Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (H.R. 4909, S. 2943)

Fact Sheet: Selected Highlights of the FY2017

National Defense Authorization Act

(H.R. 4909, S. 2943)

(name redacted)

Analyst in U.S. Defense Budget Policy

(name redacted)

Specialist in U.S. Defense Policy and Budget

December 19, 2016

Congressional Research Service

7-....

www.crs.gov

R44497

Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (NDAA

Introduction

This CRS Fact Sheet is designed as a time-urgent product offering Members the best available

information pending publication of a CRS report on the FY2017 defense funding legislation.

Following are selected highlights of the conference agreement on the FY2017 National Defense

Authorization Act (NDAA). The conference report (H.Rept. 114-840), filed in the House on

November 30, 2016, resulted from negotiations between the House and Senate on House-passed

H.R. 4909 and Senate-passed S. 2943. The agreement authorizes $611.2 billion in discretionary

funding for national defense activities within the jurisdictions of the House and Senate Armed

Services Committees. That total includes







$523.7 billion for the Department of Defense (DOD) “base budget” which funds

routine activities not associated with ongoing deployments in Afghanistan and

Iraq;

$67.8 billion for Overseas Contingency Operations (OCO) which funds

operations in Afghanistan and Iraq and certain other DOD activities; and

$19.7 billion for national security programs of the Department of Energy and

other defense-related activities.

In addition to funds authorized by the NDAA, national defense-related funding for FY2017

includes $7.8 billion for discretionary programs outside the jurisdiction of the two Armed

Services Committees and $8.1 billion for programs funded by mandatory spending.

Table 1 provides a summary of amounts recommended for authorization by the conferees. Table

2 provides a summary of selected congressional budget reductions and restrictions, and Table 3

provides a summary of selected Administration policy and cost-cutting proposals. Table 4

provides a summary of selected congressional budget increases and policy initiatives.

Discretionary Spending Limits and the NDAA

Congressional action on the FY2017 National Defense Authorization Act (NDAA) was

fundamentally shaped by legally binding caps on discretionary spending for defense programs

and for non-defense programs in each fiscal year through FY2021. The spending caps—

established by P.L. 112-25, the Budget Control Act of 2011 (BCA) and amended by P.L. 114-74

(BBA)—are enforced by “sequestration1,” a process that entails across-the-board cuts to most

funding accounts if enacted appropriations exceed either of the caps.

The annual defense caps apply to funding for the base budget, but not to amounts designated for

emergencies or for OCO. The OCO category of funding—which is not defined in law—was

adopted by the Obama Administration in 2009 to encompass funding associated with operations

in Iraq and Afghanistan. In subsequent budgets, the number of operations funded has increased

and the scope of funding designated as OCO has expanded.

The FY2017 NDAA debate focused, in part, on differences between the Administration and

Congress over how much of the FY2017 DOD budget designated as OCO funding—and thus

exempt from the budget caps—would be used for base budget purposes,. An underlying issue was

whether defense spending and non-defense base budget spending would be allowed to exceed

1

See CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions, by (name red

acted) .

Congressional Research Service

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Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (NDAA

their respective budget caps by roughly similar amounts through use of OCO-designated funding.

The Administration and the congressional minority leadership objected to providing defense

funding for base budget requirements in excess of the defense spending cap unless it was

accompanied by a comparable increase in funding for non-defense, base budget programs.2

The 2015 BBA, which raised the defense and non-defense spending caps for FY2016 and 2017,

also identified non-binding target levels of OCO funding for FY2016 and FY2017 for both the

DOD budget and international affairs budget3 (which falls into the non-defense category).

The Administration’s FY2017 DOD budget request included $58.8 billion designated as OCO, of

which $5.2 billion was to be spent on base budget requirements. The Administration’s FY2017

budget justification material makes several references to a similar enhancement of the nondefense foreign affairs budget, although the State Department published no detailed information

identifying OCO-designated funding intended to be used for base budget purposes.. A comparison

of the foreign affairs agencies’ OCO budget for FY2016 and their OCO request for FY2017 with

their OCO budget for FY2015—the last year of funding not affected by BBA—suggests that the

international affairs budget’s OCO-for-base amount is in excess of $5.0 billion—roughly the

same as in the DOD budget request.4

In November 2016, the Administration amended its FY2017 OCO request, asking for an

additional $5.8 billion to cover the cost of retaining more U.S. troops in Afghanistan than the

original budget had assumed and the cost of operations against the Islamic State.5

The House-passed version of the FY2017 NDAA (H/R/ 4909) would have dedicated $23.1 billion

of OCO-designated funding to DOD base budget purposes—$18.0 billion more than the

Administration proposed. However, the conferees agreed to allocate $8.3 billion in OCOdesignated funding for base requirements—$5.2 billion stemming from the Administration’s

request and $3.2 added during the conference negotiations (see Table 1.)

2

See OMB, “Statement of Administration Policy on H.R. 4909, National Defense Authorization Act for Fiscal Year

2017,” May 16, 2016, https://www.whitehouse.gov/sites/default/files/omb/legislative/sap/114/

saphr4909r_20160516.pdf; and Senator Harry Reid, “Reid: Senate Must Give Defense Bill Deliberative Approach It

Deserves,” press release, May 25, 2016, http://www.reid.senate.gov/press_releases/2016-05-25-reid-senate-must-givedefense-bill-deliberative-approach-it-deserves#.V1GXYE0UVFo.

3

This is designated the State Department, Foreign Operations and Related Programs (SFOP) budget.

4

See U.S. Department of State, Congressional Budget Justification Material for the Department of State, Foreign

Operations, and Related Agencies, pp. 137-38, http://www.state.gov/documents/organization/252179.pdf.

5

See U.S. Department of Defense, Fiscal Year 2017 Budget Request: Overview–Overseas Contingency Operations

Budget Amendment, http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2017/amendment/

FY17_OCO_Amendment_Overview_Book.pdf

Congressional Research Service

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Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (NDAA

Table 1. FY2017 National Defense Authorization Act (H.R. 4909, S. 2943)

(in millions of dollars of discretionary budget authority)

Budget

Request

House-passed

(H.R. 4909)

Senate-passed

(S. 2943)

Conference

Report

$101,971.6

$103,124.7

$102,435.0

$102,422.7

Research and Development

71,391.8

71,619.8

71,227.2

71,110.6

Operation and Maintenance

171,318.5

169,322.3

171,389.8

171,870.9

Military Personnel

135,269.2

134,849.8

134,018.4

134,569.5

Defense Health Program and Other

Authorizations

36,557.0

37,058.6

37,398.0

36,058.4

Military Construction/Family Housing

7,444.1

7,694.0

7,477.5

7,709.6

523,952.1

523,586.9

523,945.8

523,741.6

19,240.5

19,512.1

19,167.6

19,359.8

211.0

300.0

n/a

300.0

TOTAL: National Defense Budget

Function (050) Base Budget

543,403.6

543,399.0

543,113.4

543,401.4

DOD OCO Budget

64,573.0b

58,793.5

58,890.5

67,766.4

607,976.6

602,192.5

602,004.0

611,167.8

Bill Title

National Defense Base Budget

Procurement

Subtotal: DOD Base Budget

Atomic Energy Defense Activities

Defense-related Maritime Administrationa

GRAND TOTAL: FY2017 NDAA

Source: H.Rept. 114-840, Conference Report to Accompany S. 2943.

Notes:

a. Funding authorization for this program, provided in Title XXXV of the House bill, is outside the jurisdiction

of the Senate Armed Services Committee.

b. Includes November 2016 amendment to the President’s Budget Request for OCO.

Table 2. Selected Congressional Budget Reductions and Prohibitions

Issue

House-passed (H.R. 4909)

Senate-passed (S. 2943)

Conference Report

Administration efforts to

close the detention facility at

Guantanamo Bay, Cuba

Would prohibit the transfer of

detainees to the U.S. (section

1032) or to certain other

countries (section 1034).

Would prohibit the

permanent transfer of

detainees to the U.S. or to

certain other countries

(sections 1021, 1026,

1029); would allow

temporary transfer to U.S.

for medical treatment

(section 1024).

Maintains existing

restrictions on the closure

of the detention facility;

extends current

prohibitions on transfers

of detainees into the U.S.

and construction or

modification of facilities in

the U.S. for detainees

(sections 1032-1035).

Reductions to the request on

the basis of unobligated

balances from prior budgets

(or anticipated slower-thanplanned obligations in

FY2017), excessive fuel

price estimates,

unjustified growth, or

other factors

Would reduce the request by

$1.77 billion, of which $1.12

billion comes from the

Operation and Maintenance

accounts.

Would reduce the request

by $935 million, of which

$880 million comes from

the Military Personnel

accounts.

Reduces the request by

$1.28 billion in Operation

and Maintenance accounts

and $1.29 billion from

Military Personnel

Accounts, but adds $1.28

billion and $1.29 billion,

respectively, to OCO for

base requirements in such

accounts.

Congressional Research Service

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Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (NDAA

Issue

House-passed (H.R. 4909)

Senate-passed (S. 2943)

Conference Report

Foreign currency exchange

rate assumptions

Would cut $429 million on the

assumption that the goods and

services bought by U.S. forces

abroad will cost less than

budgeted due to assumptions

regarding currency exchange

rates.

Would cut $121 million on

the assumption that the

goods and services bought

by U.S. forces abroad will

cost less than budgeted

due to assumptions

regarding currency

exchange rates.

Cuts $573 million on the

assumption that the goods

and services bought by

U.S. forces abroad will

cost less than budgeted

due to assumptions

regarding currency

exchange reates.

Source: H.Rept. 114-840, Conference Report to Accompany S. 2943.

Table 3. Selected Administration Policy and Cost-Cutting Proposals

Administration

Proposal

House-passed (H.R. 4909)

Senate-passed (S. 2943)

Conference Report

1.6% raise in Military

Basic Pay in lieu of the

2.1% raise that otherwise

would occur by lawa

Would require that pay be

increased by 2.1% (section

601); adds to the budget

request $330 million (in OCO

funds).

Would provide a 1.6% basic

pay increase, as requested

(section 601).

Senate recedes to the House,

adopting the 2.1% pay raise; adds

$330 million (in base budget).

Reduce military endstrength by 27,015

active and 9,800 reserve

component personnel

Would authorize an endstrength increase of 28,715

active personnel and 25,000

reserve component personnel

to the Administration’s endstrength request; adds $3.24

billion (in OCO funds) to the

request.

Would authorize endstrength totals at the level

requested by the

Administration.

Authorizes an end-strength

increase of 24,000 active

personnel and 12,000 reserve

component personnel; adds $1.35

billion (in OCO funds) to the

request.

Introduce some new

TRICARE fees and

increase some existing

fees and copays

Would establish TRICARE fees

and copays similar to

Administration’s proposal

(section 701).

Would make significant

changes to TRICARE system

(Title VII, Subtitle A).

Renames the TRICARE

Standard/Extra health plan option

to TRICARE Select; modifies

enrollment fees, deductibles,

catastrophic caps, and copayments for beneficiaries in the

retired category and active duty

family members who join the

military on or after January 1,

2018; requires an open

enrollment period; and prescribes

certain requirements for preauthorization for referrals under

TRICARE Prime (section 701).

Reform of administration

of the Defense Health

Agency (DHA) and

military medical

treatment facilities

Would require DHA to

become responsible for

management of Military

Treatment Facilities (MTFs)

throughout the DOD, while

preserving certain

responsibilities of MTF

commanders (section 702).

Would consolidate the

medical departments of the

Army, Navy, and Air Force

with the Defense Health

Agency (section 721).

Requires the Director of DHA to

take responsibility for the

administration of each MTF on

October 1, 2018. Matters of

responsibility include: budget;

information technology; health

care administration and

management; administrative

policy and procedure; military

medical construction and 6) any

other matters the Secretary of

Defense determines appropriate

(section 702).

Congressional Research Service

4

Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (NDAA

Administration

Proposal

House-passed (H.R. 4909)

Senate-passed (S. 2943)

Conference Report

Remove from service 7

(of the 22) Aegis

cruisers for

modernization and

eventual 1-for-1

replacement of cruisers

now in service

Would require that no more

than 6 cruisers be inactivated

at one time and that contracts

be signed for their

modernization (section 1024);

adds $202 million for

operation (in OCO funds).

Would require that at least

11 (of the 22) cruisers be in

service at all times, with 11

to be modernized and the

other 11 replaced when they

reach the end of their

service lives (section 1011).

Prohibits the retirement,

preparation for retirement,

inactivation, or placement in

storage of any Ticonderoga-class

cruisers or Whidbey Island-class

amphibious ships, except to allow

the modernization and upgrades

for those ships to continue in

accordance with previous NDAA

direction concerning the

modernization and upgrades for

these ships, as set forth in section

1026 of the FY15 NDAA (section

1024).

Disband 1 (of 10) activeduty carrier air wings

(requiring change in

current law)

Would reject the reduction in

carrier air wings; adds $86

million for wing operations (in

OCO funds).

Would allow the reduction

to 9 active-duty carrier air

wings (section 1088).

Reduces to 9 the minimum

number of carrier air wings until

additional deployable aircraft

carriers can fully support a tenth

carrier air wing, or October 1,

2025, whichever comes first, at

which time the Secretary of the

Navy shall maintain a minimum of

ten carrier air wings (section

1042).

To meet BBA budget

caps, reduce FY2017

aircraft procurement

funding by 12% ($4.34

billion) below amount

projected in early 2015

Would add a total of $5.9

billion to the requested aircraft

procurement authorization

accounts (using OCO funds).

Would add a total of $353

million to the requested

aircraft procurement

accounts.

Cuts $270.3 million from the

requested aircraft procurement

accounts ($244.7 million from

base and $25.6 million from

OCO).

Plan a Base Realignment

and Closure (BRAC)

roundb

Would prohibit the use of

funds for a BRAC round

(section 2707); cuts $3.5

million slated for BRAC

planning.

Would prohibit the use of

funds for a BRAC round

(section 2702); cuts $4

million slated for BRAC

planning.

Includes the Senate provision

(section 2702); cuts $3.5 million

slated for BRAC planning.

Source: H.Rept. 114-840, Conference Report to Accompany S. 2943.

Notes:

a. For background, see CRS In Focus IF10260, Defense Primer: Military Pay Raise, by (name redacted).

b. For background, see CRS In Focus IF10362, The President’s FY2017 Military Construction Budget Request, by

(name redacted)

.

Congressional Research Service

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Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (NDAA

Table 4. Selected Congressional Budget Increases and Policy Initiatives

Issue

House-passed (H.R. 4909)

Senate-passed (S. 2943)

Conference Report

Registration of

Women for the

Military Draft

Had been required by section

528, adopted as a committee

amendment by a vote of 32-30;

provision was deleted by the

rule governing floor debate.

Would require registration of

women for the military draft

(section 591).

Does not include

Senate section 591.

Recovery of

amounts owed to

the U.S. by

members of the

uniformed services

Would amend 37 U.S.C. 1007

to establish a 10-year statute

of limitations on the authority

of the government to collect

an indebtedness to the

government owed by a

servicemember if the

indebtedness occurred through

no fault of the member

(effective October 1, 2027) and

would require annual DOD

report (section 642),

No similar provision.

Requires a board of

review to determine

whether the special pay

to members and former

members of the

California Air National

Guard was unwarranted

and, if so, to

recommend whether

the Secretary should

recoup the payment,

waive the recoupment,

or repay unwarranted

recoupments. Would

authorize the Secretary

to waive collection of

overpayments or to

repay previously

recouped payments that

were unwarranted.

Requires a report from

DOD and a GAO

report (section 671).

National

Commission on

Military, National

and Public Service

Would require the Secretary

of Defense to submit, not later

than July 1, 2017, a report on

the current and future need

for a centralized registration

system under the Military

Selective Service Act.

Contained a series of

provisions (sections 10661073) that would create a

National Commission on

Military, National, and Public

Service.

Troop levels in

Afghanistan

Would add $2.33 billion to

support deployment of 9,800

U.S. troops (rather than 5,500

as proposed in the original

FY2017 OCO budget).

Would make no change to

the original FY2017 request.

Includes the Senate

provisions establishing a

National Commission

on Military, National

And Public Service and

requires a study by the

Secretary of Defense to

inform the Commission

on the current and

future need for a

centralized registration

system under the

Military Selective

Service Act (section

552).

Agreement supports

the November 2016

amended OCO request,

including $2.5 billion in

additional funding to

maintain approximately

8,400 U.S. troops in

Afghanistan.

Ballistic Missile

Defense of U.S.

Would replace the National

Missile Defense Act of 1999

with new policy language to

Would amend current law,

which states that it is the goal

of the missile defense system

Congressional Research Service

Includes the House

provision with a

clarifying amendment

6

Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (NDAA

Issue

House-passed (H.R. 4909)

Senate-passed (S. 2943)

Conference Report

Territory

the effect that the United

States should maintain and

improve a robust layered

missile defense system capable

of defending the territory of

the United States and its allies

against the developing and

increasingly complex ballistic

missile threat (section 1665).

to protect U.S. territory

against a “limited” missile

attack; section 1665 would

delete the word limited.

(section 1681).

Ship Procurement

Would increase shipbuilding

authorization by a total of $2.3

billion (in OCO funds);

Includes funds for one

additional Littoral Combat Ship

($385 million), partial funding

for a destroyer ($433 million)

and an amphibious landing

transport ($856 million), and

$263 million to accelerate

construction of an aircraft

carrier.

Would add $100 million;

includes partial funding for a

destroyer ($50 million) and

an amphibious landing

transport ($50 million); cuts

$28 million from request the

for Littoral Combat Ship.

Adds $490 million;

includes partial funding

for a destroyer ($50

million) and adds $440

million for amphibious

landing transport (LPD29 or LX(R). Cuts $28

million from request for

the Littoral Combat

Ship.

Security

Cooperation with

partner countriesa

Would recodify several

existing authorities to train and

assist partner countries

(sections 1201-1206).

Would broaden the range of

purposes for which DOD can

train, equip, and assist partner

countries (sections 1251-65).

Creates a new chapter

in title 10, U.S.C.;

includes provisions to

consolidate “train-andequip” authorities and

consolidates reporting

requirements (sections

1241-1253). Codifies

and makes permanent

“Section 1208”

authority (section

1203).

Organization of

DOD and Strategic

Planningb

Would revise existing law

governing the scope and

frequency of high-level

strategic reviews (sections

901-906).

Would mandate wide-ranging

changes in DOD organization

(sections 941 and 942).

Establishes a

Commission on the

National Defense

Strategy for the United

States (section 942);

revises the

requirements of the

national military

strategy (section 943);

and revises the FY2016

section 1064

requirements for and

independent study of

the national security

strategy (section 945).

Maintenance and

Repair of Facilities

Would add $2.4 billion (in

OCO funds).

Would add $839 million (in

base budget).

Adds $396.7 million

($198.9 million base and

$197.8 million OCOfor-base).

National Guard and

Reserve Equipment

Would add $250 million.

Would make no change to

request.

Adds $250 million.

Source: H.Rept. 114-840, Conference Report to Accompany S. 2943.

Congressional Research Service

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Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (NDAA

Note:

a. For additional background, see CRS Report R44313, What Is “Building Partner Capacity?” Issues for Congress,

coordinated by (name redacted)

b. For additional background, see CRS Report R44474, Goldwater-Nichols at 30: Defense Reform and Issues for

Congress, by (name redacted)

Table 5. CRS Defense Analysts

Area of Expertise

Name

Phone

Email

Specialist in Military Ground Forces

Feickert, Andy

7-....

/redacted/@crs.loc.gov

Specialist in Military Aviation

Gertler, Jeremiah

7-....

/redacted/@crs.loc.gov

Specialist in U.S. & Foreign National

Security Programs

Hildreth, Steven A.

7-....

/redacted/@crs.loc.gov

Specialist in Defense Health Care

Policy

Jansen, Don

7-....

/redacted/@crs.loc.gov

Analyst in Military Manpower Policy

Kamarck, Kristy

7-....

/redacted/@crs.loc.gov

Specialist in Military Manpower Policy

Kapp, Lawrence

7-....

/redacted/@crs.loc.gov

Specialist in Nonproliferation

Kerr, Paul

7-....

/redacted/@crs.loc.gov

Analyst in International Security

McInnis, Kathleen J.

7-....

/redacted/@crs.loc.gov

Analyst in Intelligence and National

Security Policy

Miles, Anne Daugherty

7-....

/redacted/@crs.loc.gov

Specialist in Nonproliferation

Nikitin, Mary Beth D.

7-....

/redacted/@crs.loc.gov

Specialist in Naval Affairs

O'Rourke, Ron

7-....

/redacted/@crs.loc.gov

Specialist in Defense Acquisition

Schwartz, Moshe

7-....

/redacted/@crs.loc.gov

Specialist in National Security Policy

and Information Operations

Theohary, Catherine A.

7-....

/redacted/@crs.loc.gov

Specialist in U.S. Defense Policy and

Budget

Towell, Pat

7-....

/redacted/@crs.loc.gov

Analyst in U.S. Defense Budget Policy

Williams, Lynn

7-....

/redacted/@crs.loc.gov

Specialist in Nuclear Weapons Policy

Woolf, Amy F.

7-....

/redacted/@crs.loc.gov

Author Contact Information

(name redacted)

Analyst in U.S. Defense Budget Policy

#redacted#@crs.loc.gov , 7-....

Congressional Research Service

(name redacted)

Specialist in U.S. Defense Policy and Budget

#redacted#@crs.loc.gov

, 7-....

8

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