Appropriations for FY2005: Military Construction

Congressional research reportNov 15, 2004

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Order Code RL32310

CRS Report for Congress

Received through the CRS Web

Appropriations for FY2005:

Military Construction

Updated November 15, 2004

nae redacted

Analyst 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

Military Construction Appropriations Subcommittees. 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 with active links is

available to congressional staff at

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

Appropriations for FY2005:

Military Construction

Summary

The military construction (MilCon) appropriations bill provides funding for (1)

military construction projects in the United States and overseas; (2) military family

housing operations and construction; (3) U.S. contributions to the NATO Security

Investment Program; and (4) the bulk of base realignment and closure (BRAC)costs.

The President forwarded his FY2005 budget request of $9.6 billion to the

Congress on February 2, 2004.

Military construction subcommittees held hearings between February 25 and

June 22, 2004. The House Appropriations Committee its bill (H.R. 4837) on July 15,

2004. The Senate Appropriations Committee reported its bill (S. 2674) on the same

day. Both bills recommended $10.0 billion in new budget authority.

Floor action on H.R. 4837 began on July 21. A procedural dispute regarding

Section 129 of the bill (adjusting the cap on new budget authority available for the

military housing privatization program) precipitated the drafting of a separate bill

(H.R. 4879) incorporating a portion of the section, which was struck on a point of

order. The House passed an amended H.R. 4837 on July 22, which was received in

the Senate on September 7. On September 15, the Senate incorporated the text of S.

2674 into H.R. 4837, passing the amended bill on September 20 and appointing its

conferees. The House appointed conferees on October 8.

On October 5, the President submitted a hurricane disaster assistance emergency

supplemental appropriation bill (H.R. 5212) that included $148.9 million in DOD

construction and repair appropriations. The bill’s language was incorporated into

Division B of H.R. 4837, whose short title was changed to the Military Construction

Appropriations and Emergency Hurricane Supplemental Appropriations Act, 2005.

Division C of H.R. 4837, titled the Alaska Natural Gas Pipeline Act,

incorporates some portions of H.R. 6., the Energy Policy Act of 2003. The House

passed H.R. 4837 on October 9, as did the Senate on October 11. The President

signed the bill into law on October 13, 2004 (P.L. 108-324).

Authorization of military construction is included within the defense

authorization bill. The House passed its version of the bill (H.R. 4200) on May 19.

The Senate substituted the text of S. 2400, passing the amended bill on June 24. The

conference began on September 29, 2004, and ended on October 8. The House and

the Senate passed the bill on October 9. The President signed the bill into law on

October 18, 2004 (P.L. 108-375). For a comprehensive report on defense

authorization legislation, see CRS Report RL32305, Authorization and

Appropriations for FY2005: Defense, by (name redacte d) and (name redacted).

Key Policy Staff

Area of Expertise

Name

CRS

Division

David Lockwood

FDT

Base Closure, Process

(name redacted)

Telephone

and E-Mail

7-....

[redacted]@crs.loc.gov

7-....

FDT

[redacted]@crs.loc.gov

Base Closure,

Environmental Policy

(name re

dacted)

RSI

7-....

[redacted]@crs.loc.gov

Base Closure,

Land Use Law

(name redacted)

ALD

7-....

[redacted]@crs.loc.gov

Base Closure,

Economic

Redevelopment

J. (name redacted)

RSI

7-....

[redacted]@crs.loc.gov

Base Closure,

Economic

Redevelopment

Baird J. Webel

G&F

7-....

[redacted]@crs.loc.gov

Base Closure,

Document Search

Linwood B.

Carter

INF

7-....

[redacted]@crs.loc.gov

Base Closure,

General Military Law

(name redacted)

ALD

7-....

[redacted]@crs.loc.gov

Defense Acquisition

Valerie Grasso

FDT

7-....

[redacted]@crs.loc.gov

Def. Budget, Mil. Con./

(name redacted)

Defense Industry

FDT

7-....

[redacted]@crs.loc.gov

(name redacted)

FDT

Defense Budget

(name redacted)

FDT

Defense Reform

Gary Pagliano

FDT

Guard and Reserve

Issues

(name redacted)

FDT

7-....

[redacted]@crs.loc.gov

7-....

[redacted]@crs.loc.gov

7-....

[redacted]@crs.loc.gov

7-....

[redacted]@crs.loc.gov

* FDT = Foreign Affairs, Defense, and Trade Division; RSI = Resources, Science, and

Industry Division; ALD = American Law Division; G&F = Government and Finance

Division; INF = Information Research Division.

Contents

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

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Content of Annual Military Construction Appropriations and

Defense Authorization Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Bill Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Appropriations Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

House Appropriations Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Senate Appropriations Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Conference Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Key Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Overall Funding Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Realignment of Overseas Bases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Redeployment of U.S. Troops from Overseas Garrisons to Bases

within the United States, 2004-2014 . . . . . . . . . . . . . . . . . . . . . . . 9

Base Realignment and Closure (BRAC) . . . . . . . . . . . . . . . . . . . . . . . 11

Military Housing Privatization Budget Authority Cap . . . . . . . . . . . . 13

Significant Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Military Construction Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Defense Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

For Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

CRS Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Selected World Wide Websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

List of Figures

Figure 1. Military Construction Funding, FY1989-FY2005 . . . . . . . . . . . . . . . . 18

List of Tables

Table 1. Status of Military Construction Appropriations, FY2005 . . . . . . . . . . . . 4

Table 2. Selected U.S. Overseas Garrisons, 1986 and 2003 . . . . . . . . . . . . . . . . 10

Table 3. Selected U.S. Overseas Garrisons, Grouped Totals, 1986 and 2003 . . . 11

Table 4. Military Construction Appropriations by Account: FY2004-FY2005 . . 24

Table 5. Military Construction FY2005 Appropriations by Account:

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Table 6. Congressional Additions to Annual DOD Budget Requests for

National Guard and Reserve Military Construction, FY1995-FY2005 . . . . 26

Appropriations for FY2005:

Military Construction

Most Recent Developments

The President signed H.R. 4837, the Military Construction Appropriations and

Emergency Hurricane Supplemental Appropriations Act, 2005, into law on October

13, 2004 (P.L. 108-324).

The President signed H.R. 4200, the Ronald W. Reagan National Defense

Authorization Act for Fiscal Year 2005, into law on October 28, 2004 (P.L. 108-375).

Background

Content of Annual Military Construction Appropriations

and Defense Authorization Bills

The Department of Defense (DOD) manages the world’s largest dedicated

infrastructure, covering more than 29.2 million acres of land with a physical plant

worth almost $647 billion, housed within buildings encompassing more than 2.2

billion square feet of floor space. More than 2.36 million men and women, including

1.7 million military personnel, 465,000 civil servants, and 195,000 other U.S. and

foreign nationals, work on U.S. military installations. Eighty-eight percent of military

personnel, 95 percent of civil servants, and more than half of other employees work

on the 3,842 listed installations that constitute the 98 percent of Department of

Defense land located within the United States and its territories. The remainder work

at 860 listed installations located in foreign countries.

The military construction appropriations bill provides a large part of the funding

to enhance and maintain this infrastructure. The bill funds construction projects and

some of the facility sustainment, restoration, and modernization of the active Army,

Navy and Marine Corps, Air Force, and their reserve components;1 additional

defense-wide construction; U.S. contributions to the NATO Security Investment

Facility sustainment, restoration, and modernization (SRM) includes the repair and

maintenance of buildings, structures, warehouses, roadways, runways, aprons, railway

tracks, utility plants, and their associated distribution systems, plus minor construction (cost

not to exceed $500,000) to create new facilities or expand, alter, or convert existing

facilities. A large part of the funding dedicated to the SRM function is requested not as part

of the military construction appropriation, but rather as part of the Operations and

Maintenance account within the annual national defense appropriation.

CRS-2

Program (formerly known as the NATO Infrastructure Program);2 and military family

housing operations and construction. The bill also provides funding for the Base

Realignment and Closure (BRAC) account, which finances most base realignment

and closure costs, including construction of new facilities for transferred personnel

and functions and environmental cleanup at closing sites.3

The military construction appropriations bill is but one piece of annual

legislation that provides funding for the country’s “national security.” Other national

security appropriation legislation includes the national defense appropriations bill,

which provides funds for all non-construction military activities of the Department

of Defense and constitutes more than 90% of national security-related spending, and

the energy and water development appropriations bill, which provides funding for

atomic energy defense activities of the Department of Energy and for civil projects

carried out by the U.S. Army Corps of Engineers. Two other appropriations bills,

VA-HUD-Independent Agencies and Commerce-Justice-State, also include small

amounts for national defense.4 Supplemental appropriations bills may be passed to

provide additional Department of Defense funding as needed.

No funds may be expended by any agency of the federal government before they

are appropriated.5 In addition, for nearly half a century Congress has forbidden the

Department of Defense to obligate funds for any project or program until specific

authorization is granted.6 This explains why, for defense funds, both authorization

and appropriations bills are required. The annual Military Construction

Appropriations Act is dedicated to military construction, and the annual National

Defense Appropriations Act covers all other Department of Defense appropriations.7

Normally only one National Defense Authorization Act is passed each year to

authorize both of these appropriations.8 Therefore, major debates over defense policy

The NATO Security Investment program is the U.S. contribution to Alliance funds for the

construction of facilities and the procurement of equipment essential to the wartime support

of operational forces in the common defense of the NATO area. Facilities funded by this

program include airfields, naval bases, signal and telecom installations, pipelines, and war

headquarters, as well as early warning radar and missile installations. The U.S. contributes

approximately 25% of the total annual NSIP assessment, with the rest coming from the other

members of the North Atlantic Alliance.

Virtually all costs associated with the latest completed BRAC round (that of FY1995) have

been funded. The bulk of current BRAC appropriations are dedicated to the environmental

remediation of closed military installations.

See CRS Report RL32305, Appropriations and Authorization: FY2005: Defense, by

(name redacted) and (name redacted), for details on the defense authorization and

appropriation process.

Article I, Section 9, Clause 7 of the U.S. Constitution.

See 10 U.S.C. 114.

The relevant subcommittees of the House and Senate Appropriations Committees are

Military Construction (for the military construction appropriation) and Defense (for the

national defense appropriation).

The Subcommittee on Readiness in the House Armed Services Committee and the

(continued...)

CRS-3

and funding issues, including military construction, can be associated with any of

these bills. Because issues in the defense authorization and appropriations bills

intertwine, this report includes salient parts of the authorization bill in its discussion

of the military construction appropriation process.

The separate military construction appropriations bill dates back to the late

1950s. Traditionally, military construction was funded through annual defense or

supplemental appropriations bills. However, the Korean War prompted a surge of

military construction, followed by a steady increase in military construction

appropriations. The strong and enduring security threat posed by the Soviet Union

drove a relatively high and continuous level of spending on military infrastructure.

The congressional appropriations committees established military construction

subcommittees and created a separate military construction bill. The first stand-alone

military construction bill was written for FY1959 (P.L. 85-852).

It should be pointed out that, first, military construction appropriations are not

the sole source of funds available to defense agencies for facility investment. The

national defense appropriations bill funds so-called minor construction and property

maintenance within its operations and maintenance accounts. Construction and

maintenance of Morale, Welfare, and Recreation-related facilities are partially funded

through proceeds of commissaries, recreation user fees, and other non-appropriated

income. Second, several special accounts are included within the military

construction appropriation. Among these are the Homeowners Assistance Fund

(Defense),9 and the Department of Defense Family Housing Improvement Fund,10

both of which perform functions ancillary to the direct building of military

infrastructure.

Most congressional appropriations must be obligated in the fiscal year for which

they are appropriated. Military construction appropriations, though, are an exception.

(...continued)

Subcommittee on Readiness and Management Support in the Senate Armed Services

Committee draft legislation to authorize military construction appropriations.

The Homeowners Assistance Fund (Defense) was established by the Demonstration Cities

and Metropolitan Development Act of 1966 (42 USC 3374). It authorizes the Secretary of

Defense to acquire the title to, or to reimburse for certain losses upon the sale of, one- and

two-family homes owned by federal employees located at or near military installations

ordered closed in whole or in part.

10 U.S.C. 2883 (Department of Defense Housing Funds) is part of subchapter IV

(Alternative Authority for Acquisition and Improvement of Military Housing) of the basic

law governing the armed forces. It establishes two independent funds: the Department of

Defense Family Housing Improvement Fund and the Department of Defense Military

Unaccompanied Housing Improvement Fund (unaccompanied members of the military are

either unmarried or are married but separated geographically from their families). The funds

are sustained by direct appropriation, fund transfers made by the Secretary of Defense or the

Secretary of the Navy from other accounts, proceeds from certain title conveyances or the

lease of federal military family housing property, or other financial activity associated with

either military family or unaccompanied housing. These funds may be used for the planning,

construction, or improvement of military housing as provided for under this particular

subchapter of Title 10.

CRS-4

Because of the long-term nature of construction projects, these funds can generally

be obligated for up to five fiscal years.

Consideration of the military construction budget begins when the President’s

budget is delivered to Congress each year, usually in early February. This year, the

President submitted his FY2005 budget request to the Congress on February 2, 2004.

Bill Status

Table 1 shows the key legislative steps necessary for the enactment of the

FY2005 military construction appropriations. It will be updated as the appropriation

process moves forward.

Table 1. Status of Military Construction Appropriations, FY2005

Committee

Markup

House

Senate

07/15/04 07/15/04

House

Report

House

Passage

Senate

Report

Senate

Passage

Conf.

Report

H.Rept.

S.Rept.

07/22/04

108-607

108-309

09/20/04

H.Rept.

108-773

Conference Report

Approval

House

Senate

10/09/04 10/11/04

Public

Law

P.L.

108-324

Note: Dashes indicate no action yet taken.

Appropriations Action

An emergency supplemental appropriation, H.R. 5212, introduced on October

5, and the continuing resolution, H.J.Res. 107, enacted on September 30, 2004, are

discussed in the Legislation section below.

House Appropriations Action. The House Committee on Appropriations

Subcommittee on Military Construction held nine hearings between February 25 and

June 22, 2004. The topics addressed included Quality of Life (senior enlisted and

military family representatives, February 25), family housing privatization and

Central Command programs (March 3), overview of military construction

(Department of Defense representatives, March 10), European Command programs

(March 25), Pacific Command programs (March 31), Navy programs (June 15),

Army programs (June 16), and Air Force programs (June 22). The subcommittee

reported its bill to the full committee by voice vote on July 6, and the full committee

reported its mark on H.R. 4837 on July 15, 2004 (H.Rept. 108-607). The bill was

then placed on the Union Calendar, Calendar No. 365.

H.R. 4837 was introduced on the floor of the House on July 21. Debate centered

on Section 129 of the bill, a provision that would raise the limitation on the budget

authority that could be applied to the military housing privatization initiative and

would exempt such budget authority from scoring (Congressional Record,

H6460-6469). A more extensive discussion of the issue is included in the Military

Housing Privatization Budget Authority Cap portion of the Key Policy Issues section

CRS-5

of this report. A separate bill, H.R. 4879, which incorporated the budget authority

language of Section 129, was introduced in mid-afternoon and passed under

suspension of the rules (requiring a two-thirds majority) on a vote of 423-0-11 (Roll

no. 406, Congressional Record, H6489-95, H6498).

H.R. 4837 was brought up again as unfinished business on the evening of July

22. Mr. Nussle raised a point of order against the content of the measure, citing

Section 129 as seeking to change existing law (violating House Rule XXI). The point

of order was sustained by the Chair, thereby striking Section 129 from the bill. Mr.

Obey moved to recommit the bill to the Committee on Appropriations with

instructions to increase the military housing privatization budget authority limitation

referred to above. Mr. Nussle raised a point of order against the motion and was

again sustained by the Chair. Mr. Obey then moved to recommit the bill to the

Committee on Appropriations with slightly different instructions. The House then

engaged in ten minutes of debate on the motion, whereupon it was ordered. The

motion failed on a vote of 201-217-16 (Roll no. 416). H.R. 4837 was then passed on

a vote of 420-1-11 (Roll no. 417).

On October 8, after the return of the amended bill from the Senate (see Senate

Appropriations Actions, below), the House agreed without objection to disagree with

the amendment and appointed conferees.

Senate Appropriations Action. The Senate Committee on Appropriations

Subcommittee on Military Construction held two hearings on Defense-Wide and Air

Force construction projects (March 30) and Army and Navy projects (April 7, 2004).

The subcommittee completed the informal markup of its bill on July 14, and the full

committee reported its mark on S. 2674 on July 15 (S.Rept. 108-309).11 The bill was

placed on the Legislative Calendar under General Orders (Calendar No. 637).

The Senate received H.R. 4837 from the House on September 7, 2004, read it

twice, and placed it on the Legislative Calendar (Calendar No. 690). On September

15, S. 2674 was brought to the floor. Senator Hutchison, on behalf of herself and

Senator Feinstein, offered two amendments, S.Amdt. 3660 and S.Amdt. 3661 (see

Congressional Record S9242). S.Amdt. 3660 (new Sec. 130) would make available

additional funds in the sum of $1.5 million for the Commission on Review of

Overseas Military Facility Structure of the United States. S.Amdt. 3661 (new Sec.

131) would require the Department of Defense to assess the impact on the military

family housing program of having the total value of contracts and investments

undertaken under the Military Housing Privatization Initiative reach the limitation

on budget authority (both of these issues are addressed at length elsewhere in this

report). Both amendments were agreed to by Unanimous Consent, and the bill was

returned to the Calendar (Calendar No. 637).

An informal subcommittee markup, or poll, is not uncommon in the creation of bills that

are expected to be approved without significant amendment in drafting. It is often effected

through the distribution of a draft to subcommittee Members, who then have the opportunity

to amend the text or approve it as drafted.

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The Senate then incorporated the language of S. 2674 into H.R. 4837 as an

amendment. The Senate passed the amended H.R. 4837 on September 20 by recorded

vote 91-0-9. The Senate sent a message on its action to the House on September 22,

2004.

Conference Action. Senate conferees were appointed on September 20. The

House disagreed with the Senate amendment, and conferees were appointed on

October 8.

The conferees added Division B, the Emergency Supplemental Appropriations

for Hurricane Disasters Assistance Act, 2005, and Division C, the Alaska Natural

Gas Pipeline Act, to the basic bill.12

The conferees filed the conference report (H.Rept. 108-773, text at

Congressional Record H9054-9113) on October 9. The House considered the report

(Congressional Record H9175-9176) and agreed by the Yeas and Nays, 374-0-58

(Roll no. 529). That same day, the Senate began consideration on the conference

report, and a cloture motion was presented (Congressional Record S10978-10979).

The cloture motion was withdrawn by unanimous consent on October 11, and the

Senate agreed to the conference report by Voice Vote (Congressional Record

S11223-11228).

The bill was presented to the President and signed on October 13, 2004 (P.L.

108-324).

Key Policy Issues

Several issues regarding military construction have gained visibility during the

legislative deliberations of the current session of Congress. Among these are overall

funding levels, realignment of overseas bases, base realignment and closure (BRAC),

and perchlorate ground water contamination remediation.

Overall Funding Levels. The FY2005 budget submitted by the President on

February 2, 2004, as subsequently amended, requested $9.6 billion in new budget

authority, an amount $112.7 million below the 2004 enactment.13 As shown in Table

For more information on the Emergency Supplemental Appropriations for Hurricane

Disasters Assistance Act, 2005, see CRS Report RL32581, Assistance After Hurricanes and

Other Disasters: FY2004 and FY2005 Supplemental Appropriations, by (name redacted) and

(name redacted). For an explanation of energy policy issues related to theAlaska Natural

Gas Pipeline Act, see CRS Report RL32033, Omnibus Energy Legislation (H.R. 6):

Side-by-side Comparison of Non-tax Provisions, by (name redacted) and (name redacted),

coordinators, and CRS Report RL32315, Oil and Gas Exploration and Development on

Public Lands, by (name redacted).

The original February appropriation proposal of $9.52 billion was increased to $9.55

billion by the addition of $30 million made available by the cancellation of the RAH-64

Comanche helicopter program. This new budget authority was dedicated to three new

(continued...)

CRS-7

4, Active Component military construction requested is $378.7 million below that

enacted for FY2004, with increases in the Army and Defense-wide accounts being

more than offset by decreases for the Navy and Air Force.14 Requests for every

account within the Reserve Components, save for the Air Force Reserve, are below

the amounts enacted last year, with the net impact being a $110.5 million decline

from the previous year. The overall military construction request for FY2005 is $489

million below the enactment for FY2004.

Family housing construction and operation and debt servicing, as requested for

FY2005, represents an increase of more than $351.5 million over that enacted for

FY2004. Caution should be exercised in interpreting these figures, however, because

the military services are responsible for satisfying their own family housing needs,

and the Department of Defense and military services are engaged in an extensive

program of privatizing (i.e., removing from direct support by military construction

appropriations) a significant portion of military housing. In addition, the services are

completing a nine-year effort to substantially increase the military pay supplement

(the Basic Allowance for Housing, or BAH, that is funded in the personnel account

in the national defense appropriation) to a level that will eliminate out-of-pocket

expenses should a military member choose to live in his or her local civilian

community.

Realignment of Overseas Bases. The armed services are in the midst of

a global reassessment study of their infrastructure inventory, with an eye toward

reducing the number and realigning the concentration of troops stationed outside the

United States and its territories. This closely parallels, but is separate from, the

process of realigning military installations within the United States, known as Base

Realignment and Closure, or BRAC. Details of what is variously known as the

Global Posture Study, “global sourcing,” efficient basing, or the “global BRAC,”

have not yet been released by the Department of Defense. The Senate Committee on

Armed Services has scheduled a hearing on the matter for Thursday, September 23,

2004. The Secretary of Defense and the unified command commanders are scheduled

to appear as witnesses.

In addition, Congress created the Commission on Review of Overseas Military

Facility Structure of the United States last year to determine for itself whether the

eventual Department of Defense plan for altering overseas basing requirements and

stationing of troops will be adequate to national security needs.15 The commission is

tasked with conducting “a thorough study of matters relating to the military facility

structure of the United States overseas” and assessing “whether or not the current

military basing and training range structure of the United States overseas is adequate

to meet the current and future mission of the Department of Defense, including

(...continued)

aviation-related construction projects in the Army National Guard appropriation account.

Defense-wide military construction is devoted to projects not properly allocated within

the individual military services, such as construction specific to Special Operations

Command.

The commission was created by Section 128 of the Military Construction Appropriations

Act for Fiscal Year 2004, H.R. 2559, P.L. 108-132.

CRS-8

contingency, mobilization, and future force requirements,” among other duties. The

commission’s report, containing its findings, conclusions, and recommendations for

legislative and administrative actions, is due to the Congress not later than December

31, 2004 (though language in the report accompanying the Senate version of the

Military Construction Appropriations Act for Fiscal Year 2005, S. 2674, extends the

report deadline to August 15, 2005, as indicated below). The commission is also to

propose an overseas basing strategy for the Department of Defense that will meet its

current and future mission requirements.

The law established a commission of eight members, appointed as follows:16

Two appointed by the Majority Leader of the Senate: Maj. Gen. Lewis E. Curtis,

III, U.S. Air Force (retired), of Texas; Vice Adm. Anthony A. Less, U.S. Navy

(retired), of Virginia;

Two appointed by the Minority Leader of the Senate: Al Cornella, of South

Dakota (chair), and James A. Thomson, of California;

Two appointed by the Speaker of the House of Representatives: none appointed;

and

Two appointed by the Minority Leader of the House of Representatives: Lt.

Gen. H. G. (Pete) Taylor, U.S. Army (retired), of Texas, and Keith Martin of

Pennsylvania.

A major issue for Congress is the absence of a formal Department of Defense

plan for the future of its overseas basing. For this specific reason, Congress did not

fund some of the construction projects requested by the Department at overseas

locations for FY2004. In its report to the Senate on the FY2005 appropriations bill,

the Senate Committee on Appropriations noted that the Department of Defense is

now more than two years overdue in forwarding its master overseas basing plan to

the committee and again recommended against funding several requested overseas

construction projects.17

In its report on the FY2005 appropriations bill, the Senate Committee on

Appropriations noted that the creation of the commission had met with significant

Department of Defense opposition. Nevertheless, the committee went on to state:

Because of delays in the appointment of commissioners, the establishment of

suitable Commission facilities, and the submission to the Congress of the

Department’s global basing and presence plan, the deadline for the

Commission’s final report is extended to August 15, 2005. This will make the

Commission’s life coterminal with its funding, which under current law expires

September 30, 2005, and will provide an opportunity for the Commission to

interact with the Base Closure and Realignment Commission, whose members

need not be appointed until March 15, 2005. However, in order to inform both

The law also provides for a staff of up to 12 individuals, including an executive director,

who will assist the commissioners in carrying out their task. The Executive Director of the

commission’s staff is Patricia J. Walker, Deputy Assistant Secretary of Defense for Reserve

Affairs (Materiel and Facilities), who is on temporary detail to this position.

These included projects requested for Japan, Puerto Rico, Spain, and the United Kingdom

and a proposed barracks renovation in the Bahamas.

CRS-9

BRAC and consideration of the fiscal year 2006 military construction

appropriations bill, the committee urges the Overseas Basing Commission to

present its preliminary conclusions to the Congress no later than March 31,

2005.18

Section 2518 of the House-passed version of the National Defense

Authorization Act for FY2005 would repeal the provision of law that established the

commission. There is no such provision in the bill as it was passed by the Senate.

The conference report retained the Senate’s due date extension for the Commission’s

final report, but eliminated additional funding that the Senate had provided.

Redeployment of U.S. Troops from Overseas Garrisons to Bases

within the United States, 2004-2014.

Presidential Announcement. On August 16, 2004, President George W.

Bush included the following remarks in his address to the national convention of the

Veterans of Foreign Wars (VFW) in Cincinnati, Ohio:

I’m announcing today, over the next 10 years, we will bring home about 60,000

to 70,000 uniformed personnel, and about 100,000 family members and civilian

employees.19

The Redeployment in Context. Analysts expect that the majority of the

forces redeployed to the United States will be drawn from those countries that

currently host the largest overseas U.S. garrisons. These are the Federal Republic of

Germany, the Republic of Korea, and Japan.

It may be helpful to place this redeployment in historic context by comparing

the numbers of troops in garrison in these three countries in 1986 with those in

garrison in 2003. The figures for 1986 reflect U.S. overseas force posture during the

closing years of the Cold War.20 In addition, the United States then maintained

sizable garrisons in both the Republic of the Philippines and the Republic of Panama

that would be redeployed to the United States, its possessions, or other overseas

locations during the late 1980s and 1990s. Therefore, these troops have been

included in the construction of Tables 2 and 3.

S.Rept. 108-309, p. 10.

The President’s remarks can be seen in their entirety at the White House press release

website: [http://www.whitehouse.gov/news/releases/2004/08/20040816-12.html]. The

numbers quoted by the President include active members of the military, their families and

other dependents, and civil service employees. They do not count the host-nation nationals

and individuals employed by private contractors who may be affected by the reconfiguration

of overseas basing.

Active duty military members numbered 2.17 million in 1986, according to the

Department of Defense, with 1.70 million on permanent active duty in 2003.

CRS-10

Table 2. Selected U.S. Overseas Garrisons, 1986 and 2003

(As of September 30 of the respective years)

1986

2003

Change

Federal Republic of Germany

Army

196,924

60,882

(136,042)

Navy

37,929

14,168

(23,761)

234,853

75,050

(159,803)

Army

31,600

26,313

(5,287)

Navy

1,224

12,768

8,788

(3,980)

44,368

36,325

(8,043)

Army

2,308

1,177

(1,131)

Navy

1,224

12,768

8,788

(3,980)

Army

Navy

6,180

(6,180)

Air Force

9,184

(9,184)

15,364

(15,364)

Army

7,634

(7,634)

Navy

680

(680)

2,317

(2,317)

10,631

(10,631)

Air Force

Marine Corps

Total

Republic of Korea

Air Force

Marine Corps

Total

Japan

Air Force

Marine Corps

Republic of the Philippines

Marine Corps

Total

Republic of Panama

Air Force

Marine Corps

Total

Source: Department of Defense Base Structure Reports for Fiscal Years 1987 and 2004.

CRS-11

Table 3. Selected U.S. Overseas Garrisons, Grouped Totals,

1986 and 2003

(As of September 30 of the respective years)

1986

2003

Change

Germany, Japan, and Korea

Army

230,832

88,372

(142,460)

Navy

14,545

19,603

5,058

Air Force

71,632

37,340

(34,292)

Marine Corps

21,978

12,471

(9,507)

Total

338,987

157,786

(181,201)

Army

7,634

(7,634)

Navy

6,860

(6,860)

Air Force

11,501

(11,501)

25,995

(25,995)

Philippines and Panama

Marine Corps

Total

Source: Department of Defense Base Structure Reports for Fiscal Years 1987 and 2004.

These figures indicate that although the announced redeployment is substantial,

it has precedent in the post-Cold War era when examined in the context of the entire

military force or when focused on the U.S. garrisons in Germany, Korea, and Japan.

Base Realignment and Closure (BRAC). Four BRAC rounds have been

completed since the first in 1989. Under statutory language included in the National

Defense Authorization Act for FY2002, the Secretary of Defense is authorized to

carry out a fifth round of realignment or closures during FY2006 through FY2011.

The Secretary has established a list of criteria that he will use to recommend

base closure and realignment actions and has certified to the Congress the need to

carry out this fifth BRAC round. The Department of Defense is in the process of

evaluating the base infrastructure needs of its future military force. This process

includes the detailed assessment of each installation’s capacity as measured along a

number of dimensions, such as potential for hosting additional troops, ease of access

to major transportation resources, proximity to training and operating areas, etc., and

the changes needed in order to make it conform to the needs of the future force. This

evaluation will result in the creation of a list of BRAC actions that the Secretary is

required to submit in May 2005 to an independent BRAC Commission for review.

The BRAC Commission is scheduled to forward this list, including any revisions, to

CRS-12

the President in September 2005. The final presidential list of BRAC actions is due

to the Congress on November 7, 2005.21

The House-passed version of the National Defense Authorization Act for Fiscal

Year 2005 (H.R. 4200) contains a provision that would effectively delay the

remaining steps in the BRAC process for two years.22 In its Statement of

Administration Policy issued on May 19, 2004, the Office of Management and

Budget stated:

Base Realignment and Closure (BRAC). The Administration strongly opposes

any provision to weaken, delay, or repeal the BRAC authority passed by

Congress three years ago. If the President is presented a bill that weakens, delays,

or repeals the BRAC authority, the Secretary of Defense, joining with other

senior advisors, will recommend that the President veto the bill.

Appearing before the Senate Committee on Armed Services on September 23,

2004, Secretary of Defense Donald Rumsfeld reiterated his opposition to delay of the

BRAC round in a response to a question posed by Senator John McCain:

McCain: I want to thank the witnesses. Mr. Secretary, I was very pleased to hear

your comments in response to Senator Warner’s question about the necessity of

BRAC. Would you recommend a veto if a defense bill came to the president that

had a two-year delay in BRAC?

Rumsfeld: Yes, I certainly would. It would be a terrible thing, Senator.23

Press accounts on the deliberations of the conference committee cited the issue

of BRAC delay as one of three or four most significant issues confronting the

conferees.24

For more information on the BRAC process, see CRS Report RS21822, Military Base

Closures: DOD’s 2005 Internal Selection Process, by (name redacted) and (name re

dacted); CRS Report RL32216,

Military Base Closures: Implementing the 2005 Round,

by (name redacted); CRS Report RL30440,

Military Base Closures: Estimates of Costs

and Savings, by (name redacted); CRS Report RL

30051, Military Base Closures:

Agreement on a 2005 Round, by (name redacted); and CRS Videotape MM

70068,

Military Base Closures: DOD’s Internal 2005 BRAC Selection Process, by (name redacted)

and (name redacted), available online at [http:// www.crs.gov/products/multimedia/sem_

bc-040422.shtml].

Sec. 2821-5 in Subtitle C — Base Realignment and Closure, H.R. 4200 EH. The Senate

version of the bill contains no such language. Emphasis in the original Statement of

Administration Policy, which can be found on the World Wide Web at

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

“U.S. Senator John W. Warner (R-Va) Holds Hearing On Global Posture Review Committee Hearing,” Political Transcripts by Federal Document Clearing House, September

23, 2004.

Amy Klamper, “Defense Authorization Conferees Nearing An Agreement,” National

Journal’s CongressDaily, October 5. 2004.

CRS-13

Conference Report, Ronald Reagan National Defense Authorization

Act for Fiscal Year 2005 (H.R. 4200). The conference report for the Ronald

Reagan National Defense Authorization Act for Fiscal Year 2005 does not delay the

implementation of the 2005 BRAC round, but several sections in the bill do address

BRAC issues:

Sec. 2831. The Secretary of Defense is required to submit an updated forcestructure plan and infrastructure inventory not later than March 15, 2005. Existing

law states that these are to be submitted along with the Department’s Fiscal Year

2006 budget justification material.

Sec. 2832. This section specifies the final criteria that are to be used by the

Secretary of Defense in calculating the “military value” of installations considered

for closure or realignment and “other criteria” that the Secretary shall consider in

making his recommendations. Previous law established several criteria for the

evaluation of military value and “special considerations” that are to be included “at

a minimum” in the writing of the Secretary’s recommendations. The Act’s language

appears to remove some flexibility in the ability of the Secretary to choose those

factors he deems relevant to the calculation. Previous law specified that military

value is the primary consideration in creating the recommended BRAC action list.

The Act’s language requires the Secretary to “give priority” to military value. The

section goes on to state that the “final selection criteria specified in this section shall

be the only criteria to be used, along with the force-structure plan and infrastructure

inventory ... in making recommendations for the closure or realignment of military

installations inside the United States under this part in 2005.”

Sec. 2833. Existing law authorizes the Secretary of Defense to place a military

installation in an inactive status as an alternative to closure or realignment. The Act’s

language repeals this authority.

Sec. 2834. Previous law required the Commission to give the Secretary of

Defense a 15-day warning before adding an installation to his list of

recommendations for closure or realignment and demanded that seven of the nine

Commissioners then vote for the addition. The Act’s language made the same

requirement applicable to Commission consideration for adding an installation to the

Secretary’s list of recommendations and requires that at least two members of the

Base Realignment and Closure Commission visit any installation for which the

Commission intends to add a closure or realignment recommendation not made by

the Secretary of Defense or to expand a realignment that the Secretary has

recommended.

Military Housing Privatization Budget Authority Cap. In the late 1990s,

Congress granted to the Department of Defense specific “alternative authorities” by

which the Department could enter into “public-private partnerships” with private

enterprise.25 These partnerships are corporations that assume responsibility for the

These special authorities give the Department of Defense the power to take actions, such

as guaranteeing rents, guaranteeing minimum occupancy rates, investing equity, offering

(continued...)

CRS-14

construction, maintenance, and operation of housing for military personnel on, or

adjacent to, military installations. To date, the military services have negotiated

contracts for 32 separate projects that will create or refurbish more than 61,000

military family housing units.26

This Military Housing Privatization Initiative leverages, but does not replace,

the use of appropriated funds to provide military housing. The budget authority

needed to support the initiative is calculated, or “scored,” by the Department of

Defense according to guidelines established by the Office of Management and

Budget.27 10 U.S.C. 2883(g) imposes limitations on the total value in budget

authority of all contracts and investments undertaken using the alternative authorities,

restricting the Department of Defense to $850 million for the acquisition or

construction of military family housing and $150 million for the acquisition or

construction of military unaccompanied housing (barracks or dormitories).

Contract negotiations for the creation of almost 74,000 privatized military

family housing units are ongoing, and the Department of Defense is planning to

privatize an additional 34,000 units during the next few years. The Department of

Defense estimates that it will exhaust the budget authority granted to it under the

program before the end of the current fiscal year. The Department, therefore, has

requested that this budget authority limitation be raised.28

Efforts to Raise the Budget Authority Cap. Section 2806 of H.R. 4200,

the National Defense Authorization Act for Fiscal Year 2005 (engrossed as agreed

to or passed by House) would repeal the limitation on budget authority applied to

military family housing.29 The Senate version of the bill (S. 2400, incorporated into

(...continued)

direct loans, etc., that it otherwise could not.

See CRS Report RL31039, Military Housing Privatization Initiative: Background and

Issues, by (name redacted), for a list of the alternative military housing privatization

authorities granted to the Department of Defense. The list of existing, solicited, and planned

housing privatization projects can be found online at [http://www.acq.osd.mil/housing/].

Budget scoring (or “scorekeeping”) is the percentage of dollar value, from 0% to 100%,

of an action’s cost that must be allocated to an agency’s budget in a given fiscal year.

Therefore, if the cost of an action (in this case, the use of an alternative authority in the

creation of a housing public-private partnership) is estimated $1 million and is scored at

10%, then $100,000 of the agency’s budget authority for that year must be used to cover the

assessment. A score of 100% would mean that all $1 million would have to be covered by

the agency’s budget authority in the designated year. This scoring is calculated based on the

Government’s “degree of exposure,” or the statistical probability that a default on the

project by the private contractor will have a financial impact on the federal deficit. Each of

the authorities created for the MHPI has an associated budget score that was calculated by

the Office of Management and Budget.

The Department and the military services have focused their attention on family, not

unaccompanied, housing, so it is the $850 million family housing authority that is being

exhausted.

The section leaves unchanged the $150 million budget authority cap on military

(continued...)

CRS-15

H.R. 4200 as an amendment in the nature of a substitute) does not contain similar

language, and the difference between the two remains to be worked out in

conference. In the meantime, Section 129 of the Military Construction

Appropriations Act for FY2005 (H.R. 4837), as it was reported to the House, would

have raised the budget authority cap on military family housing by $500 million to

$1.35 billion. This section was struck when a point of order was raised and sustained

during floor debate.

An independent bill, the Military Housing Improvement Act of 2004 (H.R.

4879), accomplishing the same goal, was introduced and passed by the House on July

21, 2004 (see “Military Construction Appropriations,” in the Legislation section,

below, for more information on legislative action). It was received by the Senate on

September 7, 2004, and referred to the Committee on Armed Services. Senator

Hutchison, on behalf of herself and Senator Feinstein, offered S.Amdt. 3661 to the

Senate version of the Military Construction Appropriations Act for Fiscal Year 2005,

S. 2674, when it was laid before the Senate on September 15. This amendment would

require the Department of Defense to assess the impact of the exhaustion of new

budget authority on the military family housing program. The amendment was

accepted into the bill, which was then incorporated into the House version of the

Military Construction Appropriations Act (H.R. 4837). Because the language raising

the budget authority cap was struck from the House bill on a point of order, the

principal effect of this amendment is to allow the issue to be raised in conference.

The Senate passed the amended bill on September 20, 2004.

Section 2805 of the Ronald Reagan National Defense Authorization Act for

Fiscal Year 2005 (H.R. 4200) repealed both the budget authority cap and the

termination date for the use of the alternative authorities, which had been set for

December 31, 2012.

The Budget Scoring Issue — Differences Between OMB and CBO.

The Congressional Budget Office has taken issue with the Office of Management and

Budget interpretation of federal accounting standards in its scoring of the

Department’s alternative authorities. The OMB calculated its scoring according to

the financial liability each authority places on the government, thereby recording

costs incrementally over time. The CBO, on the other hand, argues that the

Department is engaging in a “governmental activity” by supplying family housing in

whatever form, either government or privately owned, to military personnel.30 The

CBO contends that the Department of Defense exercises significant control over the

operation of these housing projects and that the government is the dominant or only

source of project income, rendering the partnered private-sector corporation

effectively an instrument of the government.31

(...continued)

unaccompanied housing.

This, in the eyes of the CBO, differs from the case where a military member accepts a

cash housing allowance and uses it to secure commercial accommodation in a rented or

purchased dwelling that is independent of the Department of Defense.

The CBO bases its contention of government control of privatized projects on provisions

(continued...)

CRS-16

The “leveraging” in the privatization initiative occurs when appropriated funds

are used, either in the form of a loan guarantee, direct loan, or equity stake, to assist

the private-sector corporation in securing the additional commercial financing

necessary to capitalize the project. Because the CBO regards privatization projects

as inherently governmental, it considers all such investments as borrowing authority,

a form of budget authority, that should be recorded up front rather than scored over

time.

For its part, the Department of Defense maintains that privatized housing is

controlled by a private corporation, not the government, that military members are

free to use their housing allowance wherever they wish, and that the budget authority

recorded is properly limited to the amount of financial liability incurred by the

Department, as calculated by the OMB scoring rules.

In awarding its 32 family housing projects, the Department of Defense has used

OMB’s accounting methodology to record obligations of approximately $580

million. The CBO, using the rationale explained above, contends that the full amount

of the Department’s commitments to date approximates $6 billion.

The Office of Management and Budget devoted a significant portion of its

Statement of Administration Policy on S. 2674, the Senate version of the Military

Construction Appropriations Act for Fiscal Year 2005, issued on September 20,

2004, to an explanation of its position on the issue of the housing privatization cap,

stating:

The President’s Budget included a request that would increase the military

housing privatization cap from $850 million to $1.85 billion. This increase will

help improve the quality of life of our military families by eliminating inadequate

housing and allowing them the option to rent high-quality homes at prices

covered by housing allowances. Furthermore, without this increase, the current

limit would be reached by November 2004. OMB would not score any additional

cost to this provision, because it does not increase the amount of budget authority

available to the Department of Defense (DOD). Moreover, DOD does not need

additional budget authority to cover the construction cost of these private

projects. These projects receive private sector funding and are controlled and

managed by private owners, and DOD does not require service members to live

in the units and does not guarantee their occupancy. Any immediate costs to

DOD associated with these contracts, such as credit subsidies or cash

investments, are paid for out of funds appropriated to the Department’s housing

accounts. Additional costs to the Department in the form of allowances paid to

(...continued)

that are written into most partnering contracts. These can permit the Department of Defense

to direct or influence business operations, control occupancy and access to housing (physical

and contractual), and influence construction and management of the housing development.

The CBO argues that the Department of Defense is the dominant source of project income

because the housing is intended to be occupied by military families throughout its economic

life and has the authority to contribute to the partnership itself by contributing land and

housing units, providing cash contributions and direct loans, requiring rent payment by

military tenants through pay allotment or by providing a single project-wide lump-sum

payment per month, or by reserving units for military families.

CRS-17

service members are offset by avoidance of costs associated with building and

maintenance of government housing. The Administration urges the Senate to

either eliminate the cap or raise the cap to the requested $1.85 billion, which is

essential to meet the FY2007 DOD goal of eliminating inadequate housing

units.32

Significant Funding Trends

Between FY1985 and FY1998, funding devoted to military construction

declined steadily as DOD and Congress struggled with a changing strategic

environment, a shrinking military force, and the uncertainties associated with several

rounds of base realignments and closures. Appropriations began to rise with FY1998

as Congress sought to replace outdated facilities and improve the quality of life for

military personnel at home and in the workplace. Administration requests for military

construction funding (not including BRAC and family housing) continued to decline

until FY2000, but have risen for FY2001 and FY2002. The request for FY2005 rises

above the level requested for FY2004, but falls short of projections made several

years ago. In FY2001, DOD anticipated that its annual construction requests would

approximately triple between FY2003 and FY2007, which would have led an

observer to anticipate an FY2005 request approximately $1 billion higher than that

submitted (see Figure 1).

The Statement of Administration Policy can be found on the World Wide Web at

[http://www.whitehouse.gov/omb/legislative/sap/108-2/s2674sap-s.pdf].

CRS-18

Figure 1. Military Construction Funding, FY1989-FY2005

Note: Does not include BRAC or Family Housing funding

Source: Department of Defense, Financial Summary Tables, successive years

Table 4 breaks down the FY2005 request by appropriations account and

compares it to FY2004 enacted levels. Table 5 shows congressional action on current

military construction appropriations by account. Table 6 compares Administration

military construction requests and enactments for Guard and Reserve projects from

FY1995 to FY2005.

Several issues were singled out for special attention in the appropriations

committee reports. Among these were the inadequacy of Department requests for

sustainment, restoration, and modernization funds and the inappropriate use of

unprogrammed minor construction funding.

The House Appropriations Committee noted the long-standing tension between

funds needed for construction of new buildings and the funds that are dedicated to

the maintenance of existing facilities. The former is funded through the military

construction appropriation, while the latter is supported by sustainment, restoration,

and modernization (SRM) accounts in the national defense appropriation. The

committee remarked that the majority of military installations are rated by the

CRS-19

services at the lowest two of four possible facility readiness grades (C-3 and C-4),

while SRM appropriations are often diverted to support base operations.33

The Senate Appropriations Committee highlighted what it determined to be the

inappropriate use of minor construction funds for construction not authorized by

congressional committees. According to 10 U.S.C. 2805, the Secretary of Defense

is permitted to initiate construction projects that have not been either authorized or

specifically appropriated for using funds in what is referred to as the “unspecified

minor construction” appropriation account. This authority is intended for use only

under circumstances where the need for construction could not have been foreseen

in time to request an appropriation through the normal process and, in the case where

such construction would correct a deficiency that threatens life, health, or safety;

authority is limited to projects that will cost $3 million or less.34 The committee

observed that in the period since September 11, 2001, this authority has been

frequently used to justify projects, such as gates, inspection facilities, and even a

firing range, that are primarily intended as anti-terrorism/force protection measures,

all of which should by now be readily identifiable sufficiently far in advance to

appear in the normal appropriation process.35

Legislation

Military Construction Appropriations

H.R. 4837 (Knollenberg). Making appropriations for military construction,

family housing, and base realignment and closure for the Department of Defense for

the fiscal year ending September 30, 2005, and for other purposes. The House

Committee on Appropriations, Subcommittee on Military Construction, held nine

hearings between February 25 and June 22, 2004. The subcommittee reported its

mark of the bill by voice vote to the full committee on July 6, 2004. The full

committee mark was completed, also by voice vote, on July 9, and the committee

reported its bill on July 15 (H.Rept. 108-607, CR H5907). The bill was then placed

on the Union Calendar, Calendar No. 365.

The House Committee on Appropriations, in its report accompanying its mark

of the Military Construction Appropriations Act, endorsed the privatization efforts

of the Department of Defense, stating, “The Committee therefore strongly supports

current efforts to raise or eliminate the budgetary cap on MHPI and address scoring

methodology changes proposed by CBO”36 (see the “Military Housing Privatization

Budget Authority Cap” portion of the Key Policy Issues section above). Section 129

of its reported bill, H.R. 4837, would have increased the 10 U.S.C. 2883(g)(l) limit

on available budget authority from $850 million to $1.35 billion and would exempt

H.Rept 108-607, pp. 8-9.

In other cases, the project cost cap is $1.5 million.

S.Rept. 108-309, pp. 10-12.

H.Rept. 108-607, pg. 8.

CRS-20

the funds from scoring for purposes of the Congressional Budget and Impoundment

Control Act of 1974. This language, appearing in an appropriations bill, presented

several procedural challenges to existing House rules, though the Rules Committee

had waived all relevant points of order except a potential Rule XXI (legislating in an

appropriations bill) challenge to Section 129.37

Debate on H.R. 4837 began on July 21 (Congressional Record, H6460-6469).

Later that day, Mr. Nussle introduced a separate bill, H.R. 4879, that would raise the

budget authority cap without invoking questions of Committee of the Budget

jurisdiction. This measure passed on a vote of 423-0-11 (Roll no. 406, Congressional

Record, H6489-95, H6498).38 H.R. 4837 was again considered on July 22

(Congressional Record, H6660-6675), when Mr. Nussle raised a Rule XXI point of

order against Section 129. He was sustained by the Chair, striking the section from

the bill (Congressional Record H6667). Mr. Obey then made two motions to

recommit the bill to committee with instructions, neither of which was successful,

and the amended bill was passed on a vote of 420-1-13 (Roll No. 417).

The Senate replaced the original language of H.R. 4837 with that of S. 2674 on

September 15, passing the amended bill on September 20, with a vote of 91-0-9

(Record Vote No. 185) and appointed its conferees. The Senate transmitted a

message on its action to the House on September 22, 2004.

On October 8, the House agreed without objection to disagree with the Senate

amendment and appointed its conferees.

The conferees added Division B, the Emergency Supplemental Appropriations

for Hurricane Disasters Assistance Act, 2005, and Division C, the Alaska Natural

Gas Pipeline Act, to the basic bill,39 filing the conference report (H.Rept. 108-773,

Section 129 was inserted in the bill during its full committee mark, after the subcommittee

had committed the entirety of its 302(b) budget authority allocation. Section 302(f) of the

Congressional Budget and Impoundment Act of 1974 prohibits consideration of legislation

providing new budget authority in excess of a subcommittee’s 302(b) allocation. Section

306 of the same Act prohibits consideration of legislation considered to be within the

jurisdiction of the Committee on the Budget unless it is reported by that committee. This bill

was not reported by the Committee on the Budget. The rule accompanying the bill, H.Res.

732, waived all points of order against consideration of H.R. 4837 regarding these two

provisions of law.

However, Clause 2 of House Rule XXI prohibits unauthorized appropriations or

legislative provisions in an appropriations bill. H.Res. 732 waived all points of order against

consideration of the bill that would be based on this clause except for Section 129. The

rule’s resolution states, “Points of order against provisions in the bill for failure to comply

with clause 2 of rule XXI are waived except: section 129.” During consideration of H.Res.

732 by the Rules Committee, Mr. Frost moved to waive all points of order against Section

129. The motion was defeated by a vote of 3-7 (Rules Committee record vote no. 312),

leaving H.R. 4837 vulnerable to a Rule XXI point of order challenge.

H.R. 4879 was received by the Senate on July 22. On September 7, the bill was referred

to the Senate Committee on Armed Services.

For more information on the Emergency Supplemental Appropriations for Hurricane

(continued...)

CRS-21

text at Congressional Record H9054-9113) on October 9. The House considered the

report (Congressional Record H9175-9176) and agreed by the Yeas and Nays, 3740-58 (Roll no. 529). That same day, the Senate began consideration on the conference

report, and a cloture motion was presented (Congressional Record S10978-10979).

The cloture motion was withdrawn by unanimous consent on October 11, and the

Senate agreed to the conference report by Voice Vote (Congressional Record

S11223-11228).

The bill was presented to the President and signed on October 13, 2004 (P.L.

108-324).

S. 2674 (Hutchison). An original bill making appropriations for military

construction, family housing, and base realignment and closure for DOD for the

fiscal year ending September 30, 2005, and for other purposes. The Senate

Committee on Appropriations Subcommittee on Military Construction held the first

of its annual series of hearings on the Defense-wide and Air Force appropriations

requests on March 30, 2004. It held a hearing on the Army and Navy appropriations

requests on April 7. After informal subcommittee markup, the full committee

reported its bill on July 15, 2004 (S.Rept. 108-309, Congressional Record S8228).

The bill was then placed on the Legislative Calendar under General Orders (Calendar

No. 637).

S. 2674 was laid before the Senate on September 15, 2004. The Senate amended

the text twice (S.Amdt. 3660 and 3661, Congressional Record S9242) by Unanimous

Consent, returned it to the Calendar (Calendar No. 637), and incorporated its

language into companion measure H.R. 4837. Subsequent action is described in the

relevant section above.

H.J.Res. 107 (Young). Mr. Young introduced an emergency supplemental bill

on September 28 that would enable the continued funding through November 20,

2004, of previously authorized military construction projects and operations at a rate

consistent with that appropriated for Fiscal Year 2004. The House considered the

measure on September 29 under the provisions of rule H.Res. 802 (Congressional

Record H7778-7786). Mr. Obey moved to recommit with instructions to

Appropriations (text and consideration, Congressional Record H7783-7785), but the

motion to recommit with instructions failed by the Yeas and Nays: 200 - 221 (Roll

No. 478). The bill then passed by recorded vote: 389 - 32 (Roll No. 479). The bill

was received by the Senate on the same day, passed without amendment by

Unanimous Consent (consideration, Congressional Record S9993), and cleared for

the White House. The Senate sent a message on its action to the House on September

(...continued)

Disasters Assistance Act, 2005, see CRS Report RL32581, Assistance After Hurricanes and

Other Disasters: FY2004 and FY2005 Supplemental Appropriations, by (name redacted) and

(name redacted). For an explanation ofenergy policy issues related to the Alaska Natural

Gas Pipeline Act, see CRS Report RL32033, Omnibus Energy Legislation (H.R. 6):

Side-by-side Comparison of Non-tax Provisions, by (name redacted) and (name redacted),

coordinators, and CRS Report RL32315, Oil and Gas Exploration and Development on

Public Lands, by (name redacted).

CRS-22

30, and the bill was presented to the President, who signed it into law the same day

(P.L. 108-309).

H.R. 5212 (Young). Mr. Young introduced an emergency supplemental bill for

hurricane disaster relief on October 5, 2004. The bill included $148.9 million in

construction and repair funding related to damage caused by Hurricanes Ivan and

Jeanne ($147.6 million to rebuild Ivan-damaged Navy and Army Reserve

infrastructure at NAS Pensacola, Florida, and the remainder dedicated to repairing

damage caused by Jeanne to the former Naval Station Roosevelt Roads and at Ft.

Buchanan in Puerto Rico and Patrick AFB, Florida).40 The bill passed the House by

recorded vote 412-0-20 (Roll No. 501) on October 6and was received in the Senate

on October 7, 2004.41 The bill’s language was incorporated into H.R. 4837 as

Division B of the bill.

Defense Authorization

H.R. 4200 (Hunter, by request). To authorize appropriations for FY2005 for

military activities of the Department of Defense, for military construction, and for

defense activities of the Department of Energy, to prescribe personnel strengths for

such fiscal year for the Armed Forces, and for other purposes. Introduced on April

22, 2004, and referred to the House Committee on Armed Services, it was further

referred to the Subcommittees on Strategic Forces, Tactical Air and Land Forces,

Readiness, Projection Forces, Total Force, and Terrorism, Unconventional Threats

and Capabilities (several subcommittees held hearings prior to the introduction of the

bill). The subcommittees completed markup and returned the bill to the full

committee by May 6. The Subcommittee on Readiness, which exercises jurisdiction

over the military construction portion of the authorization bill, inserted an

amendment to the basic bill requiring the Department of Defense to complete and

provide to Congress a series of reports related to the ongoing 2005 round of Base

Realignment and Closure (BRAC) actions. These reports would be submitted by the

end of calendar year 2005, and the amendment would bar the Department from taking

any BRAC-related action until 18 months after the last report is delivered to

Congress. The subcommittee approved the amendment by unanimous voice vote. The

bill was reported out on May 14, 2004 (H.Rept. 108-491), and placed on the Union

Calendar (Calendar No. 278). Brought to the floor on May 19, 2004, subject to a rule

(H.Res.648). H.R. 4200 was debated, amended, and passed by recorded vote (391-34,

Roll no. 206) on May 19 and 20.

The bill was received in the Senate on May 21, 2004, read twice, and placed on

the Legislative Calendar under General Orders (Calendar No. 537). It was laid before

the Senate by Unanimous Consent on June 24, 2004, whereupon the Senate struck

all after the Enacting Clause and substituted the language of S. 2400. The bill then

passed with an amendment by Unanimous Consent on the same day (Congressional

The Administration’s request can be found online at [http://www.whitehouse.gov/omb/

budget/amendments/supplemental_10_5_04.pdf].

For additional detailed information on this and other disaster assistance supplemental

appropriations, see CRS Report RL32581, Assistance After Hurricanes and Other Disasters:

FY2004 and FY2005 Supplemental Appropriations, by (name redacted) and (name redacted).

CRS-23

Record, S7300).The Senate then insisted on its amendment and appointed conferees,

sending a message to the House informing it of its action on July 6, 2004. Conferees

met between September 29 and October 8, 2004.

The conferees filed their report (H.Rept. 108-767, text in Congressional Record

H9187-9683) in the House on October 8. Mr. Hunter brought up the report for

consideration under the provisions of H.Res. 843 the same day (Congressional

Record H8995-9007). The House agreed by the Yeas and Nays: 359-14-59 (Roll no.

528, Congressional Record H9175) on October 9.

The Senate agreed to the conference report by Unanimous Consent

(Congressional Record S10945-10954) on October 9, 2004.

The bill was presented to the President on October 21, and signed into law on

October 28, 2004 (P.L. 108-375).

S. 2400 (Warner). An original bill to authorize appropriations for FY2005 for

military activities of the Department of Defense, for military construction, and for

defense activities of the Department of Energy, to prescribe personnel strengths for

such fiscal year for the Armed Services, and for other purposes. Ordered to be

reported from the Committee on Armed Services as an original measure on May 6,

2004. The original bill was reported to the Senate from the Committee by Senator

Warner on May 11 (S.Rept. 108-260, with additional views). Laid before the Senate

by Unanimous Consent on May17, 2004. Debated on the Senate floor between May

17 and June 23, 2004. Passed the Senate with amendments on June 23 by Yea-Nay

vote (97-0, Record Vote No. 146). Incorporated by the Senate into H.R. 4200 as an

amendment in the nature of a substitute.42

See H.R. 4200 for further action.

CRS-24

Table 4. Military Construction Appropriations by Account:

FY2004-FY2005

(new budget authority in thousands of dollars)

FY2004

Enacted*

FY2005

Request†

Difference

MilCon, Army

1,426,724

1,771,285

344,561

MilCon, Navy

1,238,366

1,060,455

(177,911)

MilCon, Air Force

1,337,301

663,964

(673,337)

581,347

709,337

127,990

Total: Active Components

4,583,738

4,205,041

(378,697)

MilCon, Army National Guard

311,592

295,657

(15,935)

MilCon, Air National Guard

222,908

127,368

(95,540)

MilCon, Army Reserve

88,451

87,070

(1,381)

MilCon, Navy Reserve

45,498

25,285

(20,213)

MilCon, Air Force Reserve

62,032

84,556

22,524

Total: Reserve Components

730,481

619,936

(110,545)

Total: Military Construction

5,314,219

4,824,977

(489,242)

161,300

165,800

4,500

Account

MilCon, Defense-wide

NATO Security Investment Program

Family Housing Const., Army

289,440

636,099

346,659

1,044,446

928,907

(115,539)

Family Housing Const., Navy & Marine Corps

143,685

139,107

(4,578)

Family Housing Operation & Debt, Navy &

Marine Corps

841,358

704,504

(136,854)

Family Housing Const., AF

637,718

846,959

209,241

Family Housing Operation & Debt, AF

823,055

863,896

40,841

350

(301)

Family Housing Operation & Debt, Def-wide

49,440

49,575

135

DOD Family Housing Improvement Fund

(9,392)

2,500

11,892

3,820,100

4,171,596

351,496

Chemical Demilitarization

119,815

81,886

(37,929)

Total: BRAC Acct.

370,427

246,116

(124,311)

General Provision (Sec. 118)‡

55,000

63,000

8,000

GRAND TOTAL, New BA

9,666,046

9,553,375

(112,671)

Family Housing Operation & Debt, Army

Family Housing Const., Def-wide

Total: Family Housing

Source: Department of Defense.

*: FY2004 Enacted amounts reflect the original new budget authority enacted in the Military Construction

Appropriations Act for Fiscal Year 2004 as subsequently adjusted by rescissions and emergency appropriations

(P.L. 108-106).

†: FY2005 Request includes $30 million in three Army National Guard aviation-related construction projects

added in May 2004 subsequent to the cancellation of the RAH-64 Comanche helicopter program.

‡: Sec. 118 refers to the transfer of expired funds into the “Foreign Currency Fluctuations, Construction,

Defense” account, where they become available for expenditure as new appropriations.

CRS-25

Table 5. Military Construction FY2005 Appropriations by

Account: Congressional Action

(in thousands of dollars)

FY2005

Request

House

Bill

Senate

Bill

MilCon, Army

1,771,285

1,862,854

1,977,166

1,962,108

MilCon, Navy

1,060,455

1,081,042

1,016,315

1,045,947

MilCon, Air Force

663,964

797,865

841,131

844,531

MilCon, Defense-wide

709,337

718,837

696,491

663,318

Total: Active Components

4,205,041

4,460,598

4,531,103

4,515,904

MilCon, Army Nat’l. Guard

295,657

394,100

381,765

446,748

MilCon, Air National Guard

127,368

180,533

231,083

238,043

MilCon, Army Reserve

87,070

116,521

66,325

92,377

MilCon, Naval Reserve

25,285

30,955

33,735

44,246

MilCon, Air Force Reserve

84,556

111,725

101,373

123,977

Total: Reserve Components

619,936

833,834

814,281

945,391

Total: Military Construction

NATO Security Investment

Program

4,824,977

5,294,432

5,345,384

5,461,295

165,800

160,800

Family Housing Const., Army

Family Housing Ops & Maint,

Army

Family Housing Const.,

Navy & Marine Corps

Family Housing Ops & Maint,

Navy & Marine Corps

Family Housing Const.,

Air Force

Family Housing Ops & Maint,

Air Force

Family Housing Const,

Defense-wide

Family Housing Ops & Maint,

Defense-wide

DOD Family Housing

Improvement Fund

636,099

615,099

928,907

926,507

928,907

926,507

139,107

126,806

704,504

696,304

704,504

696,304

846,959

801,788

863,896

854,666

856,114

853,384

49,575

2,500

(16,609)

4,171,596

4,151,766

4,163,814

4,052,903

Chemical Demilitarization

81,886

BRAC Acct.

246,116

General Provision (Sec. 118)

63,000

GRAND TOTAL, New BA

9,553,375

10,003,000

Account

Total: Family Housing

Sources: H.Rept. 108-607, S.Rept. 108-309, H.Rept. 108-773.

Conference

CRS-26

Table 6. Congressional Additions to Annual DOD Budget

Requests for National Guard and Reserve Military Construction,

FY1995-FY2005

(current year dollars in thousands)

Fiscal

Year

Army

National

Guard

Air

National

Guard

Army

Reserve

1995 Req.

9,929

122,770

1995

Enacted

187,500

1996 Req.

Total

Change

from

Request

Naval

Reserve

Air

Force

Reserve

Total

7,910

2,355

28,190

171,154

—

248,591

57,193

22,748

56,958

572,990

+401,836

18,480

85,647

42,963

7,920

27,002

182,012

—

1996

Enacted

137,110

171,272

72,728

19,055

36,482

436,647

+254,635

1997 Req.

7,600

75,394

48,459

10,983

51,655

194,091

—

1997

Enacted

78,086

189,855

55,543

37,579

52,805

413,868

+219,777

1998 Req.

45,098

60,225

39,112

13,921

14,530

172,886

—

1998

Enacted

102,499

190,444

55,453

26,659

15,030

390,085

+217,199

1999 Req.

47,675

34,761

71,287

15,271

10,535

179,529

—

1999

Enacted

144,903

185,701

102,119

31,621

34,371

498,715

+319,186

2000 Req.

57,402

73,300

77,626

14,953

27,320

250,601

—

2000

Enacted

236,228

262,360

110,764

28,310

64,071

701,733

+451,132

2001 Req.

59,130

50,179

81,713

16,103

14,851

221,976

—

2001

Enacted

285,587

203,381

108,499

61,931

36,510

695,908

+473,932

2002 Req.

267,389

149,072

111,404

33,641

53,732

615,238

—

2002

Enacted

400,994

250,530

165,136

51,676

74,013

942,349 +327,112

2003 Req.

101,595

62,406

58,779

58,671

37,976

319,427

—

2003

Enacted

241,377

203,813

100,554

74,921

85,826

706,491

+387,064

2004 Req.

168,298

60,430

68,478

28,032

44,312

369,550

—

2004

Enacted

311,592

222,908

88,451

45,498

62,032

730,481

+360,931

2005 Req.

295,657

127,368

87,070

25,285

84,556

619,936

—

2005

Conference

446,748

238,043

92,377

44,246

123,977

945,391

+325,455

Source: Department of Defense, Financial Summary Tables, successive years; H.Rept 108-773.

CRS-27

For Additional Information

CRS Products

CRS Report RL31810. Appropriations for FY2004: Military Construction, by Daniel

Else.

CRS Report RL32305. Authorization and Appropriations for FY2005: Defense, by

(name redacted) a nd (name redacted).

CRS Report RL31305. Appropriations and Authorization for FY2003: Defense,

coordinated by (name re dacted) and (name redacted).

CRS Report RL30002. A Defense Budget Primer, by (name redacted) and

(name redacted).

CRS Report RL31039. Military Housing Privatization Initiative: Background and

Issues, by (name redacted).

CRS Report RS21822. Military Base Closures: DOD’s 2005 Internal Selection

Process, by (name redacted) and (name redacted).

CRS Report RL32216, Military Base Closures: Implementing the 2005 Round, by

(name redacted).

CRS Report RL30440. Military Base Closures: Estimates of Costs and Savings, by

(name redacted).

CRS Report RL30051. Military Base Closures: Agreement on a 2005 Round, by

(name redacted).

CRS Report RL31443. The “Deeming Resolution”: A Budget Enforcement Tool, by

(name redacted).

CRS Videotape MM70068. Military Base Closures: DOD’s Internal 2005 BRAC

Selection Process, by (name redacted) and (nam

e redacted), available online

at [http://www.crs.gov/products/multimedia/sem_bc-040422.shtml].

CRS Report RL32581. Assistance After Hurricanes and Other Disasters: FY2004

and FY2005 Supplemental Appropriations, by (name redacted) and (name redacted).

CRS Report RL32315. Oil and Gas Exploration and Development on Public Lands,

by (name redacted)

CRS-28

Selected World Wide Websites

Legislative Branch Sites

House Committee on Appropriations

[http://appropriations.house.gov/]

Senate Committee on Appropriations

[http://appropriations.senate.gov/]

CRS Appropriations Products Guide

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

CRS Multimedia Library

[http://www.crs.gov/products/multimedia/multimedialibrary.shtml]

Congressional Budget Office

[http://www.cbo.gov/]

General Accounting Office

[http://www.gao.gov/]

U.S. Department of Defense Sites

U.S. Department of Defense, Office of the Under Secretary of Defense (Comptroller),

FY2004 Budget Materials

[http://www.dod.mil/comptroller/defbudget/fy2005/index.html]

U.S. Department of Defense, Installations & Environment Home Page

[http://www.acq.osd.mil/ie/]

U.S. Department of Defense, Office of the Deputy Under Secretary of Defense

(Installations and Environment) Military Housing Privatization Program

[http://www.acq.osd.mil/housing/]

White House Sites

Executive Office of the President, Office of Management and Budget, Budget

Materials

[http://www.whitehouse.gov/omb/budget/fy2005/]

Office of Management & Budget

[http://www.whitehouse.gov/omb/]

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