend plan of your program office for the coming months. We can help if you are not sure how to ask the right questions that will assure contract funding.