# Defense: FY2015 Authorization and Appropriations > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3AR43788 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** January 28, 2015 - **Citation:** R43788 ## Text Defense: FY2015 Authorization and Appropriations (name redacted) Specialist in U.S. Defense Policy and Budget January 28, 2015 Congressional Research Service 7-.... www.crs.gov R43788 Defense: FY2015 Authorization and Appropriations Summary In contrast with the debate over the FY2014 defense budget, congressional action on the FY2015 Department of Defense (DOD) “base budget” (that is, the part of the budget not associated with operations in Afghanistan or other situations designated by the President as emergencies) was not complicated by disputes over the total amount at issue. For both the FY2015 National Defense Authorization Act (NDAA) and the FY2015 Defense Appropriations Act, President Obama’s request, and versions of the legislation that were passed by the House, approved by the relevant Senate committees, and finally enacted, varied by amounts that amounted to a small fraction of 1%. The narrow range of disagreements reflected the fact that, in each case, the request and all versions of the legislation were consistent with the binding cap on defense spending in FY2015 that had been established by the Balanced Budget Act of 2013 (P.L. 113-67). For the FY2015 NDAA, the President requested base budget authorizations for DOD totaling $495.5 billion. The version of that bill passed by the House (H.R. 4435) would have authorized $495.8 billion, the version reported by the Senate Armed Services Committee would have authorized $496.0 billion, and the enacted bill (H.R. 3979/P.L. 113-291) authorizes $495.9 billion. (See Table 11.) For base budget programs covered by the FY2015 Defense DOD Appropriations Act (which does not cover the military construction budget), the Administration requested $484.3 billion. The version of the bill (H.R. 4870) passed by the House would have added $166.3 million to that total while the version of H.R. 4870 reported by the Senate Appropriations Committee would have cut $1.1 billion. The final version of the Defense Appropriations Act (Division C of H.R. 83/P.L. 113235) provides $$483.7 billion. (See Table 19.) Within those similar gross totals, however, the Administration’s budget request and the enacted DOD funding legislation have some significant differences. Both bills either reject outright or defers a decision on several cost reduction initiatives proposed by the Administration. At the same time, both add to the budget billions of dollars for weapons programs and “readiness” improvements that were not included in the budget request. Those added costs, are offset, in part, by reductions which, according to the congressional defense committees, will have no adverse impact on DOD programs. The cost of the congressional additions (in the base budget) is further offset by the fact that some other costs are shifted into the part of the bill that funds war costs (or Overseas Contingency Operations – OCO), and thus are exempt from the statutory cap on discretionary spending. (See “NDAA Highlights” and “DOD Appropriations Overview”, below.) The Administration amended its FY2015 budget request for Overseas Contingency Operations (OCO) three times in the course of 2014, each time expanding its scope to fund other emergent DOD activities in addition to combat and post-combat operations in Afghanistan and Iraq. The final version of the NDAA (H.R. 3979/P.L. 113-291) addressed an OCO request totaling $63.7 billion from which it cut $1.5 million. Additions, including $1.25 billion to fund equipment for the National Guard and reserve components and $351.0 million for the Iron Dome anti-rocket system were offset by a cut to the amended request for the Counterterrorism Partnership Fund (CTPF) for which the act authorizes $1.3 billion of the $4.0 billion requested. Congressional Research Service Defense: FY2015 Authorization and Appropriations The final version of the FY2015 Defense Appropriations Act (H.R. 83, Division C/P.L. 113-265) adds $1.54 billion to a $63.7 billion OCO request (which included $112.0 million in emergency appropriations for DOD activities to combat the Ebola virus). Congressional Research Service Defense: FY2015 Authorization and Appropriations Contents Introduction...................................................................................................................................... 1 FY2015 Defense Budget Overview ................................................................................................. 3 FY2015 OCO Budget Request Highlights ................................................................................ 5 Historical Context .......................................................................................................................... 11 Mandatory Spending Caps ...................................................................................................... 12 Internal Cost Pressures ............................................................................................................ 15 FY2015 Base Budget Highlights ................................................................................................... 16 Implementing the 2014 Quadrennial Defense Review (QDR) ................................................ 17 Manpower Issues ..................................................................................................................... 18 Size of the Force................................................................................................................ 18 Compensation .................................................................................................................... 20 Defense Health Program ................................................................................................... 22 Force Structure ........................................................................................................................ 23 Army Force Reductions .................................................................................................... 23 Navy Force Reductions ..................................................................................................... 23 Air Force Reductions ........................................................................................................ 24 Modernization.......................................................................................................................... 24 Readiness ................................................................................................................................. 26 Efficiencies .............................................................................................................................. 27 FY2015 National Defense Authorization Act (NDAA): H.R. 4435, S. 2410, H.R. 3979.............. 28 NDAA Highlights .................................................................................................................... 29 Military Personnel Issues (Authorization) ............................................................................... 35 End-Strength Reductions (Authorization) ......................................................................... 35 Compensation and Benefits Changes (Authorization) ...................................................... 36 Sexual Assault Prevention and Response .......................................................................... 39 Ground Combat Systems (Authorization) ............................................................................... 39 Army and National Guard Helicopters.............................................................................. 39 Armored Vehicle and Tactical Vehicle Industrial Base ..................................................... 40 Naval Systems (Authorization) ............................................................................................... 41 Refueling a Nuclear-powered Carrier ............................................................................... 41 Temporary Lay-up of Aegis Cruisers and Amphibious Ships ........................................... 42 Missile-launching Submarines .......................................................................................... 42 Air Force Programs (Authorization)........................................................................................ 43 A-10 Ground-Attack Aircraft ............................................................................................ 43 Intelligence, Reconnaissance, and Surveillance (ISR) Aircraft......................................... 43 Missile Defense Programs ....................................................................................................... 44 Ground-based Midcourse Defense (GMD) ....................................................................... 44 Israeli Defense Systems .................................................................................................... 45 Provisions Regarding Guantanamo Bay Detainees ................................................................. 45 Provisions Relating to DOD Peacekeeping and Counterterrorism .......................................... 46 Global Train and Equip ..................................................................................................... 46 Human Rights Conditions ................................................................................................. 47 Other Security Assistance-related Provisions.................................................................... 47 Counterterrorism Partnerships Fund ................................................................................. 47 House Floor Action on H.R. 4435 ........................................................................................... 48 Congressional Research Service Defense: FY2015 Authorization and Appropriations FY2015 DOD Appropriations Bill (H.R. 4870; H.R. 83, Division C)........................................... 51 DOD Appropriations Overview ............................................................................................... 52 FY2015 Base Budget Appropriations Highlights .................................................................... 56 Military Personnel Issues (Appropriations) ...................................................................... 57 Proposed Force Structure Changes (Appropriations) ........................................................ 58 Ground Combat Systems (Appropriations) ....................................................................... 59 Shipbuilding (Appropriations) .......................................................................................... 59 Aircraft Procurement (Appropriations) ............................................................................. 60 FY2015 OCO Appropriations ........................................................................................... 61 House Floor Action on H.R. 4870 ........................................................................................... 63 Figures Figure 1. OCO Funding for Operations in Iraq and Afghanistan .................................................... 8 Figure 2. OCO Troops in Iraq and Afghanistan .............................................................................. 8 Figure 3. DOD Budget Authority (excluding post-9/11 war costs), FY1975-FY2015 .................. 11 Figure 4. Successive Changes to the 2011 Defense Spending Caps .............................................. 13 Figure 5. 10-year DOD Discretionary Budget Plans, 2010-2014 .................................................. 15 Figure 6. Army and Marine Corps end-strength ............................................................................ 19 Tables Table 1. FY2015 National Defense Authorization Act (H.R. 4435; S. 2410; H.R. 3979) ............... 2 Table 2. FY2015 DOD Appropriations Bill (H.R. 4870; H.R. 83, Division C) ............................... 2 Table 3. National Defense Base Budget Discretionary Funding, FY2015 Request......................... 3 Table 4. DOD Base Budget Discretionary Budget Authority .......................................................... 3 Table 5. FY2015 DOD Discretionary OCO Budget Request (including CTPF, ERI, Ebola, and operations against the Islamic State) ...................................................................................... 7 Table 6. OCO Funding Related to Afghanistan and Iraq by Mission Category............................... 9 Table 7. Evolution of BCA “Sequester” Caps: FY2011-FY2014 .................................................. 14 Table 8. Active Component End-Strength (Base Budget) ............................................................. 18 Table 9. Selected Reserve Component End-Strength .................................................................... 20 Table 10. DOD Pay and Benefits as a Share of Total Budget Authority........................................ 20 Table 11. FY2015 National Defense Authorization Act (H.R. 4435; S. 2410; H.R. 3979) ........... 29 Table 12. Selected Administration Cost Cutting Proposals ........................................................... 30 Table 13. Other Selected Congressional Budget Increases ............................................................ 32 Table 14. Selected Congressional Reductions to the Administration’s FY2015 Request .............. 34 Table 15. Selected Sexual Assault-related Provisions: H.R. 4435 and S. 2410 ............................. 39 Table 16. NDAA Changes to Authorization Request for Selected Army Vehicles ........................ 41 Table 17. ISR Aircraft Issues in FY2015 NDAA .......................................................................... 43 Congressional Research Service Defense: FY2015 Authorization and Appropriations Table 18. Selected House Floor Amendments to FY2015 NDAA (H.R. 4435)............................. 48 Table 19. FY2015 Defense Appropriations Act (H.R. 4870; H.R. 83, Division C) ....................... 51 Table 20. Selected Administration Budget and Policy Initiatives .................................................. 52 Table 21. Selected Congressional Additions to the FY2015 Base Budget Request....................... 54 Table 22. Selected Congressional Reductions to the FY2015 Base Budget Request .................... 55 Table 23. Selected Floor Amendments to H.R. 4870 ..................................................................... 63 Table A-1. FY2015 DOD Appropriations Bill (H.R. 83, Division C) Adjusted for Comparison with Request ........................................................................................................... 66 Table A-2. Congressional Authorization Action on Selected FY2015 Missile Defense Agency Request .......................................................................................................................... 67 Table A-3. Congressional Appropriations Action on FY2015 Missile Defense Agency Request ....................................................................................................................................... 70 Table A-4. FY2015 Authorization Action on Selected Ground Vehicles ....................................... 73 Table A-5. FY2015 Appropriation Action on Selected Ground Combat Vehicles ......................... 74 Table A-6. FY2015 Authorization Action on Selected Ship Programs .......................................... 75 Table A-7. FY2015 Appropriation Action on Selected Ship Programs ......................................... 77 Table A-8. FY2015 Authorization Action on Selected Space and Communications Programs ..................................................................................................................................... 79 Table A-9. FY2015 Appropriation Action on Selected Space and Communications Programs ..................................................................................................................................... 80 Table A-10. FY2015 Authorization Action on Selected Aircraft Programs ................................... 82 Table A-11. FY2015 Appropriation Action on Selected Aircraft Programs .................................. 86 Appendixes Appendix. Selected Program Funding Tables ................................................................................ 66 Contacts Author Contact Information........................................................................................................... 90 Acknowledgments ......................................................................................................................... 90 Key Policy Staff ............................................................................................................................. 90 Congressional Research Service Defense: FY2015 Authorization and Appropriations Introduction Fiscal year 2015 (FY2015) is the fourth consecutive year for which discretionary appropriations for the Department of Defense (DOD) are subject to a legally binding cap on national defenserelated spending, initially codified by P.L. 112-25, the Budget Control Act of 2011 (or BCA) and subsequently modified, most recently by P.L. 113-67, the Bipartisan Budget Act (BBA) of 2013.1 President Obama’s FY2015 DOD budget request complied with the applicable cap as did the versions of the FY2015 National Defense Authorization Act (NDAA) that were passed by the House (H.R. 4435), reported by the Senate Armed Services Committee (S. 2410), and enacted into law (H.R. 3979). Similarly, the versions of the FY2015 Defense Appropriations Act passed by the House and reported by the Senate Appropriations Committee (H.R. 4870) and the version enacted as part of the Consolidated and Further Continuing Appropriations Act of 2015 (H.R. 83, Division C) all were consistent with the defense spending cap then in force (i.e., BBA’s cap for FY2015). By contrast, congressional action on the FY2014 DOD budget had been prolonged by the fact that the Administration’s DOD budget request for that year exceeded the spending cap then in force, as did the FY2014 defense funding bills reported by the Armed Services and Appropriations Committees of both the House and Senate.2 For DOD’s FY2015 “base budget”—that is, the annual budget exclusive of war-related costs— the Administration requested $495.6 billion in discretionary budget authority. Combined with the amounts requested for national defense-related activities carried out by other agencies, including the FBI and the Department of Energy, the Administration requested a total of $522.6 billion for national defense related spending—a total that complies with the FY2015 cap on national defense discretionary budget authority set by the BBA.3 1 Enacted in 2011 to resolve the crisis that summer about raising the debt limit, P.L. 112-25, the Budget Control Act of 2011 (BCA) required annual reductions in discretionary spending (compared with a projected spending baseline) totaling about $2.1 trillion thru FY2021, in return for raising the debt limit by the same amount. For each year in the decade FY2012-FY2021, the BCA caps require roughly equal reductions (from the projected baseline) in appropriations for defense agencies and non-defense agencies. For any year for which appropriations for either category exceed the BCA cap, appropriations are reduced to the level of the cap by a process of sequestration. 2 President Obama’s DOD budget request for FY2014, as well as the initial actions on the request by Armed Services and Appropriations Committees of the House and Senate, all would have resulted in FY2014 defense appropriations that were substantially higher than the BCA spending cap in force at the time. Final action on FY2014 DOD appropriations occurred in mid-January 2014—more than three months after the start of the fiscal year—after Congress enacted P.L. 113-67, the Bipartisan Budget Act of 2013 (BBA), which raised the FY2014 defense spending cap by more than $20 billion, decreasing to that extent the amount Congress had to cut from the budget request in order to avoid sequestration. For background on the FY2014 DOD spending debate, see CRS Report R43323, Defense: FY2014 Authorization and Appropriations, by (name redacted) and (name redacted). 3 The spending limits set by BCA and later modified by BBA apply to the “national defense budget function” (or Budget Function 050), which encompasses funding for all defense-related activities of the federal government, no matter which agency conducts them. In this report, references to the BCA or BBA spending cap relating to DOD are based on CRS analysis of DOD’s share of discretionary funding in the broader Function 050 category, which has averaged about 95.4% in recent years. For further elaboration, see the text box on pp. 13-14. The statutory spending caps are binding on appropriation bills, not authorization bills. However, the Armed Services Committees of the House and Senate typically have tried to authorize in the annual NDAA a level of appropriations that would be consistent with any relevant, mandatory ceilings on defense spending. Congressional Research Service 1 Defense: FY2015 Authorization and Appropriations Although the President’s FY2015 budget request for DOD complied with the FY2015 cap, he also requested an additional $27.7 billion in defense-related spending (including $26.4 billion for DOD) as part of package called the Opportunity, Growth, and Security Initiative (OGSI). If those additional funds were appropriated, the current FY2015 defense cap would be exceeded. In that case, unless current law was amended, appropriations would be reduced to the level of the cap by a process of across-the-board reductions called “sequestration.”4 Moreover, for each year from FY2016 through FY2019, the Administration’s projected DOD budget requests would exceed the statutory defense spending cap for that year by an average of nearly $31 billion annually (see Table 7). Table 1. FY2015 National Defense Authorization Act (H.R. 4435; S. 2410; H.R. 3979) Subcommittee Markup House Senate 4/30/14 5/20/14 and 5/1/14 and 5/21/14 House Report House Passage H.R. 4435 H.R. 4435 S. 2410 H.Rept. 113-446 5/25/14 S.Rept. 113-176 5/13/14 325-98 Final Bill H.R. 3979 Senate Report 6/2/14 Report see Note House Senate 12/4/14 12/12/14 300-119 89-11 Public Law P.L. 113291 Note: House and Senate negotiators drafted a compromise NDAA based on H.R. 4435 as passed by the House and S. 2410 as reported by committee. This final version was incorporated into H.R. 3979, an unrelated bill, which then was passed by both chambers. A “Joint Explanatory Statement” on the compromise bill (equivalent to a conference report) is available on the House Armed Services Committee website at http://armedservices.house.gov/index.cfm/files/serve?File_id=78ED7A79-9066-43FD-AA75-1D8F14B4B4A2. Table 2. FY2015 DOD Appropriations Bill (H.R. 4870; H.R. 83, Division C) Subcommittee Markup House Senate 5/29/14 7/15/14 Final Bill H.R. 83, Division C House Report House Passage Senate Report H.Rept. 113-473 6/20/14 S.Rept. 113-211 6/10/14 340-73 7/17/2014 Report see Note House Senate 12/11/14 12/13/14 219-206 56-40 Public Law P.L. 113235 Note: House and Senate negotiators drafted a compromise defense appropriations bill based on H.R. 4870 as passed by the House and reported by the Senate Appropriations Committee. This final version was incorporated into H.R. 83, the Omnibus and Further Continuing Appropriations Act for FY2015, of which Division C is the defense appropriations bill. A “Joint Explanatory Statement” on the compromise bill (equivalent to a conference report) is printed in Book II of the Congressional Record for December 11, 2014 (pp. H9364-H9647). 4 For additional information on the sequestration process see CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions, by (name redacted). Congressional Research Service 2 Defense: FY2015 Authorization and Appropriations FY2015 Defense Budget Overview Excluding war-related costs, President Obama’s FY2015 budget request for national defenserelated activities (comprising Budget Function 050) amounts to $522.6 billion in discretionary budget authority. This so-called “base budget” (i.e., non-war cost) amount is consistent with the defense spending cap established by P.L. 113-67, the Bipartisan Budget Act (BBA) of 2013, which raised the BCA spending caps for FY2014 and FY2015 (see Table 3). Table 3. National Defense Base Budget Discretionary Funding, FY2015 Request (amounts in billions of dollars; totals may not add due to rounding) Discretionary Spending Mandatory Spending Total Department of Defense 495.6 6.2a 501.8 Atomic Energy Defense-Related Activities 18.0 1.4b 19.3 Defense-Related Activities 8.3 0.6 8.9 521.9c 8.2 530.0 27.7 DOD share = 26.4 0.0 27.7 Total, Base Budget Opportunity, Growth, and Security Initiative (OGSI) Source: CRS analysis of data in DOD Comptroller, National Defense Budget Estimates for FY2015 [The Green Book]( http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2015/FY15_Green_Book.pdf), Table 1-9 “National Defense Budget Authority—Discretionary and Mandatory,” pp. 14-15. Notes: a. This net amount, which reflects $1.5 billion in offsetting receipts, also includes $6.6 billion for concurrent receipt accrual payments to the military retirement trust fund. For additional information, see CRS Report RL33449, Military Retirement, Concurrent Receipt, and Related Major Legislative Issues, by (name redacted). b. The largest element of this amount is the Energy Department’s occupational illness compensation program. c. This total includes certain amounts that are not subject to BBA’s statutory cap on defense spending for FY2015, which is $521.3 billion. Within the overall FY2015 national defense budget request for discretionary spending, the base budget for DOD military activities5 is $495.6 billion. (Table 4) Table 4. DOD Base Budget Discretionary Budget Authority (amounts in billions of dollars) FY2014 Enacteda FY2015 Request Military Personnel 135.9 135.2 Operation and Maintenance (O&M) 192.8b 198.7 5 Certain civil functions performed by DOD components—the dredging of rivers and harbors and other civil works operations of the Army Corps of Engineers, for example—are not included in the “national defense” budget function. Congressional Research Service 3 Defense: FY2015 Authorization and Appropriations FY2014 Enacteda FY2015 Request Procurement 92.4 90.4 Research, Development, Test & Engineering (RDT&E) 62.8 63.5 Revolving and Management Funds 2.2 1.2 Military Construction 8.4 5.4 Family Housing 1.4 1.2 495.9 495.6 Total, DOD Base Budget (Discretionary) Source: CRS analysis of data in DOD Comptroller, National Defense Budget Estimates for FY2015 [The Green Book] (http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2015/FY15_Green_Book.pdf), Table 1-9 “National Defense Budget Authority—Discretionary and Mandatory,” p. 14. Notes: a. Because of details in the financing of certain DOD activities, and in the organization of the annual DOD funding bills, data in this table are not comparable to summary data regarding the annual authorization and appropriations bills. For example, in this table, the Military Personnel total includes an accrual payment for the so-called “TRICARE for Life” program ($7.3 billion for FY2014 and $6.2 billion for FY2015) that is scored as “discretionary” funding, but which occurs automatically each year through a permanent provision of law (10 U.S.C. 1116). Similarly, the totals in this table for O&M, Procurement, and RDT&E include amounts that Congress authorizes and appropriates as part of the Defense Health Program, a program to eliminate chemical weapons, and DOD’s drug interdiction and counter-drug program. b. The enacted FY2014 total for Operation and Maintenance (O&M) does not include $9.15 billion for activities that DOD requested in its base budget, but which Congress funded as war costs in P.L. 113-76, the Consolidated Appropriations Act for 2014. In its FY2015 budget request, DOD again includes those activities in the base budget. If those funds are not counted as part of the FY2014 base budget O&M appropriation, then the FY2015 base budget O&M request amounts to an increase of 3.1% above the prior year. But if the $9.15 billion is counted as part of the base budget O&M appropriation, then the FY2015 O&M request shows a decrease of 1.6%. Consistent with national defense budgets in recent years, the DOD request thus amounts to roughly 95% of the discretionary national defense-related base budget for FY2015. In addition to funding for DOD, the FY2015 discretionary base budget request for function 050 also includes $18.0 billion for defense-related nuclear energy activities conducted by the Department of Energy, the largest share of which is $8.3 billion for activities related to nuclear weapons. Other major components of the defense-related nuclear energy budget include $4.9 billion for environmental cleanup at defense nuclear sites, $1.6 billion for nuclear nonproliferation work, and $1.4 billion for work on nuclear reactors that power Navy ships. The remaining $8.0 billion of the FY2015 base budget request for function 050 is for defenserelated activities conducted by other agencies. Of this amount, the largest single component— $4.9 billion—would go to the FBI for counterintelligence operations. Congressional Research Service 4 Defense: FY2015 Authorization and Appropriations Opportunity, Growth, and Security Initiative (OGSI) In addition to its base budget request, the Administration has requested for FY2015 an additional $27.7 billion as the national defense component of the so-called Opportunity, Growth, and Security Initiative (OGSI), a $56 billion spending package split evenly between defense and non-defense programs. If Congress were to appropriate these funds in addition to the Administration’s total base budget request, it would exceed the FY2015 discretionary spending cap, thus triggering sequestration. The OGSI package also included proposed changes in existing federal programs that would have cut spending by $28 billion and proposed tax increases that would have boosted revenue by $28 billion, thus offsetting the cost of the proposed new spending. Even if the proposed taxes were enacted, however, sequestration would occur because the spending caps apply to the amounts appropriated for defense and non-defense discretionary spending. Unless current law was amended, offsetting revenue increases would not eliminate the required sequestration. Neither the Armed Services nor Appropriations Committees of the Senate or House has taken any action on the OGSI request in their respective FY2015 funding bills. FY2015 OCO Budget Request Highlights The Administration amended its FY2015 budget request for Overseas Contingency Operations (OCO) three times, expanding that category’s scope to include funding for DOD activities other than operations relating to combat and post-combat activities in Afghanistan and Iraq. The Initial Placeholder At the time the FY2015 budget request was submitted to Congress in March 2014, the Administration said it had not yet settled on an OCO budget for the upcoming year because of ongoing negotiations with the Afghan government that would affect the number of U.S. troops remaining in that country during FY2015. Accordingly, the budget request included, as a “placeholder” for the OCO request, $79.4 billion—essentially the amount appropriated for OCO in FY2014. When the House Appropriations Committee marked up its version of H.R. 4870, the FY2015 defense appropriations bill, it incorporated this amount with few modifications. June 2014 OCO Request On June 27, 2014, DOD released an amended OCO budget request that included $53.8 million for activities in (and in the region around) Afghanistan and Iraq. (See Table 5.) The budget amendment also included funds for two newly proposed DOD programs:6 • $4.0 billion for a new Counterterrorism Partnerships Fund (CTPF), intended to support the counterterrorism efforts of partner states (with $1.0 billion of this amount directed to support states bordering on Syria and to train and equip “properly vetted elements of the Syrian armed opposition”).7 6 This budget amendment also included increased OCO funding for the Department of State and other federal agencies including $1.0 billion for CTPF activities, $75 million for ERI, and $278 million for the U.S. share of UN peacekeeping operations in the Central African Republic. 7 DOD Comptroller, United States Department of Defense Fiscal Year 2015 Budget Amendment: Overview, Overseas Contingency Operations, June 2014, pp. 7-10. Congressional Research Service 5 Defense: FY2015 Authorization and Appropriations • $925 million for a new European Reassurance Initiative (ERI), which is intended to reassure NATO allies and bolster the defenses of NATO and non-NATO partners “that feel most threatened by Russia’s actions against Ukraine.”8 • To partly offset these costs, the budget amendment also included a rescission of $117.0 million appropriated in FY2014 to modernize Army helicopters that now are slated for retirement. This version of the OCO budget request, which amounted for $58.6 billion for DOD, was the one the Senate Appropriations Committee had acted on when it reported to the Senate its version of H.R. 4870 on July 17, 2014. Ebola-related Funding Addition On November 5, 2014, after the House had passed the FY2015 DOD appropriations bill and the Senate Appropriations Committee had reported its version of the measure to the Senate, the President requested $6.18 billion in emergency appropriations to deal with the outbreak of Ebola in Africa and to beef up domestic public health systems to deal with such threats. That package included $112 million for the Defense Advanced Research Projects Agency (DARPA) to speed development of medical technologies that would be useful in developing vaccines and other defenses against Ebola and other infectious diseases. The Office of Management and Budget categorized this request as an addition to DOD’s FY2015 OCO budget. FY2015 DOD Funding Regarding Ebola and the Islamic State For additional detail on the $5.1 billion in OCO funding requested to support DOD activities to combat the Ebola virus and the Islamic State, see CRS Report R43807, FY2015 Budget Requests to Counter Ebola and the Islamic State (IS), coordinated by (name redacted). Increase to Counter Islamic State (IS) On November 10, 2014, the President requested an additional $5.0 billion in DOD budget authority for OCO in FY2015 to cover the cost of Operation Inherent Resolve, the operations conducted by U.S. forces against the Islamic State. The Islamic State is a transnational Sunni Islamist insurgent and terrorist group that has expanded its control over areas of parts of Iraq and Syria since 2013. The major components of that request include • 8 $1.62 billion to create an Iraq Train and Equip Fund through which the Iraqi military and Kurdish and tribal security forces would be provided equipment, supplies, training, services, and stipends to support their role in the fight against the Islamic State; Ibid., pp. 10-11. Congressional Research Service 6 Defense: FY2015 Authorization and Appropriations • $2.46 billion to cover the military personnel and Operation and Maintenance (O&M) costs of U.S. forces engaged in Operation Inherent Resolve, aimed at eliminating the Islamic State; and • $972.5 million for procurement and development of equipment, including $141.3 million to replenish missiles and other munitions expended in the operation and $673.6 million for classified purposes. In sum, the November 2014 adjustments brought the Administration’s FY2015 OCO request to $63.7 billion,9 which was the amount considered by congressional negotiators drafting the final version of the FY2015 appropriations legislation. Table 5. FY2015 DOD Discretionary OCO Budget Request (including CTPF, ERI, Ebola, and operations against the Islamic State) (amounts in millions of dollars) FY2014 Enacted (P.L. 113-76) FY2015 Request OCO Related to Afghanistan and Iraq (as defined in previous budgets) Military Personnel 7,972 5,395 68,397 [59,246] 41,570 6,233 5,599 135 80 0 46 2,165 926 85,344 [76,193] 53,765 Counterterrorism Partnerships Funds (CTPF) 0 4,000 European Reassurance Initiative (ERI) 0 925 85,344 58,690 offset from prior-year cancellation 0 -117 DOD share of November 5, 2014, Ebola-related budget amendment 0 112 DOD share of November 10,2014, ISIL-related budget amendment 0 5,000 85,344 63,685 Operation and Maintenance [O&M minus $9,151 million congressional transfer in FY2014] Procurement RDT&E Military Construction Revolving and Management Funds and Other DOD Subtotal: Afghanistan and Iraq [minus $9,151 million congressional transfer to O&M in FY2014] Total (before additional funding requests related to Ebola and ISIL) Total, DOD 9 That total includes $46 million for military construction. Of that total, $63.5 billion of the OCO request was dealt with in the FY2015 Defense Appropriations Bill, which was Division C of H.R. 83 (the Consolidated and Further Continuing Appropriations Act of FY2015). The military construction request was dealt with in the FY2015 Military Construction Veterans Affairs and Related Agencies Appropriations Bill, which was Division I of H.R. 83. Congressional Research Service 7 Defense: FY2015 Authorization and Appropriations Source: DOD Comptroller, United States Department of Defense Fiscal Year 2015 Budget Amendment: Overview, Overseas Contingency Operations, June 2014, Table 1, p. 12. Notes: The enacted FY2014 total for Operation and Maintenance (O&M) includes $9.15 billion for activities that DOD requested in its base budget but which Congress funded as war costs in P.L. 113-76, the Consolidated Appropriations Act for 2014. In its FY2015 budget request, DOD again included those activities in the base budget. Counterterrorism Partnerships Fund and European Reassurance Initiative For more detailed analysis of the Administration’s request for FY2015 funding for the Counterterrorism Partnerships Fund (CTPF), see CRS Report IN10103, The Counterterrorism Partnerships Fund (CTPF) Proposal: Questions for Congress, coordinated by (name redacted). For a more detailed analysis of the Administration’s request for FY2015 funding for the European Reassurance Initiative (ERI), see CRS Report R43478, NATO: Response to the Crisis in Ukraine and Security Concerns in Central and Eastern Europe, coordinated by (name redacted). The revised OCO request assumes that, between FY2014 and FY2015, the average number of U.S. troops in Afghanistan would drop by more than two-thirds while OCO funding would decline by slightly more than one-third. (See Figure 1 and Figure 2.) Figure 1. OCO Funding for Operations in Iraq and Afghanistan Figure 2. OCO Troops in Iraq and Afghanistan (amounts in billions of dollars) (numbers in thousands of personnel) 200 Afgh. Iraq Afgh. Iraq 200 150 62 45 148 100 150 96 10 94 50 100 39 114 52 105 3 0.8 85 84.5 100 0.3 154 141 9 50 53.4 47 84 33 44 2008 2009 98 90 63 37 12 0 0 2008 2009 2010 2011 2012 2013 2014 2015 Notes: The FY2015 column omits additional funds requested for the Counterterrorism Partnerships Fund ($4.0 billion) and for the European Reassurance Initiative ($0.9 billion). That column also assumes that the proposed new OCO budget authority is partly offset by the cancellation of $117 million appropriated for Army helicopters in the FY2014 DOD appropriations bill. The FY2015 column does not reflect the November 10, 2014, request for an additional $5 billion to combat the Islamic State. 2010 2011 2012 2013 2014 2015 Notes: Data represent the average number of U.S. personnel in each country during a given fiscal year. The chart reports only personnel in each of the two countries. DOD estimates that operations in Afghanistan during FY2015 will be directly supported by—on average—63,309 U.S. military personnel stationed elsewhere in the region. The November 10, 2014, budget amendment assumes the average number of U.S. troops in Iraq associated with operations against the Islamic State during FY2015 would average 2,904. It assumes that the number of supporting personnel in the region would rise to 64,482. Source: DOD Comptroller, United States Department of Defense Fiscal Year 2015 Budget Amendment: Overview, Overseas Contingency Operations, June 2014, Figure 6, p. 6. Congressional Research Service 8 Defense: FY2015 Authorization and Appropriations According to DOD, OCO funding is slated to decline more slowly than the number of troops on the ground for several reasons. These include • the continued “forward presence” of substantial U.S. forces in the Middle East, outside of Afghanistan, to support the OCO mission; • the cost of base closure, unexploded ordnance disposal, and return of equipment to the United States; and • the costs of replacing munitions expended in the operation and of replacing or repairing equipment destroyed, worn out, or damaged in OCO.10 That contention is consistent with DOD’s functional breakdown of the FY2015 OCO request (see Table 6). On the one hand, the $11.0 billion requested for the operation of U.S. forces in Afghanistan would decline by 60%, compared with the corresponding amount in the FY2014 budget. On the other hand, the request for funding in two categories that account for more half the spending related to Afghanistan would decline by less than 10% compared with the amounts appropriated in FY2014, namely: • the $18.1 billion requested for activities outside Afghanistan to support operations in that country would amount to 91% of the corresponding expenditure in FY2014; and • the $9.2 billion requested for replacement or refurbishing of equipment and munitions would amount to a nearly 5% increase over the FY2014 amount. Table 6. OCO Funding Related to Afghanistan and Iraq by Mission Category (amounts in billions of dollars; totals may not add due to rounding) Additions to FY2015 Request (November 2014) FY2014 Enacted (P.L. 113-76) FY2015 Request (June 2014) Operations and Force Protection in Afghanistan 26.2 11.0 In-Theater Support (outside Afghanistan) 19.9 18.1 Joint Improvised Explosive Defense (IED) Defeat 0.9 0.4 Afghanistan Security Forces Fund 4.7 4.1 - 4.1 Afghanistan Infrastructure Fund 0.2 0.0 - 0.0 Coalition Support Funds 1.7 1.7 - 1.7 Procurement and Equipment Reset 8.8 9.2 0.3 9.5 Temporary End-Strength 4.7 2.4 - 2.4 Unexploded Ordnance Removal 0.0 0.3 - 0.3 2.0 - Amended FY2015 Request 11.0 20.1 0.4 10 DOD Comptroller, United States Department of Defense Fiscal Year 2015 Budget Amendment: Overview, Overseas Contingency Operations, June 2014, p. 2. Congressional Research Service 9 Defense: FY2015 Authorization and Appropriations FY2014 Enacted (P.L. 113-76) FY2015 Request (June 2014) Additions to FY2015 Request (November 2014) Iraq Train and Equip Fund 0.0 0.0 1.6 Non-DOD, Classified, and Other DOD 18.1 6.6 subtotal: Afghanistan and Iraqrelated 85.3 53.8 Counterterrorism Partnerships Fund (CTPF) 0.0 4.0 European Reassurance Initiative (ERI) 0.0 0.9 85.3 58.7 5.0 63.7 offset from prior-year cancellation 0 -0.117 - -0.117 Total, New Budget Authority 85.3 58.6 5.0 63.6 Total Budget Authority 1.2 5.0 - Amended FY2015 Request 1.6 7.7 58.8 4.0 0.9 Source: DOD Comptroller, United States Department of Defense Fiscal Year 2015 Budget Amendment: Overview, Overseas Contingency Operations Budget Amendment, November 2014. Figure 3, p. 3. Notes: The enacted FY2014 total for Operation and Maintenance (O&M) includes $9.15 billion for activities that DOD requested in its base budget but which Congress funded as war costs in P.L. 113-76, the Consolidated Appropriations Act for 2014. This table treats those funds as part of the FY2014 OCO appropriation. The table does not reflect the November 5, 2014, budget amendment requesting $112 million for DOD research on dealing with Ebola and other infectious diseases. Congressional Research Service 10 Defense: FY2015 Authorization and Appropriations Historical Context The President’s FY2015 request of $495.6 billion in discretionary budget authority for DOD’s base budget is lower than the corresponding FY2014 appropriation by less than $400 million. If Congress were to approve funding at that level, FY2015 would be the third consecutive year in which DOD’s base budget hovered at between $495 billion and $496 billion after having dropped between FY2012 and FY2013 by $35 billion, in nominal terms (that is, without taking account of inflation). The 7% reduction in DOD’s base budget in FY2013 was part of the government-wide spending reduction program initiated by the 2011 BCA. (See Figure 3.) Figure 3. DOD Budget Authority (excluding post-9/11 war costs), FY1975-FY2015 700 600 500 400 billions of dollars 300 DOD budget in constant FY15 dollars 200 DOD budget in current "then-year" dollars DOD budget in 1985, the high point in constant dollars 100 average (mean) DOD budget, FY1975-FY2015 1975 1980 1985 1990 1995 2000 2005 2010 2015 Source: DOD Comptroller, National Defense Budget Estimates for FY2015 (“The Green Book”), Table 6-10, pp. 143-149, except that, for 2001-2015, DOD budget in constant FY2015 dollars, is determined by CRS analysis of data in “The Green Book,” Table 2-1. pp. 31-33 and Table 5-6, pp. 58-59. Based on DOD’s method of adjusting for the cost of inflation, the FY2015 base budget request is 1.8% below the FY2014 appropriation in real terms. It is about 19% lower, adjusting for inflation, than DOD’s budget in 1985, which marked the peak year (in real terms) of the Reagan-era Cold War buildup. But it is slightly more than 1% higher in real terms than the average (mean) DOD Congressional Research Service 11 Defense: FY2015 Authorization and Appropriations budget since the end of the Vietnam War (1975-2015) and 23% higher than the FY2000 budget, the last one enacted before the attacks of September 11, 2001.11 Mandatory Spending Caps Since 2011, the mandatory spending caps enacted as part of the BCA have been a significant factor in restraining the rate at which DOD spending has increased (as measured in current dollars). The BCA required annual reductions in projected discretionary spending for FY2012FY2021 totaling $2.1 trillion, with the cuts falling equally on defense and non-defense programs. Compared with the Administration’s 10-year projection of discretionary DOD funding published in March 2011, the amount provided for FY2012 was reduced by terms of the BCA and the amount provided for FY2013 was reduced by sequestration, but only after the spending caps for that year were raised by terms of P.L. 112-240, the American Taxpayer Relief Act (ATRA) of 2012. The DOD budget request for FY2014 exceeded that modified cap and final action on FY2014 appropriations came only after Congress enacted P.L. 113-67, the Bipartisan Budget Act of 2014, which further raised the spending caps for FY2014 and 2015. (See Figure 4.) Based on projections by the Office of Management and Budget (OMB), the adjusted caps would increase at or slightly below the rate of inflation, thus keeping future DOD budgets flat in real terms. 11 These data exclude war-related costs in FY2001-FY2015. Congressional Research Service 12 Defense: FY2015 Authorization and Appropriations Figure 4. Successive Changes to the 2011 Defense Spending Caps (amounts in billions of dollars) 580 560 540 520 billions of dollars 500 480 460 440 420 400 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Budget Control Act 530 of 2011 (BCA) American Taxpayer Relief Act of 2012 (ATRA) Bipartisan Budget Act of 2013 (BBA) DOD future years budget plan (FYDP) FY2015-19 471 481 490 501 513 526 538 551 565 496 475 489 500 512 525 537 551 564 496 496 499 512 524 536 550 563 496 535 544 551 559 568 Source: CRS analysis based on the relevant statutes as shown above and the table entitled, “Policy Budget Authority and Outlays by Function, Category, and Program,” in the OMB publications entitled Analytical Perspectives accompanying the President’s annual budget requests for FY2012 through FY2015. The table is labelled Table 32-1 in the volumes for FY2012 and FY2013, Table 31-1 in the volume for FY2014, and Table 28-1 in the volume for FY2015. Thus, one aspect of the interaction between DOD’s long-term budget projections and the spending reduction effort embodied in BCA is that, after their initial year in effect (2012, when the FY2013 budget was at issue), Congress has twice modified the spending caps so as to reduce (but not eliminate) their impact on the then-pending budget request. (See Table 7.) Defense Spending “Caps” in Effect for FY2012-FY2021 On August 2, 2011, the Budget Control Act of 2011 became law, setting annual spending limits for National Defense (budget function 050) and Non-Defense (all other) for FY2012-FY2021. If Congress does not enact appropriations that meet the annual limit, the President is required to order a sequestration that reduces spending by applying across-the-board cuts to each program, project or activity to ensure compliance. In this report, “sequester caps” is used to refer to spending limits that must be met to avoid a sequester. In FY2012, the BCA limit was met. On January 2, 2013, Congress adjusted the original BCA annual limits in the American Taxpayer Relief Act (ATRA)(H.R. 8/P.L.112-240). The FY2013 limit was raised by $26 billion and the FY2013 limit was lowered by $4 billion. The adjusted FY2013 limit was met. On December 23, 2013, the Bipartisan Budget Act of 2013 (H.J. Res 59/P.L.113-67) raised the FY2014 limit by $22 billion and the FY2015 limit by $9 billion. The adjusted FY2014 limit was met. Adjustments to “sequester” caps are Congressional Research Service 13 Defense: FY2015 Authorization and Appropriations highlighted in the table below. BCA limits are set for the National Defense budget function (050). CRS estimated the DOD share (generally about $95.4%) for the original BCA and ATRA using the shares shown in the table entitled “Policy Budget Authority and Outlay by Function, Category, and Program” in OMB’s annual budget volume, Analytical Perspectives for FY2012, FY2013, FY2014, and FY2015. Table 7. Evolution of BCA “Sequester” Caps: FY2011-FY2014 (in billions of dollars of discretionary budget authority) Budget Control Act of 2011 (BCA): S. 365/P.L. 112-75 Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total: 12-21 National Defense 555 492 502 512 523 536 549 562 576 590 5,397 DOD Estimate 530 471 481 490 501 513 526 538 551 565 5,167 The American Taxpayer Relief Act of 2012 (ATRA): H.R. 8/P.L. 112-240 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total: 12-21 National Defense 555 518 498 512 523 536 549 562 576 590 5,419 DOD Estimate 530 496 475 489 500 512 525 537 551 564 5,179 Bipartisan Budget Act of 2013: H.J. Res 569/P.L. 113-67 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total: 12-21 National Defense 555 518 520 521 523 536 549 562 576 590 5,451 DOD Estimate 530 495 496 496 499 512 524 536 550 563 5,201 Sources: Relevant laws as shown above. OMB Table 32-1 in FY2012 and FY2013 Analytical Perspectives, Table 31-1 in FY2014 and Table 28-1 in FY2015 volume. For OMB annual estimates, see OMB, Sequestration Preview Report to the President and Congress for Fiscal Year 2015, March 10, 2014; http://www.whitehouse.gov/sites/default/ files/omb/assets/legislative_reports/sequestration/sequestration_preview_report_march2014.pdf. On the other hand, since early 2011—months before the BCA was enacted—DOD’s long-range spending plans have been pared back each year as part of the spending reduction effort of which the BCA-created spending caps are the most prominent manifestation. As a result, the Administration’s FY2015 DOD request of $496 billion in discretionary budget authority is lower by more than 18% than the $616 billion request for FY2015 that was projected in March 2010. (See Figure 5.) Even if Congress were to amend the current defense spending cap for FY2015 and provide the additional $26.4 billion requested for DOD as part of the OGSI package, discretionary DOD base budget authority for FY2015 would be 15% lower than was projected in 2010. Congressional Research Service 14 Defense: FY2015 Authorization and Appropriations Figure 5. 10-year DOD Discretionary Budget Plans, 2010-2014 (amounts in billions of dollars) 800 700 600 billions of current or "then-year" dollars 500 400 300 200 100 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 March 2010 plan 549 566 582 598 616 633 650 668 687 706 FY2011-2020 March 2011 plan 553 571 586 598 611 622 633 644 656 668 FY2012-2021 March 2012 plan 525 534 546 556 567 579 592 605 618 634 FY2013-2022 May 2013 plan 527 541 551 560 569 577 587 596 606 617 FY2014-2023 April 2014 plan 496 535 544 551 559 568 576 586 601 617 FY2015-2024 April 2014 plan 522 535 plus OGSI Source: OMB budget documentation for FY2011-FY2015, “Analytical Perspectives,” Table 32-1 in the volumes for FY2011, FY2012, and FY2013,Table 31-1 in the volume for FY2014, and Table 28-1 in the volume for FY2015. DOD Estimate of Defense Spending Caps Impact in FY2016-FY2019 In April 2014, DOD projected the impact on readiness, force structure, and selected procurement programs if the defense spending caps for future budgets currently in force were not lifted. The report, Estimated Impacts of Sequestration-Level Funding—FY 2015 Defense Budget, can be accessed at http://comptroller.defense.gov/Portals/45/ Documents/defbudget/fy2015/Sequestration_Impacts.pdf. Internal Cost Pressures Although DOD’s FY2015 base budget request is 23% higher, in real terms, than the budget was in 2000 (the last full year before the terror attacks of 9/11), the department may face increasingly tough budget choices if there is no change in the current statutory caps restricting future defense budgets to increases that would match, or fall just short of, the rate of inflation. The basic reason for this is that within major segments of the DOD budget—excluding war costs—the annual cost-per-active-duty-troop (in inflation-adjusted terms) has been steadily increasing for many years: Congressional Research Service 15 Defense: FY2015 Authorization and Appropriations • Military personnel funding per capita (excluding most of the cost of medical care) has increased by nearly 27% since 2000. Major contributing factors included annual pay raises that frequently exceeded the average rate of pay hikes in the private sector, increased housing allowances intended to eliminate out-ofpocket costs for personnel not living in government-provided housing, and various policy changes that have increased pay and medical benefits for military retirees. • Operation and Maintenance (O&M) funding, which covers deployments, training, operation of bases, repair and maintenance of equipment and facilities and most of DOD’s civilian payroll and health care costs, has been growing for more than three decades, relative to the size of the force, at an average annual rate of 2.7% above the cost of inflation. • Spending on acquisition (procurement plus R&D) per troop has increased in real terms as developments in technology make each new generation of weaponry more expensive (as well as more capable) than the generation it replaces. Moreover, combat in Iraq and Afghanistan has fostered new requirements for procurement associated with force protection, communications and transportation.12 If DOD discretionary spending (adjusted for inflation) remains essentially flat through the early 2020s as current law (i.e., the BBA spending caps) requires, and if the real per capita costs of personnel, O&M, and procurement continue to increase, some combination of reductions in the size and/or readiness of the force and reductions in the scope of planned modernization may have to occur. FY2015 Base Budget Highlights According to Administration officials, the $495.6 billion request for discretionary budget authority in DOD’s base budget was intended support the national strategy outlined in DOD’s 2014 Quadrennial Defense Review (QDR) published concurrently with the funding request.13 In general terms, the request was presented as an effort to accommodate both changing security requirements and more constrained budgets by reducing the size of the force—particularly the Army and Marine Corps—while modernizing the force and keeping it trained for a broader range of missions. Following are some major themes of the Administration’s FY2015 base budget request. 12 Acquisition spending-per-troop has shown particularly sharp increases during the two most recent periods of sustained defense budget increases: the so-called “Reagan buildup” of the early and mid-1980s and the post-9/11 buildup that peaked in 2010. 13 Department of Defense, Quadrennial Defense Review, 2014, at http://www.defense.gov/pubs/ 2014_Quadrennial_Defense_Review.pdf (hereinafter cited as “2014 QDR”). Congressional Research Service 16 Defense: FY2015 Authorization and Appropriations Implementing the 2014 Quadrennial Defense Review (QDR) A QDR, mandated by law14 to be conducted during the first year of every four-year presidential term, is required to “delineate a national defense strategy”; to determine the force structure, modernization plans, and infrastructure required to implement that strategy; and to craft a budget plan that would fund it. The review is required by law to take a 20-year outlook, and to be fiscally unconstrained by the President’s budget request. Some critics faulted the 2014 QDR for focusing on near-term security issues and accepting the limitations imposed by the Administration’s budget: [T]he 2014 QDR focused largely on the planned force structure associated with the five-year Future Years Defense Program [covering 2015-2019], and it contained a strategy that assumes increased risk to the force, without specifying the resources required to execute the strategy at a low-to-moderate level of risk.15 The Administration, on the other hand, characterized the 2014 QDR as “strategy-driven and resource-informed.”16 The DOD priorities outlined in the 2014 QDR were based on the Defense Strategic Guidance17 (DSG) issued by the Administration in January 2012. That earlier document was written as a blueprint for reshaping by 2020 a U.S. defense establishment that had been focused for more than a decade on very specific types of operations in Iraq and Afghanistan. Among the shifts proposed by DSG that were echoed in the 2014 QDR are the following: • DOD will “rebalance” its global posture to emphasize operations in the AsiaPacific region and the Middle East. • DOD will maintain a large enough force to win a major conventional war in one region while, concurrently, being able to inflict enough damage on a potential aggressor in a second region to deter that country from launching a second attack. • DOD will not maintain an active-duty force large enough to conduct large-scale stability operations on a prolonged basis, such those conducted in Iraq and Afghanistan over the past decade. • DOD will place more emphasis on being able to project military power in regions to which potential adversaries will try to deny them access with precision-guided missiles and other advanced weapons. • In a departure from the practice in recent years of having forces concentrate on training for the types of missions being carried out in Iraq and Afghanistan, 14 10 U.S.C. §118. For additional background, see CRS Report R43403, The 2014 Quadrennial Defense Review (QDR) and Defense Strategy: Issues for Congress, by (name redacted). 15 See U.S. Congress, House Armed Services, Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015, report to accompany H.R. 4435, 113th Cong., 2nd sess., May 13, 2014, H, Rept. 113-446 (Washington: GPO, 2014), p. 227. 16 2014 QDR, p. 1. 17 For further analysis, see CRS Report R42146, Assessing the January 2012 Defense Strategic Guidance (DSG): In Brief, by (name redacted) and (name redacted). Congressional Research Service 17 Defense: FY2015 Authorization and Appropriations forces will train for operating across the spectrum of conflict, from major conventional wars to peacekeeping and stability operations. • DOD will invest in capabilities other than traditional combat forces, including Special Operations Forces, Intelligence, Surveillance, and Reconnaissance (ISR) capabilities, and cyberspace defenses. • DOD will try to improve its ability to help other countries bolster their own security forces to partner more effectively with U.S. forces in missions of mutual interest. Manpower Issues Size of the Force The Administration’s FY2015 budget request projected continuation of the reduction in the number of active-component personnel begun in FY2013, with the Army and Marine Corps slated to absorb most of the reduction. Originally, the plan was that, by FY2017, the Army would drop to 490,000 active-duty soldiers, while the size of the Marine Corps would drop to 182,100. In effect, the two services thus would give up the 92,000 personnel that had been added to their strength in 2007, ending up slightly larger than they had been in 2001, the last budget year before the terrorist attacks of 9/11. With the FY2014 budget request, the planned drawdown was accelerated, with the two services slated to reach their new, lower ceilings by FY2015. However, the FY2015 budget request projected that, even if the BCA spending caps were removed, by FY2019 the Army will be further reduced, stabilizing at between 440,000 and 450,000 active-duty personnel. If the BCA caps remain in force, the projection is for an Army of 420,000 and a Marine Corps of 175,000. (See Table 8.) Table 8. Active Component End-Strength (Base Budget) (numbers in thousands; totals may not add due to rounding) Projected FY2019 (w/o sequester) Projected FY2019 (with sequester) FY2001 FY2010 FY2014 FY2015 request Army 481 566 520 490 440 to 450 420 Marine Corps 173 202 190 183 182 175 Navy 372 328 324 324 n/a n/a Air Force 354 334 328 311 n/a n/a Total 1,380 1,430 1,362 1,309 n/a n/a Source: Data for 2001 and 2010 from DOD Comptroller, National Defense Budget Estimates for FY2015 (“The Green Book”), Table 7-5, pp. 254-256; Data for FY2014 and 2015 from House Armed Services Committee, H. Rept. 113-446, Report on the Howard P. “Buck” McKeon National Defense Authorization Act for FY2015, p. 136; Projected data for 2019 from DOD Comptroller, “Briefing on the FY2015 Budget Request,” http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2015/fy2015_Budget_Request.pdf. Notes: The Administration request would fund in the base budget end strength of 182,700 for the Marine Corps, which is the level to which the Administration had planned to reduce that service prior to completion of the 2014 QDR. An additional 1,400 members of that service would be funded in the OCO budget. Congressional Research Service 18 Defense: FY2015 Authorization and Appropriations In FY2001, the last budget year before the post-9/11 buildup of U.S. force, the combined endstrength of the active component Army and Marine Corps was about 653,000—roughly twothirds of its FY1987 post-Vietnam, Cold War peak. Compared with their manpower in FY2001, the two services had grown by about 18% in FY2010, their peak year of their post-9/11 endstrength. Compared with that same baseline, the current plan would reduce their size by 5% if the spending caps were lifted and by 9% if the caps remained in force. (See Figure 6.) Figure 6. Army and Marine Corps end-strength (intervals on the horizontal axis are not equal) 1000 900 active component personnel 800 700 600 500 400 300 200 100 0 FY1987 FY2001 Army FY2010 FY2015 FY2019 w/o sequester FY2019 with sequester Marine Corps Source: Data for 1987, 2001, 2010, and 2015 from DOD Comptroller, National Defense Budget Estimates for FY2015 (“The Green Book”), Table 7-5, pp. 254-56; Projected data for 2019 from DOD Comptroller, “Briefing on the FY2015 Budget Request,” http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2015/ fy2015_Budget_Request.pdf. Notes: The Administration estimates that the Army’s end-strength in FY2019 will be between 440,000 and 450,000, if the sequestration-level budget caps are lifted. In this figure, the “FY2019 w/o sequester” column reflects Army end-strength of 440,000. FY1987 marked the peak level of active-component Army and Marine strength during the Reagan buildup of the Cold War. FY2010 was the peak level for the two services during the period of operations in Iraq and Afghanistan. The Administration’s FY2015 request also assumed a reduction of 12,900 personnel in the reserve components. More than half that cut would be taken from the Army Reserve and Army National Congressional Research Service 19 Defense: FY2015 Authorization and Appropriations Guard which—taken together—account for two-thirds of Selected Reserve personnel.18 As is the case with the Army’s active component, that service’s two reserve components would continue to shrink under the Administration’s budget plan. Compared with their FY2014 end-strength, the combined end-strength of the Army Reserve and Army National Guard would be reduced by 5% by FY2019 if DOD is granted relief from the current budget caps and by 10% if the caps remain in force. (See Table 9.) Table 9. Selected Reserve Component End-Strength (numbers in thousands; totals may not add due to rounding) FY2014 Authorized FY2015 Request Projected FY2019 w/o sequester Projected FY2019 with sequester Army Reserve 205 202 195 185 Army National Guard 354 350 335 315 Navy Reserve 59 57 n/a n/a Marine Corps Reserve 40 39 n/a n/a Air Force Reserve 70 67 n/a n/a Air National Guard 105 105 n/a n/a Total 834 821 Source: Data for 2014 and 2015 from Senate Armed Services Committee, Report on the Carl Levin National Defense Authorization Act for FY2015, S. Rept. 113-176, p. 99; projected data for 2019 from DOD Comptroller, “Briefing on the FY2015 Budget Request,” http://comptroller.defense.gov/Portals/45/Documents/ defbudget/fy2015/fy2015_Budget_Request.pdf. Compensation By DOD’s accounting, more than one-third of the department’s annual budget funds pay and benefits for military personnel. Adding the cost of pay and benefits for DOD’s nearly 800,000 civilian employees—most of whose compensation is funded in the Operation and Maintenance accounts—brings the total cost of compensation to nearly one-half the annual DOD budget. (See Table 10.) Table 10. DOD Pay and Benefits as a Share of Total Budget Authority (amounts in billions of dollars) FY2001 enacted % of 2001 DOD FY2015 request Military Personnel Appropriations 77.3 129.0 TRICARE for Life accrual — 6.2 Defense Health Program 13.7 34.6% 32.5 % of 2015 DOD 35.6% 18 The Selected Reserve consists of personnel who are assigned to organized units that regularly assemble for training a certain number of times in the course of a year. It does not include members of the Individual Ready Reserve (IRR), who are not assigned to units that regularly assemble for training, but who can be mobilized as individuals. Congressional Research Service 20 Defense: FY2015 Authorization and Appropriations FY2001 enacted % of 2001 DOD FY2015 request DOD dependents’ schools 1.5 3.0 Military Family Housing 3.7 1.2 Commissary Subsidy 1.0 1.1 Other Benefit Programs 2.4 3.6 Subtotal: Military Pay and Benefits 99.5 176.6 DOD civilian pay and benefits 39.8 69.8 TOTAL: DOD Pay and Benefits 139.3 48.5% 246.4 % of 2015 DOD 49.7% Source: DOD Comptroller, FY2015 DOD Budget Request, Overview, March 2014, p. 5-1, http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2015/ fy2015_Budget_Request_Overview_Book.pdf. Note: The decline in spending for government-provided housing for military families reflects a policy of paying servicemembers a housing allowance to cover the cost of acquiring housing in the private sector near their duty stations. The total for housing allowances (which are included in “Military Personnel Appropriations”) rose from $6.4 billion in FY2001 to $19.3 billion in the FY2015 request. The FY2015 budget request proposed several changes in compensation policy which, the Administration maintains, would not reduce the compensation of any servicemember but would slow the rate at which compensation costs were rising year to year: • Basic pay, which typically accounts for about two-thirds of the cash compensation of an active-duty servicemember, would be increased by 1% in FY2015 and FY2016. This is a lower rate than the expected increase in the Labor Department’s Employment Cost Index (ECI), which tracks changes in private sector pay. • Generals and admirals would receive no increase in basic pay in FY2015. • Servicemembers’ Basic Allowance for Housing (BAH)—a cash payment based on members’ rank, number of dependents, and housing costs in the area where they are stationed—has been intended to cover 100% of housing rental expenses for personnel who are not provided with government-supplied housing. Under the Administration’s plan, the allowance would increase more slowly than rental costs until the allowance covers 95% of rent and utility costs, requiring servicemembers to cover the remaining 5%.19 • The subsidy for commissaries—a worldwide chain of 284 supermarkets in which servicemembers, retirees, and their dependents buy items at cost-plus-5%— would be reduced by a total of $1 billion over three years (FY2015-FY2017).20 • As it had done in its budget requests for FY2013 and FY2014, the Administration included in its FY2015 DOD budget proposals to create some new fees and 19 The Administration’s proposal also would eliminate renters’ insurance from the costs to be covered by the housing allowance. In the 1990s, the housing allowance typically covered 82% of a servicemember’s housing costs. 20 DOD estimates that commissary prices are about 30% lower than those in nearby commercial supermarkets. See Defense Commissary Agency, “History of U.S. Military Commissaries,” at http://www.commissaries.com/history.cfm. Congressional Research Service 21 Defense: FY2015 Authorization and Appropriations copayment requirements and to increase some existing fees for beneficiaries of TRICARE, DOD’s medical insurance program. Defense Health Program The FY2015 budget request included a total of $47.4 billion for DOD’s health care system, which serves more than 9,600,000 active and retired servicemembers, their dependents, and their survivors. Of that total, the Defense Health Program (DHP) was slated to receive $32.0 billion, 97% of which is Operation and Maintenance funding that operates DOD’s 56 hospitals and 608 medical and dental clinics in addition to funding private sector medical care purchased by the TRICARE system under contract.21 The DHP budget includes compensation for the health care system’s 67,000 civilian employees. The other major components of DOD’s health care budget are • $8.6 billion (included in the services’ Military Personnel accounts) to fund pay and benefits for the 85,000 uniformed medical personnel, many of who support the noncombat health care mission directly or indirectly; and • $6.2 billion in payments to the Medicare-Eligible Retiree Health Care Fund, created in 2003 to provide for the future cost of post-retirement health care of personnel currently on active duty (and their dependents) under the so-called TRICARE-for-Life program.22 Like several previous DOD budget requests since 2005, the FY2015 request incorporated proposals intended to slow the rate of growth of DOD’s health care costs. The health care system (including military personnel costs), which accounted for 6.0% of DOD’s base budget in FY2001, accounted for 9.4% of the FY2015 base budget request. Compared to what the FY2015 DOD health care budget would have been in the absence of the Administrations proposed TRICARE changes, the Administration request incorporated: • an addition of $88 million to cover the administrative cost of consolidating into a single TRICARE coverage plan the current menu of three TRICARE options; • a reduction of $180 million to reflect the higher copayment fees for pharmaceuticals that TRICARE beneficiaries would pay under one of the Administration’s legislative proposals, which is intended to encourage the use of generic medications and mail-order refills; and • a reduction of $92 million in anticipation of savings that result from the consolidation and reorganization of some DOD health care facilities on the basis of a DOD study currently underway. 21 The DHP budget request also includes $655 million for medical R&D, $308 million for procurement, and $161 million in an unallocated reduction. In addition, the FY2015 military construction budget request includes $486 million for medical facilities. 22 Technically, DOD’s annual accrual payment into the TRICARE-for-Life fund is discretionary (rather than mandatory) funding and thus is covered by the annual National Defense Authorization Act. However, by law (10 U.S.C. §1116), the payment is made automatically by a permanent appropriation on the basis of actuarial calculations, so it is not included in the annual DOD appropriations bill. Congressional Research Service 22 Defense: FY2015 Authorization and Appropriations The Administration also proposed an enrollment fee for military retirees joining the TRICAREfor-Life program. Currently, there is no such fee. Personnel Policy, Military Compensation, and TRICARE Issues For more detailed analysis of congressional action on the Administration’s proposed changes to military personnel policy and compensation (including proposed changes to TRICARE), see CRS Report R43647, FY2015 National Defense Authorization Act: Selected Military Personnel Issues, coordinated by (name redacted). Force Structure The Administration’s FY2015 budget request and its projected requests through FY2019 assumed that reductions would be made in several components of the force in addition to some reorganizations. Moreover, the Administration said that deeper reductions would be necessary if the defense spending caps currently in force were not raised, officials said. Army Force Reductions In the Army’s active component, the number of brigade combat teams (BCTs)—ground combat units of 4,000 to 5,000 soldiers—would drop from 36 to 32. The remaining BCTs each would be enlarged with the addition of a third combat battalion. The Army also would reduce from 13 to 11 the number of combat aviation brigades—each of which fields upwards of 100 combat and transport helicopters as well as pilotless drones. To save an estimated $1.1 billion in annual operating costs, the service would dispose of nearly 800 of its almost 4,600 helicopters. In the process, the service hoped to economize on its aviation training and maintenance overhead by eliminating entire fleets of several older types of aircraft. More controversially, the plan would transfer to active-component Army units all 192 of the Apache attack helicopters currently assigned to National Guard units, while transferring to Guard units 111 Blackhawk troop-carrying helicopters currently assigned to the active Army. Navy Force Reductions The FY2015 budget request for the Navy would have paid to remove spent nuclear fuel from the two reactors that power the 25-year-old aircraft carrier U.S.S. George Washington, for which the Navy long had planned a mid-life refueling and modernization to equip the ship for another 25 years of service. But Administration officials said that, if the defense spending caps currently in force were not removed, the Navy would retire the ship instead, reducing the carrier force to 10 ships. To save money, the Navy’s budget also would remove from service—but not scrap—half its fleet of 22 Aegis cruisers and 3 of its amphibious landing ships. The vessels would be modernized over several years and put back in service one-by-one to replace similar ships that had remained in service and had worn out. Congressional Research Service 23 Defense: FY2015 Authorization and Appropriations Air Force Reductions Contending that the Air Force could not sustain its current force under the reduced budgets now in prospect, Administration officials planned to retire entire fleets of certain types of aircraft so they could shut down the associated training and maintenance pipelines. They planned to retire the U-2 long-range reconnaissance plane which, they said, could be replaced by long-range drones. They also planned to retire the A-10 ground attack plane, contending that many other types of aircraft could perform its missions using precision-guided bombs and missiles. If the future defense spending caps remained in force, they said, the Service would propose in future budgets retiring its force of KC-10 mid-air refueling tankers and one version of the Global Hawk long-range reconnaissance drone. Modernization According to the Administration, its FY2015 DOD budget request and plan for future DOD budgets would modernize the smaller force in prospect with an emphasis on systems that could prevail over a “near-peer competitor”—that is, another traditionally organized military force equipped with high-tech weaponry and communications. Compared with previously announced modernization plans, however, the request reflected tighter defense budgets both in reductions in the number of some items acquired and, in some cases, a shift to less technologically ambitious development efforts. Strategic Nuclear Forces The budget request would sustain the existing “triad” of strategic nuclear weapons launchers: manned bombers, land-based ICBMs, and ballistic missile launching submarines. It included $913 million in FY2015 and an additional $8.9 billion over the course of the following four years to develop a new long-range bomber to replace B-52s that have been in service since the early 1960s.23 The request also included $1.22 billion to continue developing a new missile-launching sub (and its associated nuclear power plant) to replace the ten Ohio-class ships currently in service, which are slated to begin retiring in 2025.24 Ground Combat Systems Both the Army and the Marine Corps sidetracked efforts to push the technology envelope in developing a new generation of armored combat vehicles, putting emphasis, instead, on less complex programs. The Army’s highest-priced R&D program, the Ground Combat Vehicle (GCV) program (intended as a successor to the Bradley armored troop carrier) was cancelled weeks before the FY2015 DOD budget was made public.25 According to DOD, this single move will reduce by a total of $3.7 billion the budgets requested in FY2015-FY2019. 23 For additional information and analysis, see CRS Report RL34406, Air Force Next-Generation Bomber: Background and Issues for Congress, by (name redacted). 24 For additional information and analysis, see CRS Report R41129, Navy Ohio Replacement (SSBN[X]) Ballistic Missile Submarine Program: Background and Issues for Congress, by (name redacted). 25 FY2014 budget documents, published in April 2013, projected that DOD would request $953.1 billion to continue the GCV program in FY2015. For additional information and analysis, see CRS Report R41597, The Army’s Ground (continued...) Congressional Research Service 24 Defense: FY2015 Authorization and Appropriations The budget request included $92.4 million to continue development of an Advanced MultiPurpose Vehicle (AMPV) intended to replace some 3,000 Vietnam War-era M-113 troop carriers currently used as mobile command posts and battlefield ambulances and supply carriers.26 In 2012, the Marine Corps had abandoned its Expeditionary Fighting Vehicle (EFV) program, an effort to develop an amphibious armored vehicle that would move from ship to shore at 50 mph and then function as a troop carrier. Other efforts to develop less technologically ambitious combat vehicles for the Marines have been slow to gain momentum in recent years. With the existing fleet of AAV-7 amphibious troop carriers reaching 40 years of service, the Marine Corps FY2015 budget request includes $105.5 million to develop an Amphibious Combat Vehicle (ACV)—a conventional armored troop carrier that would replace some of the older AAV-7s. Unlike the vehicle it would replace, the ACV might travel on wheels rather than on tracks, and would be carried close to shore in a landing craft.27 Ships Reflecting the Administration’s priority on forces that could hold their own in high-tech, conventional warfare, the FY2015 budget request continued the policy of funding annually two Virginia-class nuclear-powered submarines (requesting $5.88 billion for the program) and two Arleigh Burke-class destroyers equipped with the Aegis anti-missile/anti-aircraft system (for which the budget includes $2.81 billion).28 The emphasis on systems that can fight in intense conventional combat was the Administration’s stated rationale for funding in FY2015 three Littoral Combat Ships [LCSs], rather than the four ships that had been planned. Although the Navy had planned to buy a total of 52 of the ships (two versions of which are being built), Defense Secretary Hagel directed the Navy to buy no additional LCS ships (beyond those requested for FY2015) and to come up with a design for a more robust and combat-capable ship. In the event, DOD announced on December 11, 2014 that the Navy would continue purchasing both LCS versions with additional firepower and other improvements.29 Aircraft The Administration’s request would continue funding several major aircraft programs that have been among DOD’s top priorities, though the amounts requested for FY2015 were less than had been projected in DOD’s FY2014 budget documents. (...continued) Combat Vehicle (GCV) Program: Background and Issues for Congress, by (name redacted). 26 For additional information and analysis, see CRS Report R43240, The Army’s Armored Multi-Purpose Vehicle (AMPV): Background and Issues for Congress, by (name redacted). 27 For additional information and analysis, see CRS Report R42723, Marine Corps Amphibious Combat Vehicle (ACV) and Marine Personnel Carrier (MPC): Background and Issues for Congress, by (name redacted). 28 For additional information and analysis, see CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress, by (name redacted), and CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress, by (name redacted). 29 For additional information and analysis, see CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress, by (name redacted). Congressional Research Service 25 Defense: FY2015 Authorization and Appropriations For the three versions of the F-35 Joint Strike fighter used by the Navy, Marine Corps and Air Force, the budget requested $5.82 billion for 34 planes. This amounted to a reduction of eight planes ($1.15 billion) from the FY2015 request that was projected in DOD’s FY2014 budget request.30 The request included a total of $2.31 billion to continue development and begin production of the KC-46A mid-air refueling tanker, a modification of the Boeing 767 jetliner intended to replace KC-135 tankers that date from the 1960s.31 No funds were requested by the Navy to continue production of either the F/A-18E/F carrierbased strike fighter or the EF-18G Growler, a variant of the fighter equipped to jam enemy radars. Some critics of the F-35 view continued production of the F/A-18E/F as a possible alternative to the Navy’s version of the F-35.32 Readiness DOD characterized the FY2015 budget request as a blueprint for the revitalization of conventional warfighting capabilities that had atrophied during a decade of counterinsurgency operations in Iraq and Afghanistan. DOD budget documents cited three factors as contributing to a shortfall in current readiness:33 • Mandatory deficit reduction measures enforced by sequestration in FY2013 and by spending caps in FY2012, FY2104, and FY2015, which have constrained budgets for training, equipment maintenance, and facilities upkeep. • Maintenance of relatively large forces in Iraq and Afghanistan that required units to deploy frequently for operations in a demanding environment without adequate time between deployments for rest and rehabilitation of personnel and equipment. • A constant need to devote available training time and equipment to preparing troops to fight a very specific, limited type of war at the expense of preparing for conventional combat against a technologically advanced adversary. For FY2015, DOD’s base budget request for operations and maintenance (O&M) accounts— which fund training, equipment maintenance, facilities upkeep and other activities contributing to readiness—amounted to $198.7 billion. This is 3.1% more than was appropriated for base budget O&M funding in FY2014. However, in the FY2014 Consolidated Appropriations Act (P.L. 11376), Congress shifted to the part of the bill funding war costs $9.15 billion for O&M activities that DOD had presented as part of the base budget. If those funds are counted as part of the 30 For additional information and analysis, see CRS Report RL30563, F-35 Joint Strike Fighter (JSF) Program, by (name redacted). 31 For additional information and analysis, see CRS Report RL34398, Air Force KC-46A Tanker Aircraft Program, by (name redacted). 32 For additional information and analysis, see CRS Report RL30624, Navy F/A-18E/F and EA-18G Aircraft Program, by (name redacted). 33 DOD Comptroller, FY2015 DOD Budget Request, Overview, March 2014, pp. 3-1 thru 3-22, at http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2015/fy2015_Budget_Request_Overview_Book.pdf. Congressional Research Service 26 Defense: FY2015 Authorization and Appropriations FY2014 base budget O&M appropriation, the FY2015 O&M request would represent a reduction of 1.6%. Efficiencies In addition to proposed reductions in the size of the force and the pace of modernization, the FY2015 request—like the three budgets that preceded it—included a number of organizational and management initiatives that are intended to further reduce DOD operating costs:34 • The FY2012 request projected savings totaling $150 billion over the course of FY2012-FY2016. • The FY2013 request projected savings of an additional $60 billion in FY2013FY2017. • The FY2014 request projected savings of an additional $35 billion in FY2014FY2018. The FY2015 budget assumed operational efficiencies that would reduce DOD costs in FY2015FY2019 by an estimated $73.3 billion, including the following projected savings: • a 20% reduction in headquarters budgets expected to save an estimated $5.3 billion. • various proposed efficiencies in the Defense Health Program (aside from the proposed changes in the TRICARE medical insurance system) projected to save $17.3 billion. • cuts to training, travel and other support costs expected to save $21.0 billion; and • various efficiencies in contracting expected to save $29.9 billion. The FY2015 budget request and five-year projection also assumed reductions in manpower and in military facilities construction funds totaling $12.2 billion. In addition, the budget request assumed a so-called “BRAC”-round of base-closures that would cost $1.9 billion through FY2019 but would yield annual savings thereafter. 34 DOD Comptroller, FY2015 DOD Budget Request, Overview, March 2014, pp. 4-1 thru 4-3, at http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2015/fy2015_Budget_Request_Overview_Book.pdf. Congressional Research Service 27 Defense: FY2015 Authorization and Appropriations FY2015 National Defense Authorization Act (NDAA): H.R. 4435, S. 2410, H.R. 3979 The versions of the National Defense Authorization Act (NDAA) for FY2015 that were passed by the House on May 25, 2014 (H.R. 4435) and reported on June 2, 2014, by the Senate Armed Services Committee (S. 2410) each would have authorized total DOD base budget appropriations that would have exceeded the Administration’s base budget request by less than $500 million. The base budget authorized by H.R. 3979—the version of the NDAA that was cleared for the President on December 8, 2014—fell between the House and Senate versions of the bill, authorizing $495.9 billion, which is $347 million more than the Administration requested. (See Table 11.) Authorized funding levels for Overseas Contingency Operations (OCO) in the House-passed, Senate committee reported, and final versions of the FY2015 NDAA are not comparable. The Administration’s original FY2015 budget request included $79.4 billion for OCO, but that amount—which was identical with DOD’s enacted FY2014 OCO appropriation—was specifically described as a placeholder that would be replaced with an updated request once decisions were made about the number of U.S. troops slated to remain in Afghanistan through FY2015. Before the Administration submitted its revised OCO request, the House passed H.R. 4435, which would have authorized the placeholder OCO amount, and the Senate Armed Services Committee reported S. 2410, which would have provided a blanket authorization for OCO appropriations without specifying the amount. House and Senate negotiators drafting H.R. 3979 took account of total FY2015 OCO funding requests totaling $63.7 billion, which the Administration submitted in three parts: • On June 26, 2014, it requested $53.7 billion for operations associated with Afghanistan and Iraq plus $4.0 billion for a Counterterrorism Partnerships Fund and $925 million for a European Reassurance Initiative to signal U.S. support for countries unsettled by Russia’s occupation of Ukrainian territory. • On November 5, 2014, it requested $112 million for the Defense Advanced Research Projects Agency (DARPA) to develop vaccines and other technologies relevant to the effort to combat the Ebola virus. • And on November 10, 2014, it requested $5.0 billion for operations against the Islamic State. Congressional Research Service 28 Defense: FY2015 Authorization and Appropriations Table 11. FY2015 National Defense Authorization Act (H.R. 4435; S. 2410; H.R. 3979) (amounts in millions of dollars of discretionary budget authority) Administration Request House-passed H.R. 4435 Senate Committeereported S. 2410 Procurement 89,508 90,984 89,549 91,399 Research and Development 63,534 63,791 63,484 63,826 Operation and Maintenance 165,722 164,555 166,075 165,417 Military Personnel 135,194 135,244 135,147 134,716 Defense Health Program and Other Authorizations 35,029 34,742 35,266 33,980 Military Construction and Family Housing 6,557 6,533 6,452 6,552 Subtotal: DOD Base Budget 495,544 495,849 495,973 495,891 Atomic Energy Defense Activities (Energy Dept.) 17,873 17,565 17,687 17,524 513,417 513,414 513,660 513,415 Subtotal: Overseas Contingency Operations 63,733 79,445 0 63,732 (Counterterrorism Partnerships Fund) non-add (4,000) 0 0 (1,300) (925) 0 0 (371) 577,150 592,859 513,660 577,147 Enacted Bill H.R. 3979 Base Budget TOTAL: National Defense Budget Function Base Budget (European Reassurance Initiative) non-add GRAND TOTAL: FY2015 NDAA Sources: House Armed Services Committee, H.Rept. 113-446, Report on the Howard P. “Buck” McKeon National Defense Authorization Act for FY2015, pp. 372-375; Senate Armed Services Committee, S.Rept. 113-176, Report on the Carl Levin National Defense Authorization Act for FY2015, pp. 296-299; Joint Explanatory Statement to accompany the National Defense Authorization Act for Fiscal Year 2015 [H.R. 3979] on the House Armed Services Committee website at http://armedservices.house.gov/index.cfm/files/serve?File_id=78ED7A79-906643FD-AA75-1D8F14B4B4A2. Notes: Administration officials described the $79.4 billion OCO total included in the FY2015 budget request as a “placeholder” Subsequent to House passage of H.R. 4435 and Senate committee approval of S. 2410, the Administration sent to Congress several amendments to its original OCO request. In sum, the final FY2015 OCO request amounted to $63.7 billion: $53.7 billion for operations related to Afghanistan and Iraq, $5 billion to combat the Islamic State, $4 billion for Counterterrorism Partnership activities, $925 million for actions to reassure European allies in the wake of Russia's occupation of Ukrainian territory, and $112 million for DOD research related to combatting the Ebola virus. NDAA Highlights The House and Senate versions of the bill each barred—during FY2015—several of the costreduction initiatives that had been incorporated into the Administration’s budget request. Both bills included provisions that would bar Administration proposals for a new round of military base closures, the retirement of various Air Force planes (including A-10 ground attack aircraft), and changes in the military commissary system. However, the final version of the bill approved limited steps that could lead to eventual implementation of many of the Administration’s proposals to reduce the rate of growth of military Congressional Research Service 29 Defense: FY2015 Authorization and Appropriations compensation and to retire some types of weapons. On several of these issues, including the proposed transfer of Apache helicopters from the National Guard to the Army, the housing allowance for military personnel, and pharmacy co-payments for TRICARE beneficiaries, the Joint Explanatory Statement on H.R. 3979 agreed to by House and Senate negotiators specifically cited the possibility that Congress might, at some future date, agree to these or similar costreduction proposals. (See Table 12.) Table 12. Selected Administration Cost Cutting Proposals Issue Administration Proposal House-passed H.R. 4435 Senate Committeereported S. 2410 Enacted Bill H.R. 3979 Annual Raise in Military Basic Pay 1.0%; freeze for generals and admirals Authorizes 1.8% raise (added cost of $534.9 million); Authorize freeze for generals and admirals (Section 602) Supports the Administration proposal (Section 601) Joint Explanatory Statement notes President’s authority to set the raise at 1%; Bill authorizes $215.3 million more than requested for basic pay; Bill freezes pay for generals and admirals (Section 601) Annual Commissary Subsidy ($1.4 billion in FY2014) 3-year phase-in of $1 billion reduction, beginning with $200 million reduction in FY2015 Adds $100 million to reverse Administration proposal, pending study (Section 632) Adds $200 million to reverse Administration proposal; requires DOD report Adds $100 million to reverse budget proposal: Requires study of possible cost reductions (Section 634) Housing Allowance for assignment in U.S. (currently covers 100% of cost) Gradually reduce rate of growth until allowance covers 95% of cost Rejects proposal; Includes no change in current law governing housing allowance Authorizes the Administration proposal (Section 603) Authorizes reduction of allowance in FY2015 by 1% of average housing costs (Section 604) TRICARE medical insurance for active duty and retired servicemembers and their dependents Proposes increased deductibles and enrollment and participation fees and pharmacy copayments Authorizes none of the proposed changes Authorizes only the proposed increase in pharmacy copayments (Section 702) Authorizes a $3 increase in pharmacy co-payments (Section 702) Decision to retire or refuel the aircraft carrier USS George Washington (previously slated for refueling and modernization in FY2016 to provide 25 years of additional service) Defer until 2016 choice between refueling the ship and retiring it (DOD five-year budget plan assumes ship would be retired in FY2016) Adds $796.2 million for refueling and modernization; bars use of 50% of Section of Defense office budget until funds are obligated to upgrade the ship (Section 1024) Authorizes transfer of up to $650 million from other accounts to refuel the ship (Section 123); Bar use of funds for any action regarding the ship that are not necessary for refueling (Section 1021) Adds $795.1 million for refueling and modernization; Incorporates Senate provision barring spending for any purpose not necessary for refueling and modernization (Section 1023) Congressional Research Service 30 Defense: FY2015 Authorization and Appropriations Senate Committeereported S. 2410 Administration Proposal House-passed H.R. 4435 Status of 11 Aegis cruisers and three amphibious landing ships near the midpoint of expected service life Mothball the ships and gradually modernize them and put them back into service to replace similar ships as they wear out Prohibits inactivation of any of the ships; Requires that 2 cruisers be modernized in FY2015 (Section 1026) Establishes rules for the Administration’s phased modernization plan; Requires that all ships be kept in active service for full expected lifetime (Section 1022) Bars retirement of any of the ships and requires that modernization of two cruisers begin in FY2015 (Section 1026) Army/National Guard helicopter missions Move all Apache attack helicopters from National Guard units to Army units; Re-equip some of those Guard units with Black Hawk troop carriers Prohibits removing Apaches from National Guard units; Adds $105.2 million to buy new Black Hawks and modernize older ones Prohibits moving more than 48 Apaches from National Guard units (Section 1703); Creates commission to study Army/National Guard structure (Sections 1701-09) Adds $145.0 million for new Black Hawks for National Guard units Bars moving any Apaches from National Guard to Army in 2015 but allows moving 48 in 2016 (Section 1712); Creates commission to review Army/National Guard roles (Sections 1701-1707; Adds $103.0 million for National Guard Black Hawks Tomahawk cruise missile production (projected in 2013 to continue thru 2018 at rate of 196 missiles per year) Reduce total purchase, buying the last 100 missiles in FY2015 ($194.3 million) Adds $82.0 million for 96 additional Tomahawks Adds $82 million for 100 additional Tomahawks Adds $82.0 million for 96 additional Tomahawks A-10 ground attack planes. Retire all A-10s Prohibits retirement of A-10s (Section 132); Adds $635.0 million in OCO account to continue operating, and upgrading A-10s Prohibits retirement of any A-10s (Section 134); Adds $339.3 million to continue operating A-10s Bars retirement of any A-10s but allows up to 36 to be removed from daily operation (Section 133); Adds $331.1 million for A-10 operations U-2 intelligence collection planes Replace U-2s with Global Hawk drones Prohibits retirement of U-2s (Section 133) Adds $70.1 million to keep U-2s in service; Cuts $136.0 requested to equip Global Hawks with capability of U-2s Prohibits retirement of U-2s (Section 133); Adds $70.1 million to keep U-2s in service; Cuts $136.0 requested to equip Global Hawks with capability of U2s Issue Congressional Research Service Enacted Bill H.R. 3979 31 Defense: FY2015 Authorization and Appropriations Senate Committeereported S. 2410 Enacted Bill H.R. 3979 Issue Administration Proposal House-passed H.R. 4435 E-3A AWACS radar planes Retire seven (of 31) AWACS Prohibits retirement of more than four AWACS until AF reports how it will meet requirements with planned force of 24 planes (Section 135); Adds $12.2 million for AWACS operations Prohibits retirement of any AWACS (Section 136); Adds $59.5 million to continue operating all 31 planes Prohibits retirement of any AWACS (Section 136); Adds $59.5 million to continue operating all 31 planes military base closures Prepare for a Base Realignment and Closure (BRAC) process in FY2017 Prohibits planning for another BRAC round (Section 2711); Cuts $4.8 million requested for BRAC planning Prohibits planning for another BRAC round (Section 2702); Cuts $4.8 million requested for BRAC planning Prohibits planning for another BRAC round (Section 2711); Cuts $4.8 million requested for BRAC planning Source: Created by the Congressional Research Service As both the House and Senate versions of the NDAA would have done, H.R. 3979 authorizes billions of dollars more than the budget requests for various purposes (with those gross increases offset, in some measure, by proposed cuts to the request). Taken as a whole, the Senate bill’s addons were less ambitious than those that would have been authorized by the House bill: for two big-ticket Navy items—refueling an aircraft carrier and buying an amphibious landing ship—the House bill would have authorized additional funds while the Senate bill would have allowed the Navy to use for those purposes funds that had been appropriated in earlier budgets. For several programs, the increased authorizations provided by the final version of the bill were closer to the higher, House-passed, amounts. For example, H.R. 3979 would add to the amount requested nearly $1.7 billion for the carrier refueling and the additional amphibious landing ship. However, more than $1.0 billion of the final bill’s additional authorization would apply to the OCO budget, which is exempt from the statutory cap on defense spending. (See Table 13.) Table 13. Other Selected Congressional Budget Increases Issue Operation and Maintenance (O&M) “readiness” funding Congressional Research Service House-passed H.R. 4435 Adds $1.11 billion in base budget for increased operational tempo, depot maintenance and other readiness-related activities Senate Committee-reported S. 2410 Adds $586.8 million in base budget for readiness-related activities Enacted Bill H.R. 3979 Adds $267.0 million for readiness in base budget and an additional $666.2 million in OCO budget (which is exempt from budget caps) 32 Defense: FY2015 Authorization and Appropriations Senate Committee-reported S. 2410 Issue House-passed H.R. 4435 EF-18G Growler electronic warfare planes (Navy) Adds $450.0 million for five Growlers Directs the Navy to retain the option of buying additional Growlers; For that purpose, adds $25.0 million and authorizes the use of $75.0 million appropriated in FY2014 (Section 121) Adds $450.0 million for five additional growlers and directs the Navy to retain he option of buying more (Section 125) San Antonio-class (LPD-17) amphibious landing ship (most recently funded of which—the 11th of the class—cost $2.09 billion in FY2012) Adds $800.0 million for a 12th ship of this class; Authorizes incremental funding for the ship (Section 122) Authorizes the Navy to transfer up to $650 million from procurement accounts to fund an additional LPD17 (Section 123) Adds $800.0 million for a 12th ship of this class; Authorizes incremental funding for the ship (Section 121) C-130 Hercules modernization Prohibits cancellation of avionics upgrade for older planes (Section 131); Adds $73.8 million to upgrade avionics and engines Adds $73.8 million to upgrade avionics and engines on older planes Prohibits cancellation of avionics upgrade for older planes (Section 134); Adds $73.8 million to upgrade avionics and engines Armored combat vehicles Adds $192.0 million to upgrade M-1 tanks and modernize armored tank recovery vehicles to sustain the armored vehicle industrial base Adds $136.9 million to modernize Bradley troop carriers, buy tank recovery vehicles, and give tanks more limited modifications to sustain the industrial base Adds $232.9 million modernize Bradleys, buy tank recovery vehicles and provide the more extensive tank upgrades Accrual payments to Military Retired Pay account; (Budget includes $18.9 billion to cover estimated future payments to current servicemembers) No change Adds $500.0 million to cover the cost of P.L. 113-82, exempting persons who joined the service before 1/1/2014 from the BBA’s reduction in the retired pay COLA formuila; Also extends that exemption through 1/1/2016 (Section 621) Extends the exemption created by P.L. 113-82 (Section 623; Does not authorize a corresponding additional payment to the Military Retired Pay account Israeli missile defense systems (Budget includes $176.0 for procurement of Iron Dome defense against short-range rockets and mortars and $96.8 million for R&D on three other systems, for a total of $272.8 million) Adds $176.0 million for Iron Dome and $72.0 million for the other three Israeli missile defense systems (total of $520.8 million authorized) Shifts the $176.0 million requested for Iron Dome procurement to R&D; Adds $175.0 million for R&D on the other three Israeli systems (total of $447.8 million authorized) Adds $175 million for Iron Dome and transfers resulting Iron Dome procurement (totaling $351.0 million) to OCO budget; Adds $123.8 million for R&D on other systems (total of $571.6 million authorized Congressional Research Service Enacted Bill H.R. 3979 33 Defense: FY2015 Authorization and Appropriations Senate Committee-reported S. 2410 House-passed H.R. 4435 Issue Enacted Bill H.R. 3979 Develop a replacement for Russian RD-180 satellite booster Adds $220.0 million to develop a replacement for the Russian-manufactured RD-180 rocket engine used to launch heavy DOD satellites Adds $100.0 million to develop a replacement rocket propulsion system Adds $220.0 million to develop a replacement for the Russianmanufactured RD-180 rocket engine Construction of ballistic missile defense site near the East Coast (in addition to current sites in Alaska and California) Adds $20.0 million for planning and design of East Coast site None None Procurement funding for National Guard and reserve forces Adds $105.2 million Adds $151.8 million Adds $1.35 billion (of which $1.25 billion is in OCO funding) Source: Created by the Congressional Research Service To compensate for the added cost of rejecting at least some Administration-proposed savings and making some sizeable additions to the budget request, H.R. 3979—as the House and Senate versions of the NDAA would have done—would authorize less than the budget requested for many programs, with some of the reductions amounting to hundreds of millions of dollars. While some of the proposed reductions were aimed at slowing down certain acquisition programs, others were justified on grounds that they reflected fact-of-life developments (such as changes in foreign currency exchange rates) and would have no adverse impact on DOD’s FY2015 activities. (See Table 14.) Table 14. Selected Congressional Reductions to the Administration’s FY2015 Request House-passed H.R. 4435 Issue Senate Committee-reported S. 2410 Enacted Bill H.R. 3979 Littoral Combat Ships; Budget requests 3 ships ($1.43 billion) Cuts 1 ship ($450.0 million); Adds $100.0 million for long lead-time components No change to request No change to request KC-46 tanker plane; Budget requests 7 planes ($1.58 billion) Cuts 1 plane ($229.7 million) because of budget constraints No change to request No change to request UCLASS carrier-based, long-range drone; Budget requests $403.0 million Cuts $203.0 million No change to request No change to request Army radios and radars (Budget requests total $1.15 billion) Cuts total of $225.0 million from three programs Cuts $293.4 million from the same three programs Cuts $225.0 million from the three programs Congressional Research Service 34 Defense: FY2015 Authorization and Appropriations Senate Committee-reported S. 2410 House-passed H.R. 4435 Issue Enacted Bill H.R. 3979 Anticipated cost reductions due to fluctuations in currency exchange rates Cuts $ 414.1 million Cuts $220.9 million Cuts $220.9 million Smaller civilian workforce than budget assumed Cuts $315.0 million Cuts 250.0 million Cuts $421.3 million Overestimated military personnel costs in previous budgets No change to request Cut’s $761.1 million Cuts $688.0 million Reduction of funding for service contractors Cuts $817.5 million No change to request No change to request Source: Created by the Congressional Research Service Military Personnel Issues (Authorization) CRS Analysis of Selected Military Personnel Issues For additional detail and analysis of selected military personnel issues touched upon in the FY2015 NDAA, see CRS Report R43647, FY2015 National Defense Authorization Act: Selected Military Personnel Issues, coordinated by (name re dacted). End-Strength Reductions (Authorization) As the House and Senate versions of the FY2014 NDAA would have done, H.R. 3979 authorizes the Administration-proposed reductions in the size of the active and reserve components of the services. This will reduce active component end-strength by 52,800 to a total of 1,361,400 personnel (Table 8) while reducing reserve component end-strength by 12,900 to a total of 820,800 personnel (Table 9).35 In its report on H.R. 4435, the House Armed Services Committee expressed concern that, considering ongoing overseas commitments of U.S. forces, the additional reductions that will be necessary if the budget caps are not lifted, “may have serious implications on the capacity and capability of the All-Volunteer Force and the ability for the services to meet the National Defense Strategy.”36 The House committee also directed the Government Accountability Office (GAO) to investigate why 25% of Army Reserve and 30% of Army National Guard personnel are not available for mobilization at any given time, mostly for medical reasons. 35 The NDAA also authorizes the annual end-strength of the Coast Guard Reserve, for which both bills would maintain the current end-strength of 9,000 personnel, as requested. 36 H.Rept. 113-446, p. 135. Congressional Research Service 35 Defense: FY2015 Authorization and Appropriations Compensation and Benefits Changes (Authorization) The House-passed version of the FY2015 NDAA would block each of the Administration’s proposals to slow the rate of growth in military pay and benefits, while the version reported by the Senate Armed Services Committee would authorize some of those initiatives.37 In its report on H.R. 4435, the House Armed Services Committee warned of the cumulative effect on relatively junior enlisted personnel of the proposed changes in pay and benefits, recommending that any changes be deferred until Congress receives the recommendations of the legislatively mandated Military Compensation and Retirement Modernization Commission (MCRMC). This group, established by a provision of the NDAA for FY2013,38 is due to report its findings and recommendations by February 1, 2015. The Senate Armed Services Committee, in its report on S. 2410, said it “reluctantly” supported proposed restraints on the increase for FY2015 in servicemembers’ basic pay and housing allowances, as well as a proposed increase in certain pharmacy co-payment requirements under TRICARE. However, the Senate committee, too, called for deferring other proposed changes in TRICARE and the commissary system pending receipt of the MCRMC recommendations. It also urged the commission to conduct a survey of servicemembers. The enacted version of the bill—H.R. 3979—steered a middle course between the House and Senate bills on these issues. But in the Joint Explanatory Statement accompanying the bill, House and Senate negotiators noted that they were deferring judgment on some of the proposed cost reductions, not rejecting them out of hand, and warning that the overall budget situation would be a factor in the Armed Services Committees’ future decisions: We note that if sequestration-level budgets remain in effect for fiscal year 2016 and beyond, DOD will need to make painful cuts and achieve substantial savings across its entire budget in order to avoid an unacceptable reduction in readiness of the Armed Forces of the United States. The [Joint Chiefs of Staff] have urged us to take all action necessary, including compensation adjustments, to avoid such readiness impacts.39 Military Basic Pay Authorization Section 601 of the final bill freezes the basic pay of generals and admirals during FY2015, as the Administration had proposed. The House and Senate bill’s each contained similar provisions. For personnel of all other ranks, Section 601 of the Senate Committee’s bill would have authorized a 1% raise in basic pay, beginning January 1, 2015, as called for by the budget request. In its report on H.R. 4435, the House Armed Services Committee endorsed the 1.8% increase in basic pay that would occur on that date under existing law40 which ties the annual increase in 37 See “Compensation,” above. P.L. 112-229, Section 671. 39 Joint Explanatory Statement [hereinafter, JES] to accompany the National Defense Authorization Act for Fiscal Year 2015 [H.R. 3979] on the House Armed Services Committee website at http://armedservices.house.gov/index.cfm/files/serve?File_id=78ED7A79-9066-43FD-AA75-1D8F14B4B4A2; p. 86. 38 40 37 U.S.C. §1009. Congressional Research Service 36 Defense: FY2015 Authorization and Appropriations military basic pay to the Labor Department’s Employment Cost Index (ECI), a measure of private sector compensation. The House-passed bill included no provision relating to the annual increase in basic pay (except for its Section 602, freezing basic pay for generals and admirals). However, House bill would have increased the amount authorized for military personnel spending by $534.9 million—the difference between the cost of the 1% raise included in the budget request and the 1.8% raise favored by the House committee. The enacted bill contains no provision relating to basic pay (except for generals and admirals). However, the accompanying Joint Explanatory Statement acknowledges that the President had “exercised his authority under Section 1009 (e) of Title 37, United States Code” to implement a 1% raise rather than the 1.8% raise that the ECI formula would require.41 Military Retired Pay COLA H.R. 3979 includes a provision (Section 623) that essentially mirrored Section 621 of the Senate bill, delaying until January 1, 2016, the effective date of a reduction in the annual cost-of-living adjustment (COLA) for military retired pay. The provision’s roots lay in the Bipartisan Budget Act (BBA) of 2013 (P.L. 113-67) enacted late in December 2013. In addition to raising mandatory budget caps in FY2014 and FY2015, that law reduced the cost of living adjustments (COLAs) provided to military retirees under the age of 62 from a percentage equal to the increase in the Consumer Price Index (CPI) to a percentage that was 1% lower than the CPI change. Subsequent legislation (P.L. 113-76 and P.L. 113-82) exempted from that provision all currently serving military personnel who joined prior to January 1, 2014. Section 623 of the enacted bill extends that exemption to cover all who joined the service prior to January 1, 2016. In its report on S. 2410, the Senate Armed Services Committee said this would defer any change in the retirees’ COLA until Congress had time to review the report of the legislatively mandated compensation review commission (MCRMC), which is due to report early in 2015. Housing Allowance (BAH) Authorization Section 603 of the Senate bill (S. 2410) would have authorized, as requested, a change in the method for computing servicemembers’ Basic Allowance for Housing (BAH) in order to allow DOD to reduce the rate of growth in BAH payments in fiscal years 2015-2017 until they cover 95% of housing and utility costs in a particular region rather than 100% of costs, as currently is the policy. The House bill included no provision relating to the proposed change in the housing allowance. However, in its report, the committee asked DOD to share with the Military Compensation Commission any analysis it had carried out concerning the likely effects on the force of the proposed change in the housing allowance. Section 604 of the final bill allows DOD to implement that portion of the planned reduction in growth that was planned for FY2015—the first year of the three-year phase-in period—pending 41 JES to accompany H.R. 3979, p. 93. Congressional Research Service 37 Defense: FY2015 Authorization and Appropriations the Military Compensation Commission report. “By adopting changes to BAH beginning in the first year of the proposal, the agreement preserves the option for Congress to achieve the full savings requested by DOD,” the Joint Explanatory Statement says.42 Commissary Subsidy Authorization Like the House and Senate versions of the FY2015 NDAA, the final version of the bill rejected the Administration proposal to reduce by $200 million the annual operating subsidy to the military commissary system. The subsidy amounted to $1.37 billion in FY2014 and the Administration requested $1.11 billion in FY2015. H.R. 3979 authorizes restoration of the $200 million difference to the commissary budget, as the Senate bill would have done. In its report on S. 2410, the Senate committee directed the Secretary of Defense to present to the military compensation commission an analysis of the impact of the commissary proposal on the purchasing power of the families of younger enlisted personnel and an assessment of other business models for the commissary system. The House bill would have added $100 million to the commissary budget request. Section 634 of the final bill—which parallels Section 632 of the House bill—requires the Secretary of Defense to sponsor a review of the commissary system by an independent organization “experienced in grocery retail analysis.” The review is to include an assessment of “the impact that eliminating or reducing the commissary subsidy would have on eligible beneficiaries.”43 TRICARE Authorization The House bill rejected the Administration’s proposed increases in TRICARE fees and pharmacy copays, including the proposed enrollment fee for retirees joining TRICARE-for-Life. The bill included a provision (Section 736) barring the closure or realignment of any DOD medical facility pending a report to Congress by the Government Accountability Office (GAO) on a currently ongoing DOD study that is expected to recommend such changes. The Senate bill would have authorized the Administration’s proposal to increase pharmacy copayments under TRICARE in ways designed to encourage the use of generic medications and mail-order refills (Section 702). Section 702 of the final version of the bill authorizes a $3 increase in the current pharmacy copayment and requires that all prescriptions for maintenance medications—those used on a regular basis for chronic conditions such as high cholesterol—be filled either through a pharmacy at a military medical facility or through TRICARE’s mail-order system. 42 43 JES to accompany H.R. 3979, p. 86. Ibid., p. 93. Congressional Research Service 38 Defense: FY2015 Authorization and Appropriatio [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR43788. Public record. Not legal advice.