Authorization and Appropriations for FY2005: Defense

Congressional research reportDec 14, 2004

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Authorization and Appropriations

for FY2005: Defense

Updated December 14, 2004

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Specialists in National Defense

Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

The annual consideration of appropriations bills (regular, continuing, and supplemental) by

Congress is part of a complex set of budget processes that also encompasses the

consideration of budget resolutions, revenue and debt-limit legislation, other spending

measures, and reconciliation bills. In addition, the operation of programs and the spending

of appropriated funds are subject to constraints established in authorizing statutes.

Congressional action on the budget for a fiscal year usually begins following the submission

of the President’s budget at the beginning of each annual session of Congress.

Congressional practices governing the consideration of appropriations and other budgetary

measures are rooted in the Constitution, the standing rules of the House and Senate, and

statutes, such as the Congressional Budget and Impoundment Control Act of 1974.

This report is a guide to one of the 13 regular appropriations bills that Congress considers

each year. It is designed to supplement the information provided by the House and Senate

Appropriations Subcommittees on Defense. It summarizes the status of the bill, its scope,

major issues, funding levels, and related congressional activity, and is updated as events

warrant. The report lists the key CRS staff relevant to the issues covered and related CRS

products.

NOTE: A Web version of this document is available to

congressional staff at

[http://www.crs.gov/products/appropriations/apppage.shtml].

Authorization and Appropriations for FY2005: Defense

Summary

Early on the morning on October 7, 2004, a conference agreement on the

FY2005 defense authorization bill (H.R. 4200) was announced. The House approved

the conference agreement by a vote of 359-14 on October 8, and the Senate approved

it by unanimous consent on October 9. The President signed the bill into law (P.L.

108-375) on October 23. On the key issues, conferees rejected a House provision to

delay military base closures; authorized purchases, but not leasing, of Boeing KC767 or other refueling aircraft; increased statutory caps on Army and Marine Corps

active duty end-strength in FY2005 by 23,000; rejected a House provision that would

limit purchases of defense goods from nations that require offsets for purchases of

U.S. weapons; and increased benefits for 62-and-older survivors of military retirees.

Earlier, on July 22, 2004, both the House (by a vote of 410-12) and the Senate

(by a vote of 96-0) approved a conference agreement on the FY2005 defense

appropriations bill (H.R. 4613). The President signed the bill into law (P.L. 108-287)

on August 5, 2004. The conference agreement provides $391.2 billion for regular

Department of Defense programs, about $1.7 billion below the Administration

request, $25 billion in emergency funds for operations in Iraq and Afghanistan, $685

million for State Department operations in Iraq, $95 million for assistance to refugees

in Sudan and Chad, $500 million for fire fighting, $50 million for security at the

party conventions, and $26 million for a federal judiciary shortfall. Later, the energy

and water appropriations bill, included in the consolidated appropriations bill (H.R.

4818), rescinded $300 million in regular FY2005 defense appropriations.

The appropriations conference agreement resolves what was, perhaps, the major

defense issue in Congress this year: whether to provide additional funds for ongoing

operations in Iraq and Afghanistan. On May 12, after considerable prodding from

Congress, the Administration requested $25 billion to cover costs for the next few

months. The key issue in Congress then became how much flexibility to grant the

Defense Department in allocating the funds. None of the congressional defense

committees agreed to the Administration request for full funding flexibility. The

conference agreement on the appropriations bill provides $3.8 billion of the funds in

a flexible transfer account, of which $1.8 billion is for classified programs, leaving

$2 billion available for unforseen expenses. The remainder is provided in regular

defense appropriations accounts subject to standard procedures requiring advance

congressional approval if funds are shifted between accounts. The appropriations

conference report also resolves a number of major weapons issues. It makes

substantial cuts in a few high-profile weapons programs, including the Space-Based

Radar and the Transformational Communications Satellite. It approves funding to

begin construction of the Navy DD(X) destroyer and Littoral Combat Ship.

One other major defense policy issue was resolved in action on the energy and

water appropriations bill. In floor votes on the defense authorization bill, both the

House and the Senate rejected amendments to eliminate funds for the Robust Nuclear

Earth Penetrator nuclear warhead and new low-yield nuclear weapons development.

The conference agreement on the energy and water appropriations bill, however,

following the House, eliminates funds for both programs.

Key Policy Staff

Area of Expertise

Acquisition

Aviation Forces

Arms Control

Arms Sales

Base Closure

Defense Budget

Defense Industry

Defense R&D

Ground Forces

Health Care; Military

Intelligence

Military Construction

Military Personnel

Military Personnel;

Reserves

Missile Defense

Naval Forces

Nuclear Weapons

Peace Operations

Radio Frequency,

Military

Readiness

Space, Military

War Powers

Name

Valerie Grasso

(name redacted)

Amy Woolf

Richard Grimmett

David Lockwood

(name redacted)

Jeff Chamberlin

Gary Pagliano

Daniel Else

Michael Davey

John Moteff

Edward Bruner

Steven Bowman

Richard Best

Al Cumming

Daniel Else

Robert Goldich

David Burrelli

Telephone

E-Mail

7-....

[redacted]@crs.loc.gov

7-....

[redacted]@crs.loc.gov

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[redacted]@crs.loc.gov

7-....

[redacted]@crs.loc.gov

7-....

[redacted]@crs.loc.gov

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rs.loc.[re

[redac

dacted]@crs.loc.[re

ted]@c dacted]@crs.loc.gov

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[redac

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[redacted]@crs.loc.gov

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[redacted]@crs.loc.gov

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[redac

dacted]@crs.loc.gov

(name redacted)

7-....

[redacted]@crs.loc.gov

Steven Hildreth

(name redacted)

Ronald O’Rourke

Jonathan Medalia

Nina Serafino

7-....

[redac

7-....

ted]@crs.loc.[re

dacted]@crs.loc.gov

[redacted]@crs.loc.gov

Lennard Kruger

7-....

[redacted]@crs.loc.gov

(name redacted)

Marcia Smith

(name redacted)

Richard Grimmett

7-....

[redac

[redacted]@crs.loc.gov

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dacted]@crs.loc.gov

Contents

Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Overview: What the Defense Authorization and Appropriations Bills Cover . . . 1

Status of Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Highlights of Final Conference Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Defense Authorization Conference Agreement . . . . . . . . . . . . . . . . . . . . . . . 3

Defense Appropriations Conference Agreement . . . . . . . . . . . . . . . . . . . . . 18

Congressional Committee and Floor Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

House Defense Authorization Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

House Defense Authorization Floor Action . . . . . . . . . . . . . . . . . . . . . . . . . 29

Senate Defense Authorization Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Senate Defense Authorization Floor Action . . . . . . . . . . . . . . . . . . . . . . . . 36

House Defense Appropriations Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

House Defense Appropriations Floor Action . . . . . . . . . . . . . . . . . . . . . . . . 46

Senate Defense Appropriations Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Senate Defense Appropriations Floor Action . . . . . . . . . . . . . . . . . . . . . . . 49

Issues for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Funding for Iraq and Afghanistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Deficits and the Defense Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Active Duty End-Strength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Missile Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

“Bow Waves” and “Train Wrecks”: Cost Growth and Affordability of

Major Weapons Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Evolutionary Acquisition and Spiral Development . . . . . . . . . . . . . . . . . . . 68

Military Personnel Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Base Closures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Overseas Troop Deployments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Army Transformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

DOD’s Civilian and Uniformed Personnel Systems . . . . . . . . . . . . . . . . . . 74

Easing Environmental Provisions Affecting Military Training . . . . . . . . . . 76

Development of New Nuclear Weapons . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Boeing KC-767 Tanker Aircraft Acquisition . . . . . . . . . . . . . . . . . . . . . . . . 78

Buy American Act, Trade Offsets, and Related Issues . . . . . . . . . . . . . . . . 79

Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Concurrent Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Defense Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Defense Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

CRS Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Appendix A. Funding Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Appendix B. Overview of the Administration Request . . . . . . . . . . . . . . . . . . . 93

Comanche Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Continued Growth in Operation and Maintenance and in Military

Personnel Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Growth of Large Acquisition Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Appendix C: Defense Budget Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

List of Figures

Figure B-1. Operation and Maintenance Budget

Authority Per Active Duty Troop, FY1955-FY2009 . . . . . . . . . . . . . . . . . . 96

Figure B-2. Military Personnel Budget Authority

Per Active Duty Troop, FY1973-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Figure C-1. National Defense Outlays % of GDP, FY1947-FY2009 . . . . . . . . 100

Figure C-2. Federal Outlays % of GDP, FY1962-FY2009 . . . . . . . . . . . . . . . . 101

List of Tables

Table 1a. Status of FY2005 Defense Appropriations, H.R. 4613 . . . . . . . . . . . . . 3

Table 1b. Status of FY2005 Defense Authorization: H.R. 4200, S. 2400 . . . . . . 3

Table 2. Side by Side Comparison of Key Provisions: Defense Authorization . . 7

Table 3. Side by Side Comparison of Key Provisions: Defense

Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Table 4. Congressional Budget Resolution Target for the National Defense

Budget Function (050) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Table A-1. Congressional Action on FY2005 Defense Appropriations Bill by

Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Table A-2. National Defense Budget Function Request by Appropriations

Bill, FY2002-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Table A-3. Congressional Action on Missile Defense Programs . . . . . . . . . . . . 86

Table A-4. House and Senate Action on Major Weapons Acquisition

Programs: Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

Table A-5. House and Senate Action on Major Weapons Acquisition

Programs: Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

Table B-1. National Defense Budget Function, FY2004-FY2009,

Administration Projection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Table B-2. Department of Defense Budget, FY2004-FY2005, With and

Without FY2004 Supplemental Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Table B-3. Increases in Funding for Selected Acquisition Programs,

FY2000-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Table C-1. Change in National Defense Budget Function by

Appropriations Title, FY2000-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Table C-2. Administration Projections for the National Defense Budget

Function, FY2005-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Authorization and Appropriations for

FY2005: Defense

Most Recent Developments

Early in the morning on October 7, 2004, a conference agreement on the

FY2005 defense authorization bill (H.R. 4200) was announced. The House approved

the conference report (by a vote of 359-14) on October 8, and the Senate approved

it (by unanimous consent) on October 9. The President signed the bill into law (P.L.

108-375) on October 28. On the key issues, conferees rejected a House provision to

delay military base closures; authorized purchases, but not leasing, of Boeing KC767 or other refueling aircraft; increased statutory caps on Army and Marine Corps

active duty end-strength in FY2005 by 23,000; rejected a House provision that would

limit purchases of defense goods from nations that require offsets for purchases of

U.S. weapons; and increased benefits for 62-and-older survivors of military retirees.

Earlier, on July 22, 2004, both the House (by a vote of 410-12) and the Senate (by a

vote of 96-0) approved a conference agreement on the FY2005 defense

appropriations bill (H.R. 4613). The President signed the bill into law on August 5,

2004 (P.L. 108-287). The conference appropriations agreement provides $416.9

billion in new budget authority, including $391.2 billion for regular Department of

Defense programs and $28.2 billion in emergency funding, of which $25 billion is

for operations in Iraq and Afghanistan. The $391.2 billion in regular defense

appropriations is about $1.7 billion below the Administration request. The energy

and water appropriations bill, included in the consolidated appropriations bill

approved in November (H.R. 4818), however, rescinded $300 million of regular

FY2005 defense appropriations.

Overview: What the Defense Authorization and

Appropriations Bills Cover

Congress provides funding for national defense programs in several annual

appropriations measures, the largest of which is the defense appropriations bill.

Congress also acts every year on a national defense authorization bill, which

authorizes programs funded in several regular appropriations measures. The

authorization bill addresses defense programs in almost precisely the same level of

detail as the defense-related appropriations, and congressional debate about major

defense policy and funding issues often occurs mainly in action on the authorization.

Because the defense authorization and appropriations bills are so closely

related, this report tracks congressional action on both measures.

The annual defense appropriations bill provides funds for military activities of

the Department of Defense (DOD), including pay and benefits of military personnel,

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operation and maintenance of weapons and facilities, weapons procurement, and

research and development, as well as for other purposes. Most of the funding in the

bill is for programs administered by the Department of Defense, though the bill also

provides (1) relatively small, unclassified amounts for the Central Intelligence

Agency retirement fund and intelligence community management, (2) classified

amounts for national foreign intelligence activities administered by the CIA and by

other agencies as well as by DOD, and (3) very small amounts for some other

agencies.

Several other appropriations bills also provide funds for national defense

activities of DOD and other agencies — see Table A-2 in the Appendix for a list and

for budget amounts. This report does not generally track congressional action on

defense-related programs in these other appropriations bills, except for a discussion

of action on some Department of Energy nuclear weapons programs in the energy

and water appropriations bill.

Status of Legislation

Congress began action on annual defense authorization bills the week of May 3,

2004. The House Armed Services Committee began subcommittee markup of its

version of the FY2005 national defense authorization (H.R. 4200) on May 5,

completed full committee markup on May 12, and reported the bill on May 13

(H.Rept. 108-533). The House began floor action on the bill on May 19 and

approved it on May 20. The Senate Armed Services Committee completed full

committee markup of its version of the bill (S. 2400) on May 7 and issued a report

on May 11 (S.Rept. 108-284). Floor action on S. 2400 began in the Senate on May

17, and resumed on June 2 after the Memorial Day recess. Debate continued through

June 23, when the bill was passed by a vote of 97-0. The Senate debated the bill for

a total of four weeks.

Action on the annual defense appropriations bills began on June 2, when the

House Defense Appropriations Subcommittee completed marking up its version of

the bill. The full committee marked up the bill on June 16 and reported H.R. 4613

on June 18 (H.Rept. 108-553). The full House debated and passed the bill by a vote

of 403-17 on June 22. The Senate Appropriations Committee marked up its version

(S. 2559) on June 22, and filed a report on the bill on June 24 (S.Rept. 108-284). In

floor action, the Senate took up the House-passed version of H.R. 4613 on June 24,

incorporated the reported version of S. 2559 into H.R. 4613, considered amendments,

and then passed H.R. 4613, as amended, by a vote of 98-0. A conference report was

filed on July 20, 2004 (H.Rept. 108-622) and approved both in the House and in the

Senate on July 22. The President signed the bill into law on August 5, 2004 (P.L.

108-287).

Earlier, the Senate passed its version of the FY2005 concurrent budget

resolution (S.Con.Res. 95) on March 12, and the House passed its version

(H.Con.Res. 393) on March 25. A conference agreement was filed on April 10 and

approved in the House on April 11 and “deemed” to be in effect on the House side

on April 19, 2004 (H.Res. 649). The Senate has not taken up the conference

agreement, but the conference agreement on the defense appropriations bill included

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a provision deeming amounts approved in the budget resolution for discretionary

programs to be in effect in the Senate for subsequent action on appropriations bills.

Table 1a. Status of FY2005 Defense Appropriations, H.R. 4613

Subcommittee

Markup

House

Report

House

Senate

Passage

Report

Senate

Passage

Conf.

Report

Senate

6/2/04 6/22/04

Conference Report

Approval

House

6/22/04

6/18/04

6/24/04

(403-17)

H.Rept.

S.Rept.

H.R.

108-553

108-284

4613

6/24/04

(98-0)

S. 2559

Public

Law

Senate

7/20/04

8/5/04

7/22/04 7/22/04

H.Rept.

(P.L. 108(410-12) (96-0)

108-622

287)

Note: In floor action, the Senate substituted its version of the bill, S. 2559, into H.R. 4613.

Table 1b. Status of FY2005 Defense Authorization: H.R. 4200, S. 2400

Full Committee

Markup

House Senate

5/12/04 5/7/04

House

Report

House

Senate Senate Conf.

Passage

Report Passage Report

Conference Report

Approval

House

Public Law

Senate

5/20/04

10/8/04

10/9/04

5/13/04

5/11/04 6/23/04 10/8/04

10/28/04

(391-34)

(359-14) (Unanimous

H.Rept.

S.Rept. (97-0) H.Rept.

(P.L. 108H.R.

H.R.

Consent)

108-491

108-260 S. 2400 108-767

375)

4200

H.R. 4200

Highlights of Final Conference Agreements

Defense Authorization Conference Agreement

The conference on the defense authorization bill had to resolve differences

between the House and the Senate on a number of major policy issues. What follows

is a brief review of the issues, followed in each case by a summary of how the

conference agreement of October 7 addresses them. For more extensive background

on these issues, see the “Issues for Congress” section below.

Funding for operations in Iraq and Afghanistan. The appropriations

conference agreement provided $25 billion in emergency funding for

operations in Iraq and Afghanistan. The remaining issue for the

authorization conference is whether to add reporting requirements.

The Senate version of the authorization requires quite extensive

additional reporting on operations in Iraq in particular.

Authorization conference outcome: Authorized $25 billion, as

expected, including $435 million for body armor, $572 million for

up-armored Humvees, and $100 million for bolt-on armor. Requires

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a number of reports, including quarterly accounting for operations

conducted as part of the Global War on Terrorism, a report on the

post-major combat operations phase of Operation Iraqi Freedom, and

a report on training for post-conflict operations.

Oversight of prisoner abuse in Iraq and elsewhere. The Senatepassed bill includes an amendment proposed by Senator Patrick

Leahy that states it is U.S. policy not to abuse prisoners in its control

and that requires the Administration to produce a number of

documents related to treatment of U.S.-held prisoners. The House

has rejected a number of proposals to require production of similar

documents. Conference outcome: Includes a sense of the Congress

section regarding abuse of detainees, development of a policy to

prevent abuse, and reports to Congress on the policy.

Army and Marine Corps end-strength. The House authorization bill,

as reported by the Armed Services Committee and passed on the

floor, increases Army end-strength by 10,000 and Marine Corps endstrength by 3,000 in each of the next three years, for a total increase

of 39,000. The bill also establishes the new end-strength totals as

statutory minimums. In floor action on June 17, the Senate adopted

an amendment by Senator Jack Reed to increase Army end-strength

by 20,000 in FY2005. The House and Senate appropriations bills

provide funds for the higher troop levels within the $25 billion

provided for Iraq and Afghanistan. Conference outcome: Agreed

to increase Army end-strength by 20,000 and Marine end-strength by

3,000 in FY2005 and establishes the increased totals as minimums.

Also authorizes, but does not require, additional increases of 10,000

in the Army and 6,000 in the Marine Corps over the next four years,

but does not yet establish them as minimums.

Military base closures. The House approved a measure in the

authorization bill that would delay the next round of military base

closures, now planned for 2005, until 2007, and that would require

a number of reports in the interim. By a vote of 49-47, the Senate

rejected an amendment to its version of the authorization that would

have delayed domestic base closures until 2007. This issue is likely

to be a major conference item because the Administration has

threatened a veto if the final bill includes a delay in base closures.1

Conference outcome: Does not agree to the House proposal to

delay base closures by two years. Requires approval of 7 of 9

commissioners to add a facility to the base closure list that the White

House will propose.

Health care for reservists. In a key floor vote, the Senate approved

an amendment to the authorization bill by Senators Lindsey Graham

Office of Management and Budget, Statement of Administration Policy on H.R. 4200, May

19, 2004; [http://www.whitehouse.gov/omb/legislative/sap/108-2/hr4200sap-h.pdf].

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and Tom Daschle to provide health insurance through the militaryrun TRICARE program for all non-deployed reservists and their

dependents, with the Defense Department paying the employer share

of the costs. Earlier, the Senate Armed Services Committee had

approved a more limited measure to establish a health insurance

program for non-deployed reservists and their dependents, called

TRICARE Reserve Select. Under the program, employers could

agree to pay part of the cost of the program, with reservists paying

the remaining cost, or reservists could sign up by paying the full

cost. The House authorization includes neither provision. Instead,

the House bill establishes a three-year demonstration program for

providing health insurance through TRICARE for reservists without

access to employer-provided health insurance. The Senate bill also

provides for a similar two-year demonstration program. Conference

outcome: Does not approve the Senate proposal to provide

TRICARE for all non-deployed reservists. Instead, who serve 90

consecutive days in active service or more and who agree to sign up

for an additional year or more of service in the reserves one year of

access to TRICARE after demobilization.

Military Survivor Benefit Plan. The House authorization includes

a measure that was adopted in markup to phase in increased benefits

for 62-and-older surviving dependents of military retirees to 55% of

retired pay (now provided to younger survivors) over four years

through 2008. The Senate approved a floor amendment to the

authorization bill that increases benefits for 62-and-older survivors

from the current 35% of retired pay to 45% after September 2008

and to 55% after September 2014. Conference outcome: As in the

House, phases in full 55% benefit level by 2008.

KC-767A tanker acquisition. The House authorization approved a

measure to require the Air Force to enter into a contract to acquire

Boeing 767 tanker aircraft. The Senate approved a floor amendment

to the authorization bill that establishes quite strict requirements

before any funds can be obligated for 767 tanker acquisition.

Conference outcome: Does not approve the House mandate to

enter into a contract for 767s by next March. Repeals the leasepurchase program approved last year. Instead, prohibits leasing and

authorizes multi-year procurement of 100 new aerial refueling

aircraft (which could be 767s or an alternative).

Renewal of authorization for public-private partnerships to provide

military family housing. After this year, a statutory cap on funding

for military housing privatization expires, and virtually all of the

congressional defense committees called for extending it. Repealing

the cap, however, would increase mandatory spending, so advocates

struggled to find an offset for the extension — an effort to extend the

program in House action on the military construction appropriations

bill was defeated on a point of order. Conference outcome: The

authorization conference agreement repeals the funding cap, offset

CRS-6

by savings from repealing the KC-767 lease-purchase plan, which

CBO had scored as mandatory spending.

Limits on defense offset agreements and Buy American provisions.

The House authorization includes a measure that would prohibit the

United States from purchasing foreign-made defense items unless

the seller agrees to provide trade “offsets” equal, as a share of value,

to the offsets the selling nation applies to purchases from the United

States. The provision may be waived if the Secretary of Defense

certifies that a purchase is necessary to meet U.S. national security

objections. In contrast, the Senate adopted an amendment to the

authorization bill by Senator McCain (S.Amdt. 3461) that would

allow the Secretary of Defense to exempt several allies from existing

Buy American requirements. Conference outcome: Rejects the

House provision that would limit purchases and substitutes a

provision that would require the Secretary of Defense to develop a

comprehensive acquisition trade policy to ensure that U.S. firms are

not disadvantaged by foreign offsets.

Limits on arms sales and technology transfers to China. The House

authorization includes one provision that would tighten restrictions

on transfer of technology with potential military utility to China by

U.S. or by foreign firms and another to expand the number of

Chinese firms defined as “military companies” to which sales are

restricted. The Senate bill includes no similar provisions.

Conference outcome: As in the House bill, would expand the

number of Chinese firms defined as “military companies.”

Disposition of nuclear waste at Department of Energy nuclear

weapons production facilities. The Senate authorization includes a

measure that would allow liquid waste stored at the Savannah River

nuclear weapons production plant to be redefined as low-level waste

that could be stabilized and stored indefinitely on site. The Senate

narrowly rejected a floor amendment to delete the provision. The

House bill does not address the issue. Conference outcome:

Approves the Senate provision with some amendments, including

requiring a National Academy of Sciences study of alternatives for

waste cleanup.

Development of the Robust Nuclear Earth Penetrator and other new

nuclear weapons. Both the House and the Senate rejected

amendments to the defense authorization bill to eliminate funds

requested for RNEP and other new nuclear weapons development.

The House-passed version of the FY2005 energy and water

appropriations bill (H.R. 4614), however, eliminates the $36 million

requested for the programs in the Department of Energy budget.

Conference outcome: The conference agreement on the energy and

water appropriations bill, included in the consolidated appropriations

bill, H.R. 4818, eliminates funds for RNEP and other new nuclear

weapons R&D.

CRS-7

Table 2. Side by Side Comparison of Key Provisions: Defense Authorization

House Authorization

Senate Authorization

Conference Authorization

Military Personnel End-Strength, Pay, and Benefits

Increased statutory end-strength for the Army by

10,000 troops each year from FY2005 through

FY2007 and for the Marine Corps by 3,000 troops

each year through FY2007. Set FY2005 levels as

minimums.

Approved a floor amendment to increase Army

end-strength by 20,000 in FY2005, but did not

establish it as a floor.

Increased end-strength for the Army by 20,000 and

for the Marine Corps in FY2005, established both

as minimums, and approved increases of 10,000 in

the Army and 6,000 in the Marine Corps through

FY2009.

Approved the requested pay raise of 3.5% for

uniformed personnel.

Approved the requested pay raise of 3.5% for

uniformed personnel.

Approved the requested pay raise of 3.5% for

uniformed personnel.

Approved the request to complete a five-year

phase in of increased housing allowances sufficient

to eliminate out-of-pocket housing costs.

Approved the request to complete a five-year

phase in of increased housing allowances sufficient

to eliminate out-of-pocket housing costs.

Approved the request to complete a five-year

phase in of increased housing allowances sufficient

to eliminate out-of-pocket housing costs.

Approved a measure to increase Survivor Benefits

Plan (SBP) annuities for age 62-and-older

survivors of military retirees from 35% of retired

pay to 55% in increments through FY2008.

Approved a floor amendment to increase Survivor

Benefits Plan (SBP) annuities for age 62-and-older

survivors of military retirees from 35% of retired

pay to 55% in increments through FY2014.

Approved the House proposal to phase in the full

55% level by FY2008.

Eliminated a statutory limit on funding for military

housing privatization.

Approved a floor amendment increasing the

privatization cap by $1 as a placeholder for

negotiations in conference.

Eliminated the statutory cap on funding for

housing privatization.

CRS-8

House Authorization

Senate Authorization

Conference Authorization

Permanently increased the Family Separation

Allowance from $100 to $250 per month and

increased Imminent Danger Pay from $150 to $225

per month. Also increased hardship duty pay,

which may be provided to troops outside of

combat zones, from $300 to $750 per month.

Increased the Family Separation Allowance from

$100 to $250 per month and increased Imminent

Danger Pay from $150 to $225 per month.

Increased the Family Separation Allowance from

$100 to $250 per month and increased Imminent

Danger Pay from $150 to $225 per month. These

measures make permanent increases that Congress

approved in the FY2003 and FY2004 Iraq

supplemental appropriations bills. Did not accept

House provision on hardship duty pay.

Established a program to replace lost income of

reservists mobilized for extended periods up to

$3000 per month.

Approved a floor amendment requiring that

Federal agencies ensure that employees will not

lose income when mobilized as reservists.

Neither House nor Senate provision adopted.

Authorized the Secretary of Defense to reimburse

personnel for purchases of self-protection

equipment if not provided by the services before

deployment.

Required the Defense Department to reimburse

military personnel, families, or charitable

organizations for purchases of self-protection

equipment if not provided by the services before

deployment.

Requires the Defense Department to reimburse

military personnel, families, or charitable

organizations for purchases of self-protection

equipment if not provided by the services before

deployment. Establishes procedures for claims.

Permanently extended to all hospitalized personnel

a provision in the FY2004 defense appropriations

act (P.L. 108-283) that eliminated a requirement

that military personnel pay for meals while

hospitalized for combat-related injuries.

Extended to all hospitalized personnel a provision

in the FY2004 defense appropriations bill that

eliminated a requirement that military personnel

pay for meals while hospitalized for combatrelated injuries.

Permanently repeals the requirement that

hospitalized personnel pay for meals.

Authorized the Defense Department to accept

donation of frequent flyer miles for travel of

military personnel or family members.

Authorized the Defense Department to accept

donation of frequent flyer miles for travel of

military personnel or family members and others.

Authorizes the Defense Department to accept

donation of frequent flyer miles for travel of

military personnel or family members and others.

CRS-9

House Authorization

Senate Authorization

Conference Authorization

Directed the Defense Department to establish a

three-year demonstration program that would

permit non-deployed reservists not eligible for

employer-sponsored health benefits to sign up for

health insurance through the military-run

TRICARE program.

Established a two-year demonstration program to

allow non-deployed military reservists not eligible

for employer-sponsored heath insurance to sign up

for health insurance through the military-run

TRICARE program.

Does not approve a TRICARE for reservists

demonstration project but requires the Government

Accountability Office to report on Defense

Department preparations to carry one out.

Adopted a floor amendment to allow all reservists

to sign up for medical insurance through the

military TRICARE program if they pay 28% of the

cost. The Committee bill established a new health

insurance program, called TRICARE Reserve

Select, under which reservists and their dependents

may sign up for health insurance through

TRICARE, with employees paying 28% of the

cost, as in the federal civilian health program, if

employers agree to cover the remaining cost, or

100% if employers do not cover part of the cost.

Allows reservists who have been activated and

who reenlist to sign up for insurance through

TRICARE for one year for each 90 days of active

service. Would require them to pay of 28% of the

cost.

Also made permanent a provision in the FY2004

Iraq supplemental that made reservists eligible for

TRICARE medical benefits 90 days before

activation.

Made permanent a provision in the FY2004 Iraq

supplemental that made reservists eligible for

TRICARE medical benefits 90 days before

activation.

Established a commission on roles, missions, and

compensation of the National Guard and Reserves.

Established a commission on roles, missions, and

compensation of the National Guard and Reserves.

Required separate campaign medals for Operation

Enduring Freedom in Afghanistan and Operation

Iraqi Freedom.

Not included in conference report because a

similar provision was enacted earlier.

Made permanent a provision in the FY2004 Iraq

supplemental that made reservists eligible for

TRICARE medical benefits 90 days before

activation.

Required separate campaign medals for Operation

Enduring Freedom in Afghanistan and Operation

Iraqi Freedom.

CRS-10

House Authorization

Senate Authorization

Conference Authorization

Directed the Secretary of Defense to submit

proposed changes in the Uniform Code of Military

Justice regarding sexual assaults. Also extended

the term of a task force on sexual assaults. Added

a floor amendment requiring a uniform policy on

sexual assault.

Directed the Secretary of Defense to establish a

uniform policy on sexual assault.

Directs the Secretary of Defense to establish a

uniform policy on sexual assault and requires

various reports.

Approved a provision to revise eligibility

requirements for award of the Combat Infantry

Badge and Combat Medical Badge to Army

personnel in Korea.

Approved a floor amendment to apply criteria for

awarding the Combat Infantryman Badge and the

Combat Medical Badge to Army personnel in

Korea equivalent to procedures applied elsewhere.

Agreed to the Senate provision.

Adopted a floor amendment to eliminate the

phase-in of concurrent receipt for veterans with a

disability rating of 100% and immediately provide

full benefits.

Agreed to the Senate provision with a technical

amendment.

Adopted a floor amendment expressing the sense

of Congress supporting current policy that there be

no media coverage of the return to the United

States of remains of deceased service members.

Agreed to the Senate provision with a technical

amendment.

Adopted a floor amendment to exempt abortions of

pregnancies due to rape or incest from the

prohibition against using DOD funds for abortions.

Not included in conference agreement.

Adopted a floor amendment to transfer

administration of the Energy Employees

Occupational Illness Compensation Program from

the Department of Energy to the Department of

Labor.

Agreed to the Senate provision with an

amendment.

CRS-11

House Authorization

Senate Authorization

Conference Authorization

Major Weapons Programs (note that final funding for major weapons programs is determined in defense appropriations)

Approved $10.2 billion, approximately the amount

requested, for missile defense programs, though

the committee trimmed funds for kinetic

interceptor development and added funds for

ground-based mid-course defense and for

additional Patriot PAC-3 missiles.

Approves $9.9 billion for missile defense

programs, generally in line with the appropriations.

Reduced funds for kinetic energy interceptor

development

Adopted a floor amendment to require the

Secretary of Defense to prescribe and apply

criteria for operationally realistic testing of

fieldable prototypes developed under the ballistic

missile defense program.

Agreed to the Senate provision.

Required the Air Force to enter into a multi-year

contract to acquire Boeing KC-767A tanker

aircraft. Also required that a new contract be

negotiated after June 1, 2004, and that an

independent panel review the contract terms.

Approved a floor amendment requiring the Air

Force to comply with all applicable acquisition

laws and regulations before entering into a contract

for refueling aircraft.

Repeals a provision in the FY2004 authorization

permitting leases of KC-767 tankers and adopts a

provision permitting multiyear procurement of

refueling aircraft.

Approved the requested shift of funds from

Comanche helicopter development to other Army

aviation and related programs.

Approved the requested shift of funds from

Comanche helicopter development to other Army

aviation and related programs.

Approves the requested shift of funds from

Comanche helicopter development to other Army

aviation and related programs.

Added $118 million to procure 35 UH-60 Army

helicopters, rather than the 27 requested.

Did not add funds for UH-60s.

Approved the requested $905 million for Stryker

medium armored vehicle procurement.

Approved the requested $905 million for Stryker

medium armored vehicle procurement.

Approves the requested $905 million for Stryker

medium armored vehicle procurement.

Cut $245 million from the $3.2 billion requested

for Army Future Combat System development.

Approved the requested $3.2 billion for Army

Future Combat System development.

Cuts $270 million from the $3.2 billion requested

for FCS development

Provided $10.0 billion for missile defense

programs, $177 million below the request, cut

funding for kinetic interceptor development by

$200 million, and added $90 million for additional

Patriot PAC-3 missiles.

CRS-12

House Authorization

Senate Authorization

Conference Authorization

Provided about the requested amounts to procure

three DDG-51 destroyers, one Virginia-class attack

submarine, one LPD-17 amphibious ship, and two

T-AKE auxiliary ships.

Approved requested funds for three DDG-51

destroyers, one Virginia-class submarine, one

LPD-17 amphibious ship, and two T-AKE

auxiliary ships.

Provides about the requested amounts to procure

three DDG-51 destroyers, one Virginia-class attack

submarine, one LPD-17 amphibious ship, and two

T-AKE auxiliary ships.

Added $150 million as an initial increment for

construction of a new LHD(R) amphibious ship.

Added $150 million as the first increment of

funding for procurement of the first of the new

LHA(R)-class of amphibious assault ships.

Adds $150 million as the first increment of

funding for procurement of the first of the new

LHA(R)-class of amphibious assault ships.

Approved funds for continued development of the

DD(X) destroyer but eliminated $221 million to

begin constructing the first ship.

Approved $1.5 billion, as requested, for DD(X)

destroyer development, including $221 million in

the R&D accounts for design and production of the

first ship of the class, and added $99.4 million to

accelerate design of the second ship.

Approves $1.5 billion for DD(X) development,

including $221 million for initial ship construction,

added $84 million for second ship, trimmed $45

million from fleet support R&D.

Approved funds for continued development of the

Littoral Combat Ship (LCS) but eliminated $107

million to begin constructing the first ship.

Approved $1.5 billion, as requested for Littoral

Combat Ship (LCS) development, including $107

million to start production of the first ship.

Approves $350 million for development of the

LCS, including $107 million to begin constructing

the first ship.

Approved $2.9 billion, as requested, for 42

Navy/Marine F/A-18E/F aircraft.

Authorized $2.9 billion, as requested, for 42 F/A18E/F aircraft.

Authorizes $2.9 billion, as requested, for 42 F/A18E/F aircraft.

Approved $4.6 billion, as requested, for F-35 Joint

Strike Fighter development.

Approved $3.6 billion for F-35 Joint Strike fighter

development, adding $15 million for the shorttakeoff variant.

Approves $3.5 billion for F-35 development —

adds $8 million for STOVL, but cut $134 million

from engine development.

Approved $4.2 billion for 24 F/A-22 fighters.

Approved $3.9 billion for 22 F/A-22 fighters, a

reduction of $280 million and 2 aircraft from the

request.

Approves $4.2 billion for 24 F/A-22 fighters, with

small reductions for efficiencies.

Added $100 million to begin development of a

next-generation bomber.

Adds $30 million for bomber development.

CRS-13

House Authorization

Senate Authorization

Conference Authorization

Added $35 million to the $508 million requested

for Space-Based Infrared System-High (SBIRSHigh) development.

Added $35 million to the $508 million requested

for Space-Based Infrared System-High (SBIRSHigh) development.

Adds $35 million to the $508 million requested for

Space-Based Infrared System-High (SBIRS-High)

development.

Cut $100 million from the $775 million requested

for Transformational Communications Satellite

development.

Cut $100 million from the $775 million requested

for Transformational Communications Satellite

development.

Following the appropriations, cuts $300 million

from the $775 million requested for

Transformational Communications Satellite

development.

Provided $328 million, as requested, for SpaceBased Radar development.

Following the appropriations, provides $75

million, $273 million less than requested, for

Space-Based Radar development.

Added substantial funds for force protection and

related programs, including $705 million for uparmored Humvees, $332 million for add-on armor

for Humvees and trucks, $421 million for body

armor, and $517 million for the Army’s Rapid

Fielding Initiative. Also passed a separate

measure, H.R. 4323, to provide statutory authority

to the Secretary of Defense to procure equipment

needed for combatant commands rapidly by

waiving normal acquisition requirements.

Added substantial amounts for force protection and

related measures, including $925 million for uparmored Humvees and add-on armor (the

Administration requested $163 million for 818 uparmored Humvees), $603 million for force

protection gear and combat clothing, and $107

million for the Army Rapid Fielding Initiative

(designed to deploy high priority items rapidly to

the soldiers in the field) and for Army and Marine

individual equipment.

Authorizes $105 million for the Rapid Fielding

Initiative, added $572 million for up-armored

Humvees, added $100 million for bolt-on armor.

Approved a provision that would delay military

base closures until 2007 and that would require the

Defense Department to submit several reports

related to military basing requirements by March

of 2006.

Rejected a floor amendment to delay military base

closures.

Did not include the House provision delaying base

closures, but requires several reports and a vote of

7 of 9 members of the Base Closure Commission

to add facilities to the closure list.

Other Key Actions.

CRS-14

House Authorization

Senate Authorization

Conference Authorization

Approved $409 million, as requested, for the

Cooperative Threat Reduction program that

finances programs to safeguard or eliminate

weapons in the former Soviet Union. Provided a

one year waiver of limits on funding for a

chemical demilitarization plant in Russia about

which there has been a longstanding disagreement

between the House and Senate.

Approved $409 million, as requested, for the

Cooperative Threat Reduction program. Also

allowed the President annually to waive limits on

funding for a chemical demilitarization plant in

Russia.

Approves $409 million, as requested, for the

Cooperative Threat Reduction program. Also

allows the President to waive limits on funding for

a chemical demilitarization plant in Russia for

each calendar year through December 31, 2006.

Approved $1.3 billion, as requested, for

Department of Energy non-proliferation programs.

Approved $1.3 billion, as requested, for

Department of Energy non-proliferation programs.

Approves $1.3 billion, as requested, for

Department of Energy non-proliferation programs.

Approved measures to require that outsourcing of

activities performed by more than 10 employees be

permitted only if certain conditions are met,

including a requirement that costs of health care

and other benefits not disadvantage federal

employees, and another to provide that Defense

Department civilian employees may protest

privatization decisions.

Approved floor amendments similarly limiting

outsourcing and permitting specific representatives

of civilian employees to protest privatization

decisions, but did not address health care and other

benefits.

Agreed to set requirements for outsourcing,

including savings of 10% or $10 million.

Approved the Senate provision regarding bid

protests with clarifications. Did not require that

health and other benefits not disadvantage federal

employees, but required a study of the impact of

health and other benefits. In report language,

noted that the FY2005 defense appropriations bill

limits outsourcing if health and other benefits are a

disadvantage to federal employees.

Approved a measure that would require that

foreign countries receive no more in trade offsets

as a percentage of the value of a contract for

purchasing U.S. military equipment than the

percentage of domestic content required for U.S.purchased military equipment.

Approved a floor amendment to ease “Buy

American” restrictions on defense trade with some

allies.

Rejected the House provision that would limit

purchases and substituted a provision that would

require the Secretary of Defense to develop a

comprehensive acquisition trade policy to ensure

that U.S. firms are not disadvantaged by foreign

offsets.

CRS-15

House Authorization

Senate Authorization

Conference Authorization

Approved one provision that would make it U.S.

policy to restrict U.S. contracts with foreign

companies that transfer technology with potential

military utility to China and another to expand the

number of Chinese firms defined as a “military

company” to which sales are restricted.

Made no similar provisions.

Did not agree to the House provision regarding

foreign firms that trade with China. Agreed to the

House provision defining Chinese firms that are

considered “military companies.”

Adopted an amendment in the committee markup

to prohibit leasing of support ships from foreign

providers for more than one year.

Made no similar provision.

Agreed to no similar provision.

Approved funding as requested for Robust Nuclear

Earth Penetrator R&D and for other research on

new nuclear weapons.

Approved requested funding for the Robust

Nuclear Earth Penetrator and for other nuclear

weapons R&D.

Approved requested funding for the Robust

Nuclear Earth Penetrator and for other nuclear

weapons R&D. But funding remained at issue in

energy and water appropriations bill.

Approved a measure to ease rules regarding

handling of radioactive waste at the Savannah

River nuclear plant in South Carolina and the

Idaho National Laboratory.

Approved the Senate provision.

Increased cap on U.S. military personnel in

Colombia to 500.

Agreed to an Administration request to increase a

legislative cap on U.S. military personnel in

Colombia from 400 to 800 and to increase the cap

on contractors from 400 to 600.

Agreed to the request to increase the cap on

military personnel in Colombia to 800 and on

contractors to 600.

Approved $300 million for the Commanders’

Emergency Response Program (CERP) for smallscale reconstruction projects in Iraq and

Afghanistan.

Authorized $300 million for the CERP, and

authorized the Secretary of Defense, with the

concurrence of the Secretary of State, to use up to

$250 million to train and equip Iraqi and Afghan

security forces.

Authorized up to $300 million for the

Commanders’ Emergency Response Program and

up to $500 million to train and equip Iraqi and

Afghan military and security forces.

CRS-16

House Authorization

Approved a measure requiring the Secretary of

Defense to prescribe policies to prevent the abuse

of detainees and adopted a floor amendment

expressing the sense of Congress concerning the

abuse of detainees in Iraq.

Senate Authorization

Conference Authorization

Adopted a floor amendment to provide Federal

assistance to states and local jurisdictions to

prosecute hate crimes.

Not included in conference agreement.

Adopted a floor amendment increasing penalties

for obscene language in broadcasts.

Not included in conference agreement.

Adopted a floor amendment expressing the sense

of the Senate that Armed Forces Radio and

Television Service programming should be

balanced.

Not included in conference agreement.

Adopted a floor amendment repealing FCC

regulations that loosened ownership restrictions for

television and radio media companies.

Not included in conference agreement.

Approved a floor amendment requiring reports on

detainees; stating policy on U.S. adherence to

international conventions on torture; prohibiting

torture; and requiring the Secretary of Defense to

prescribe regulations to ensure compliance and

report twice a year on investigations of possible

violations.

Approved a measure stating the sense of Congress

with regard to misconduct at Abu Ghraib and the

prohibition on torture; setting out U.S. policy

regarding proper treatment of detainees; requiring

the Secretary of Defense to prescribe policies to

ensure that detainees are treated in a humane

manner; setting out minimum criteria for these

policies; requiring that the Secretary certify that

federal employees and contractor personnel

involved with handling or interrogation of

detainees fulfil annual training requirements; and

containing several reporting requirements.

CRS-17

House Authorization

Senate Authorization

Conference Authorization

Adopted a floor amendment to extend military

extraterritorial jurisdiction to cover personnel and

contractor personnel of any federal agency or

provisional authority supporting the mission of the

Department of Defense overseas

Agreed to the Senate provision.

The House version of the FY2005 energy and

water appropriations bills eliminated funding for

the Robust Nuclear Earth Penetrator and other new

nuclear weapons R&D.

The Senate did not act on its version of the energy

and water appropriations bill.

The conference agreement on the energy and water

appropriations bill, included in the consolidated

appropriations bill, eliminates requested funding

for the Robust Nuclear Earth Penetrator and for

other new nuclear weapons R&D.

The House bill, as reported by the Armed Services

Committee, included a provision, Section 1541,

requiring the Treasury Department, rather than the

Defense Department, to make annual payments to

the military retirement fund for the costs of

providing TRICARE health insurance to over-65

military retirees beginning in FY2006. This is an

effort to free up an additional $11-12 billion for

defense programs by shifting costs to the nondefense side of the budget.

No provision.

Included an amended version of the House

measure, Section 725.

CRS-18

Defense Appropriations Conference Agreement

The conference agreement on the FY2005 defense appropriations bill, approved

in the House and Senate on July 22, 2004, and signed into law on August 5, provides

$25 billion for operations in Iraq and Afghanistan, and resolves a number of major

weapons issues.

Highlights of the defense appropriations conference agreement include

Funding for operations in Iraq and Afghanistan. Both the Houseand Senate-passed versions of the defense appropriations bill

included $25 billion, as the Administration requested on May 12, to

cover costs of ongoing military operations in Iraq and Afghanistan

through the first few months of FY2005. The main issue in

Congress was how much flexibility to provide the Defense

Department in allocating the funds among budget accounts. The

conference agreement provides $3.8 billion of the money in a

flexible transfer account, called the Iraq Freedom Fund, and the

remainder in regular appropriations accounts. The level of detail in

which the funds are provided is quite narrow, as in the House-passed

appropriations bill, and the Defense Department will have to seek

advance approval from the congressional defense committees to shift

funds to other uses.2 Of the $3.8 billion in the Iraq Freedom Fund,

$1.8 billion is for classified programs, so $2 billion is available for

unforseen expenses.

Repeal of FY2004 rescission.

The FY2004 Consolidated

Appropriations Act (P.L. 108-199), enacted last January, rescinded

$1.8 billion of funds in earlier defense appropriations bills. The

conference agreement repeals the rescission. The Congressional

Budget Office scores this as a reappropriation of funds. So the total

of emergency appropriations for the Defense Department in the

FY2005 defense appropriations bill is $26.8 billion, with additional

amounts for other agencies.

Emergency funding for non-defense programs. The defense bill

includes emergency funds for a number of other programs, including

$685 million for State Department operations in Iraq,$95 million to

respond to the humanitarian crisis in the Darfur region of Sudan and

Chad, $400 million to fight wild fires in the West, $50 million for

security at the upcoming Democratic and Republican political

conventions, and $26 million to make up a shortfall in Federal

Judiciary defender services.

For an extensive discussion, see CRS Report RL32422, The Administration’s FY2005

Request for $25 Billion for Operations in Iraq and Afghanistan: Precedents, Options, and

Congressional Action, by (name redacted) and (name redacted).

CRS-19

Navy DD(X) and LCS ship construction. The Administration

requested $221 million in R&D funding for the DD(X) destroyer

program to begin construction of the first ship of the class and $107

million, also in R&D funds, to begin construction of the first Littoral

Combat Ship (LCS). The House authorization cut money for ship

construction from both programs, though it approved continued

development funding. The Senate authorizers approved the

requested construction funds for both programs and also added $99

million in design funds for the DD(X) to accelerate production of a

second ship. The House Appropriations Committee agreed with the

House authorization in cutting money for DD(X) construction and

added $125 million for advance procurement for an additional DD51 destroyer in place of the DD(X). The House appropriators did

not, however, agree to trim funds for the LCS and instead added

$107 million (for a total of $214 million) to fully fund construction

of the first ship. Like the Senate authorization, the Senate

Appropriations Committee approved the requested construction

funds for both programs and added $99 million for the DD(X),

though it shifted the $221 million requested for DD(X) construction

from R&D to the procurement accounts. The appropriations

conference agreement provides $221 million for DD(X)

construction, but in procurement rather than in R&D. The

agreement also provides $214 million to fully fund construction of

the first LCS in the R&D accounts. So the House authorization cuts

did not prevail in final congressional action on appropriations.

F/A-22 fighter. The Senate Armed Services Committee trimmed the

request from 24 to 22 aircraft, saving $280 million. The House

authorization and the House and Senate appropriations bills,

however, all supported the full 24 aircraft, $4.2 billion procurement

request. The appropriations conference agreement trims $30 million

from the request for assumed efficiencies, but supports the full 24

aircraft request.

Army Future Combat System (FCS). The House authorization

trimmed $245 million from the FCS program and imposed a

requirement that the Army more fully justify the program. The

Senate provided the full $3.2 billion requested. The House

Appropriations Committee cut $324 million and eliminated funds

for the non-line of sight launch system (NLOS-LS), while providing

full funding for the non-line of sight cannon (NLOS-C). The Senate

appropriations bill provided the full $3.2 billion requested and the

committee report specifically approved funding for NLOS-LS. The

appropriations conference agreement trimmed $268 million from the

program, but included $58.2 million for NLOS-LS.

Space programs. The House appropriators shifted $91 million from

the Evolved Expendable Launch Vehicle (EELV) program to the

Space-Based Infrared System-High (SBIRS-High) program, as the

Air Force requested. Senate appropriators, however, cut $100

CRS-20

million from the EELV due to delays but did not add anything to

SBIRS-High. The appropriations conference agreement cuts $100

million from the EELV and adds $91 million to SBIRS-High. The

House appropriators cut $100 million from the $775 million

requested for the Transformational Communications Satellite

program, following the House authorization, while the Senate

appropriators cut $400 million. The appropriations conference

agreement cuts $300 million, which will require the Air Force to

substantially restructure the program. The House appropriators

essentially terminated Space-Based Radar development, leaving $75

million for a more basic technology development effort, while the

Senate appropriators cut $100 million from the $327 million

requested. The appropriations conference agreement agrees with the

House, effectively terminating the current Space-Based Radar

program.

CRS-21

Table 3. Side by Side Comparison of Key Provisions: Defense Appropriations

House Appropriations

Senate Appropriations

Conference Appropriations

Provided funding for a military pay raise of 3.5%

and for housing allowances and other benefits as

approved in the House authorization.

Provided funding for a military pay raise of 3.5%

and for housing allowances and other benefits as

approved in the Senate authorization.

Provided funding for a military pay raise of 3.5%

and for housing allowances and other benefits.

Within the $25 billion for Iraq and Afghanistan,

included funds for Army and Marine Corps endstrength increases as approved in the House

authorization.

Within the $25 billion for Iraq and Afghanistan,

included funds for an increase in Army endstrength of 20,000 as approved in the Senate

authorization.

Provides funds for added end-strength within the

$25 billion provided for Iraq and Afghanistan.

Cut $499.7 million from military personnel

accounts to reflect perennial underexecution of

military personnel programs in prior years, as

reported by the General Accounting Office.

Cut $375 million from military personnel accounts

to reflect perennial underexecution of military

personnel programs in prior years, as reported by

the General Accounting Office.

Cuts $528 million from military personnel

accounts to reflect unobligated balances of prior

year funds.

Cut $94 million from military personnel accounts

to reflect the planned end of U.S. operations in

Bosnia in December 2004.

Cut $94 million from military personnel accounts

to reflect the planned end of U.S. operations in

Bosnia in December 2004.

Military Personnel End-Strength, Pay, and Benefits

Major Weapons Programs

Added $2.2 billion to “recapitalize” Army and

Marine Corps ground forces, including $950

million, doubling the amount requested, to procure

Stryker armored personnel carrier, $350 million

for other armored combat vehicles, $503 million

for helicopters, $390 million for trucks and other

support vehicles, and $52 million for the

ammunition production base.

Adds $1.5 billion for Army recapitalization,

including $625 million for Strykers, $313 million

for other Army and Marine Corps armored

vehicles and related equipment, $333 million for

Army trucks, and $51 million for the ammunition

production base.

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House Appropriations

Senate Appropriations

Conference Appropriations

In Iraq/Afghanistan emergency funds provided

$674 million for up-armored Humvees, $198

million for bolt-on armor, $297 million for the

Army Rapid Fielding Initiative, and $59 million

for aircraft hardening equipment.

In Iraq/Afghanistan emergency funds, provided

$865 million, for an Army “Rapid Response Force

Protection Initiative” for up-armored Humvees,

bolt on armor, armored cabs, or other related

purposes. Also provided $240 million for Marine

Corps vehicle hardening.

In Iraq/Afghanistan emergency funds, provided

$572 million for up-armored Humvees, $100

million for the Rapid Response Force Protection

Initiative, $65 million for the Rapid Fielding

Initiative, and $15 million to counter improvised

explosive devices.

Provided $9.7 billion for missile defense, $458

million below the request, and rescinded $31.5

million due to termination of a joint satellite

program with Russia (called RAMOS) and $74.7

million due to restructuring of the Airborne Laser

program.

Provided $10.2 billion, about the amount

requested, for missile defense programs. Added

$80 million for the Israeli Arrow program. Agreed

to terminate the U.S.-Russian RAMOS program,

but allocated $5 million for a follow-on program.

Added $163.5 million for Ground-Based

Midcourse Defense. Cut $252 million, about half

the amount requested, from kinetic energy

interceptor program.

Provided $10.0 billion for missile defense, cut

$163 million from the kinetic energy interceptor,

cut an unallocated $180 million, added $246

million for mid-course defense.

Cut the Army’s request for $3.2 billion for Future

Combat System development by $324 million, $79

million more than the House authorization, of

which$76 million was from the non-line of sight

launch system (NLOS-LS), terminating the project.

Provided the full $3.2 billion requested for Army

Future Combat System development. The

committee specifically approved continued

funding for the non-line of sight launch system

(NLOS-LS).

Cut $250 million from the FCS request as

excessive overhead, provides $58 million for

NLOS-LS.

Provided $76 million to fully fund construction of

a Theater Support Vessel in Army R&D accounts.

Approved the $65 million requested for TSV

R&D.

Approved the $65 million requested for TSV

R&D, rejecting the House addition.

Agreed with the House authorization in trimming

$248 million from the DD(X) R&D program,

including $221 million to begin constructing the

first ship.

Approved $221 million for construction of the first

DD(X) destroyer, but moved the money from R&D

to procurement, and added $99 million for design

of the second ship of the class, following the

Senate authorization.

Approved $221 million for construction of the first

DD(X) destroyer, but moved the money from R&D

to procurement, and added $84 million for design

of the second ship.

CRS-23

House Appropriations

Senate Appropriations

Conference Appropriations

In place of DD(X) construction, the committee

added $125 million in advance procurement for

one additional DDG-51 destroyer to be fully

funded in the FY2006 or FY2007 budgets.

Approved $3.4 billion for 3 ships, as requested, but

did not provide additional advance procurement

funds for future ship construction.

Approves $3.4 billion for 3 ships, as requested,

added $50 million for upgrades, but did not

provide additional advance procurement funds for

ship construction.

Did not agree with the House authorization cut of

$107 million for construction of the first Littoral

Combat Ship and, instead, added $107 million to

fully fund building the first ship, cut $50 million

for design of the second ship of the class.

Provided $107 million in R&D, as requested, for

construction of the first prototype Littoral Combat

Ship, but did not add funds, as the House did, to

fully fund construction.

Adds $107 million to fully fund construction of the

first ship, trimmed $2 million from second ship

design.

Eliminated $44 million requested for R&D on the

LHA(R) amphibious ship program and provided no

funds for procurement, rejecting the addition of

$150 million for LHA(R) advance procurement

recommended in the House and Senate

authorization bills.

Added $175 million for LHD(R) advance

procurement — the House committee provided no

funds, while both authorization bills approved

$150 million.

Adds $150 million for LHA(R).

Supported procurement of 24 F/A-22 fighters, as

requested.

Supported procurement of 24 F/A-22 fighters, as

requested — did not follow Senate authorization in

cutting 2 aircraft.

Supports procurement of 24 F/A-22 fighters, as

requested.

Provided $4.4 billion for F-35 Joint Strike Fighter

R&D funding, a reduction of $240 million to

reflect delays. Also prohibited obligation of $1.4

billion of the funds until DOD reports to Congress

on plans to adjust the program following an

independent review.

Provided full funding, as requested, for Navy and

Air Force development of the F-35 Joint Strike

Fighter — did not concur with House cuts due to

delays.

Cut $240 million due to delays. Requires a report

on the program by December 15, 2004.

CRS-24

House Appropriations

Senate Appropriations

Conference Appropriations

Provided $100 million in a “Tanker Replacement

Transfer Fund” available to acquire KC-767 tanker

aircraft whenever the status of the program

warrants acquisition.

Provided $110 million for tanker aircraft

replacement, but did not specify whether the funds

were for KC-767s, in effect leaving the issue for

authorizers to decide.

Provides $100 million for tanker replacement, but

leaves other issues for authorization.

Objected to the Air Force failure to fully fund

purchases C-17 and C-130 aircraft and shifted

$159 million from C-17 upgrades to fully fund 15

aircraft, one more than requested.

Added $34 million to C-17 program for

maintenance training, did not address full funding

issue.

Adds $159 million for full funding of 15 aircraft

and $34 million for training.

Added $91 million for the Space Based Infrared

System-High (SBIRS-High) program, more than

the $35 million the House and Senate authorizers

added.

Provided $508 million for development of the

Space-Based Infrared System-High (SBIRS-High),

but did not add $91 million, as the Air Force had

requested and the House agreed.

Adds $91 million for SBIRS-High.

Provided $75 million for the Space Based Radar

program, $253 million below the request,

effectively terminating the program, with the

remaining funds to be used for alternative

technologies and concepts.

Provided $228 million for the Space-Based Radar

program, $100 million below the request, but did

not agree with House cuts that would effectively

terminate the program.

Provides $75 million, a cut of $253 million from

the request, as in the House, effectively

terminating the program.

Cut $100 million from the request for $775 million

for the Transformational Communications

Satellite, following the House and Senate

authorizations.

Provided $375 million for the Transformation

Communications Satellite, $400 million below the

request.

Provides $475 million, a cut $300 million from the

request.

Cut $91 million from the Evolved Expendable

Launch Vehicle (EELV) for transfer to SBIRSHigh, and, in report language, said that two

contractors may not be justified.

Cut $100 million Provided $511 million for the

Evolved Expendable Launch Vehicle, $100 million

below the request due to launch delays.

Cuts $91 million.

CRS-25

House Appropriations

Senate Appropriations

Provided $557 million for development of a

replacement Marine One helicopter, $220 million

below the request.

Provided $557 million for development of a

replacement Marine One helicopter, $220 million

below the request, as in the House.

Added $50 million for new bomber development,

half what the House authorization added.

Conference Appropriations

Cuts $220 million.

Adds $30 million for new bomber development.

Other Key Actions

Added $25 billion for operations in Iraq and

Afghanistan, almost all in regular appropriations

accounts except for $2.978 billion in the Iraq

Freedom Fund, of which $1.978 was only for

classified programs leaving $1 billion as flexible

funding.

Provided $25 billion for operations in Iraq and

Afghanistan, almost in regular appropriations

accounts subject to normal procedures requiring

congressional approval of transfers above certain

thresholds, with $2.5 billion in the flexible Iraq

Freedom Fund.

Provides $25 billion for operations in Iraq and

Afghanistan, most in regular appropriations

In a manager’s amendment in full committee

markup, added $685 million to the emergency

funding for Iraq for State Department operations

and $95 million in emergency funds for famine

relief and refugee assistance in Sudan and Chad.

Approved a floor amendment to provide $95

million for assistance to refugees in Sudan and

Chad.

Adds $685 million for State Department operations

in Iraq, $95 million for assistance to refugees in

Sudan and Chad, $500 million for fire fighting,

$50 million for security at the party conventions,

and $26 million for a federal judiciary shortfall

Added $800 million, close to amounts approved in

prior years, for unrequested, earmarked medical

R&D and related projects, including breast cancer

and prostate cancer research.

Added about $650 million for earmarked medical

R&D and related programs, of which $200 million

for cancer research, including peer-reviewed breast

cancer, prostate cancer, and other cancer research,

was provided in a single block, with the Defense

Department directed to allocate the funds.

Adds about $1 billion for earmarked medical R&D

and related programs, most as in the House bill and

as in the past, earmarked for particular programs.

accounts, with $3.8 billion in the flexible Iraq

Freedom Fund, of which $1.8 billion is for

classified programs, leaving $2 billion for

unforseen expenses.

CRS-26

House Appropriations

Senate Appropriations

Agrees to the House provision.

Approved a measure setting conditions on the

conversion of work involving more than 10

employees to private contractors, including full

competition, that savings exceed the lesser of

10% or $10 million, and that the contractor not

receive an advantage due to health insurance

costs.

Cut operation and maintenance accounts by $415

million to reflect under-obligation of O&M funds

in prior years, by $335 million for assumed

efficiencies in administrative and related activities;

by $86 million to eliminate growth above inflation

in requested funds for base operations support, by

$92 million for overstated civilian pay

requirements, by $177 million to reflect a slower

rate than estimated in converting jobs from

uniformed positions to civilian ones, by $316

million in working capital funds to reflect cash

balances and purchases that will not be necessary,

by $967 million of excess cash balances in the

transportation working capital fund, by $300

million for overstated requirements for outside

contracts, by $100 million for unnecessary

payments to contractors for taxes, and by $55

million for overestimated civilian separation

incentives.

Conference Appropriations

Cut operation and maintenance accounts by $478

million to reflect the planned end of U.S.

operations in Bosnia in December 2004, by $92

million for overstated civilian pay requirements,

by $197 million due to slower rates of converting

military to civilian jobs and fewer civilian buyouts,

and by $347 million for costs of environmental

programs.

Cuts operation and maintenance accounts by

$478 million for operations in Bosnia, by $92

million for overstated civilian pay requirements,

by $156 million for slower military to civilian

conversions, and by $235 million as an unallocated

cut in administration and servicewide activities.

CRS-27

Congressional Committee and Floor Action

House Defense Authorization Markup

The House marked up its version of the defense authorization bill on May 12.

Some highlights of the committee-reported bill include the following.

Military Personnel End-Strength, Pay, and Benefits.

Increased statutory end-strength for the Army by 10,000 troops each

year from FY2005 through FY2007 and for the Marine Corps by

3,000 troops each year through FY2007.

Approved the requested pay raise of 3.5% for uniformed personnel.

Approved a measure to increase annuities for age 62-and-older

survivors of military retirees from 35% of retired pay to 55% in

increments through FY2008.

Eliminated a statutory limit on funding for military housing

privatization.

Permanently increased the Family Separation Allowance from $100

to $250 per month and increased Imminent Danger Pay from $150

to $225 per month. Also increased hardship duty pay, which may be

provided to troops outside of combat zones, from $300 to $750 per

month.

Established a program to replace lost income of reservists mobilized

for extended periods up to $3000 per month.

Permanently extended to all hospitalized personnel a provision in the

FY2004 defense appropriations act (P.L. 108-283) that eliminated

a requirement that military personnel pay for meals while

hospitalized for combat-related injuries.

Directed the Defense Department to establish a three-year

demonstration program that would permit non-deployed reservists

not eligible for employer-sponsored health benefits to sign up for

health insurance through the military-run TRICARE program.

Required separate campaign medals for Operation Enduring

Freedom in Afghanistan and Operation Iraqi Freedom.

Directed the Secretary of Defense to submit proposed changes in the

Uniform Code of Military Justice regarding sexual assaults. Also

extended the term of a task force on sexual assaults.

CRS-28

Major Weapons Programs.

Provided $10.0 billion for missile defense programs, $177 million

below the request, cut funding for kinetic interceptor development

by $200 million, and added $90 million for additional Patriot PAC-3

missiles.

Required the Air Force to enter into a multi-year contract to acquire

Boeing KC-767A tanker aircraft. Also required that a new contract

be negotiated after June 1, 2004, and that an independent panel

review the contract terms.

Approved the requested shift of funds from Comanche helicopter

development to other Army aviation and related programs.

Approved $2.9 billion, as requested, for 42 F/A-18E/F aircraft.

Approved $4.6 billion, as requested, for F-35 Joint Strike Fighter

development.

Added $100 million to begin development of a next-generation

bomber.

Added $118 million to procure 35 UH-60 Army helicopters, rather

than the 27 requested.

Added $150 million as an initial increment for construction of a new

LHD(R) amphibious ship.

Provided about the requested amounts to procure three DDG-51

destroyers, one Virginia-class attack submarine, one LPD-17

amphibious ship, and two T-AKE auxiliary ships.

Approved funds for continued development of the DD(X) destroyer

and the Littoral Combat Ship (LCS) but eliminated $221 million

from the DD(X) program and $107 million from the LCS budget to

begin constructing the first of each class of ships.

Adopted an amendment in the committee markup to prohibit leasing

of support ships from foreign providers for more than one year.

Other Key Actions.

Added substantial funds for force protection and related programs,

including $705 million for up-armored Humvees, $332 million for

add-on armor for Humvees and trucks, $421 million for body armor,

and $517 million for the Army’s Rapid Fielding Initiative. Also

passed a separate measure, H.R. 4323, to provide statutory authority

to the Secretary of Defense to procure equipment needed for

CRS-29

combatant commands rapidly by waiving normal acquisition

requirements.

Approved a provision that would require the Defense Department to

submit several reports related to military basing requirements by

March of 2006 and only then permit a new round of military base

closures no sooner than 2007.

Approved a measure that would require that foreign countries

receive no more in trade offsets as a percentage of the value of a

contract for purchasing U.S. military equipment than the percentage

of domestic content required for U.S.-purchased military equipment.

Approved one provision to tighten restrictions on transfer of

technology with potential military utility to China and another to

expand the number of Chinese firms defined as a “military

company” to which sales are restricted.

Approved an amendment offered in committee mark-up to

strengthen requirements that Defense Department civilian employees

be allowed to compete for operations that otherwise would be

outsourced.

Provided $409 million, as requested, for the Cooperative Threat

Reduction program.

Approved funding as requested for Robust Nuclear Earth Penetrator

R&D and for other research on new nuclear weapons.

Included a provision requiring the Treasury Department, rather than

the Defense Department, to make annual payments to the military

retirement fund for the costs of providing TRICARE health

insurance to over-65 military retirees beginning in FY2006. This is

an effort to free up an additional $11-12 billion for defense programs

by shifting costs to the non-defense side of the budget.

House Defense Authorization Floor Action

On Tuesday, May 18, the House Rules Committee met to consider proposed

amendments to H.R. 4200 and to decide which to allow for debate on the House

floor. The committee reported a rule (H.Res. 648) on May 19, as debate on the bill

was scheduled to begin. Several leading Democrats, including Representative Martin

Frost, the ranking member of the Rules Committee, Representative Ike Skelton, the

ranking member of the Armed Services Committee, and Representative John Spratt,

the second ranking member of the Armed Services Committee, opposed the rule

because it did not make in order several proposed amendments.

CRS-30

Amendments Not Made in Order.

All of the senior Democrats who opposed the rule complained, in particular, that

the rule did not make in order an amendment proposed by Representative Spratt to

transfer $414.4 million from specified missile defense programs to provide targeted

military pay raises, Marine Corp force protection measures, and improvements to the

Patriot PAC-3 missile defense system. Other amendments not made in order by the

rule included

An amendment by Representative Loretta Sanchez to make penalties

for sexual abuse crimes under the Uniform Code of Military Justice

consistent with penalties under the U.S. Code.

An amendment by Representative Jane Harman to limit missile

defense funding to the FY2004 level, which is about $1.2 billion

below the FY2005 request, to require operational testing before

missile defense systems are deployed, and to authorize $500 million

for port security;

An amendment by Representative John Tierney to require

operational testing before deploying missile defense systems;

An amendment by Representative Jim Cooper to authorize $67.7

billion in supplemental appropriations for military operations in Iraq

and Afghanistan; and

An amendment by Representative Ed Markey to delete $29.8 million

requested in the Department of Energy for a new facility to produce

plutonium pits for nuclear weapons.

An amendment by Representative Jim Matheson

congressional authority for renewed nuclear testing.

An amendment by Representative Adam Schiff to add $200 million

to Department of Energy non-proliferation programs.

An amendment by Representative Norm Dicks also to require the

Defense Department to follow a formal process in making new rules

for civilian personnel in DOD, to consult unions about the rules, and

to allow congressional review.

An amendment by Representatives Jay Inslee and Chris Van Hollen

to provide specified civil service protections for civilian defense

employees.

An amendment by Representative Joel Hefley, to provide a right of

appeal and some other protections to groups of as few as 10 federal

employees whose jobs are being studied for privatization.

to require

CRS-31

An amendment by Representative Tom Lantos to require federal

agencies to make up lost wages of employees who are military

reservists mobilized for service, and to establish a cost-sharing plan

with state and local governments to eliminate losses for state and

local government employees.

An amendment by Representative Jose Serrano to provide health

screening for military personnel exposed to depleted uranium.

Amendments Agreed To.

Of the amendments made in order, selected amendments that the House agreed

to include

An amendment by Representative Virgil Goode to allow military

personnel to assist in border protection (231-191);

An amendment by Representative Duncan Hunter expressing the

sense of Congress concerning the abuse of persons in custody in Iraq

(416-4);

An amendment by Representative Kendrick Meek to require the

Secretary of Defense to identify mission-critical information that

should be transmitted immediately from the field to senior Defense

Department officials and to set up mechanisms to transmit such

information;

An amendment by Representative Alcee Hastings that expresses the

sense of Congress that no funds available to any department or

agency of the United States government may be used to provide

assistance for the reconstruction of Iraq unless the President certifies

to Congress that the United States has entered into an agreement

with the Iraqi Governing Council or a transitional government in

Iraq under which Iraq agrees that it will expend a significant portion

of its revenues generated from oil production for reconstruction;

An amendment by Representative Curt Weldon expressing the sense

of Congress that the Secretary of Defense should assist the Iraqi

government in destroying the Abu Ghraib prison and replacing it

with a modern detention facility (308-114);

An amendment by Representative Ike Skelton on behalf of

Representative Louise Slaughter and others, requiring the Secretary

of Defense to develop a comprehensive policy for the Department of

Defense on the prevention of and response to sexual assaults

involving members of the Armed Forces and requiring DOD to take

related measures to address sexual assaults involving members of

the Armed Forces (410-0);

CRS-32

An amendment by Representative Norm Dicks requiring the Air

Force to enter into a contract to acquire KC-767 tanker aircraft by

March 1, 2005 (in Hunter en bloc amendment);

An amendment by Representative Alcee Hastings to add $100

million for Department of Energy cleanup (in Hunter en bloc

amendment);

An amendment by Representative Donald Manzullo to require the

job creation in the United States be a factor in determining contract

awards (in Hunter en bloc amendment);

An amendment by Representative Curt Weldon to give rural

firefighting agencies priority in acquiring excess defense property (in

Hunter en bloc amendment);

An amendment by Representative Henry Brown to give state and

local health agencies priority in acquiring excess defense property

(in Hunter en bloc amendment);

A second amendment by Representative Henry Brown to require the

Secretary of Defense to consider establishing a joint medical care

facility with the Veteran’s Administration when requesting funds for

health facility construction (in Hunter en bloc amendment);

An amendment by Representative Brian Baird requiring the Defense

Department to study and issue a report to Congress on mental health

services available to U.S. military personal deployed to combat

theaters (in Hunter en bloc amendment);

An amendment by Representative Zach Wamp making changes to

the Energy Employees Occupational Illness Compensation Program;

and

An amendment by Representative Jim Ryun requiring the Secretary

of Defense to initiate senior officer official educational programs

with Taiwan (290-132).

Amendments and Motion to Recommit Rejected.

Of the amendments made in order under the rule, the House rejected

An amendment by Representative Susan Davis to repeal the

prohibition on servicewomen and female military dependents

receiving abortions, even when paid for privately, at overseas

military hospitals (202-221);

An amendment by Representative Mark Kennedy to delete the

provision in the House committee bill that would delay military base

closures until 2007 (162-259); and

CRS-33

An amendment by Representative Ellen Tauscher to reduce funds for

the Robust Nuclear Earth Penetrator nuclear warhead and other new

nuclear weapons R&D by $36.6 million, the total amount requested,

and to transfer the funds to intelligence programs and conventional

weapons to defeat hardened and deeply buried targets (204-214).

The House also rejected by a vote of 202-224 a motion to recommit offered by

Representative Henry Waxman. The motion instructed the Armed Services

Committee to report back a bill including a sense of the Congress statement that the

House should appoint a select committee to investigate the treatment of detainees

held in connection with Operation Iraqi Freedom, Operation Enduring Freedom, or

any other operation related to the Global War on Terrorism.

Senate Defense Authorization Markup

The Senate Armed Services Committee finished marking up its version of the

FY2005 defense authorization bill (S. 4200) on May 6. Some highlights of the

committee-reported version of the bill include

Military Personnel End-Strength, Pay, and Benefits.

Gave the Secretary of Defense authority to increase Army active

duty end-strength by up to 30,000 through FY2009. The committee

did not, however, increase permanent statutory end-strength.

Approved the requested pay raise of 3.5% for uniformed personnel.

Increased the Family Separation Allowance from $100 to $250 per

month and increased Imminent Danger Pay from $150 to $225 per

month. These measures make permanent increases that Congress

approved last year in the FY2003 and FY2004 Iraq supplemental

appropriations bills.

Established a two-year demonstration program to allow nondeployed military reservists not eligible for employer-sponsored

heath insurance to sign up for health insurance through the militaryrun TRICARE program.

Also established a new health insurance program, called TRICARE

Reserve Select, under which reservists and their dependents may

paying 28% of the cost, as in the federal civilian health program, if

employers agree to cover the remaining cost, or 100% if employers

do not cover part of the cost.

Also made permanent a provision in the FY2004 Iraq supplemental

that temporarily gave reservists earlier eligibility for pre-deployment

medical care.

CRS-34

Added $400 million to the request for reserve medical care.

Established a commission on the National Guard and Reserves.

Required separate campaign medals for Operation Enduring

Freedom in Afghanistan and Operation Iraqi Freedom.

Extended to all hospitalized personnel a provision in the FY2004

defense appropriations bill that eliminated a requirement that

military personnel pay for meals while hospitalized for combatrelated injuries.

Directed the Secretary of Defense to establish a uniform policy on

sexual assault.

Major Weapons Programs.

Approved $10.2 billion, approximately the amount requested, for

missile defense programs, though the committee trimmed funds for

kinetic interceptor development and added funds for ground-based

mid-course defense and for additional Patriot PAC-3 missiles.

Added $35 million for cost overruns on the Space Based Infrared

System-High early warning satellite and $35 million for the

Advanced Extremely High Frequency communication satellite.

Approved the requested shift of funds from Comanche helicopter

development to other Army aviation and related programs.

Approved the requested $905 million for Stryker medium armored

vehicle procurement.

Approved the requested $3.2 billion for Army Future Combat

System development.

Approved requested funds for three DDG-51 destroyers, one

Virginia-class submarine, one LPD-17 amphibious ship, and two

T-AKE auxiliary ships.

Added $150 million as the first increment of funding for

procurement of the first of the new LHA(R)-class of amphibious

assault ships.

Approved $1.5 billion, as requested, for DD(X) destroyer

development, including $221 million in the R&D accounts for

design and the start of production of the first ship of the class, and

added $99.4 million to accelerate design of the second ship.

CRS-35

Approved $1.5 billion, as requested for Littoral Combat Ship (LCS)

development, including $107 million for design and the start of

production of the first ship of the class.

Authorized $2.9 billion for 42 Navy/Marine F/A-18E/F aircraft, as

requested.

Approved $3.6 billion for F-35 Joint Strike fighter development,

adding $15 million for the short-takeoff variant.

Approved $3.4 billion for 22 F/A-22 fighters, a reduction of $280

million and 2 aircraft from the request.

Authorized $708 million, as requested, for the Joint Unmanned

Combat Air vehicles program.

Other Key Actions.

Added substantial amounts for force protection and related

measures, including $925 million for up-armored Humvees and

add-on armor (the Administration requested $163 million for 818

up-armored Humvees), $603 million for force protection gear and

combat clothing, and $107 million for the Army Rapid Fielding

Initiative (designed to deploy high priority items rapidly to the

soldiers in the field) and for Army and Marine individual equipment.

Provided $11 billion, an increase of $445 million over the request,

for basic and applied research.

Approved $409 million, as requested, for the Cooperative Threat

Reduction program that finances programs to safeguard or eliminate

weapons in the former Soviet Union. Also allowed funding for a

chemical demilitarization plant in Russia about which there has been

a longstanding disagreement between the House and Senate.

Approved $1.3 billion, as requested, for Department of Energy nonproliferation programs.

Approved requested funding for the Robust Nuclear Earth Penetrator

and for other nuclear weapons R&D.

Approved a potentially controversial legislative measure regarding

handling of radioactive waste at the Savannah River nuclear plant.

Agreed to an Administration request to increase a legislative cap on

U.S. military personnel in Colombia from 400 to 800 and to increase

the cap on contractors from 400 to 600.

CRS-36

Senate Defense Authorization Floor Action

The Senate began floor action on S. 2400 on May 17, when it approved an

amendment by Senator Hutchison to authorized medical and dental care for military

academy cadets and midshipmen. Through the rest of that week, the Senate disposed

of only a few more amendments, in part because members of the Armed Services

Committee were involved in hearings on the Iraq prison abuse scandal. The Senate

resumed debate on June 2. The Senate continued floor debate on the bill the weeks

of June 14 and June 21, picking up its pace, adopting 36 amendments and rejecting

2, with 34 amendments pending as of June 23. On June 22, a cloture motion was

filed with a vote expected on June 24 about whether to cut off debate. Late on June

23, however, the Senate passed the bill by 97 to 0.

Amendments Agreed To.

The Senate cleared a number of technical amendments that were agreed to by

both sides and also agreed to an amendment by Senators John Warner and Ted

Stevens to authorize $25 billion for military operations in Iraq and Afghanistan.

Selected substantive measures agreed to included amendments

By Senator Pete Domenici, S.Amdt. 3192, to accelerate nonproliferation measures aimed at removing and safeguarding fissile

materials abroad (May 19, voice vote);

By Senator Robert Byrd, S.Amdt. 3212, to increase the authorized

size of the defense acquisition work force by 15% over the next

three years (May 19, voice vote);

By Senators Tom Daschle and Lindsey Graham, S.Amdt. 3258, to

allow all non-deployed reservists to receive health insurance for

themselves and their dependents through the military TRICARE

program, with the federal government paying the employer share of

costs (June 2, 70-25);

By Senators John Warner, Carl Levin, and Ted Stevens, S.Amdt.

3260, to authorize $25 billion in contingent emergency funds for

operations in Iraq and Afghanistan ( June 2, 95-0);

By Senator Ron Wyden, S.Amdt. 3305, to require that federal

employees, rather than contractor personnel, oversee acquisition

contracts (June 14, unanimous consent);

By Senator Christopher Dodd, S.Amdt. 3312, to provide

reimbursements for protective, safety, or health equipment

purchased by or on behalf of service members deployed in

connection with Operation Noble Eagle, Operation Enduring

Freedom, or Operation Iraqi Freedom (June 14, 91-0);

By Senators Edward Kennedy and Saxby Chambliss, S.Amdt. 3257,

to require public-private competitions and establish other regulations

CRS-37

governing outsourcing of Defense Department functions with more

than 10 civilian employees (June 14, unanimous consent);

By Senators Susan Collins and Carl Levin, S.Amdt. 3224, to provide

civilian personnel with bid protest rights in outsourcing competitions

(June 14, unanimous consent);

By Senator John Warner Amendment, S.Amdt. 3432, to name the

bill in honor of Ronald W. Reagan (June 14, unanimous consent);

By Senator Tom Harkin S.Amdt. 3316, expressing the sense of the

Senate that Armed Forces Radio and Television Service

programming should be balanced (June 14, unanimous consent);

By Senator Harry Reid, S.Amdt. 3307, to require that any plan for

compensation to individuals in military prisons in Iraq include

provisions for compensation to former prisoners of war held by the

regime of Saddam Hussein (June 14, unanimous consent);

By Senators Gordon Smith and Edward Kennedy, S.Amdt. 3183, to

provide Federal assistance to States and local jurisdictions to

prosecute hate crimes, including crimes against gays (approved June

15, 65-33);

By Senator Richard Durbin, S.Amdt. 3386, to affirm that the United

States may not engage in torture or cruel, inhuman, or degrading

treatment or punishment (approved June 16, voice vote);

By Senators Jeff Sessions and Charles Schumer, S.Amdt. 3372, to

extend military extraterritorial jurisdiction to cover not only

personnel and contractor personnel of the Department of Defense,

but also personnel and contractor personnel of any federal agency or

provisional authority supporting the mission of the Department of

Defense overseas (approved June 16, unanimous consent);

By Senator Patty Murray, S.Amdt. 3427, to facilitate the availability

of child care for the children of members of the Armed Forces on

active duty in connection with Operation Enduring Freedom or

Operation Iraqi Freedom (approved June 17, voice vote);

By Senator John Warner, a second degree amendment, S.Amdt.

3453, to require the Secretary of Defense to prescribe and apply

criteria for operationally realistic testing of fieldable prototypes

developed under the ballistic missile defense program — in adopting

the Warner amendment the Senate rejected an to an amendment by

Senator Jack Reed, S.Amdt. 3354, to require the Director of

Operational Test and Evaluation to prescribe and oversee operational

tests (approved, June 17, 55-44);

CRS-38

By Senator Jack Reed, S.Amdt. 3352, to increase Army active duty

end-strength for FY2005 by 20,000 to 502,400 (approved June 17,

93-4);

By Senator Tom Daschle, S.Amdt. 3202, to provide relief for

mobilized military reservists from certain federal agricultural loan

obligations (approved June 17, unanimous consent);

By Senators John Ensign, Lindsey Graham, and Saxby Chambliss,

S.Amdt. 3440, to protect documents relating to the United Nations

Oil for Food program with Iraq and to require a GAO report on the

program (approved June 17, unanimous consent);

By Senators Hilary Clinton and James Talent, S.Amdt. 3163, to

improve medical tracking and pre-deployment medical treatment of

reservists (approved June 17, unanimous consent);

By Senator Diane Feinstein, S.Amdt. 3172, to state the sense of the

Senate that perchlorate contamination is a health problem (approved

June 17, unanimous consent);

By Senator Christopher Bond, S.Amdt. 3245, to require two reports

on operation of the Federal Voting Assistance Program and the

military postal system together with certain actions to improve the

military postal system (approved June 17, unanimous consent);

By Senator Ben Campbell, S.Amdt. 3237, to equalize procedures

applied to Army personnel in Korea with procedures applied

elsewhere in awarding the Combat Infantryman Badge and the

Combat Medical Badge (approved June 17, unanimous consent); and

By Senator Bill Nelson, S.Amdt. 3279, to require a report on any

relationships between terrorist organizations based in Colombia and

foreign governments and organizations (approved June 17,

unanimous consent);

By Senators Durbin, Mikulski, Landrieu, Murray, Dayton, and

Corzine, S.Amdt. 3196, to ensure reservists who are federal

employees will not lose pay if mobilized for active duty (approved

June 18, unanimous consent);

By Senator Reid, S.Amdt. 3297 as modified, to eliminate the phasein of concurrent receipt for those veterans with a disability rating of

100% that Congress established last year (approved June 18,

unanimous consent);

By Senator Warner, S.Amdt. 3458 as modified, to express sense of

Congress to continue current policy that there be no media coverage

of the return to the United States of remains of deceased service

members (approved June 21, 52 to 38);

CRS-39

By Senator Brownback, S.Amdt. 3464, to increase penalties tenfold

for indecent language broadcast on television or radio (approved

June 22, 99-1);3

By Senator Dorgan, S.Amdt. 3235, to repeal FCC regulations

published in 2003 that generally loosened ownership restrictions for

television and radio media companies; amendment retains current

39% limit on the size of the national audience that was adopted in

P.L. 108-199 (FY2004 Consolidated Appropriations Act) (approved

June 22);4

By Senator Reid (for Hollings), S.Amdt. 3466, to protect children

from violent programming (approved June 22);

By Senator Warner (for McCain), S.Amdt. 3461, to allow the

Secretary of Defense to exempt from Buy American restrictions

seven countries who have “declaration of principles” agreements

with the United States regarding reciprocal procurement of defense

items (approved June 22, 54-46);

By Senator Levin (for Boxer), S.Amdt. 3367, to exempt abortions of

pregnancies due to rape or incest from the prohibition against using

DOD funds (part of en bloc amendments approved on June 22);

By Senator Warner (for McCain), S.Amdt. 3319, to repeal several

reporting requirements on identifying and assessing essential items

in the defense industrial base that were adopted in last year’s defense

authorization act (part of en bloc amendments approved on June 22);

By Senator Warner (for McCain), S.Amdt. 3441, to prohibit

acquisition of Air Force tanker refueling aircraft until 60 days after

currently required studies are completed and to require the Secretary

of Defense to certify that acquisition complies with all applicable

laws, Office of Management circulars, and regulations (part of en

bloc amendments approved on June 22);

By Senator James Inhofe, S.Amdt. 3198, to increase from $150

million to $250 million the amount of assistance the United States

may provide to Iraqi and Afghan military and security forces (part of

en bloc amendments approved on June 22);

For more detail, see CRS Report RL31925, Regulation of Broadcast Indecency:

Background and Legal Analysis by Angie Welborn and (name redacted).

For more detail, see CRS Report RL31925, FCC Media Ownership Rules: Issues for

Congress by (name redacted); see also, BNA,

Daily Report for Executives, “Senate Gets

Tough on Media Ownership, Indecency, but Prospects Dim in Conference.”

CRS-40

By Senators Clinton, Leahy, and Kennedy, S.Amdt. 3204, to require

a Comptroller General report on closure of Department of Defense

dependent elementary and secondary schools and commissary stores.

(part of en bloc amendments approved on June 22);

By Senator Bond, S.Amdt. 3384, as modified, to include certain

former nuclear weapons workers in a group receiving benefits under

the Energy Employees Occupational Illness Compensation Program

and to provide for disposal of excess stocks (agreed to on June 23);

By Senator Warner (for McConnell), S.Amdt. 3472, to require a

report on the stabilization of Iraq , including efforts to enlist the

support of other nations (approved by a vote of 71 to 27 on June 23);

By Senators Landrieu and Snowe, S.Amdt. 3315 as modified, to

phase in increases in survivor benefits over 3½ years (agreed to on

June 23);

By Senator Bingaman, S.Amdt. 3459 as modified, to require reports

on detainment of foreign nationals held by DOD for more than 45

(agreed to on June 23);

By Senator Daschle, S.Amdt. 3468 to S.Amdt. 3409, to assure

funding increases for veterans health care sufficient to cover

increases in population and inflation (agreed to on June 23 after a

motion to waive a point of order against S.Amdt. 3409 was rejected

by a vote of 49-49); and

By Senator Reid (for Leahy), S.Amdt. 3387, stating that it is U.S.

policy that foreign prisoners be treated according to standards the

United States would regard as legal if applied by an enemy against

American prisoners, that U.S. officials are bound by laws against

torture and abuse, and that cases against prisoners at Guantanamo be

pursued expeditiously and requiring that the Administration provide

various information to Congress, including a schedule for military

commissions at Guantanamo, all International Red Cross reports

regarding treatment of prisoners in current operations, and a report

setting forth all approved interrogation techniques (motion to table

failed June 23, 45-50, and amendment was subsequently agreed to).

Amendments Rejected.

The most high-profile debate in the Senate’s first week of action on the

authorization was about an amendment by Senators Trent Lott, Byron Dorgan, and

others to delay domestic military base closures by two years that the Senate narrowly

rejected. Another major debate concerned a provision in the bill to allow nuclear

waste at the Savannah River nuclear plant in South Carolina to be redefined as lowlevel waste that could be stored indefinitely on site, but the Senate rejected an

amendment by Senator Maria Cantwell to delete provisions backed by the

Department of Energy from the bill. A key debate the week of June 14 was over a

CRS-41

proposal by Senators Edward Kennedy and Diane Feinstein to eliminate funds for the

Robust Nuclear Earth Penetrator nuclear warhead and other new nuclear weapons,

which the Senate also rejected.

Amendments rejected include

An amendment by Senators Trent Lott, Byron Dorgan, Olympia

Snowe, Diane Feinstein, Thad Cochran, and Tom Daschle, S.Amdt.

3158, to delay by at least two years the next round of domestic

military base closures, to permit only bases abroad to be closed in

2005, and to provide that Congress must renew authority for base

closures to occur in 2007 by approving a joint resolution to be

considered under expedited procedures (rejected May 18, 47-49).

An amendment by Senator Frank Lautenberg and others, S.Amdt.

3151, to strengthen measures designed to prevent U.S.-based

companies from engaging in business with nations found to sponsor

international terrorism (rejected May 19, 49-50);

An amendment by Senators John Kyl and John Coryn, S.Amdt.

3191, to raise funds for defense programs by imposing an excise tax

on lawyers fees exceeding $20,000 per hour in tobacco cases

(rejected May 19, 39-62);

An amendment by Senator Maria Cantwell, S.Amdt 3261, to

eliminate a provision in the committee version of the bill that would

allow the Department of Energy to reclassify certain waste at the

Savannah River, South Carolina, nuclear weapons production plant

as low-level waste that can be stored indefinitely on-site (not agreed

to June 3, 48-48);

An amendment by Senators Edward Kennedy and Diane Feinstein,

S.Amdt. 3263, to prohibit the use of funds for new nuclear weapons

development under the Stockpile Services Advanced Concepts

Initiative or for the Robust Nuclear Earth Penetrator (RNEP)

(rejected June 15, 42-55);

By Senator Christopher Dodd, S.Amdt. 3313, to prohibit the use of

contractors to seek intelligence from military detainees and to

establish limitations on the transfer of custody of prisoners of the

Department of Defense (tabled June 16, 54-43);

By Senator Patrick Leahy, S.Amdt. 3292, to stiffen penalties against

profiteering and fraud in contracts for military operations support,

post-war relief, or reconstruction (rejected June 16, 46-52);

By Senator Barbara Boxer, S.Amdt. 3368, to allow deployment of

the ground-based midcourse defense element of the national ballistic

missile defense system only after the mission-related capabilities of

CRS-42

the system have been confirmed by operationally realistic testing

(rejected June 17, 42-57);

By Senator Jack Reed, S.Amdt. 3354, to require the Director of

Operational Test and Evaluation to prescribe and oversee operational

tests of ballistic missile defense systems (rejected when the Senate

agreed to the Warner 2nd degree substitute, June 17, 55-44); and

By Senator Joseph Biden, S.Amdt. 3379, to provide funds for the

security and stabilization of Iraq by suspending a portion of the

reduction in the highest income tax rate for individual taxpayers

(rejected June 17, 44-53).

By Senator Lautenberg. S.Amdt. 3291, to require that the Secretary

of the Defense develop a protocol to permit media coverage of the

return of remains of service members who die overseas (rejected

June 21, 39 to 54);

By Senator Levin, S.Amdt. 3338, re-allocate funds from Groundbased Midcourse interceptors in the missile defense program to

nuclear nonproliferation activities in the Department of Energy’s

Global Threat Reduction Initiative program, and to anti-terrorism/

force protection programs (rejected June 22, 44 to 56);

By Senator Dayton, S.Amdt. 3197, to restore current Buy American

restrictions by deleting Sections 842 and 843 in the reported version

of the bill that had allowed the Secretary of Defense to exempt some

21 countries who had memorandums of understanding with the

United States about defense trade (rendered moot June 22 by

passage of the Warner (McCain) S.Amdt. 3461);

By Senator Levin (for Kennedy), S.Amdt. 3377, to require reports on

the efforts of the President to stabilize Iraq and relieve the burden on

members of the Armed Forces of the United States deployed in Iraq

and the Persian Gulf region (rejected June 23, 48-50);

By Senator Reed, S.Amdt. 3353, to limit the obligation and

expenditure of funds for the Ground-Based Midcourse Defense

program pending the submission of a report on operational test and

evaluation (rejected June 23, 45-53);

By Senator Levin (for Byrd), S.Amdt. 3423, to reduce authority

provided in the committee bill for U.S. military personnel in

Colombia from 800 to 500 and for contractor personnel from 600 to

500 (rejected June 23, 40-58);

By Senators Leahy and Corzine, S.Amdt. 3485 (to S.Amdt. 3387),

to direct the Attorney General to submit to the Committee on the

Judiciary of the Senate all documents in the possession of the

Department of Justice relating to the treatment and interrogation of

CRS-43

individuals held in the custody of the United States (rejected June

23, 46-50);

By Senator Levin (for Corzine), S.Amdt. 3303, to reduce the age for

receipt of military retired pay for nonregular service from 60 to 55

(rejected when a motion to waive a point of order that the measure

violated provisions of the Budget Act by increasing mandatory

spending was not upheld June 23, 49-49); and

By Senator Reid (for Daschle), S.Amdt. 3409, to assure that funding

is provided for veterans health care each fiscal year to cover

increases in population and inflation (rejected when a motion to

waive a point of order that the measure violated provisions of the

Budget Act by increasing mandatory spending was not upheld June

23, 49-48).

House Defense Appropriations Markup

The House Appropriations Committee marked up its version of the FY2005

defense authorization bill on June 16 and reported H.R. 4613 on June 18, 2004

(H.Rept. 108-553). Some highlights of the committee-reported version of the bill

include the following.

Iraq and Afghanistan Costs.

The committee provided $25 billion to cover part of the costs of

operations and Afghanistan — the committee would make the

money available on enactment of the bill, so some of the funds could

be used to cover costs in FY2004 as well as FY2005. The

committee did not agree to the Administration request to provide all

of the funds in a flexible account that would allow the Secretary of

Defense to transfer money to activities without prior congressional

approval. The committee also required quarterly reports on the use

of the funds.

Military Personnel End-Strength, Pay, and Benefits.

Provided funding for a military pay raise of 3.5% and for housing

allowances and other benefits as approved in the House

authorization.

Within the $25 billion for Iraq and Afghanistan, included funds for

Army and Marine Corps end-strength increases as approved in the

House authorization.

Cut $499.7 million from military personnel accounts to reflect

perennial underexecution of military personnel programs in prior

years, as reported by the General Accounting Office.

CRS-44

Major Weapons Programs.

Added $2.2 billion for what the committee describes as an initiative

to “recapitalize” Army and Marine Corps ground forces. The

increases included $950 million, doubling the amount requested, to

procure Stryker armored personnel carriers and associated

equipment sufficient to stand-up an additional Stryker brigade, $350

million for other armored combat vehicles, $503 million for

helicopters, $390 million for trucks and other support vehicles, and

$52 million for the ammunition production base.

Provided $9.7 billion for missile defense, $458 million below the

request. The committee indicated overall support for the program,

but said that the remaining funds provide a sufficient increase over

last year’s program. The committee also rescinded $31.5 million

due to termination of a joint satellite program with Russia (called

RAMOS) and $74.7 million due to restructuring of the Airborne

Laser program.

Cut the Army’s request for $3.2 billion for Future Combat System

development by $324 million, $79 million more than the House

authorization. Most of the reduction was in what the committee

described as management overhead, but the committee also cut $76

million from the non-line of sight launch system (NLOS-LS),

terminating the project. The committee continued full funding for

the non-line of sight cannon (NLOS-C) program, however.

Provided $165 million, $76 million more than requested, to fully

fund construction of a Theater Support Vessel in Army R&D

accounts.

Agreed with the House authorization in trimming $248 million from

the DD(X) R&D program, including funds to begin constructing the

first ship.

In place of DD(X) construction, the committee added $125 million

in advance procurement for one additional DDG-51 destroyer to be

fully funded in the FY2006 or FY2007 budgets.

Did not agree with the House authorization cut of $107 million for

construction of the first Littoral Combat Ship. Instead, the

committee added $107 million to the program to fully fund the cost

of building the first ship, though it cut $50 million for design of the

second ship of the class, saying it was redundant.

Eliminated $44 million requested for R&D on the LHA(R)

amphibious ship program and provided no funds for procurement,

rejecting the addition of $150 million for LHA(R) advance

procurement recommended in the House and Senate authorization

bills.

CRS-45

Supported procurement of 24 F/A-22 fighters, as requested.

Provided $4.4 billion for F-35 Joint Strike Fighter R&D funding, a

reduction of $240 million to reflect delays that are anticipated in

view of problems in controlling aircraft weight. Also prohibited

obligation of $1.4 billion of the funds until DOD reports to Congress

on plans to adjust the program following an independent review.

Objected strongly to provisions in multi-year procurement contracts

the Air Force negotiated to purchase C-17 and C-130 aircraft, saying

that they violate rules requiring full funding of the total cost of

useable end-items of equipment.5

The committee revised

requirements in the annual appropriations bill governing multi-year

procurement and shifted $159 million from C-17 upgrades to fully

fund 15 aircraft, one more than requested.

Provided $100 million in a “Tanker Replacement Transfer Fund”

available to acquire KC-767 tanker aircraft whenever the status of

the program warrants acquisition.

Added $91 million for the Space Based Infrared System-High

(SBIRS-High) program, more than the $35 million the House and

Senate authorizers added. Agreed, with minor variations, to cuts the

authorizers made in the Transformational Communications Satellite

and the Evolved Expendable Launch Vehicle (EELV). In report

language, the committee said that two contractors for the EELV may

not be justified.

Provided $75 million for the Space Based Radar program, $253

million below the request, effectively terminating the program, with

the remaining funds to be used for alternative technologies and

concepts.

Added $50 million for new bomber development, half what the

House authorization added.

Other Key Actions.

Added $900 million, close to amounts approved in prior years, for

unrequested, earmarked medical R&D projects, including breast

cancer and prostate cancer research.

For an extensive discussion of recent debates over “full funding” versus “incremental

funding, with historical background on the full funding requirement, see CRS Report

RL31404, Defense Procurement: Full Funding Policy — Background, Issues, and Options

for Congress, by Ronald O’Rourke and (name redacted).

CRS-46

Added $500 million in operation and maintenance accounts to

redress shortfalls identified by the military services in short-term,

readiness-related areas.

Cut operation and maintenance accounts by $415 million to reflect

under-obligation of O&M funds in prior years, by $335 million for

assumed efficiencies in administrative and related activities; by $86

million to eliminate growth above inflation in requested funds for

base operations support, by $92 million for overstated civilian pay

requirements, by $177 million to reflect a slower rate than estimated

in converting jobs from uniformed positions to civilian ones, by

$316 million in working capital funds to reflect cash balances and

purchases that will not be necessary, by $967 million of excess cash

balances in the transportation working capital fund, by $300 million

for overstated requirements for outside contracts, by $100 million

for unnecessary payments to contractors for taxes, and by $55

million for overestimated civilian separation incentives.

Added $25 billion for operations in Iraq and Afghanistan. The

committee provided almost all of the funds in regular appropriations

accounts except for $2.978 billion in the Iraq Freedom Fund, a

flexible transfer account. Of the $2.978 billion, however, $1.978 is

available only for classified programs described in an annex to the

report, so only $1 billion is available as flexible funding.

In a manager’s amendment during the full committee markup, the

committee added $685 million to the emergency funding for Iraq for

State Department operations and also added $95 million in

emergency funds for famine relief and refugee assistance in Sudan

and Chad.

House Defense Appropriations Floor Action

On June 22, the House voted to pass H.R. 4613, the FY2005 DOD

Appropriations Act by 403 to 17. Before the bill was passed, however, controversy

erupted over H.Res. 683, the rule to consider H.R. 4613, which, as proposed by the

Rules Committee, included placeholder language that would allow the conferees to

raise the ceiling on the national debt as part of the bill rather than requiring a separate

vote (H.Rept. 108-559). The vote on the rule, H.Res. 683, was 220 to 196.6

The House then adopted the Lewis en bloc amendment requiring several reports

from DOD, including one on reducing the dud rate of cluster munitions, another on

contracts for security, translation, and interrogation services in Iraq, Afghanistan, or

Guantanamo Bay, as well as requiring notification to the International Relations,

Foreign Relations, and the defense committees before providing assistance to Iraqi

and Afghan military and security forces. The House rejected an amendment by

Congressional Record, June 22, p. D670.

CRS-47

Congressman Inslee that would have prohibited the use of funds for implementing

reforms of DOD’s civilian personnel system.7 Five amendments were withdrawn.

Senate Defense Appropriations Markup

Military Personnel End-Strength, Pay, and Benefits.

Provided funding for a military pay raise of 3.5% and for housing

allowances and other benefits as approved in the Senate

authorization.

Within the $25 billion for Iraq and Afghanistan, included funds for

an increase in Army end-strength of 20,000 as approved in the

Senate authorization.

Cut $375 million from military personnel accounts to reflect

perennial underexecution of military personnel programs in prior

years, as reported by the General Accounting Office.

Cut $93.8 million from military personnel accounts to reflect the

planned end of U.S. operations in Bosnia in December 2004.

Major Weapons Programs.

Provided $865 million, out of the $25 billion in emergency funding

added for Iraq and Afghanistan, for an Army “Rapid Response Force

Protection Initiative.” The funds may be used for up-armored

Humvees, bolt on armor kits, armored cabs, or other related

purposes. Also provided $240 million for Marine Corps vehicle

hardening.

Provided $10.2 billion, about the amount requested, for missile

defense programs. Added $80 million for the Israeli Arrow

program. Agreed to terminate the U.S.-Russian RAMOS program,

but allocated $5 million for a follow-on program. Added $163.5

million for Ground-Based Midcourse Defense. Cut $252 million,

about half the amount requested, from the Ballistic Missile Defense

System Interceptor program, a program to develop a very high

acceleration, mobile booster and warhead for land- and sea-basing

and to explore space-based interceptors.

Provided the full $3.2 billion requested for Army Future Combat

System development. The committee specifically approved

continued funding for the non-line of sight launch system (NLOSLS), which the House committee wants to terminate.

Provided $905 million, as requested, for Stryker armored vehicle

procurement — the House bill added $950 million.

Congressional Record, June 22, p. H4722.

CRS-48

Approved $221 million for construction of the first DD(X)

destroyer, but moved the money from R&D to procurement. The

House committee eliminated the funds. Also added $99 million for

design of the second ship of the class, following the Senate

authorization.

Provided $107 million in R&D, as requested, for construction of the

first prototype Littoral Combat Ship — the House committee

provided an additional $107 million to fully fund construction.

Added $175 million for LHD(R) advance procurement — the House

committee provided no funds, while both authorization bills

approved $150 million.

Supported procurement of 24 F/A-22 fighters, as requested.

Provided full funding, as requested, for Navy and Air Force

development of the F-35 Joint Strike Fighter — did not concur with

House cuts due to delays.

Provided $110 million for tanker aircraft replacement, but did not

specify whether the funds were for KC-767s, in effect leaving the

issue for authorizers to decide.

Provided $508 million for development of the Space-Based Infrared

System-High (SBIRS-High), but did not add $91 million, as the Air

Force had requested and the House agreed.

Provided $228 million for the Space-Based Radar program, $100

million below the request. The committee did not agree with House

cuts that would effectively terminate the program.

Provided $375 million for the Transformation Communications

Satellite, $400 million below the request. The House cut $100

million.

Provided $511 million for the Evolved Expendable Launch Vehicle,

$100 million below the request due to launch delays. The House cut

$91 million.

Provided $557 million for development of a replacement Marine

One helicopter, $220 million below the request, as in the House.

Other Key Actions.

Added about $650 million for earmarked medical R&D programs,

about half the amount in the House bill. Of this amount $200

million for cancer research, including peer-reviewed breast cancer,

prostate cancer, and other cancer research, was provided in a single

block, and the committee directed the Defense Department to

allocate the funds. In the past, most such funds have been

CRS-49

earmarked for specific diseases. Also provided $50 million in a

similar block for other peer-reviewed medical R&D programs.

Cut $478.2 million from operation and maintenance accounts to

reflect the planned end of U.S. operations in Bosnia in December

2004.

Provided $25 billion for operations in Iraq and Afghanistan. The

committee provided most of the funds in regular appropriations

accounts, subject to normal procedures requiring congressional

approval of transfers above certain thresholds. Provided $2.5 billion

in the flexible Iraq Freedom Fund.

Senate Defense Appropriations Floor Action

On June 24, the Senate took up the House-passed version of the FY2005 defense

appropriations bill (H.R. 4613), substituted the terms of its committee-reported

version of the bill (S. 2559), acted on a number of amendments, and then passed the

amended version of H.R. 4613 by a vote of 98-0.

Amendments Adopted. The Senate adopted a number of amendments to

add relatively small amounts for a number of specific projects. In addition, the

Senate approved amendments

By Senator Mike DeWine (S.Amdt. 3493) to provide $95 million —

as was provided in the House-passed bill — for humanitarian relief

activities in Sudan and Chad (the Senate did not, however, add $685

million, as the House did, for State Department operations in Iraq);

and

By Senator Robert Byrd (S.Amdt. 3502), expressing the sense of the

Senate that the Administration should request funds for ongoing

military operations, including operations in Iraq and Afghanistan, as

part of the regular annual defense budget request rather than as

supplemental appropriations (approved 89-9).

Amendment Rejected. The Senate also rejected one amendment

By Senator Biden (S.Amdt. 3520) to increase the amount provided

for humanitarian relief in Sudan and Chad to $188 million (tabled,

53-42).

Issues for Congress

One issue was paramount in congressional debate about the FY2005 defense

budget — whether Congress should provide funding for operations in Iraq and

Afghanistan before early 2005, when the Bush Administration initially said it planned

to request supplemental appropriations. In May, the Administration requested an

CRS-50

additional $25 billion for Iraq and Afghanistan, which Congress subsequently

approved in all versions of the annual defense authorization and appropriations bills.

Congress did not, however, agreed to provide the Administration with the extensive

flexibility it wanted to allocate the money among accounts.

A number of other issues were also on the agenda, including some that were

politically contentious this year and some with significant long-term defense policy

implications. Among the key issues for Congress were

To what extent budget deficits over the next few years might

constrain defense spending;

Whether Congress should require a substantial, temporary increase

in active duty end-strength, particularly in the Army, to ease

pressures on the force caused by operations in Iraq and Afghanistan;

Whether the planned deployment of a missile defense test bed with

a limited operational capability in September or October was

scheduled primarily for political rather than for sound technical

reasons;

To what extent major weapons programs in all of the services may

need to be reined in, both because of limits on overall defense

spending and because of rapid cost growth in several big projects;

How the Defense Department’s change in longstanding regulations

governing weapons acquisition procedures to permit what DOD calls

“evolutionary acquisition” is affecting managerial controls and

congressional oversight over major weapons programs;

Whether Congress should provide additional military personnel

benefits, including (1) access to DOD-provided health insurance for

non-deployed military reservists and their dependents and (2)

increased military retiree survivor benefits;

Whether Congress should delay or restrict a new round of base

closures planned in calendar year 2005;

The status of Pentagon plans to redeploy U.S. military forces

stationed abroad and the implications for congressional oversight

and defense budgets;

How the Army plans to manage and to finance a far-reaching

reorganization of its combat forces to increase the number of

deployable combat brigades and to turn brigades, rather than

divisions, into the major unit of action in future operations;

How the Defense Department is restructuring its civilian personnel

system following Congress’s approval last year of the Pentagon’s

request for broad authority to reform civil service pay and

performance rules;

Whether Congress should approve the Defense Department’s request

for changes in environmental laws and regulations governing

military training in addition to changes Congress approved last year;

Whether Department of Energy plans to investigate new nuclear

weapons — including low and variable yield weapons and earth

penetration weapons — are strategically sound and in line with

authority Congress provided last year;

CRS-51

Whether Congress should require the Defense Department to begin

acquiring Boeing KC-767 tanker aircraft; and

Whether Congress should take steps to limit foreign military sales

offsets or to strengthen “Buy American” requirements.

The following discussion provides brief background information on each of these

issues and discusses congressional action to date.

Funding for Iraq and Afghanistan

The Administration did not initially request funding for ongoing operations in

Iraq and Afghanistan in the regular FY2005 defense bills. Instead, officials said that

they expected to request supplemental appropriations for overseas operations some

time early in calendar year 2005, possibly when the FY2006 budget request is

submitted at the beginning of February. After considerable debate in Congress,

however, on May 12, 2004, the White House submitted an amendment to its FY2005

request in which it asked for $25 billion to be appropriated into a reserve fund for

operations in Iraq and Afghanistan in early FY2005.8

Two issues remained for Congress, however. One was whether Congress should

appropriate more than $25 billion, since costs in FY2005 are expected to total at least

twice as much.9 Although there was considerable discussion about the issue, and

several amendments were proposed to add money, the House- and Senate-passed

versions of the authorization and appropriations bills all provided $25 billion.

A second issue — and, in the end, the key one — was how much flexibility

Congress would agree to provide the Administration in allocating additional funds.

The Administration’s May 12 request would permit the Secretary of Defense, in

consultation with the Office of Management and Budget, to allocate the funds to any

budget account, requiring only that the Secretary notify Congress five days before

transferring the funds. Many Members of Congress, including the leaders of the

appropriations committees, said that they were not willing to provide so much

flexibility and intended to ensure that funds are available only for specified activities

(for a full discussion, see CRS Report RL32422, The Administration’s FY2005

Request for $25 Billion for Operations in Iraq and Afghanistan: Precedents and

Options for Congress, by (name redacted) and (name redacted)).

The debate over funding for Iraq and Afghanistan began as soon as the

Administration presented its budget request, when some legislators complained that

the Administration’s failure to request money was intended to avoid a congressional

debate about Iraq policy during the presidential election campaign, to obscure the

war’s long-term costs, and to understate the size of projected federal budget deficits.

Office of Management and Budget, “Budget Amendment: $25 Billion Contingent

Emergency Reserve Fund (Department of Defense — Iraq Freedom Fund),” May 12, 2004,

[http://www.whitehouse.gov/omb/budget/amendments/amendment_5_12_04.pdf].

In testimony before the Senate Armed Services Committee on May 13, 2004, Deputy

Secretary of Defense Paul Wolfowitz said that costs in Iraq and Afghanistan are running at

$4.5-$5 billion per month, an annual rate of $50-$60 billion.

CRS-52

The issue became particularly acute days later when Army Chief of Staff General

Peter Schoomaker was asked about it in a Senate Armed Services Committee hearing

on February 10. Schoomaker said he was “concerned ... on how we bridge between

the end of this fiscal year and whenever we could get a supplemental in the next year.

And I do not have an answer for exactly how we could do that.” General Michael

Hagee, the Commandant of the Marine Corps, echoed Schoomaker’s concern.

In response, the next day, February 11, DOD Comptroller Dov Zakheim held

a press briefing to explain that Pentagon leaders were sure they could meet Army and

Marine Corps requirements into next Spring by “cash flowing” regular FY2005

appropriations.10 In FY2003, Zakheim said, the Defense Department was able to

provide $26 billion for Iraq war costs before Congress could approve supplemental

appropriations; the money, he said, was mainly operation and maintenance funds that

would otherwise not have been spent until the fourth quarter of the fiscal year. DOD

and also the Office of Management and Budget (OMB), he said, were certain that

they could manage FY2005 funding in a similar way. Zakheim also argued that it

was appropriate to delay requesting funds for Iraq because of great uncertainty about

costs, particularly following the planned transfer of sovereignty to an interim Iraqi

government on June 30.

Subsequently, a number of related issues emerged.

One issue is what precedents earlier wars provide. Last year, a CRS

memo reported that the initial funding for most conflicts — from

World War II, to Korea, to Vietnam, to the 1991 Persian Gulf War

— was generally provided through supplemental appropriations.11

That memo did not, however, address funding for wars after the

initial phases. On that question, the precedents are mixed. While

the Korean conflict was financed mainly with supplementals, World

War II and Vietnam were funded both with supplementals and with

regular appropriations. (For a review of methods used to fund

operations since 1991, see CRS Report RL32141, Funding for

Military and Peacekeeping Operations: Recent History and

Precedents, by Jeff Chamberlin.) Vietnam therefore, is the most

recent truly comparable example. In that case, the Administration

first asked for a $700 million supplemental for FY1965 in May of

1965; then for a $1.7 billion addition to the regular FY1966 defense

appropriations bill, which was requested as a budget amendment in

the summer of 1965; and then, in January of 1966, as troop levels in

Southeast Asia were climbing, a supplemental of $12.3 billion for

FY1966 and regular appropriations of $10.3 billion for FY1967,

both requested when the FY1967 budget was submitted. So, in the

case of Vietnam, the Johnson Administration asked for emergency

DOD Comptroller Dov Zakheim, “Defense Department Special Briefing: Purpose Of

Budget Supplementals,” February 11, 2004, available electronically at [http://www.defense

link.mil/transcripts/2004/tr20040211-0440.html].

(name redacted), “Budgeting for Wars in th e Past,” Congressional Distribution Memo,

updated March 27, 2003.

CRS-53

supplementals when necessary, but also requested funds in regular

appropriations bills as soon as those bills were on the congressional

agenda, even though troop levels were in flux and the duration of the

conflict could not be foreseen.

As the defense bills were being marked up, there was also some

discussion in Congress about the adequacy of FY2004 funding for

Iraq. In testimony before the House Armed Services Committee on

April 21, 2004, General Richard Myers, the Chairman of the Joint

Chiefs of Staff, said that the military services had identified a

preliminary shortfall of about $4 billion through the end of the fiscal

year. He also said that the Defense Department was in the midst of

a budget review which the service chiefs thought would be able to

find enough money in, for example, underexecuting acquisition

programs, to cover the shortfall. General Myers reiterated that

assessment in testimony before the Senate Defense Appropriations

Subcommittee on May 12, 2004. In its review of the issue, CRS

found that FY2004 shortfalls could be substantial but that funds to

cover costs are also available, so that the Defense Department may,

indeed, be able to get through FY2004 (see CRS Report RL32381,

Adequacy of the Army’s FY2004 Funding for Operations in Iraq, by

(name redacted)). More recently,

the Government Accountability

Office calculated that the Defense Department was as much as $12

billion short and would have to halt planned training and make other

substantial changes in plans to pay the bills (Government

Accountability Office, Military Operations: Fiscal Year 2004 Costs

for the Global War on Terrorism Will Exceed Supplemental,

Requiring DOD to Shift Funds from Other Uses, GAO-04-915, July

21, 2004). In the end, Congress made the $25 billion it provided in

emergency funds available immediately on enactment of the

legislation, so funds were available in August, and the

Administration tapped about $2 billion for immediate costs.

A final related issue is whether the Defense Department has

requested enough money for everyday equipment for troops in Iraq

and Afghanistan, including equipment for force protection — that is,

for items such as up-armored Humvees, body armor, robots and

other devices for coping with improvised explosive devices (IEDs),

night vision goggles, and other equipment of immediate value to

troops on the ground. Senator Jack Reed pointed to a Defense

Department reprogramming request that would allocate $619 million

for urgent Iraq needs.12 And in the April 21 House Armed Services

Committee hearing with General Myers, Representative Curt

Weldon cited a number of shortfalls in such equipment that the

Army identified in its annual unfunded priorities list.

Jonathan Weisman, “War May Require More Money Soon,” Washington Post, April 21,

2004.

CRS-54

Congressional Action. In all four versions of the annual defense bills,

Congress agreed to provide $25 billion as an initial down payment for costs of

operations in Iraq and Afghanistan in FY2005. The House, Senate, and conference

versions of the defense appropriations make the money available as soon as the bill

is signed into law, which means that the money could be used not only for initial

costs in FY2005, but also to cover any shortfalls in the remainder of FY2004.

The key issues to be resolved in the appropriations conference were how to

divide up the money among Department of Defense appropriations accounts, how

much to provide in a flexible transfer account that can be used to meet unanticipated

expenses, how much “general transfer authority” to provide the Defense Department

to move money between appropriations accounts (with advance congressional

approval), and what reporting requirements to establish.

The House version of the appropriations bills provided somewhat more detail

than the Senate bill in allocating the money among regular appropriations accounts

and in specifying what weapons programs it approved, though the differences were

relatively minor. The House bill provided $2.978 billion in a flexible transfer

account, called the Iraq Freedom Fund. Of the $2.978 billion, however, $1.978

billion was for classified programs described in an annex to the report, so only $1

billion was available as flexible funding. The Senate bill technically provided all of

the $25 billion in the Iraq Freedom Fund, but it also set detailed floors and/or ceilings

on amounts that could be transferred from the fund into regular appropriations

accounts, leaving $2.5 billion as flexible funding. The House bill also provided $3

billion of general transfer authority for the entire FY2005 defense appropriations bill,

including the $25 billion in emergency funds. The Senate bill provided $4 billion.

Transfers of funds using general transfer authority are subject to detailed

requirements governing the reprogramming of funds and require advance approval

of the congressional defense committees.

The House appropriations bill required a number of reports on operations in Iraq

and Afghanistan, including semiannual reports on the amounts spent by month, an

assessment of progress, an assessment of the effects of operations on personnel

recruitment and retention, monthly costs of equipment repair, the amounts and types

of foreign support, and details of reserve mobilizations; a report by October 1, 2004,

on projected costs from FY2006 through FY2011 or a certified statement by the

President that a realistic projection of costs is not possible; quarterly reports on

amounts used to provide transportation and other logistical support to allied nations

providing forces in Iraq; and a list of all contracts for support of operations in Iraq,

Afghanistan, and Guantanamo Bay.

The Senate appropriations bill required five-day advance notification to

Congress of any transfer of funds into regular appropriations accounts under the

terms of the bill; quarterly reports on cumulative transfers; quarterly reports on

logistical and other support to allied nations; 15-day advance notification of support

for the New Iraqi Army and the Afghan National Army; and quarterly reports on the

use of funds for the Commander’s Emergency Response Program.

The appropriations conference agreement provides most of the $25 billion in

regular appropriations accounts, with report language further directing the allocation

CRS-55

of procurement and some operating funds in some detail. This is closer to the House

than to the Senate approach. The agreement also provides $3.8 billion in the flexible

Iraq Freedom Fund, but $1.8 billion of that is for specific classified programs,

leaving $2 billion in flexible funding. The conference bill also provides that $1.5

billion of the $25 billion for Iraq and Afghanistan may be transferred among accounts

provided only that Congress is promptly notified of the transfer. The

Iraq/Afghanistan title of the bill also increases FY2004 general transfer authority by

$700 million, from $2.1 to $2.8 billion. And the overall bill provides $3.5 billion of

general transfer authority — a substantial increase from amounts provided in recent

years.

The conference agreement requires a number of reports on operations in Iraq

and Afghanistan, including semi-annual reports, due on April 30 and October 31 of

each year, on amounts expended for military operations and reconstruction in Iraq

and Afghanistan in the previous six months, progress in preventing attacks on U.S.

personnel, effects of operations on military readiness, effects on personnel

recruitment and retention, costs for repair or equipment, types and extent of foreign

support, and reserve mobilizations.

Deficits and the Defense Budget

Congressional debate about the FY2005 budget seems to mark a turning point

of sorts. After several years in which mounting budget deficits were apparently of

less interest in Congress than tax cuts, Medicare prescription drug coverage, and

increased benefits for military retirees, old-time deficit cutting religion appeared to

undergo a bit of a revival. The Administration proposed a budget plan which it said

will cut the federal budget in half by FY2009, though there is considerable debate

about whether it would actually accomplish that. In their versions of the FY2005

budget resolution, both the House and the Senate imposed somewhat tighter

restrictions on total discretionary spending than the Administration, and the Senate

voted to reimpose procedural restrictions, known as “PAYGO” rules, both on

increases in mandatory programs and on reductions in revenues. Statutory PAYGO

rules were first established by the Budget Enforcement Act of 1990, but expired after

FY2002.

Battles over how to control federal deficits were fixtures of congressional

budget debates from the time Congress approved the first Gramm-Rudman-Hollings

deficit control act in November 1985 into the late 1990s. Congress passed revised

measures to limit deficits in 1987, 1990, 1993, and 1997. It was only after 1998 that

an economic boom, together with several rounds of tax increases and measures to

limit spending, led, though only temporarily, to budget surpluses. The deficit battles,

as well as the end of the Cold War, were a major factor affecting defense spending.

Adjusted for inflation, the defense budget declined in real terms for 14 straight years,

from FY1986 through FY1999, and began to turn up again only in FY2000 as deficit

pressures eased.

The re-emergence of the deficit as an issue, therefore raises an obvious question:

to what extent might ongoing efforts to control budget deficits eventually limit the

amounts available for defense? This year, there was a serious debate in Congress

about the total amount for defense for the first time in several years. In the Senate,

CRS-56

Budget Committee Chairman Don Nickles proposed, and the full committee reported,

a budget resolution that reduced the recommended total for national defense by $6.9

billion below the Administration request. In the House, Budget Committee

Chairman Jim Nussle initially proposed a $2 billion cut in defense in an attempt to

make the point that everything — even defense — needed to be on the table to

control long-term spending. While Congress did not, in the end, support cuts in

defense, the long-term budget situation may raise the issue again in the future.

Congressional Action. In the Senate, the Budget Committee reported

version of the annual budget resolution (S.Con.Res. 95) recommended $415.2 billion

for the national defense budget function (function 050), $6.9 billion below the CBO

reestimate of the Administration request (see Table 4). In a floor vote on March 10,

however, the Senate approved an amendment by Senator John Warner to restore the

funds. In the House, Budget Committee Chairman Jim Nussle dropped his proposal

to recommend $2 billion less for defense than the Administration requested. The

House resolution (H.Con.Res. 393), as reported by the Budget Committee and as

passed by the full House, recommended the requested level of funding for national

defense, though $2.6 billion of the request was shown in a new budget function for

Homeland Security.

The conference agreement on the budget resolution provides $472.2 billion for

national defense in FY2005, including $50 billion for overseas contingency

operations. The House approved the budget resolution on May 20, and also approved

a measure “deeming” the totals in the budget resolution to have been agreed to for

purposes of subsequent House action on appropriations bills and other legislation.

The Senate, however, never took up the budget resolution. This compelled the

Senate to begin acting on FY2005 appropriations bills with the level of funding for

total discretionary programs set at the level projected in the FY2004 budget

resolution, which was $814 billion in new budget authority. This was about $8

billion below the level requested by the Administration and $7 billion below the level

approved in the “deeming” resolution in the House.

This caused some problems in the Senate, which came to a head in action on the

defense appropriations bill. As a way of coping with the $7 billion gap with the

House, the Senate Appropriations Committee designated $7 billion in the regular

FY2005 defense appropriations bill as “emergency” funds. The effect was to allow

allocations of funds to other, non-defense appropriations bills to equal the total in the

House. If House conferees had accepted this approach, it would have freed up $7

billion for additional funding for non-defense bills within the $821 billion cap on

discretionary funding. The House leadership objected. The solution was to include

in the FY2005 defense appropriations bill a measure “deeming” a total of $821

billion in discretionary budget authority to apply in the Senate as in the House. With

Senate passage of the defense appropriations conference report, that level is now in

effect. Ultimately, the defense appropriations conference agreement provided $391.2

billion for regular Department of Defense programs, about $1.7 billion below the

Administration request.

CRS-57

Table 4. Congressional Budget Resolution Target for

the National Defense Budget Function (050)

(millions of dollars)

FY2004

FY2005

FY2006

FY2007

FY2008

Administration Request (OMB Estimate)

Budget Authority

460,547

423,098

444,016

464,787

485,812

Outlays

453,684

450,586

436,147

447,074

467,063

Administration Request (CBO Reestimate) /a/

Budget Authority

463,604

422,157

445,708

466,709

487,999

Outlays

452,946

449,442

442,157

448,787

467,709

Senate Budget Committee Budget Resolution, Excluding Contingency Fund

Budget Authority

463,604

415,257

445,708

456,148

467,482

Outlays

452,946

444,033

440,563

441,290

451,419

Senate-Passed Budget Resolution, Excluding Contingency Fund

Budget Authority

422,157

445,708

456,148

467,482

Outlays

449,442

442,157

441,732

451,564

Senate-Passed vs Senate Budget Committee

Budget Authority

+6,900

Outlays

+5,409

+1,594

+442

+145

Senate-Passed vs. CBO Reestimate of Request

Budget Authority

-10,561

-20,517

Outlays

-7,055

-16,145

House-Passed Budget Resolution, Excluding Allowance for Iraq Supplemental /b/

Budget Authority

461,544

419,634

442,400

464,000

486,149

Outlays

451,125

447,114

439,098

445,927

465,542

House Alternative, Cummings, Congressional Black Caucus

Budget Authority

408,486

430,694

451,728

473,293

Outlays

439,979

428,774

434,219

453,061

House Alternative, Stenholm, Blue Dog Coalition /a/

Budget Authority

422,157

444,807

466,423

488,691

Outlays

449,442

441,451

448,337

468,010

House Alternative, Hensarling, Republican Study Committee

Budget Authority

461,544

419,634

442,400

464,000

486,149

Outlays

451,125

447,114

439,098

445,927

465,542

House Alternative, Spratt, Democratic Substitute /a/

Budget Authority

463,600

422,200

445,700

466,700

488,000

Outlays

453,000

448,300

441,500

448,400

467,500

Conference Agreement, Including Contingency Fund

Budget Authority

463,617

472,157

432,366

442,103

452,073

Outlays

452,953

474,298

452,218

434,750

438,532

FY2009

508,150

487,181

510,429

489,186

479,494

463,058

479,494

463,106

+48

-30,935

-26,080

508,369

487,186

494,923

473,956

511,074

489,757

508,369

487,186

510,400

489,300

462,069

447,364

Sources: Congressional Budget Office; Senate Budget Committee, March 5, 2004; S.Con.Res. 95 as

passed by the Senate; House Budget Committee report on the FY2005 budget resolution, H.Rept. 108441; Congressional Record, March 25, 2004; H.Rept. 108-498.

Notes

a. The CBO reestimate, the Blue Dog Coalition plan, and the Democratic Substitute all make

projections through FY2014 — figures beyond FY2009 are not shown here.

b. The House-passed budget resolution excludes $2.6 billion of homeland security-related funding

from the national defense budget function (function 050) in FY2005and instead provides it in

a new “homeland security” budget function (function 100). If the defense-related homeland

security funds are added to the National Defense Budget Function, the totals equal the CBO

reestimate of the Administration request.

CRS-58

In an attempt to ease constraints on defense spending, the House Armed

Services Committee included in its version of the defense authorization bill a

procedural measure to shift costs of future health insurance benefits for military

personnel when they retire from the Defense Department to the general Treasury and

from discretionary funds subject to budgetary caps to the mandatory side of the

ledger. Under current law, the Defense Department is required to make annual

contributions to the military retirement fund sufficient to cover cost in the future of

providing guaranteed medical care to 65-and-over military retirees (this is known as

TRICARE for Life, and was established in the FY2001 national defense

authorization act, P.L. 106-398). These contributions are considered part of the cost

of military personnel and are scored as discretionary funds requiring annual

appropriations.

The measure (Section 1541 of the House bill), which was approved with

amendments in the conference agreement (Section 725 of the conference bill),

requires the Treasury to make the contributions to the retirement trust fund instead

of the Defense Department beginning in the FY2006 budget. The effect would be to

reduce DOD personnel costs by an average of about $12 billion a year over the next

five years. A sense of Congress provision added in the conference agreement urges

that this shift should not reduce the total discretionary funding requested for the

Defense Department — in effect, increasing defense spending by $12 billion a year.

So far, the Office of Management and Budget has not agreed. In a December

9, 2004 letter to the Chairmen of the House and Senate Budget Committees, OMB

urged that the FY2006 budget resolution score the health insurance contributions to

the military retirement fund according to earlier precedents. Traditionally, OMB has

supported the principle, known as “accrual accounting,” which holds that the

actuarily determined costs of future benefits for current personnel should be included

in annual budgets of federal agencies in order to allocate the actual, full costs of

personnel to current programs.

Active Duty End-Strength

Even before the current conflict in Iraq began, there was some support in

Congress for increasing the size of the active duty force, particularly in the Army, as

a means of reducing strains on military personnel that some argued were aggravated

by frequent military operations abroad, such as peacekeeping operations in Bosnia

and Kosovo.13 In the House, Representative Ike Skelton, the ranking Democrat on

the House Armed Services Committee, argued for some years that the Army needed

about 40,000 more troops.14

Many, including senior Army leaders, complained that peacekeeping operations created

an excessively high operational tempo. Others argued that the Army should not have been

overly taxed by deploying 5,000-10,000 of its 480,000 active duty troops in contingency

operations, and that it would not have had problems if its personnel system was better

adapted to post-Cold War requirements. For a discussion, see John C.F. Tillson, It’s the

Personnel System, Institute for Defense Analyses, September 2000.

See, for example, Rep. Ike Skelton, “We Are Wearing Them Out: Why We Need to

(continued...)

CRS-59

Now, the need to keep a substantial number of troops in Iraq for an as yet

indeterminate period has made end-strength a critical issue. Currently, the Defense

Department has waived statutory caps on end-strength, and it is keeping about 30,000

more personnel in the active duty force than before the war in Iraq. Costs of paying

these additional troops — as well as temporarily mobilized reserve troops — has

been covered with FY2003 and FY2004 supplemental appropriations. Army leaders

have said that they want to keep as many as 30,000 additional troops in the service

for the next couple of years, not only to ease strains of overseas deployments, but also

to allow some flexibility as the Army reorganizes its combat units (see below). So

it appears likely that the Administration will want to keep some additional endstrength for some time, still paid for with supplemental appropriations — Army

officials say the increases will be needed the end of FY2006.

The Defense Department, however, has opposed congressional measures to

increase statutory end-strength and to establish end-strength minimums. It appears

that the Defense Department wants flexibility to increase or reduce troop levels

without a congressional mandate. But neither critics nor proponents of an increase

in statutory end-strength have addressed why it would be better or worse than the

present situation, in which DOD is keeping added end-strength by waiving the

current statutory caps.

In response to past, pre-Iraq proposals to increase end-strength, Secretary

Rumsfeld has argued that the services can increase the number of deployable troops

without adding to overall end-strength by more efficiently managing the forces that

are available. One key efficiency measure is a plan to transfer as many as 10,000

jobs now performed by uniformed personnel to civilians in FY2004 and another

10,000 in FY2005. Reportedly, some Pentagon studies have found that as many as

320,000 military jobs could be performed by civilians.15

These prospects have not persuaded advocates in Congress that potential

problems caused by the burden of rotating forces into Iraq are being adequately

addressed. Some Members of Congress have proposed increasing the Army’s

statutory end-strength by as many as 40,000 troops. And some have proposed, as

well, that some of the additional troops should be assigned to units specially

organized and trained for stability operations overseas.

A part of the discussion of end-strength is the cost. The Congressional Budget

Office estimated that in 2002 the average active duty service-member received a

compensation package, including pay and non-cash benefits, of

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