FY2006 Supplemental Appropriations: Iraq and Other International Activities; Additional Hurricane Katrina Relief

Congressional research reportJun 15, 2006

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Order Code RL33298

CRS Report for Congress

Received through the CRS Web

FY2006 Supplemental Appropriations:

Iraq and Other International Activities;

Additional Hurricane Katrina Relief

Updated June 15, 2006

Paul M. Irwin, Coordinator

Specialist in Social Legislation

Domestic Social Policy Division

Larry Nowels, Coordinator

Specialist in Foreign Affairs

Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

FY2006 Supplemental Appropriations:

Iraq and Other International Activities;

Additional Hurricane Katrina Relief

Summary

On February 16, 2006, the Administration submitted two separate FY2006

supplemental appropriations requests. The first, totaling $72.4 billion, would fund

ongoing military operations in Iraq and Afghanistan ($67.9 billion), and State

Department operations in Iraq and various foreign aid programs, including additional

assistance for Iraq ($4.2 billion). The other supplemental would provide $19.8

billion for recovery and reconstruction activities in hurricane-affected Gulf Coast

areas. Thus, Congress considered a combined spending proposal of $92.2 billion.

For the military component of the supplemental, several issues arose in

Congress, including whether DOD’s funding requests for training Afghan and Iraqi

security forces were necessary in light of the pace of implementation, how to make

transparent the DOD assumptions about military personnel levels for active-duty and

reserve forces that underlie the request, whether DOD could better contain increases

in operating costs, and whether DOD’s investment request financed peacetime as

well as wartime needs.

The supplemental proposal for international matters covered a range of activities

that were either not addressed in the regular FY2006 appropriations, addressed

circumstances that had changed since passage of the regular spending measures, or,

like military operations in Iraq and Afghanistan, have been largely funded through

supplementals rather than incorporated into the “base” of annual, on-going

diplomatic and aid operations. The request of $1.6 billion in Iraq stabilization

assistance was the first sizable aid package for Baghdad since Congress approved

$18.45 billion in the FY2004 emergency supplemental measure. Other foreign policy

elements included funding for U.S. diplomatic costs in Iraq and Afghanistan,

reconstruction aid for Afghanistan, democracy promotion programs for Iran, Darfur

humanitarian relief and peace implementation aid in Sudan, Pakistan earthquake

reconstruction, Liberia refugee repatriation, and food aid for Africa.

For hurricane recovery, half the funds — $9.9 billion — were designated for the

Department of Homeland Security, mostly for the Federal Emergency Management

Agency (FEMA). The Department of Housing and Urban Development would

receive $4.4 billion, most of which would be used for community planning and

development. DOD would receive $1.8 billion and the Army Corps of Engineers

$1.5 billion, primarily to be used for flood control and coastal emergencies,

procurement, and construction. The Small Business Administration would receive

$1.3 billion for loans to homeowners, renters, and businesses.

On March 17, 2006, the House passed a $91.95 billion supplemental

appropriation measure (H.R. 4939; H.Rept. 109-388), $270 million less than

requested by the Administration. On May 4, the Senate approved its version totaling

$108.9 billion, $16.8 billion more than the request. Congress cleared on June 15 for

the President’s signature a $94.5 billion supplemental package, $2.3 billion above the

request.

Key CRS Policy Staff

Subject

Name

Telephone

E-Mail

Iraq Military Operations & International Affairs Supplemental:

Coordinator for Iraq Military Operations &

International Affairs Supplemental

Larry Nowels

7-7645

lnowels@crs.loc.gov

Department of Defense

Amy Belasco

7-7627

abelasco@crs.loc.gov

Iraq State Department Operations

Susan B. Epstein

7-6678

sepstein@crs.loc.gov

Iraq Reconstruction

Curt Tarnoff

7-7656

ctarnoff@crs.loc.gov

Afghanistan

Kenneth Katzman

7-7612

kkatzman@crs.loc.gov

Iran

Kenneth Katzman

7-7612

kkatzman@crs.loc.gov

Sudan/Darfur

Ted Dagne

7-7646

tdagne@crs.loc.gov

Pakistan

K. Alan Kronstadt

7-5415

akronstadt@crs.loc.gov

Coordinator for Hurricane Recovery Supplemental Paul M. Irwin

7-7573

pirwin@crs.loc.gov

Agriculture

Ralph Chite

7-7296

rchite@crs.loc.gov

Army Corps of Engineers & Flood Control

Nicole T. Carter

7-0854

ncarter@crs.loc.gov

Community Development Block Grant, Dept. of

Housing & Urban Development (HUD)

Eugene Boyd

7-8689

eboyd@crs.loc.gov

Defense Operation and Maintenance, and

Procurement, Department of Defense

Amy Belasco

7-7627

abelasco@crs.loc.gov

Education hurricane recovery programs

Rebecca R. Skinner

7-6600

rskinner@crs.loc.gov

Federal Emergency Management Agency

(FEMA), Dept. of Homeland Security

Keith Bea

7-8672

kbea@crs.loc.gov

Fish and Wildlife Service, Dept. of the Interior

M. Lynne Corn

7-7267

lcorn@crs.loc.gov

Historic Preservation Fund

Susan Boren

7-6899

sboren@crs.loc.gov

Low-Income Home Energy Assistance Program

Libby Perl

7-7806

eperl@crs.loc.gov

Military Construction

Daniel H. Else

7-4996

delse@crs.loc.gov

National Oceanic and Atmospheric Administration Wayne Morrissey

7-7072

wmorrissey@crs.loc.gov

Small Business Administration (SBA), Disaster

Loans Program

N. Eric Weiss

7-6209

eweiss@crs.loc.gov

Tenant-Based Rental Assistance, HUD

Maggie McCarty

7-2163

mmccarty@crs.loc.gov

Transportation

John Frittelli

7-7033

jfrittelli@crs.loc.gov

Veterans Affairs

Sidath Viranga

Panangala

7-0623

spanangala@crs.loc.gov

Border Security

Blas Nunez-Neto

Jennifer Lake

7-0622

7-0620

bnunezneto@crs.loc.gov

jlake@crs.loc.gov

Port Security and the DP World Purchase

John Frittelli

James K. Jackson

7-7033

7-7751

jfrittelli@crs.loc.gov

jjackson@crs.loc.gov

Pandemic Influenza Preparedness

Sarah A. Lister

7-7320

slister@crs.loc.gov

Hurricane Recovery Supplemental:

Contents

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

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Summary of Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Defense Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

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

Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

International Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Conference Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Hurricane Recovery and Other Domestic Issues . . . . . . . . . . . . . . . . . . . . . 14

Conference Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Border Security: Administration and Senate Proposals . . . . . . . . . . . . . . . . . . . . 19

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

American Port Security and the Dubai Ports World Operational Control of

Six U.S. Terminals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Defense Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Potential Issues in DOD’s FY2006 Supplemental Request . . . . . . . . . . . . . 25

Afghan and Iraq Security Forces Funds: Obligations Slower

Than Anticipated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Coalition Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Commander’s Emergency Response Program (CERP) . . . . . . . . . . . . 30

Iraq Freedom Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

New Joint Improvised Explosive Device Defeat Fund . . . . . . . . . . . . 30

Military Personnel Request and Visibility of Personnel Plans . . . . . . 31

Operation and Maintenance Funding Rises Substantially in

FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Investment Funding Grows in FY2006 Without Clear Overall

Rationale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Research and Development Emphasizes Improvised Explosive

Devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Military Construction Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Flexibility Issues: Transfer Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Intelligence Community Management Account . . . . . . . . . . . . . . . . . 41

International Affairs Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

U.S. Diplomatic Mission Operations in Iraq . . . . . . . . . . . . . . . . . . . . . . . . 45

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Iraq Stabilization Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Afghanistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Sudan — Darfur and Other Sudan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Darfur Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

The North-South Peace Agreement and Aid for Non-Darfur Sudan . . 56

Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Other Foreign Assistance Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Hurricane Recovery and Disaster Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . 60

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Department of Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

National Oceanic and Atmospheric Administration . . . . . . . . . . . . . . . . . . 64

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Small Business Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Disaster Loans Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Defense Department Supplemental for Repairs, Rebuilding, and

Help for Shipbuilders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Who Should Pay for Higher Costs Due to Delays in Shipbuilding . . . 69

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Military Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Request for Increased Flexibility to Transfer Funds . . . . . . . . . . . . . . 75

Other Funding for Hurricane Damages . . . . . . . . . . . . . . . . . . . . . . . . 75

Army Corps of Engineers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Department of Homeland Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Federal Emergency Management Agency . . . . . . . . . . . . . . . . . . . . . . 79

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Other DHS Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Department of the Interior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Fish and Wildlife Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

National Park Service, Historic Preservation Fund . . . . . . . . . . . . . . . 82

Other Interior Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Department of Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Department of Veterans Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Medical Center, New Orleans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Department of Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

Department of Housing and Urban Development . . . . . . . . . . . . . . . . . . . 89

Community Development Block Grants . . . . . . . . . . . . . . . . . . . . . . . 89

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

Tenant-Based Rental Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

Other Departments and Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Department of Justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

National Aeronautics and Space Administration . . . . . . . . . . . . . . . . . 95

Environmental Protection Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Armed Forces Retirement Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

General Services Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Low-Income Home Energy Assistance Program . . . . . . . . . . . . . . . . . 96

Other Departments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Other Titles for Disaster and Related Assistance . . . . . . . . . . . . . . . . . . . . . 97

Pandemic Influenza Prevention and Preparedness . . . . . . . . . . . . . . . . 98

Appendix A — Department of Defense FY2006 War-Related Supplemental

Request and Prior Funding by Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

List of Tables

Table 1. Summary of FY2006 Supplemental Request . . . . . . . . . . . . . . . . . . . . . 2

Table 2. War-Related Defense Amendments: Senate Action . . . . . . . . . . . . . . . 8

Table 3. War-Related Defense Amendments: House Action . . . . . . . . . . . . . . 11

Table 4. International Amendments: House Action . . . . . . . . . . . . . . . . . . . . . . 12

Table 5. International Amendments: Senate Action . . . . . . . . . . . . . . . . . . . . . . 14

Table 6. Hurricane Recovery Amendments: House Action . . . . . . . . . . . . . . . . 16

Table 7. Hurricane Recovery and Other Domestic Amendments: Senate

Action on Selected Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Table 8. Defense Department War and Occupation Appropriations,

FY2004-FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Table 9. Average Monthly DOD Budget Authority for War and Occupation,

FY2005 Enacted-Revised FY2006 Request . . . . . . . . . . . . . . . . . . . . . . . . 26

Table 10. Department of Defense FY2006 War-Related Bridge

Supplemental and FY2006 War-Related Supplemental Request . . . . . . . . 27

Table 11. State Department and Foreign Aid Funds in FY2006

Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Table 12. Iraq Stabilization and State Department Operations . . . . . . . . . . . . . . 47

Table 13. Afghanistan Aid Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Table 14. Sudan Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Table 15. Pakistan Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Table 16. Summary of FY2006 Supplemental for Hurricane Recovery and

Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Table 17. FY2006 Disaster Supplemental for Agriculture . . . . . . . . . . . . . . . . . 63

Table 18. FY2006 Hurricane Supplemental for the National

Oceanic and Atmospheric Administration . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Table 19. FY2006 Hurricane Supplemental for Small Business . . . . . . . . . . . . 65

Table 20. FY2006 Hurricane Supplemental for Defense . . . . . . . . . . . . . . . . . . 66

Table 21. FY2006 Hurricane Supplemental for the Army Corps of Engineers . 76

Table 22. FY2006 Hurricane Supplemental for Homeland Security . . . . . . . . . 79

Table 23. FY2006 Hurricane Supplemental for Interior . . . . . . . . . . . . . . . . . . . 82

Table 24. FY2006 Hurricane Supplemental for Education . . . . . . . . . . . . . . . . . 84

Table 25. FY2006 Hurricane Supplemental for Veterans Affairs . . . . . . . . . . . 86

Table 26. FY2006 Hurricane Supplemental for Transportation . . . . . . . . . . . . . 88

Table 27. FY2006 Hurricane Supplemental for HUD . . . . . . . . . . . . . . . . . . . . 89

Table 28. FY2006 Hurricane Supplemental: Other Departments and

Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

FY2006 Supplemental Appropriations:

Iraq and Other International Activities;

Additional Hurricane Katrina Relief

Most Recent Developments

On June 15, the President signed H.R. 4939 (P.L. 109-234), legislation

providing $94.52 billion in emergency supplemental spending for military operations

in Iraq and Afghanistan, foreign assistance in support of the war on terror and other

international crises, additional relief for victims of Gulf Coast hurricanes, and other

matters. The Senate approved (98-1) the conference report (H.Rept. 109-494) also

on June 15, while the House passed the measure on June 13 (351-67). The total

supplemental is about $2.3 billion higher than the President’s request but within the

limit the President said was acceptable in order to avoid a veto of the legislation.

Previously, the House had approved a $91.95 billion supplemental, while the Senatepassed measure totaled $108.9 billion. The size of the Senate bill had prompted a

veto threat from the White House.

For war related costs in Iraq and Afghanistan, H.R. 4939 provides $65.86

billion, roughly the same level as requested. The enacted bill, however, is about $1.9

billion less than passed earlier by the House and Senate, a reduction that serves as an

offset for the addition of $1.9 billion to fund the President’s border security initiative.

The other major reduction to the Administration’s request is $1 billion less to train

and equip Iraqi and Afghan security forces.

The conference agreement includes $4.25 billion for foreign assistance and the

State Department, including $3 billion for aid and U.S. mission operations in Iraq,

$66 million for democracy programs in Iran, and $618 million for humanitarian

support in Sudan. The overall foreign aid and State Department package is about the

same as the President proposed, but the conference agreement reduces amounts for

Iraq and Iran by about $215 million and $9 million, respectively. The bill, however,

increases emergency aid for Darfur and southern Sudan by $104 million. The

conference bill also drops a Senate provision that would have rescinded $47 million

in previously appropriated economic aid for Egypt.

H.R. 4939, as approved by conferees, provides $19.3 billion in additional relief

for victims of Gulf Coast hurricanes. Included in this total is $5.2 billion for

Community Development Block Grants, as passed in the Senate, and $1 billion more

than the House and the request. The measure appropriates $3.7 billion for levee

repair and flood control projects, a level about $300 million below the Senate, but

slightly above the President’s amended proposal. The largest reduction in the

hurricane relief portion of the supplemental is for FEMA. H.R. 4939 provides $6

CRS-2

billion for a variety of disaster recovery and relief activities, $1.2 billion less than the

revised Administration request and $4.4 billion below the Senate level.

Other major issues settled by conferees include:

Border security — fully funds the President’s $1.9 billion amended

request adding 1,000 new Border Patrol Agents and facilitating

National Guard deployments along the southern border;

Avian influenza preparedness — includes $2.3 billion to prepare for

and respond to the threat of a possible pandemic outbreak. The

Senate had approved $2.7 billion, an amount not requested by the

Administration but the President said he would accept this

congressional add-on;

Agriculture drought assistance — provides $500 million for farmers

in the Gulf Coast region affected by last year’s hurricanes. The

Senate had proposed $3.9 billion.

Overview

On February 16, 2006, the Administration submitted two separate FY2006

supplemental appropriations requests. The first, totaling $72.4 billion, would fund

ongoing military operations in Iraq and Afghanistan ($67.9 billion), non-DOD

intelligence operations ($0.3 billion), State Department operations in Iraq and various

foreign aid programs, including additional assistance for Iraq ($4.2 billion), and other

counter-terrorism funding for other agencies ($12 million). The other supplemental

would provide $19.8 billion for recovery and reconstruction activities in hurricaneaffected Gulf Coast areas. Subsequently, the White House revised its request on

April 25, proposing an additional $2.2 billion for the Army Corps of Engineers to

assist in post-Katrina recovery efforts, an amount offset by a $2.2 billion reduction

in funding requested for FEMA’s Disaster Relief Fund. The President further revised

his supplemental request on May 18, asking for $1.95 billion to support an enhanced

border security initiative, a proposal offset with cuts to the original DOD

supplemental recommendation. Thus, Congress considered a combined spending

proposal of $92.2 billion, as shown in Table 1.

The request for Iraq and Afghanistan military operations continued the

Administration’s practice of funding these activities through supplementals rather

than in regular DOD appropriations. Congress, however, did approve a $50 billion

bridge fund for Iraq in P.L. 109-148, the Defense Department FY2006 appropriation,

to cover early FY2006 costs of military spending until a supplemental could be

considered by Congress and enacted. Thus, the total amount of existing and

proposed appropriations for military and intelligence operations in Iraq, Afghanistan

and other global war on terrorism for FY2006, was $117.9 billion. This compared

to about $99 billion approved for FY2005 and $67 billion for FY2004.

CRS-3

The supplemental proposal

for international matters covered a

range of activities that were either

not addressed in the regular

FY2006 Foreign Operations and

State Department appropriation

measures (Darfur peacekeeping,

Pakistan earthquake relief), where

circumstances have changed since

passage of the regular spending

measures (Iran democracy

promotion and various refugee and

food crises), or have been largely

funded through supplementals

rather than incorporated into the

“base” of annual, on-going

diplomatic and aid operations

(Iraq reconstruction and U.S.

embassy support in Iraq). The

request of $1.6 billion in

stabilization assistance for Iraq

was the first sizable aid package

for Baghdad since Congress

approved $18.45 billion in the

FY2004 emergency supplemental

measure.

Further, the

Administration seeks about $750

million for Iraq in its regular

FY2007 Foreign Operations

budget.

The $19.8 billion for

recovery and reconstruction in the

Gulf Coast region follows

enactment last year of two

FY2005 supplementals of $10.5

billion (P.L. 109-61) and $51.8

billion (P.L. 109-62) for hurricane

relief.1

Table 1. Summary of FY2006

Supplemental Request

($s — billions)

Req.* House Senate Conf.

Military ops:

Iraq,

Afghanistan,

& Global War

on Terror

$65.92 $67.72 $67.67 $65.86

State Dept. &

Foreign Aid

$4.23

$4.06

$4.45

$4.25

Intelligence

and other war

on terror

$0.44

$0.38

$0.39

$0.30

Hurricane

relief and

reconstruction $19.76 $19.11 $28.81 $19.34

Low Income

Home Energy

Assistance

—

$0.75

—

Agriculture &

Drought

Assistance

—

$3.96

$0.50

Pandemic

Influenza

—

$2.59

$2.30

Port Security

—

$0.65 —

Border

Security

$1.95 —

$1.90

Veterans

Medical

Services

—

$0.43 —

Other

—

$0.03

$0.06

Defense

Offset

—

($1.90)

—

TOTAL

$92.22 $91.95 $108.90 $94.52

$1.90

Totals may not add because of rounding.

Conference totals are estimates.

* Request includes Administration revisions of

April 25 and May 18, 2006.

Additional resources for hurricane victims have been made available through the

(continued...)

CRS-4

The President requested that the entire amount of both supplementals be

considered “emergency” appropriations, a designation that would exempt the funds

from any limitations contained in the FY2006 Budget Resolution. Nevertheless, the

supplemental adds to the size of the U.S. budget deficit. The Administration did not

seek any offsets from other previously approved spending that could have the effect

of reducing the supplemental’s impact on the deficit, although revisions to the

original request were offset with reductions in the initial supplemental proposal.

Some Members argued that some or all of the supplemental appropriation should be

off set. Especially as the size of the Senate version of the emergency supplemental

grew during committee and floor consideration, calls for offsets or the removal of

spending for matters other than the Iraq war or hurricane relief intensified. Some

Senate-passed amendments included corresponding offsets for new spending items

— such as the amendment by Senator Gregg to add funds for border security, with

an equivalent reduction in Defense Department appropriations. But many did not.

As noted elsewhere, despite not proposing any offsets to the original $92.2 billion

request, President Bush said on several occasions that he would veto the legislation

if the final version exceeded his proposal, although he would allow increases for

pandemic influenza preparedness.

Summary of Congressional Action

As cleared for the President on June 15, H.R. 4939 provides $94.52 billion

emergency supplemental spending for military operations in Iraq and Afghanistan,

foreign assistance in support of the war on terror and other international crises,

additional relief for victims of Gulf Coast hurricanes, and other matters. The House

passed the conference agreement on June 13 (351-67) and the Senate on June 15 (981). The total supplemental is about $2.3 billion higher than the President’s request

but within the limit the President said was acceptable in order to avoid a veto of the

legislation. Previously, the House had approved a $91.95 billion supplemental, while

the Senate-passed measure totaled $108.9 billion. The size of the Senate bill had

prompted a veto threat from the White House.

For war related costs in Iraq and Afghanistan, H.R. 4939 provides $65.86

billion, roughly the same level as requested. The conference agreement includes

$4.25 billion for foreign assistance and the State Department, including $3 billion for

aid and U.S. mission operations in Iraq, $66 million for democracy programs in Iran,

and $618 million for humanitarian support in Sudan. The overall foreign aid and

State Department package is about the same as the President proposed, but the

conference agreement reduces amounts for Iraq and Iran by about $215 million and

$9 million, respectively. H.R. 4939, as approved by conferees, provides $19.3 billion

in additional relief for victims of Gulf Coast hurricanes. Included in this total is $5.2

billion for Community Development Block Grants, $3.7 billion for levee repair and

flood control projects, and $6 billion for a variety of disaster recovery and relief

(...continued)

Department of Homeland Security Disaster Relief Fund and through assumed tax savings

for people affected by the disaster. See below for further discussion of complete hurricane

recovery measures and funding.

CRS-5

activities, $1.2 billion less than the revised Administration request and $4.4 billion

below the Senate level. Other major issues settled by conferees include $1.9 billion

for the President’s border security initiative, $2.3 billion for Avian influenza

preparedness, and $500 million for farmers in the Gulf Coast region affected by last

year’s hurricanes.

In previous congressional action, on March 17 (H.R. 4939; H.Rept. 109-388),

the House provided $91.95 billion in supplemental funds, $270 million less than the

Administration’s request. The legislation reduced the defense portion of the

supplemental by $137 million, cut international programs by $166 million, and Gulf

Coast hurricane relief by $658 million. H.R. 4939 further made available in FY2006

$750 million for Low Income Home Energy Assistance that had previously been

appropriated for FY2007. This action, which was not requested by the

Administration, raised the total funding level of the bill. In addition to trimming the

President’s proposal, the House-passed measure included a provision that would

block the sale of operations at five American port terminals to the UAE-based Dubai

Ports World.

The Senate-passed version of H.R. 4939 increased the overall size of the

legislation to $108.9 billion, $16.8 billion over the request and $17 billion higher

than the House. The bill provided $67.7 billion for military operations in Iraq and

Afghanistan,2 and $4.45 billion for State Department and foreign assistance

programs, roughly at the levels requested. The legislation further provided $28.8

billion for hurricane related expenses, about $9 billion more than proposed. The

Senate also included several provisions unrelated to either military operations,

international affairs, or hurricane reconstruction, including $2.3 billion for pandemic

influenza preparedness, nearly $4 billion for agriculture disaster and economic

assistance, $650 million for port security, and $1.9 billion for enhanced security at

American borders that was offset with cuts for defense spending in the bill.

President Bush threatened to veto the legislation because of the added spending,

although the White House said it supported the pandemic influenza appropriation,

and would accept a bill that did not exceed about $94.5 billion. During floor

consideration, the Senate acted on several amendments that proposed to reduce

various items in the bill, but in most cases the amendments were defeated, tabled, or

withdrawn. For example, Senator Coburn submitted an amendment cutting 19

separate programs proposed by the Senate Appropriations Committee totaling over

$2 billion. In individual votes, the Senate approved one element of the Coburn

amendment — cutting $15 million for the National Marine Fisheries Service to

implement seafood promotion strategies — but tabled an item that would have

The actual figure for Defense costs in Iraq and Afghanistan is something less than the

$67.7 billion figure. During floor debate, the Senate passed an amendment by Senator

Gregg providing $1.9 billion for border security operations, offset by a 2.775% unspecified

cut in defense monies for both the Iraq war and Hurricane Katrina. Because the Defense

Department would have discretion to distribute the cut, it is not possible to say what the total

for war costs in the Senate bill would be. If the entire reduction was applied to war

expenditures, the Senate total could be as low as $65.8 billion, or as high as $67.6 billion

if the reduction was taken exclusively from DOD hurricane damage funds. The total for war

costs could also fall somewhere in between this high and low range.

CRS-6

deleted $700 million to relocate a CSX freight rail line further inland from the Gulf

Coast and defeated a proposal to delete Section 2303 that would broaden the Navy’s

liability for higher shipbuilding costs associated with business disruption. Senator

Coburn withdrew that remaining 16 divisions of his amendment.

The Senate further rejected an amendment by Senator McCain reducing

agriculture assistance by $74.5 million. The Senate also tabled an amendment by

Senator Thomas that would have replaced the committee text of the bill with the

President’s request, plus funding for pandemic influenza preparedness and border

security (with offsets), thereby reducing the bill’s total cost to $94.5 billion, and an

amendment by Senator Ensign that would have required the bill to be recommitted

to the Appropriations Committee with instructions to report back legislation not

exceeding $94.5 billion.

Other amendments passed by the Senate are set out below in tables and

discussed in detail.

Defense Issues

Conference Action. Conferees, following a Senate recommendation, cut $2

billion from the Administration’s defense request to finance border security needs.

But unlike the Senate position, the conference agreement allocates those cuts to

particular accounts. Most, but not all, of the cuts are taken from procurement as

requested by the Administration, but conferees also reduced the amounts to train the

Afghan and Iraq Security Forces by $1 billion. The Administration opposed this cut

but conferees argued that DOD could not use all of the funding requested within the

fiscal year.

The conference agreement also adopts the Senate proposal to consolidate all

funds to develop ways to defeat Improvised Explosive Devices (IEDs) in a new Joint

Improvised Explosive Defeat fund and gives DOD the authority to transfer those

funds to individual accounts with a reporting requirement to Congress within 60 days

of enactment, and then every 30 days thereafter, on how the funds will be spent.

Since most of the funds for IEDs were requested in operation and maintenance

(O&M) accounts, the conference version shows a lower total for O&M even though

the conferees largely approved the service requests.

In the case of war-related military construction, the conference agreement

approves $235 million, deleting funds for several projects in Bagram, which OMB

withdrew without explanation, and reducing funds for an IED bypass road in Iraq, the

utility of which both houses questioned. Conferees expressed some frustration with

the Administration’s actions in changing its mind about whether certain projects were

truly emergencies.3 The enacted bill drops a Senate provision that prohibited

construction of permanent U.S. bases in Iraq or U.S. control of Iraqi oil resources or

infrastructure.

Congressional Record, June 8, 2006, p. H3613-p.H3614.

CRS-7

In section 1213, conferees endorse the Senate’s resolution calling on the

Administration to submit requests for war-related funds after FY2007 in the annual

budget rather than in supplementals.

Senate Action. During floor debate, the Senate passed the Gregg amendment

(S.Amdt. 4939) which provided $1.9 billion for border security operations,

construction and procurement offset by a 2.775% unspecified cut in defense monies

for both the Iraq war and Hurricane Katrina. Because the Defense Department would

have discretion to distribute the cut, it was not possible to say what the total for war

costs in the Senate bill would be. If the entire reduction was applied to war

expenditures, the Senate total could be as low as $65.8 billion, or as high as $67.7

billion if the reduction was taken exclusively from DOD hurricane damage funds.

The total for war costs could have also fallen somewhere in between this high and

low range.

The Senate appropriators also cut $207 million from the $67.9 billion request

for war funds compared to a House cut of $137 million. Except for the Gregg

amendment, the Senate bill, like the House, largely redistributed funds with increases

being mainly offset by cuts.

In addition to the Gregg amendment reduction, significant war-cost-related floor

amendments considered in the Senate included:

an amendment by Senator Byrd (S.Amdt. 3079), adopted 94 to 0,

that as in previous supplementals, stated a sense of the Senate that,

after FY2007, the Administration should submit requests for funds

for ongoing military operations in Iraq and Afghanistan in the

regular budget covering the entire fiscal year and including detailed

justification;

an amendment by Senator Biden adopted by voice vote (S.Amdt.

3717 as modified by S.Amdt. 3855) that prohibited the use of any

funds in the bill to establish permanent military bases in Iraq or

exercise U.S. control over Iraq’s oil infrastructure or resources; a

House amendment by Congresswoman Lee prohibited the use of

funds to negotiate a basing agreement with the government of Iraq

(see below).

CRS-8

Table 2. War-Related Defense Amendments: Senate Action

Sponsor

Purpose/Congressional Record Page Reference

Vote

Gregg

Added $1.9 billion for operating, procurement, and

construction expenses for border security offset by a $1.9

billion cut to DOD’s monies for war and Gulf hurricane

expenses (pp. S3532-S3542).

Agreed

59-39

Coburn

Deleted Section 2303 broadening Navy’s liability for

higher shipbuilding costs associated with business

disruption (pp. S3864-S3869).

Rejected

48-51

Biden

Prohibited use of funds to establish permanent military

bases in Iraq or U.S. control of Iraqi oil or oil

infrastructure (pp. S3937, S3942-S3943, S3948-S3949).

Agreed

voice vote

Byrd

Sense of the Senate that Administration should submit cost

of military operations for Iraq and Afghanistan in the

regular budget after FY2007.

Agreed

94-0

ChamblissIsakson

Required comprehensive DOD report on mortuary

procedures.

Agreed

voice vote

Warner

Provided authority to heads of any federal agency to

provide benefits equivalent to those of the Foreign Service

to civilian personnel detailed to Iraq or Afghanistan.

Agreed

voice vote

Durbin and

others

Provided that federal employees activated to serve in the

military would receive pay equal to their civil service pay.

Agreed

voice vote

Salazar

Added requirement to cover training to reporting

requirement on Improvised Explosive devices.

Agreed

voice vote

The Senate bill also differed from the House bill because it:

reduced the $5.9 billion request to train, equip, and provide

infrastructure to Afghan and Iraqi security forces to $5.6 billion —

a more modest cut than the $4.8 billion House level — but added a

proviso that no funds could be spent on infrastructure until “after the

formation of the unified Iraqi government;”4

established a new $1.958 billion transfer fund, the “Joint Improvised

Explosive Device Defeat Fund,” that would centralize funds that are

in three separate accounts in the request, with Congress to receive a

spending plan within 90 days of enactment;

added procurement funds to keep the Abrams tank modification line

and the C-17 cargo aircraft lines open, accelerate V-22 production,

and buy more Predator UAVs that would be largely offset by cuts to

other programs;

added military personnel funds for recruiting and retention

incentives and for higher death benefits for service members who

S.Rept. 109-230, p. 22.

CRS-9

died between May 12 and August 1, 2005 who are made eligible in

the bill; and

cut $200 million from military construction projects in Afghanistan

and Iraq, calling for projects to be limited to those that “immediately

support operations,” and reducing funding for projects that could

signal a permanent U.S. presence in Iraq.

The Senate Committee also cited considerable concern about DOD’s

procurement requests because of the lack of standard budget information on

requirements and schedules. Like the House, the Senate Committee reduced DOD’s

requested transfer limit from $4 billion to $2 billion. Otherwise, the Senate

Committee basically approved the request.

House Action. The House-passed supplemental reduced the Department of

Defense’s $67.9 billion request for war costs by $137 million overall, but

redistributed the funding among the various titles. The major changes made by the

House were to:

reduce the $5.9 billion request to train, equip and provide

infrastructure for Afghan and Iraqi security forces by cutting $1

billion intended for infrastructure for police forces, citing inadequate

justification;

increase funds for procurement to $17.7 billion by adding $1.3

billion more primarily for upgraded tanks and HMMWVs;

cut $600 million from Operation and Maintenance (O&M) funds,

providing $32.1 billion, close to the request;

increase military personnel funding by $340 million to $9.9 billion,

largely to restore a cut to DOD’s regular FY2006 funding; and

cut military construction by $162 million, reducing the total to $323

million by rejecting various projects.

With the exception of these changes, the House measure largely approved the

Department’s request. The House Appropriations Committee, however, placed a

hold on spending for $990 million for military infrastructure for Afghan and Iraq

security forces until DOD submits a detailed project level plan. The committee cut

by half DOD’s requested ceiling on transfer authority to $2 billion and rejected the

request to allow transfers to or from military construction accounts. Citing

dissatisfaction with information provided by DOD, the House panel also required

several additional reports. The committee further set a $3.571 billion floor on

funding in the bill for National Guard and Reserve programs to prosecute the global

war on terror (GWOT).

During floor debate, the House considered several amendments affecting

defense issues but none changed the $67.7 billion for the Department of Defense

approved by the House Appropriations Committee. The House:

CRS-10

agreed to an amendment by Representative Barbara Lee that would

prohibit the United States from using funds in the act to enter into a

basing agreement with the government of Iraq. Members focused

on differences among statements by various Administration

spokesmen about whether the United States would have permanent

bases in Iraq.5 Although the United States does not currently have

any basing agreements with Iraq, the Defense Department has

invested about $746 million in military construction funding in Iraq,

another $126 million in neighboring countries supporting the Iraq

mission, and another $322 million in bases supporting both Iraq and

Afghanistan.6 The House approved $225 million, cutting the DOD’s

request by $123 million (see below). If the House level is approved,

DOD would have invested about $1.1 billion in bases in or in

support of the Iraq mission (not including bases supporting both Iraq

and Afghanistan). Secretary Rumsfeld recently testified that some

“30 U.S. military bases have been returned to Iraqi control or closed

altogether.”7

agreed to an amendment by Representative Millender-McDonald to

redirect Defense Health funding to training in orthotics and

prosthetics.

rejected (193 to 225) an amendment by Representative Waxman to

prohibit the Army from spending any funds in the act with any

contractor where the Defense Contract Audit Agency had judged to

be unreasonable more than $100 million of contract costs.

Supporters argued that new contracts should not be signed with

contractors where auditors found unreasonable costs while others

raised concerns about whether not renewing current contracts could

disrupt the military’s logistical support.8

sustained a point of order against an amendment by Representative

Kaptur that would set up a Truman type commission that would

investigate government contracts for military operations and

reconstruction in Iraq and Afghanistan and relief and reconstruction

contracts for Hurricane Katrina.9

Congressional Record, March 16, 2006, p. H1107ff.

CRS calculations based on appropriations reports and other sources.

Secretary Rumsfeld testifying before the Senate Armed Services Committee, Hearing on

Defense Authorization, February 7, 2006, transcript.

See Congressional Record, p. H1101-H1104.

See Congressional Record, p. H1098.

CRS-11

Table 3. War-Related Defense Amendments: House Action

Sponsor

Purpose/Congressional Record Page Reference

Vote

Lee

Prohibited using funds in act to enter into a basing rights

agreement with Iraq government (pp. H1101-H1104).

Agreed,

voice vote

MillenderMcDonald

Redirected funding for Defense Health by $20 million to

increase training for prosthetics and orthotics in U.S.

schools (p. H1013).

Agreed,

voice vote

Kaptur

Set up a “Truman”-type House Commission to investigate

government contracts for military operations and

reconstruction in Iraq and Afghanistan and Hurricane

Katrina relief and reconstruction (pp. H1098-H1099).

Point of

order

sustained

Waxman

Prohibited spending Army funds with any contractor if the

Defense Contract Audit Agency has found that more than

$100 million of costs are unreasonable (pp. H1101-H1104,

and H1110-H1111).

Rejected

193-225

International Issues

Conference Agreement. As approved in the enacted bill, H.R. 4939

provides $4.25 billion for State Department and international assistance activities.

This level is slightly higher ($26 million) than the President’s request, and about

midway between levels previously approved by the House and Senate. Major

changes from the executive’s request or versions passed by the House and Senate

include:

Iraq stabilization aid and U.S. mission support in Baghdad is set at

$3.04 billion, roughly $200 million less than the request. Most of

the reduction is for Provincial Reconstruction Team support;

Iran democracy, broadcasting, and student exchange programs are

funded at $66 million, midway between House and Senate levels and

$9 million below the request;

Darfur peacekeeping and humanitarian assistance receives $499

million, the same as the House and Senate but $110 million less than

the request;

Liberia economic aid totals $63.8 million, up from the $13.8 million

request;

Haiti receives $20 million, half the amount approved in the Senate.

The House and request did not include funding for Haiti; and

Jordan receives $50 million, less than the Senate level of $100

million. There was no request or funding in the House bill.

CRS-12

House Action. In total, the House-passed measure cut the international

portion of the supplemental to $4.1 billion, $66 million less than requested. In most

cases where reductions were made, the House Appropriations Committee stated its

view that the emergency nature of the requests were not fully justified and that the

Committee will address the issues again when it considers the regular FY2007

appropriation proposal. Major items and changes to the Administration requests

included:

reductions in USAID security and operation costs in Iraq,

Afghanistan, and Sudan;

cuts in security for Provisional Reconstruction Teams in Iraq, but

full funding for other State Department operational costs in Iraq and

Afghanistan;

near-full funding for Iraq stabilization assistance, with the

redirection of $26.3 million from some prison and judge security

funds to counter-narcotics programs in Colombia;

Substantial cuts in Afghan reconstruction and debt relief proposals;

a reduction from $75 million to $56 million for democracy and

related programs in Iran;

full funding for southern Sudan and Darfur, plus an additional $110

million for peacekeeping operations in Darfur, for a total Sudan

package of $618 million;

full funding for Pakistan earthquake relief and emergency food

refugee aid for Africa;

an additional $50 million in economic aid for Liberia; and

$26.3 million for the purchase of DC-3 aircraft for Colombian drug

interdiction efforts.

Table 4. International Amendments: House Action

Sponsor

Purpose/Congressional Record Page Reference

Vote

Shays

Directed that $20 million of economic aid funds for Iraq be

used for the Community Action Plan program (pp. H1016H1017).

Agreed,

voice vote

Burton

Redirected $26.3 million of Iraq funds for counter-narcotics

activities in Colombia (pp. H1067-H1068).

Agreed,

250-172

Capuano

Increased by $50 million funds for peacekeeping operations

in Darfur (p. H1068).

Agreed,

213-208

Garrett

Cut $5 million for public diplomacy programs in Iran

(pp. H1069-H1070).

Rejected,

75-344

Garrett

Cut $5 million for education and cultural exchanges for

Iranian students (p. H1070).

Rejected,

78-343

Foxx

Cut $36.1 million for broadcasting into Iran (pp. H1070H1071).

Rejected,

88-333

CRS-13

Senate Action. As passed, the Senate version of H.R. 4939 largely funded the

Administration’s request for international programs, with some exceptions. The

Senate bill provided $4.45 billion for international affairs, an increase of $220

million over the request. Concerning major items and changes to the request, the

Senate measure:

cut security funding for Provisional Reconstruction Teams in Iraq;

further reduced State Department operational costs in Iraq by $60

million in order to add an additional $60 million for support of U.N.

peacekeeping in Darfur;

fully funded Iraq stabilization assistance, with an earmark of $96

million for broad-based democracy programs;

did not provide the House-passed counter-narcotics funding for

Colombia;

included $3.3 million for demobilization assistance in Colombia;

fully funded southern Sudan and Darfur, with an additional $110

million in funding for peacekeeping in Darfur, the same as the

House;

added $50 million for economic aid for Liberia, the same as the

House;

added $42.5 million for various Migration and Refugee Assistance

programs in Somalia, the Horn of Africa, Democratic Republic of

Congo, North Caucasus, North Asia, and Burma;

increased to $20 million Emergency Migration and Refugee

Assistance for the Horn of Africa;

provided $35 million for drought relief in West Africa and the Horn

of Africa;

added $12 million for Hurricane Stan relief in Guatemala;

rescinded $47 million in previously appropriated funds for economic

aid to Egypt in order to offset the increases for African drought and

Guatemala hurricane relief;

added $40 million in economic aid for Haiti;

added $100 million in Economic Support Funds for Jordan;

added $13.2 million in Democracy Funds and peacekeeping in the

Democratic Republic of Congo, with a rescission of the same

amount from the Export-Import Bank; and

provided $5 million for election support in the Democratic Republic

of Congo.

CRS-14

Table 5. International Amendments: Senate Action

Sponsor

Purpose/Congressional Record Page Reference

Vote

Lugar

#3597

Waived annuity limitations on reemployed Foreign Service

and Civil Service annuitants in order to fill positions in

Iraq and Afghanistan (pp. S3792-S3793).

Agreed,

voice vote

Leahy

#3661

Required notification to House and Senate Appropriations

Committees regarding the obligation of Democracy Fund

money (p. S3793).

Agreed,

voice vote

Leahy

#3663

Clarified report language reducing the amount of

Democracy Fund appropriations for Iran by $5 million to

$34.8 million, and specifying $5 million of Democracy

Fund appropriations for election support in the Democratic

Republic of Congo (p. S3793).

Agreed,

voice vote

Menendez

#3777

Increased by $60 million, to $129.8 million, funds for a

U.N. peacekeeping operation in Darfur; reduces by $60

million funds for State Department mission operations in

Iraq (pp. S3939-S3940).

Agreed,

voice vote

McConnell

#3612

Added a Presidential national security waiver authority

regarding restrictions on U.S. aid to the Palestinian

Authority (p. S3940).

Agreed,

voice vote

Biden

#3719

Provided not less than $250,000 of Diplomatic and

Consular Programs of the State Department be used to

create an office of a special envoy for Sudan (p. S3940).

Agreed,

voice vote

Leahy

#3823

Provided that $3.3 million of funds appropriated under the

International Narcotics Control and Law Enforcement

account be used to support the demobilization process in

Colombia; has the effect of reducing funds requested for

Iraq (pp. S3940-3941).

Agreed,

voice vote

Kennedy

#3686

Provided that of ESF appropriations for Iraq, $104.5

million should be available for broad-based democracy

assistance through NGOs in Iraq (pp. S3945-3948).

Agreed,

voice vote

Leahy

#3657

Provided $12 million for Hurricane Stan relief in

Guatemala and $35 million for drought relief in West

Africa and the Horn of Africa; rescinds $47 million in

previously appropriated cash transfer aid for Egypt (pp.

S3963-3964).

Agreed,

voice vote

Santorum

#3640

Added $25 million for Iran democracy programs (pp.

S3937, 3969).

Ruled nongermane

Hurricane Recovery and Other Domestic Issues

Conference Agreement. H.R. 4939, as enacted, includes $19.3 billion for

hurricane recovery activities, $2.3 billion for pandemic influenza preparedness, $1.9

CRS-15

billion for border security, and $563 million for other disaster assistance and related

domestic activities. The conference agreement provisions include:

$6.7 billion for the Department of Homeland Security — primarily

for Federal Emergency Management Agency activities — $3.2

billion below the initial request and $1.0 billion below the revised

request;

$5.2 billion for the Community Development Block Grant at the

Department of Housing and Urban Development, $0.8 billion more

than requested;

$3.7 billion for the Army Corps of Engineers for hurricane related

activities, $2.2 billion below the initial request and approximately

the same as the revised request;

$2.3 billion for pandemic influenza preparedness, an amount

separately requested by the Administration as part of its regular

FY2007 budget request;

$1.9 billion for border security, the same as the revised request;

$542 million for the Small Business Administration Disaster Loan

program, $712 million less than requested; and

$500 million for agricultural disaster assistance, for which no funds

were requested.

House Action. The House-passed measure provided $19.1 billion for

supplemental appropriations for relief and recovery from the 2005 Gulf Coast

hurricanes, a reduction of $0.7 billion from what was requested by the President. The

House bill agreed with much of the supplemental request, but made the following

changes:

did not fund the request of $202 million for Tenant-Based Rental

Assistance at the Department of Housing and Urban Development

(HUD);

reduced the request for Procurement at DOD by $250 million —

$887 million is provided;

reduced DOD Military Construction by $270 million — $135.5

million is provided;

reduced the Department of Veterans Affairs (VA) funds for

rebuilding the VA medical center in New Orleans by $50 million —

$550 million was provided and the obligation was made contingent

on enactment by June 30, 2006, of authority for rebuilding the

medical center. In addition, the VA was allowed to transfer up to

$275 million of these funds for unforeseen medical needs related to

the global war on terror;

expanded the mechanism requested for the distribution of $4.2

billion for the Community Development Block Grant (CDBG) so

that it would not be limited to Louisiana projects; and

added a provision to make available in FY2006 $750 million for the

Low-Income Home Energy Assistance Program (LIHEAP) that were

appropriated for FY2007 in the Deficit Reduction Act of 2005 (P.L.

109-171); these were contingency funds (allotted to one or more

CRS-16

states, at the Administration’s discretion, and based on emergency

need), and would remain available until the end of FY2007.

Table 6. Hurricane Recovery Amendments: House Action

Sponsor

Purpose/Congressional Record Page Reference

Vote

MillenderMcDonald

Provides $20 million for Defense Health Programs to expand

training capacity for prosthetics and orthotics (pp. H1013H1014).

Agreed,

voice vote

Jindal

Decreases funding for FEMA disaster relief by $2 million and

increases funding for Defense-wide procurement by the same

amount (p. H1084).

Agreed,

voice vote

Melancon

Increases funding for Flood Control and Coastal Emergencies by

$465 million (pp. H1033-H1034).

Rejected,

199-215

Jefferson

Increases Community Planning and Development by $2 billion

and decreases FEMA by the same amount (pp. H1034-H1035).

Rejected,

174-248

Sabo

Increases funding for the Customs and Border Protection (CBP),

the United States Coast Guard (USCG), FEMA administrative

and regional operations, and FEMA preparedness by $700

million, $125 million, $300 million, and $100 million,

respectively (pp. H1076-H1079, and H1094-H1095).

Rejected,

208-210

Neugebauer

Eliminates all funding in the bill for hurricane recovery

(pp. H1079-H1082, and H1095-H1096).

Rejected,

89-331

MillenderMcDonald

Increases funding for election activities under FEMA by $20

million (p. H1082-84, H1096).

Rejected,

194-227

Gingrey

Reduces funding for the National Historical Preservation Fund by

$3 million (p. H1086).

Rejected,

voice vote

Senate Action. On May 4, 2006, the Senate amended and approved its

version of the FY2006 supplemental appropriations, H.R. 4939. As passed, the

legislation provided a total of $28.8 billion for hurricane recovery, $9.0 billion (45%)

more than the President’s request, and roughly 51% more than the House provided

($19.1 billion). In addition, the bill provided $2.6 billion in funds for the prevention

and preparedness for pandemic influenza. The House did not fund these activities;

the President requested supplemental funds in November 2005. The Senate bill

provided a supplemental appropriation of $6.9 billion for other disaster assistance

unrelated to hurricane recovery or pandemic influenza; such assistance was not

requested by the Administration nor included in the House bill. The Senate bill

differed from the bill as passed by the House as follows. The Senate bill provided:

$1.1 billion for mapping and debris removal to help Gulf Coast

fisheries affected by the hurricanes;

$2.5 billion more for levee repairs and related (total of $4.0 billion)

for coastal and flood protection;

CRS-17

$1.2 billion more for the Disaster Relief Fund and other a activities

administered by FEMA (total of $11.1 billion), with funds set aside

for the development of housing alternatives other than travel trailers;

$881 million for education needs, including higher education loans

and grants;

$1.5 billion for repairs to transportation infrastructure, public transit,

and grants for federal aid for highways;

$1 billion more for CDBG (total of $5.2 billion) compared to both

the request and the House approved funding, with a set-aside for

low-income and assisted housing;

$3.9 billion for emergency agricultural disaster assistance for crop

losses;

$648 million for port security enhancement;

$2.3 billion for pandemic influenza preparedness and response

activities;

$1.9 billion for border security; and

$430 million for veterans medical services.

Table 7. Hurricane Recovery and Other Domestic Amendments:

Senate Action on Selected Amendments

Sponsor

Purpose/Congressional Record page reference

Vote

Akaka

#3642, as

modified

by #3647

Provides an additional $430 million for Veterans Affairs

medical care (pp. S3560-S3564).

Agreed,

84-13

Gregg

#3594

Provides $1.9 billion for enhanced U.S. border security,

offset with a corresponding reduction in defense accounts

in titles I and II (p. S3532-S3543).

Agreed,

59-39

Reid

#3604

Provides $1.9 billion for enhanced U.S. border security,

without an offset (pp. S3532-S3544).

Defeated,

44-54

Ensign

Motion to recommit the bill with instructions that it be

reported back with a total net spending not exceeding

$94.5 billion (pp. S3562-S3563).

Tabled,

68-28

Coburn

#3641,

Division I

Prohibits the availability of funds for the relocation of a

CSX freight rail line further inland from the Gulf Coast

(pp. S3557-S3560; S3564-S3566).

Tabled,

49-48

Coburn

#3641,

Division II

Prohibits the availability of funds for seafood promotion

strategies (pp. S3569-S3573).

Agreed,

voice vote

Allard

#3701

Provides $27.6 million to repair Capitol complex utility

tunnels (pp. S3683-S3684).

Agreed,

voice vote

CRS-18

Sponsor

Purpose/Congressional Record page reference

Vote

Dodd

#3727

Provides $30 million for the Election Assistance

Commission for payments to states affected by 2005

hurricanes (pp. S3870-S3872).

Agreed,

voice vote

Domenici

#3769

Provides an additional $1.67 billion for levee rehabilitation

in New Orleans (p. S3859).

Agreed,

voice vote

Hutchison

#3789

Ensures that all localities incurring damage from Hurricane

Rita have the same cost-sharing requirements for federal

aid (p. S3859).

Agreed,

voice vote

Salazar

#3736

Provides an additional $30 million for National Forest

System projects (pp. S3878-S3879).

Agreed,

voice vote

Obama

#3810

Requires all contracts for hurricane relief exceeding

$500,000 be awarded using a competitive bidding process

(pp. S3879-S3880).

Agreed,

98-0

McCain

#3617

Strikes $6 million to sugarcane growers in Hawaii (pp.

S3858-S3863).

Defeated,

40-59

Cornyn

#3699

Establishes a floor to ensure that areas within States

adversely affected by 2005 hurricanes receive at least 3.5%

of funds set aside for the Community Development Block

Grant program (pp. S3938-S3941).

Agreed,

voice vote

Kennedy

#3688

Provides $289 million for compensation of individuals

harmed by pandemic influenza vaccine (pp. S3937, S394243, S3948).

Agreed,

53-46

Inouye

#3601

Provides $1 million for assessing and monitoring waters in

Hawaii (pp. S3966-3968).

Agreed,

51-45

McCain

#3616

Strikes $74.5 million for agriculture assistance (pp. S3937,

S3953-3955, S3964).

Defeated,

37-61

Inouye

#3673

Adds $900,000 for assessments of reservoirs and dams in

Hawaii (pp. S3966-S3967).

Defeated,

43-53

Vitter

#3728

Provides an additional $200 million for flood prevention in

Louisiana, offset by a reduction in funds for FEMA (pp.

S4007, S4011-S4013).

Agreed,

voice vote

Thune

#3704

Provides $20 million for Veterans Affairs Medical

Facilities, with an offset (pp. S4007, S4013-4014, S4016).

Defeated,

39-59

CRS-19

Border Security: Administration and Senate

Proposals10

On May 18, 2006, the President amended the FY2006 supplemental request by

adding $1.948 billion11 for border security-related functions within the Departments

of Homeland Security (DHS) and Justice (DOJ). For the DHS, the request included:

$805 million for Customs and Border Protection (CBP), portions of

which will support deployment of 1,000 additional Border Patrol

agents and 256 miles of vehicle barriers;

$327 million for Immigration and Customs Enforcement (ICE) for

4,000 additional detention beds in support of the Administration’s

goal to end catch and release along the southern border;

$25 million for the Federal Law Enforcement Training Center

(FLETC); and

$15 million for the DHS Preparedness Directorate for border

security-related grants.

In addition, the revised request included $756 million in DOD funding for

deploying rotations of up to 6,000 National Guard personnel along the southern

border. Such personnel would be mobilized under Title 32 authorities to operate

surveillance systems, build patrol roads, fences, and vehicle barriers, and train

personnel, but would not perform law enforcement functions. Although personnel

would be under the control of individual governors, DOD would approve the use and

numbers of personnel. As proposed, these funds would be provided in the operation

and maintenance, defensewide account to be transferred to other accounts at DOD’s

discretion.12

According to Administration witnesses, these funds would provide up to 6,000

reserve personnel at any one time in the first year and 3,000 in the second year with

most of the personnel rotating in on two- to three-week assignments during their

annual training. Thus, up to 156,000 reservists could be mobilized for short periods

in the course of a year out of a 440,000 total in the Army National Guard. During a

This section was prepared by Jennifer Lake, Blas Nuñez-Neto, and Amy Belasco. For

a more detailed breakdown of the Homeland Security-related funding in the Supplemental

Appropriations Bills, please refer to CRS Report RL33428 Homeland Security Department:

FY2007 Appropriations, Jennifer Lake and Blas Nuñez-Neto, Coordinators.

The actual request for DHS and DOJ was for $1.974 billion; however $16 million within

the CBP Construction account and $10 million within the U.S. Attorney’s office were not

border security related. The adjusted request for border security was $1.948 billion.

Office of Management and Budget, Estimate No. 6, FY2006 Emergency

Supplemental(Border Security: Departments of Defense, Homeland Security, and Justice),

May 18, 2006; [http://www.wh itehouse.gov/omb/budget/amendments/

supplemental_5_18_06.pdf].

CRS-20

recent hearing, a variety of concerns were raised — whether adequate personnel

would still be available for war and hurricane missions, the prerogatives of

governors, and the effectiveness of short-term mobilizations.13

Congressional Action. The Senate bill provided an amount similar to the

request, but it differed substantially in its scope. The Senate bill generally focused

on capital improvements within DHS, while the President’s request focused on

funding for CBP, ICE, and National Guard personnel deployments, and for other

resources on the border. The Senate bill included:

$1.09 billion for CBP, portions of which will be used to replace air

assets and border patrol vehicles, to upgrade air operations facilities,

deploy sensor and surveillance technology, and for construction;

$600 million for the Coast Guard aircraft and vessel acquisition,

construction, renovation and improvement;

$80 million for ICE;

$60 million to accelerate database integration and the conversion of

the United States Visitor & Immigrant Status Indicator Project (USVISIT) to a 10-print enrollment system;

$50 million for the DHS Chief Information Officer to upgrade law

enforcement communications equipment;

$18 million for the Federal Law Enforcement Training Center for

information technology improvements and a language training

center; and

$2 million for the DHS Office of Policy to conduct a needs

assessment for comprehensive border security.

To offset the $1.948 billion cost of additional border security programs, the

Administration proposed reducing $1.948 billion in funding requested for Operation

Iraqi Freedom and Operation Enduring Freedom (Afghanistan and other global war

on terror operations). These funds would have come primarily from procurement.

Although the Administration did not identify cuts specifically by weapon systems,

some of the cuts appeared to come from those identified for reduction by the House

and Senate Appropriations Committees appropriators, while others would reject

congressional adds-ons (see sections below and Appendix A for details). The Senate

bill included an offset through an unspecified cut of $1.9 billion in DOD funds for

both war costs (Title I) and hurricane recovery (Title II). Under the Senate provision,

the Administration would have allocated the cut among programs in both titles.

The FY2006 conference agreement includes $1.9 billion for border security, the

same as the amount requested. The supplemental funds include: $805 million for

CBP; $327 million for ICE; $25 million for FLETC; and $15 million for grants.

These funds total $1.17 billion for DHS border security activities, as compared to the

$1.9 billion proposed by the Senate. The conference agreement includes the

President’s proposal to fund the deployment of up to 6,000 National Guard troops to

Senate Armed Services Committee, Transcript, Hearing on National guard Role in Border

Security, May 17, 2006; available on Reuters.

CRS-21

the border. However, this proposal is funded at $708 million, as opposed to the $756

million requested.

American Port Security and the Dubai Ports World

Operational Control of Six U.S. Terminals14

The takeover of terminal operations at six major U.S. ports by Dubai Ports

World (DP World), based in the United Arab Emirates (UAE), sparked intense

concerns among Members of Congress and the public, and reignited the debate over

what role foreign acquisitions play in U.S. national security, and specifically security

of American ports. DP World purchased the terminals from P&O Ports, a

multinational terminal operating company based in the United Kingdom which leases

marine terminals around the world, including terminals at six U.S. ports — New

York, New Jersey, Philadelphia, Baltimore, Miami, and New Orleans.

These ports are owned by a port authority, which is a public or quasi-public

organization associated with the city, county, or state government. The port authority

is responsible for the overall administration of the property, terminals, and other

facilities on the port complex. Marine terminals within these ports are areas with

equipment for loading and unloading ships and space for staging cargo until it is

loaded on the ship or transferred to overland modes of transport. P&O Ports is also

involved in other cargo handling services at other East and Gulf Coast ports, and a

cruiseship terminal in New York. DP World acquired P&O’s terminal leases or

concessions at these ports, which account for a portion of the total cargo handling or

cruise ship activity that takes place at these ports. DP World currently operates 19

container terminals outside the United States and is involved in other cargo handling

services in 14 countries. DP World operates as a commercial entity but is owned by

the Government of Dubai in the UAE.

In addition to issues related to the review process for foreign investment in the

United States and U.S. foreign policy with regard to the UAE, a key issue for

Congress as it evaluated this transaction was what role marine terminal operators

have in the security of U.S. ports. While the federal government, namely the Coast

Guard and Customs and Border Protection (CBP), takes the lead in port security,

security responsibilities are also shared with the port authorities, local law

enforcement, vessel owners, terminal operators, and port workers. Coast Guard

regulations and CBP security programs require terminal operators to provide basic

security infrastructure and follow certain security practices when handling cargo.

While the United States actively promotes internationally the policy of relaxing

rules concerning foreign investment, including the national treatment of foreign

firms, some in Congress and others question some aspects of this policy as it relates

to allowing foreign competitors unlimited access to the Nation’s industrial base.

Much of this debate focuses on the activities of a relatively obscure committee, the

Prepared by John Frittelli, Analyst in Transportation, and James Jackson, Specialist in

International Trade and Finance.

CRS-22

Committee on Foreign Investment in the United States (CFIUS) and the Exon-Florio

provision (added to the Defense Production Act in 1988; P.L. 100-418), which gives

the President broad powers to block certain types of foreign investment.15

The proposed acquisition of port terminals operated by DP World sparked a

firestorm of activity in the 2nd Session of the 109th Congress. H.J.Res. 79 and

S.J.Res. 32 express Congressional disapproval of the proposed acquisition and direct

CFIUS to conduct a full 45-day review of the transaction and to brief Members of

Congress on the results of the investigation. Numerous other bills related to the issue

were also introduced. The matter was inserted into the FY2006 Supplemental

Appropriation during a House markup of the legislation on March 8.

In the face of mounting pressure from Capitol Hill and elsewhere, DP World

announced on March 9 that it would not manage the American ports itself, but

transfer operations to a U.S. “entity.” Subsequently, on March 15 DP World said it

would sell the U.S. port facility operations to an American buyer, a process that

might take four to six months. In the meantime, the UAE-based company said that

P&O Ports North America would be operated separately by a U.S. subsidiary.

Congressional Action

During the March 8 markup on the $92 billion emergency FY2006 emergency

supplemental, House Appropriations Committee Chairman Lewis submitted an

amendment aimed at blocking the acquisition by DP World of the six American port

terminals. The amendment, which passed 62-2, barred the use of any appropriated

funds to take action allowing the purchase by DP World, notwithstanding any “prior

action or decision by or on behalf of the President.” President Bush previously had

said that he would veto any legislation containing such text.

Following the March 9 announcement by DP World that it would turn over port

operations to an American entity, Chairman Lewis said in a press release issued on

March 10, that “reports that Dubai Ports World has agreed to sell its holdings of a

subsidiary involved in managing six American ports is encouraging news.”16

Nevertheless, the Lewis amendment remained in the House-passed version of H.R.

4939. The House defeated (38-377) an amendment offered by Representative

Gilchrest on March 15 that would have struck the text banning DP World purchase.

The Senate bill did not include language similar to the House regarding Dubai

Ports World. However, a Byrd amendment accepted by the Senate Appropriations

Committee added $648 million for port security grants, radiation portal monitors, and

for activities of the Coast Guard, Customs and Border Protection Service.

For more information, see CRS Report RL33312, The Exon-Florio National Security Test

for Foreign Investment, by James Jackson.

Chairman Lewis Makes a Statement on DP-World Development, March 10, 2006.

Available at House Appropriations Committee website: [http://appropriations.house.gov/

index.cfm?FuseAction=Home.Home]

CRS-23

The conference agreement on H.R. 4939 deletes the House provision.

Conferees noted that the DP World decision to transfer operations to a U.S. entity

makes the House-passed text unnecessary. The enacted bill further drops the Senatepassed title providing $648 million for port security funding.

Defense Supplemental17

To cover war costs, the FY2006 revised supplemental requested $65.9 billion

for the Department of Defense (DOD) war-related costs, an amount that was in

addition to the $50 billion that DOD already received in the FY2006 bridge fund

included in DOD’s FY2006 Appropriations Act (P.L.109-148).18 If enacted, this

would have brought DOD’s total for Iraq (Operation Iraqi Freedom or OIF) and

Afghanistan/other global war on terrorism activities (Operation Enduring Freedom

or OEF) to $115.8 billion in FY2006.

If passed as revised, DOD’s funding in FY2006 would have been $17 billion

more than the $99 billion received in FY2005 and $49 billion more than the $67

billion received in FY2004 (Table 8).19 Based on this request, DOD’s war and

occupation costs would have increased from $67 billion in FY2004 to $116 billion

in FY2006 — an increase of 72% in two years.

In FY2003, the year of the invasion of Iraq, the Defense Department’s war costs

totaled between $69 billion and $76.2 billion depending on whether $7.1 billion in

funds provided in DOD’s FY2003 regular appropriations are included.20

Prepared by Amy Belasco, Specialist in National Defense. Military construction section

prepared by Daniel Else, Specialist in National Defense.

In FY2005 and FY2006, Congress included “additional appropriations” for war costs in

Title IX of DOD’s regular appropriations act to ensure that DOD would have sufficient

funds to cover war costs until a supplemental was passed.

The $99 billion total for FY2005 includes $75.9 billion in the FY2005 Supplemental (P.L.

109-13) and $23.1 billion of the $25 billion appropriated to DOD in the FY2005 bridge

supplemental (Title IX, P.L. 108-287). Congress provided that the FY2005 bridge funds

were available upon enactment and DOD obligated $1.9 billion in FY2004, leaving $23.9

billion available for FY2005.

See CRS Report RL33110, The Cost of Iraq, Afghanistan and Enhanced Security Since

9/11, by Amy Belasco.

CRS-24

Table 8. Defense Department War and Occupation

Appropriations, FY2004-FY2006

($s — billions)

FY2004

Department of P.L.108-106;

Defense

P.L.108-287a

Total

FY2005

FY2006 Bridge:

P.L.108-287;

P.L.109-13b

P.L.108-148

FY2006

Revised

Supp.

FY2006

Total with

Supp.

$66.8

$98.8

$50.0

$65.9

$115.8

Annual Change

$32.0

$17.0

$ Change Since

FY2004

$32.0

$49.0

% Change

Since FY2004

48%

73%

Source: CRS calculations based on public laws.

a. Total for P.L. 108-106 excludes $3.5 billion rescission of FY2003 funds; includes $1.9 billion of

funds in the FY2004/FY2005 bridge fund that was obligated in FY2004 (Title IX, P.L. 108287).

b. Total for FY2005 includes funds available for FY2005 from the FY2004/FY2005 bridge fund and

funds appropriated in the FY2005 supplemental (P.L. 109-13) excluding funds for Tsunami

relief and the Office of the Director of National Intelligence.

According to DOD’s justification materials, the FY2006 supplemental request

assumed that monthly deployment levels would average about 138,000 troops in Iraq

and 18,000 troops in Afghanistan, with temporary fluctuations during troop rotations.

DOD did not provide a breakdown of how the revised $65.9 billion request would

be allocated between Iraq and Afghanistan. DOD’s justification materials stated that

monthly military personnel and operation and maintenance costs — the expenditures

most closely tied to military operations — averaged $4.5 billion in Iraq and $0.8

billion in Afghanistan and other global war on terrorism activities, or a total of $5.3

billion monthly for both operations in FY2005.21

If one defines “military operations costs” as the cost of military personnel and

operation and maintenance and applies this approach to the enacted bridge fund and

DOD’s new supplemental FY2006 request, average military operations costs per

month would increase from $5.6 billion in FY2005 to $6.8 billion per month in

FY2006, a 21% increase (see Table 9). These average monthly costs include only

those costs that would be obligated in FY2006 but not all of DOD war and

occupation costs that are associated with operations. For example, this definition of

“military operations costs” does not include additional funds spent for national

intelligence (cost not tracked by DOD) or training of Afghan and Iraq security forces,

Department of Defense, FY 2006 Supplemental Request For Operation Iraqi Freedom

(OIF) and Operation Enduring Freedom (OEF), February 2006; [http://www.dod.mil/

comptroller/defbudget/fy2007/FY06_GWOT_Supplemental_Request_-_FINAL.pdf], p. 3

(hereinafter cited as DOD, FY2006 Supplemental Request - war).

CRS-25

now a substantial expense. Nor do military operations costs — as defined by DOD

— include DOD’s substantial investment costs for additional equipment for

deployed forces that DOD believes needs to be ordered in FY2006 to meet its

military needs.22

If all these costs are included, full monthly war and occupation costs would have

averaged $8.2 billion in FY2005, and would have increased to $9.7 billion in FY2006

if DOD’s request were enacted. Table 9 shows the average monthly increases for

each of these categories, which range from decreases for military personnel and

Afghan and Iraq training funds to increases in O&M and investments.

Potential Issues in DOD’s FY2006 Supplemental Request

In its revised FY2006 supplemental request, the Department of Defense

requested $65.9 billion to provide special pays for military personnel, activate

reserves, support military operations, repair equipment, house and provide for troops,

buy additional military equipment, conduct research and development, construct

military facilities, train Afghan and Iraqi security forces, and reimburse coalition

allies, a reduction of $1.9 billion from the original request.23 Table 10 lists the

major elements of the new request by title, the amount in the FY2006 bridge fund

(Title IX, P.L.109-148) and the total for FY2006 as requested and approved to date.

For a breakdown by appropriation account, see table appended to this report.

DOD requests that its procurement funds be available for three years to take into account

the one to three years that it takes to contract, order, produce and receive military parts and

equipment.

See Office of Management and Budget (OMB), Estimate No. 6, May Office of

Management and Budget, Estimate No. 3, OMB, FY2006 Supplemental Request, Estimate

No. 3, FY2006 Emergency Appropriations (various agencies), Ongoing Military, Diplomatic

and Intelligence Operations in the Global War on Terror, Stabilization and

Counterinsurgency Activities in Iraq and Afghanistan, and Other Humanitarian Assistance,

2-16-06; [http://www.whitehouse.gov/omb/budget/amendments/

supplemental2_2_16_06.pdf]; (Hereafter cited as OMB, FY2006 Supplemental War

Request.) DOD, FY2006 Supplemental Request - war.

CRS-26

Table 9. Average Monthly DOD Budget Authority for War and

Occupation, FY2005 Enacted-Revised FY2006 Request

($s — billions)

Title

FY2005:

Bridge & Suppa

FY2006:

Bridge

&Revised

Supp Requestb

Military Personnel

$18.4

$15.8

($2.6)

-14%

Operation & Maintenance(O&M)

$46.0

$61.3

$15.3

33%

Other supportc

$2.9

$4.2

$1.2

42%

Military Operations Total

$67.3

$81.3

$13.9

21%

Monthly Average: Military

Operations (BA)

$5.6

$6.8

$1.2

21%

Other Defense programsd

$3.9

$5.0

$1.0

26%

Afghan and Iraq Training Forces

Fund

$7.0

$5.9

($1.1)

-16%

Intelligencee

[5.1]e

[5.6]

[.5]e

[10%]e

Investment

$20.5

$23.8

$3.3

16%

Total Costs

$98.9

$115.8

$16.9

17%

Monthly Average,Total Budget

Authority

$8.2

$9.7

$1.5

18%

FY2006 +/- FY2005

Sources: CRS calculations based on public laws, conference reports, DOD, FY2006 Supplemental

Justification Materials, February 2006.

Note: Totals may not add because of rounding.

a. Includes remaining funds in FY2005 bridge (P.L. 108-287) and FY2005 Supplemental (P.L. 10913) excluding funds for Tsunami relief and office of the Director of National Intelligence.

b. Includes $50 billion in P.L. 109-148, FY2006 DOD Appropriations Act and $67.9 billion in

FY2006 supplemental request (OMB Estimate No. 6, May 16, 2006; and revised OMB Estimate

No. 3, original request.

c. “Other support” includes defense health and working capital funds.

d. “Other Defense programs” include Iraq Freedom Fund, the Office of Inspector General, and Drug

Interdiction and Counterdrug.

e. Funding of $1.8 billion for intelligence was included in the Iraq Freedom Fund in P.L.108-287, and

$3.3 billion in P.L. 109-13 for a total of $5.1 billion for FY2005. Funding of $3 billion was

included in the Iraq Freedom Fund in the FY2006 bridge (P.L. 109-148), and the FY2006

request includes an additional $2.6 billion for a total of $5.6 billion; see DOD, FY2006

Justification - War, Feb. 2006, p. 1.

Several issues about the FY2006 supplemental request arose in Congress,

including whether DOD’s funding requests for training Afghan and Iraqi security

forces were necessary in light of the pace of implementation, how to make

transparent the DOD assumptions about military personnel levels for active-duty and

reserve forces that underlie the request, whether DOD could better contain increases

in operating costs, and whether DOD’s investment request finances peacetime as well

as wartime needs.

CRS-27

Table 10. Department of Defense FY2006 War-Related Bridge

Supplemental and FY2006 War-Related Supplemental Request

($s — billions)

FY2006 FY2006

Enacted Supp.

FY2006

plus

Revised House

Enacted Request Request Supp.

Senate

Supp.

Conf.

Iraq Freedom Fundb

$4.66

$4.76

$0.10

$0.00

$0.03

$0.00

Afghanistan Security Forces Fund

$0.00

$2.20

$1.85

$1.91

$0.00

$3.70

$3.01

$3.70

$3.01

$0.00

$1.95

$1.96

$6.21

$15.80

$9.59

$9.93

$10.20

$10.28

$28.56

$61.29

$32.71

$32.11

$31.60

$31.03

Procurement

$7.98

$24.38

$14.60

$17.68

$15.46

$14.91

Research, Development, Test & Eval

$0.05

$0.83

$0.74

$1.00

$0.71

Military Construction

$0.00

$0.49

$0.37

$0.32

$0.28

$0.24

Revolving & Management Funds

$2.52

$3.03

$0.52

$0.50

$0.52

$0.03

$1.38

$1.35

$1.32

$1.31

Title

Iraq Security Forces Fund

Joint Improvised Explosive Defeat

Military Personnel

Operation and Maintenance

Other Defense

Total

General Provision reducing DOD

war & hurricane funds e

$50.00

$117.87

$65.87

-.-

$67.72 $67.67

-.-

$1.31

$65.86

($1.90)f

a. Reflects $1.948 billion reduction proposed by the Administration on May 18, 2006 (OMB Estimate No. 6).

b. Iraq Freedom Fund includes $3 billion for intelligence in the FY2006 bridge fund (Title IX, P.L.109-148),

and $100 million in the FY2006 request for two-year money for commanders’ “near-term urgent

operational needs;” see OMB, Estimate No. 3, 2-16-06; also includes $100 million for the Coast Guard.

c. Request and House bill included $1.958 billion in three separate accounts.

d. Excludes Afghan and Iraq Security Forces Fund.

e. “Other” includes Defense Health, Drug Interdiction and the Office of the Inspector General. Department

of Defense, FY 2006 Supplemental Request For Operation Iraqi Freedom (OIF) and Operation

E n d u rin g F re e d o m (OE F ), February 2006; [http://www.dod.mil/co mp tr o ller /

defbudget/fy2007/FY06_GWOT_Supplemental_Request_-_FINAL.pdf].

f. The Senate adopted an amendment providing $1.9 billion for border security, to be offset by an unspecified

cut of $1.9 billion in DOD funds for both war costs (title I) and hurricane rehabilitation (title II). The

Administration would determine the distribution of the cut among programs in both titles. Consequently,

the $67.67 billion Senate total for war costs could have fallen somewhere in the range of $65.77 billion

and $67.67 billion, depending on how the reductions would be allocated.

Afghan and Iraq Security Forces Funds: Obligations Slower Than

Anticipated. In its FY2006 supplemental, DOD requested $2.2 billion for the

Afghan Security Forces Fund and $3.7 billion for the Iraq Security Forces Fund to

train and equip Afghan and Iraqi security forces. These funds were in addition to

$500 million that DOD could use in the FY2006 bridge for either country.24

Section 9005, P.L. 109-148 sets a ceiling of $500 million from funds within Title IX.

CRS-28

Altogether, DOD would have had available $6.4 billion in FY2006 and FY2007 for

training and equipping, in addition to funds already appropriated.25

For Iraqi security forces, the request included:

$787 million to equip Iraq’s brigades by purchasing aircraft, patrol

boats, equipment, and ammunition, $751 million for basing and

infrastructure;

$712 million for police equipment, $696 million for basing, $250

million for training, $296 million to maintain buildings; and $65

million for other police needs; and

$73 million to train and equip Iraqi security guards for detainee

operations or contract for those services.

For Afghan security forces, the request included:

$585 million for police training, $346 million for police

infrastructure, $235 million to maintain equipment and pay police

salaries and $195 million for equipment;

$225 million to operate and support Afghan military forces, $221

million for military equipment, $138 million for training, and $240

million for military infrastructure; and

$14 million for detainee operations.

Although training and equipping Afghan and Iraqi security forces is clearly a

high priority for the Administration, it appears that DOD is obligating these funds

more slowly than originally anticipated so that funding requested for FY2006 could

be greater than currently required. The $5.9 billion requested in the FY2006 bridge

supplemental would be in addition to the $7 billion — $1.3 billion for Afghanistan

and $5.7 billion for Iraqi security forces — already received by DOD in FY2005, and

the $6.9 billion previously provided in the FY2004 supplemental.

As of January 2006, about $235 million of the $5 billion provided for training

Iraqi forces in the FY2004 supplemental was unobligated or still available to be

spent;26 obligations data for Afghanistan are not available. Of the $5.7 billion

appropriated for Iraq in FY2005, about $2.1 billion or about 37% is obligated as of

January 1, 2006. In its plan for FY2005, DOD had projected obligations of $4.3

billion or about 75% at that point. In the case of Afghanistan, DOD has obligated

about $733 million or 33% of the $1.3 billion appropriated as of January 1, 2006.

This is also below the $825 million or 64% anticipated by DOD last year.27

As in previous proposals, the monies are requested to be available for two years or until

September 30, 2007.

State Department, Section 2207 Reports, Iraq Relief and Reconstruction Funds (IRRF) Status of Funds, obligations as of December 28, 2005.

See entries for these accounts in Standard Form (SF)133, Report on Budget Execution and

Budgetary Resources, October 2005 and FY2006, 1/30/06 for 1st quarter FY2006.

[http://www.whitehouse.gov/omb/reports/sf133/FY_2005_SF_133s_w_Revis.pdf]. For

(continued...)

CRS-29

Potential Training Funding Issues. With the current rate of spending,

some observers questioned whether the full $5.9 billion requested to train and equip

Afghan and Iraqi forces was needed at this time. Last year, DOD anticipated that

training funds appropriated in FY2004 would run out in June 2005 for Iraq and in

October 2005; some $235 million remains available. Obligations of FY2005

appropriations are also below those anticipated for FY2005 monies, particularly for

Iraq. On the other hand, the FY2006 supplemental requested funds that would be

available for two years and so could also be used in both FY2006 and FY2007.

Another potential issue was whether Congress might want advance notification

of DOD’s overall plans for the types of equipment to be provided to Afghan and Iraqi

security forces. While the current and proposed statutory language requires DOD to

provide five-day advance notification of individual transfers from the account, this

does not give Congress an overall sense of DOD plans for the amounts and types of

equipment to be provided. Nor is it clear whether DOD plans to transfer or leave

behind any U.S. equipment and how that would factor into such plans.

Congressional Action. The conference agreement endorses the $1.9 billion

in Afghan training funds recommended by both houses, $300 million below DOD’s

request, suggesting that the funds could not be spent in FY2006. For Iraq, the

conference measure provides $3 billion, $700 million below the request. Conferees

did not specify where the funds would be cut, and permit DOD to use funds for

infrastructure facilities for both military and security forces, dropping restrictions

proposed by the House. Conferees also endorse House-proposed reporting

requirements and call on the Administration to seek funds from neighboring

countries for Iraq’s security forces.28

In prior action, the House measure provided $1.9 billion to Afghan security

forces and $3 billion for Iraqi Security forces in specially segregated funds to cover

the cost to train, equip, and build facilities for military and police forces. Pending

submission of complete justification materials, the House Appropriations Committee

cut funds intended to build facilities for Afghan ($396 million) and Iraqi police forces

($696 million). The Committee also put a hold on another $991 million slated for

military infrastructure until DOD submits a detailed, project-by-project financial

plan.

The Senate-passed measure provided $1.91 billion to train Afghan security

forces — close to the House level and $3.7 billion for Iraq security training — $700

million more than the House and the same as the request. During Committee

markup, the Senate panel added language that places a hold on funds to repair and

construct Iraqi security infrastructure until formation of a unified government.29 In

its April 25, 2006 statement of administration policy, the Administration specifically

(...continued)

DOD plan, see DOD, “Iraq/Afghanistan Security Forces: DOD’s FY05 Supplemental

Request,” March 2005.

Congressional Record, June 8, 2006, p. H. 3608.

S.Rept. 109-230, p. 21-22.

CRS-30

objected to the reduction in funds for Afghan security forces as reported by the

Senate Committee on Appropriations.

Coalition Support. As in previous years, DOD requested funds to make

payments to “key cooperating nations” that provide logistical and military support for

operations in Iraq and Afghanistan. In the FY2006 supplemental, DOD requested

$1.5 billion for coalition support and $550 million for “lift and sustain funds” — to

assist Iraq and Afghanistan and other nearby friendly nations in their efforts to

combat terrorism — in addition to the $195 million in coalition support bridge funds.

This would bring the total to $2.2 billion for support of coalition partners.

In FY2005, DOD received $1.2 billion for coalition support. DOD did not

provide a rationale for the increased funding for coalition support requested. If

history is a guide, much of the funds will go to Pakistan, with the remainder to

Jordan, Afghanistan, Ukraine, Poland, and other coalition allies.30

Congressional Action. The conference agreement cuts in half DOD’s

request for coalition support for U.S. allies participating in the war on terror from

$1.5 billion to $740 million, as recommended by the Senate. The House measure had

provided $1.2 billion. In its April 25, 2006 statement of administration policy, the

Administration specifically objected to the Senate-proposed cuts for coalition

support.

Commander’s Emergency Response Program (CERP). DOD also

requested $423 million for the Commander’s Emergency Response Program (CERP),

a program where military commanders can fund local projects for humanitarian relief

and reconstruction. The FY2005 Supplemental set an upward limit of $854 million

in FY2005, $500 million above DOD’s request.31

Congressional Action. The conference agreement approves DOD’s request

for a ceiling of $423 million on CERP programs, as recommended in both House and

Senate bills. The House Appropriations Committee, however, cited concerns about

a change in the program’s focus.

Iraq Freedom Fund. Conferees rejected DOD’s request for $100 million in

the Iraq Freedom Fund for unspecified purposes, as had been recommended by the

House. The Senate bill provided $25 million.

New Joint Improvised Explosive Device Defeat Fund. The Senate bill

set up a new transfer account that would allow the Director of the Joint Improvised

Explosive Device Defeat Organization to “investigate, develop and provide

equipment, supplies, services, training, facilities, personnel and funds to assist U.S.

forces in the defeat of improvised explosive devices,” (IEDs). DOD would report to

Office of the Secretary of Defense, Coalition Support Fund Tracker, FY2002-FY2005,

February 2006.

See Section 1006, P.L. 109-13, which raised the limit set in the FY2005 National Defense

Authorization Act (P.L. 108-375).

CRS-31

the congressional defense committees within 60 days of enactment on its plans.32

The $1.958 billion allocated to this new account was drawn from $490 million in

O&M, Army, $1.1billion in Other Procurement, Army and $357 million in RDT&E

Army included in DOD’s request. The House approved the monies in DOD’s request

for countering IEDs but left the funds in the three separate accounts.

Military Personnel Request and Visibility of Personnel Plans. The

Defense Department requested $9.6 billion for military personnel in the FY2006

supplemental, which would bring total funding for the year — including the bridge

supplemental — to $15.8 billion. This is $2.9 billion less than received by DOD for

FY2005.33 It was not clear why the level would be almost $3 billion lower this year.

Additional War-related Military Personnel Benefits. In the FY2006

supplemental request, $3.2 billion was slated to pay for additional war-related

military personnel benefits including:

$1.4 billion for special pays for active-duty forces including hostile

fire pay, family separation allowances, hardship duty;34

$341 million for additional recruiting and retention bonuses to

sustain wartime forces levels;

$59 million for higher foreign language proficiency pay;

$544 million for death gratuities;

$400 million for additional life insurance claims above peacetime

levels;35

$474 million for catch-up benefits for service members who suffered

traumatic injuries who would qualify under the new benefit enacted

in the FY2006 National Defense Authorization Act;36 and

$22 million for insurance premiums for OIF/OEF personnel.

With the $800 million already received in the FY2006 bridge fund, the total for warrelated special pay and benefits in FY2006 would be about $4 billion.37 Since the

launch of military operations in Iraq, Congress has raised and added war-related

personnel benefits and may again consider whether these benefits are sufficient.

See Congressional Record, June 8, 2006, p. H3588, and H.R. 4939 as marked up by the

Senate, p. 101-102.

DOD’s reported war-related obligations for military personnel are $15.9 billion according

to the September 30, 2005 report of the Defense Finance Accounting Service (DFAS),

Supplemental & Cost of War Execution Report. These reports, however, appear not to

capture about $2.95 billion in military personnel obligations as recorded by the SF-133, the

government’s standard financial reporting system.

Congress has authorized monthly levels of $225 for imminent danger pay, $250 for family

separation allowance and $100 for hardship duty location pay for those deployed less than

12 months and $300 for those deployed more than 12 months.

Payments go to the Department of Veterans Affairs to pay claims.

CRS calculations based on H.Rept. 109-359, p. 471.

CRS-32

Sustaining Force Levels. The FY2006 supplemental request included $6.2

billion to sustain current force levels, including $653 million to support active-duty

force levels above normal peacetime levels, known as “overstrength,” and about $5.5

billion to pay activated reservists.38 In DOD’s plan, Army troop levels would be

16,300 above and Marine Corps levels would be 6,000 above peacetime strength

levels in FY2006. DOD has already received $420 million to cover overstrength

costs, which would bring the total base for the Army and 175,000 for the Marine

Corps.

DOD’s FY2006 request also included $5.5 billion to pay activated national

guard and reserve forces, in addition to $4.6 billion included in the FY2006 bridge

fund for “incremental” war costs for military personnel. That would bring the total

to about $10.1 billion, or about $1.5 billion less than requested in FY2006.39 DOD’s

wartime financial reporting system reports $8.4 billion to activate reserve forces in

FY2005 but this figure appears to be understated.40

DOD’s FY2006 supplemental justification did not include any information

about the mix of active-duty and reserve forces anticipated in FY2006 that would be

funded with these monies. And because of the discrepancies in the figures, it is

impossible to say whether DOD’s estimated funding in FY2006 is similar to or

different from last year. In general, the more that DOD relies on reservists, the

higher are war-related military personnel costs. That is because DOD’s incremental

war costs for active-duty forces include only special pays because their regular pay

is included in DOD’s regular appropriations whereas the additional full-time pay for

activated reservists is a wartime expense.

According to a DOD data base, about 36% of the 270,00 forces deployed in

support of the global war on terror were activated reservists and about 64% were

active-duty in FY2005, figures similar to those cited by DOD spokesperson.41

According to DOD, the FY2006 funding request supported overall force levels in

FY2006 that were similar to those in FY2005 — about 138,000 in Iraq and 18,000

in Afghanistan. These figures did not appear to include other forces in the region or

elsewhere supporting the global war on terrorism.

In light of concerns about stress and sustaining both active-duty and reserve

forces, some observers wanted to know the DOD planning assumptions for the

FY2006 supplemental request for military personnel, including not only personnel

This includes some $933 million for basic allowance for housing for dependents of

activated reservists.

See H.Rept. 109-359, p. 471.

DFAS, Supplemental & Cost of War Execution Report, September 2005; the FY2007

budget shows almost all military personnel funds as obligated; see OMB, FY2007 Budget

Appendix at [http://www.whitehouse.gov/omb/budget/fy2007/pdf/appendix/mil.pdf]. CRS

compared appropriated levels to those reported in DFAS reports and those reported in the

FY2007 budget to identify a discrepancy of about $3 billion.

CRS calculations based on Defense Manpower Data Center, Contingency Tracking

System, Deployed Military Personel by Country and Component, November 2005 run.

CRS-33

in-country but all those paid for by bridge and supplemental funds. That information

was not provided in DOD’s justification material.

Congressional Action. The conference agreement adds $560 million to the

Navy Military Personnel account. Of that amount, about $200 million increases

recruiting and retention incentives by two-thirds above the request. Another $300

million restores monies cut from the regular budget in a government-wide 1% acrossthe-board cut levied to offset additional Gulf Hurricane monies.42 Restoring that cut

would fund peacetime military personnel expenses even though the funds are being

included in the war supplemental. The increase also adds a Senate-proposed

provision of $49 million for higher death benefits, which the bill makes available to

service members who died between May 12, 2005, and August 1, 2005.

In earlier action, the Senate bill also included $300 million to restore funds cut

for regular expenses of Military Personnel, Navy by the 1% cut. In addition, the

Senate added $195 million to the $305 million request for recruiting and retention

incentives that is included in the services’ military personnel accounts. Most of the

funds went to the Army. (An additional $85 million for recruiting and retention was

in the O&M accounts.)

Operation and Maintenance Funding Rises Substantially in FY2006.

The Defense Department requested $32.7 billion in Operation and Maintenance

(O&M) funds in the FY2006 supplemental. These funds would be in addition to the

$28.6 billion received in the FY2006 bridge fund, and would bring total funding in

FY2006 to $61.3 billion. That amount is $15.5 billion or about one-third higher than

the $45.8 billion appropriated in FY2005.

O&M funding pays for activities and services ranging from personnel support

for troops (e.g., subsistence, body armor, morale, welfare and recreation activities)

to the cost of operating forces and billeting troops. Major elements in the $32.7

billion FY2006 supplemental — all in addition to FY2006 Title IX bridge funds —

included:

$12 billion for operating support (fuel, spare parts, and related

expenses);

$1.9 billion in personnel support (e.g., subsistence, body armor and

other protective gear);

$2.4 billion for billeting of soldiers, base camp facilities, staging

areas, airfields;

$500 million for command, control, communications and tactical

intelligence;

$9.5 billion for transportation personnel and equipment both to and

within the theater;

$3.2 billion for equipment maintenance in-theater and depot

maintenance at home; and

See Congressional Record, June 8, p. H. 3606. Sec. 3801, Title, III, Chapter 8, P.L.109148 requires a 1% across-the-board cut government-wide except for the VA and emergency

appropriations.

CRS-34

$2.8 billion in other unspecified support costs.

It is difficult to explain the increases in FY2006 because DOD did not show the

funding already received in the bridge supplemental in its justification materials.

Since DOD did not request the bridge funds — though it did not oppose them —

there was no formal request or justification material. It appears that about half of the

$15.3 billion increase in FY2006 for O&M could be explained by higher

transportation, maintenance, and fuel costs.

Depot Maintenance and Transportation Slated for Large Increases.

If the FY2006 request was approved as proposed, DOD’s total depot maintenance bill

for FY2006 would be $7.3 billion — about $2.1 billion, or almost 40% higher than

the FY2005 level.43 According to DOD’s justification material, the additional depot

maintenance requirements reflected the harsh desert environment and wartime

conditions, which have increased the wear and tear on equipment.

Another area programmed for large increases was transportation of personnel

and equipment to and within theater for which DOD is requesting $9.5 billion.

Including FY2006 bridge funds would bring the FY2006 total to $10.8 billion, or

about $4 billion, or almost 60% higher than the $6.8 billion in FY2005. DOD

attributed about $1.8 billion of the increase to higher fuel costs in FY2006.

Excluding those costs, the total would still be almost one-third higher than the

previous year.

DOD did not provide a breakdown between its use of more expensive airlift vs.

sealift to transport goods but noted that the “Department is working to reduce the

proportion of air transport used and to lower the costs ... but ... will continue to need

air transport for the most critical items and shipment,” a commitment also included

in DOD’s justification material for FY2005.44 It is not clear why in the fourth year

of operations, DOD is still heavily relying on air transport of supplies.

Higher fuel prices may also account for increases in operating tempo costs that

include fuel, spare parts, and other costs of deployed units. DOD’s request is

predicated on the assumption that the average price of fuel — with service charges

— rises from $62 to $84 per barrel.45 DOD estimates that higher fuel costs in

FY2006 account for $2.6 billion in higher costs, including $2.2 billion financed in

the bridge fund and $423 million in the new supplemental.46

The FY2006 O&M supplemental also included $539 million for body armor

plus an additional $140 million in the bridge supplemental for a total of $680 million.

DOD obligated $5.2 billion for depot costs in FY2005; see DFAS, Supplemental & Cost

of War Execution Report, September 2005.

DOD, FY2006 Supplemental Request — war, p. 10.

Ibid., p. 12

Ibid., pp. 10, 12.

CRS-35

This appeared to be comparable to the $650 million appropriated for body armor in

FY2005.47

These three areas — equipment maintenance, transportation, and higher fuel

costs would account for about $8.7 billion, or roughly half of the $15 billion increase

in O&M in FY2006. From DOD’s justification material, the source or rationale for

other funding increases or for continuation of FY2005 levels for other areas was not

apparent.

Congressional Action. The $31.6 billion in funding proposed in the

conference agreement for O&M is $1.7 billion below the request and close to the

Senate level. The cuts include $500 million to O&M, Air Force, presumably

reflecting the House difference about the likely cost of fuel; a $750 million cut to

coalition support which halves the Administration’s request; and a transfer of funds

to counter IEDs from O&M to the new centralized account. Conferees also endorse

the House’s call for a report on the long-term cost to repair Army equipment due by

July 7, 2006.

In earlier action, the House-passed measure cut a total of $630 million from

DOD’s $32.7 billion O&M request, decreasing funds for higher fuel prices (-$759

million), coalition support (-$300 million), and “lift and sustain” aid to U.S. allies

(-$104 million). These cuts were partly offset by increases for depot maintenance of

upgraded M1A1 tanks for Army National Guard units ($130 million) and for Marine

Corps repair/reset ($100 million).

The Senate-passed bill reduced by $1.1 billion DOD’s O&M request — almost

twice the amount cut by the House. Like the House, most of the cuts were for higher

fuel prices (-$813 million), coalition support (-$760 million), “lift and sustain” aid

for allies (-$104 million). The bill also transferred $490 million in monies to counter

IEDs to the new account. These cuts were partly offset by additions for repairs of

M1A1 tanks for Army National guard units ($130 million like the House), additions

for Air Force optempo ($194 million) and transportation ($500 million), no reason

provided, plus a $73 million addition for family counseling and transition assistance

for service members.

Investment Funding Grows in FY2006 Without Clear Overall

Rationale. In its revised FY2006 supplemental request, DOD requested $14.6

billion for procurement, $1.7 billion below its original request in addition to the $8

billion included in the bridge supplemental. The Administration’s proposal did not

identify specific cuts by weapon system but only totals by account, so it was

sometimes not clear where the cuts would be taken. If enacted as proposed, FY2006

war-related procurement would total $22.7 billion compared to $18.8 billion

appropriated in FY2005.48 Although some of the decreases in the revised request

CRS calculations based on H.Rept. 108-622, p. 380 and H.Rept. 109-72, pp. 103-105.

CRS calculations based on DOD, FY 2006 Supplemental Request — war, p. 2; H.Rept.

109-148, p. 468, and H.Rept. 109-72, p. 114. DOD also transferred an additional $2.2

billion from its baseline budget to war-related procurement in FY2005, for a total of $20.9

(continued...)

CRS-36

reflected cuts made, others would reject additions proposed by the appropriators such

as for additional C-17 aircraft. The FY2006 original supplemental request included

the following:

$3.1 billion for Army modularity equipment;

$7.2 billion to reconstitute equipment;

$2.6 billion for force protection items;

$500 million for classified items;

$1.2 billion for ammunition; and

$692 million for SINCGARS radios for “transition teams supporting

OEF/OIF.”49

The supplemental also included substantial funding for tactical vehicles, such

as High Mobility Multi-Purpose Wheeled Vehicles ($410 million for Army

HMMWVs and $271 million for those of the Marine Corps), night vision devices

($173 million for the Army and $259 million for the Marine Corps), target devices

such as lightweight laser designator rangefinder ($95 million and $113 million for

Knight Family fire support and target designators for the Army), and additional

communication aids. Modification kits for aircraft (e.g., AH-64 helicopters in the

Army and AV-8s in the Navy) were also requested. Similar items were included in

the bridge fund, including, for example, over $1 billion for radios of various types.50

Rationales for Procurement Request Unclear. Although DOD’s request

included descriptions of individual procurement items, it did not give any rationale

or explain whether funding requests for various items reflect battlefield losses,

washout rates for worn equipment, equipment provided for state-side units whose

equipment remains overseas, or additional gear for deployed units. This made it

difficult to assess whether funding levels were too high, too low or about right. Nor

was it clear whether the Army and Marine Corps, in particular, had additional

unfunded requirements that would come due in later years or whether some of these

items were originally budgeted in the baseline budget but transferred to the

supplemental.

Carryover of FY2005 Procurement Monies. About $6 billion of

procurement monies appropriated in FY2005 remain to be obligated in FY2006. In

addition, much of the $8 billion for procurement in the FY2006 bridge fund is

probably still available.51 If DOD received an additional $16.4 billion in the FY2006

(...continued)

billion; see table in Appendix A.

DOD, FY 2006 Supplemental Request — war, p. 26.

Ibid., p. 2; H.Rept. 109-148, p. 468; H.Rept. 109-72, pp. 2, 14-16, 26, passim; see H.Rept.

109-359, pp. 477-482 for FY2006 bridge.

CRS calculation of unobligated balances is from comparing amounts appropriated in

FY2005 with obligations in DFAS, Defense Finance Accounting Service (DFAS),

Supplemental & Cost of War Execution Report, September 30, 2005; later reports not

available.

CRS-37

supplemental, DOD would have as much as $30 billion in procurement monies to

spend in FY2006 in addition to its baseline budget.

As part of its budget review, DOD set a goal that all supplemental procurement

funds should be obligated by the fourth quarter of the fiscal year. In light of the large

amount of funds and the fact that monies were not likely to be available until the

third quarter, it appeared unlikely that DOD would reach that goal. Although

procurement monies are generally available for three years, it could be argued that

a shorter period of time would be appropriate for urgently required procurement

funds, and would improve oversight.

Congressional Action. Although the conference agreement adopts a

procurement total of $15.0 billion — $2.6 billion below the House level and $450

million below the Senate level — some $1.1 billion of this decrease reflects the

transfer of procurement funds to counter IEDs from procurement to the new

consolidated account. Thus, the actual cut to the original request is closer to $1.5

billion with about $440 million taken from trucks and other logistical support

equipment, $210 million from the Bridge to Future Networks, a program still

undergoing testing, and cuts to various communications devices.

The

Administration’s revised request included some of these cuts.

Conferees also include the congressional adds of $230 million for 3 V-22

aircraft, the $227 million to keep the C-17 aircraft line open, and $300 million to

keep open the line to upgrade M1A1 tanks. Like both houses, the enacted bill shifts

some of the funds requested to recapitalize old HMWWVs to buying more new

vehicles.

In prior congressional action, the House bill added $1.3 billion to the DOD

request for procurement funds, primarily to upgrade and keep open production lines

for M1A1 and M1A2 tanks ($400 million), and buy Tank Urban Survival Kits ($100

million), improved recovery vehicles ($100 million), 8 MQ-1 Predators ($77

million). The measure also proposed to spend $100 million to keep the C-17

production line open even though it is not clear whether additional planes will be

needed.

Preferring to buy new uparmored HMMWVs rather than rebuild old ones, the

House Appropriations Committee swapped $480 million in recapitalization monies

to buy new vehicles, bringing the total for new HMMWVs to $890 million, which

would buy about 6,850 vehicles at about $130,000 each.52 The Committee argued

that buying new vehicles was more appropriate because these would be uparmored

whereas the repaired vehicles would not and therefore would not be usable in

combat. If the recapitalized HMMWVs are not suitable for combat, then it was not

clear why DOD included that funding in the supplemental. DOD did not show how

their funding request meshes with the Army’s requirements in theater. In recent

years, the Army has received about $3.2 billion to purchase 18,129 uparmored

CRS calculation based on DOD, FY 2006 Supplemental Request - war, p. 24, which shows

that $410 million buys 3,146 HMMWVs.

CRS-38

HMMWVs, which is close to their March 2005 requirement, a requirement which

was increased in late February 2006.53

In its report, the Senate Committee stated its concern that DOD’s justification

for war-related procurement “includes only descriptive summaries . . . and is absent

of meaningful program and budget information, such as requirements, pricing and

delivery schedules.” For this reason, the committee warned that “Congress will not

be able to fully support supplemental requests unless it is provided with the same

detailed justification and program materials that is receives with the annual

request.”54

The Senate bill cut $940 million of DOD’s $16.4 billion procurement request

that included a transfer of $1.1 billion in Army procurement funds for countering

IEDs to the new centralized Joint IED Defeat Fund (see above). Additions to various

programs were largely offset by cuts elsewhere. The $700 million in cuts included

programs considered to be duplicative (-$111 million for Explosive Ordnance

Devices, -$30 million for communication equipment), not executable or ahead of

need (-$74 million for UH-1Y/AH-1Z helicopters, -$30 million for Hellfire missiles),

troubled (-$110 million from Joint Network nodes), or questionable (-$145 million

for LOGCAP trucks, trailers, and other equipment).

These cuts were offset by various increases. Like the House, the Senate added

funds to keep production lines open including $400 million for M1A1Abrams tank

improvements and $228 million for additional C-17 cargo aircraft. The Senate also

added $230 million to buy three V-22 aircraft, a long-troubled program which

recently completed operational testing, based on the rationale that these planes would

replace CH-46 and CH-53D helicopters that are being damaged or lost in combat.

Other additions were for more Predator UAVs primarily for Special Operations

Command ($85 million). Like the House, the SAC added funds for Abrams Tank

Urban Survival Kits ($100 million), and buys new HMMWVs rather than rebuilding

current ones.

Research and Development Emphasizes Improvised Explosive

Devices. The revised FY2006 supplemental requested $736 million (rather than

$782 million) in addition to the $50 million in bridge funds. About half — or $357

million — was for DOD’s efforts to counter the effects of all forms of Improvised

Explosive Devices (IEDs), reflecting the high priority placed on finding ways to

counter these devices. The remaining RDT&E projects appeared directed primarily

at enhancing the effectiveness of current systems. The FY2005 supplemental

included $587 million for RDT&E projects. It is unusual for RDT&E funds to be

provided in emergency supplementals because of the long-term nature of the work.

Congressional Action. The conference agreement proposes $711 million

for RDT&E, reflecting primarily the transfer of $357 million for joint IED research

to the new consolidated account as proposed by the Senate. This transfer is partly

The Army does not cite the new requirement in Army, “Armor Summary,” February 28,

2006, and “Wheeled Vehicle Summary,” March 2006.

S.Rept. 109-230, p. 23.

CRS-39

offset by an addition for classified programs to Air Force, RDT&E that was proposed

by both houses. The funds that DOD requested for research to counter IEDs to be

included in the centralized account may or may not be used for R&D. DOD is to

report its spending plan within 60 days of enactment.

Previously, the House bill provided $1 billion for RDT&E programs, adding

$220 million for classified projects. The SAC transferred $358 million in Army

RDT&E funds for countering IEDs to its new centralized transfer account, added

$320 million for a classified Air Force program, and made other small changes. The

net effect of these changes was a total of $710 million for RDT&E, $70 million

below the request.

Military Construction Request. The revised FY2006 supplemental

requested $406 million for military construction projects, a reduction of $79 million.

The original supplemental included:

$348 million for Iraq;

$80 million for Afghanistan;

$22 million for planning and design; and

$35 million for construction to support classified activities in the

United Kingdom.

According to the Defense Department, about $238 million was for force protection,

$36 million for airfield improvements, $28 million for fuel facilities, $42 million for

power, water and roads, and $83 million for support facilities. Congress scrutinized

these individual projects closely because of concerns about the United States

establishing an “enduring presence” in the region.

Congressional Action. As enacted, H.R. 4939 provides a total of $235

million for military construction projects, about $170 million below the revised

request. That total includes $49.6 million for projects in Afghanistan and $146

million for projects in Iraq. Conferees accept the Administration’s withdrawal of

three projects for Bagram, Afghanistan, for wastewater treatment and bulk storage

and one for an air control tower, but express some frustration with the lack of

explanation from the Administration for why these projects are no longer considered

emergencies. Conferees also provide $50 million rather than $167 million to build

a new road in Iraq to bypass urban areas to avoid Improvised Explosive Devices

(IEDs), a proposal that was questioned by both houses.

The conference agreement does not include the Biden amendment which

prohibited the use of funds in the act to establish permanent U.S. bases or exercise

U.S. control over the infrastructure or oil resources of Iraq and included no

explanation for this decision.55 Both houses cited concerns about DOD’s military

construction requests and called for bases to be “expeditionary” rather than

permanent.

H. Rept.109-494, p. 102..

CRS-40

In earlier action, the House measure cut $137 million of DOD’s $485 million

request for military construction, rejecting two projects to fix power plants at

National Security Agency stations in the United Kingdom as non-emergencies and

cutting $107 million from an Army proposal to build new roads in Iraq to bypass

urban areas to avoid Improvised Explosive Devices (IEDs), a rationale not

convincing to the committee.

The House Committee also cited concerns about DOD’s “substantial military

construction expenditures of a magnitude normally associated with permanent

bases,” for “expeditionary” bases that are supposed to be austere. and

“expeditionary.” The Committee believed that military construction requirements

for contingency operations should be considered in regular authorization and

appropriations bills. Concerned about not having DOD’s updated master plan for

Central Command, the House panel also placed a hold on military construction funds

until that report is provided.

Echoing the concerns of the House, the Senate Committee report stated that

military construction projects should be “of an emergency nature,” and appropriate

for “expeditionary” types of bases in order to be consistent with the “current policy

of the United States to establish no permanent military bases in Iraq;” projects should

be limited to those which “immediately support operations ongoing in Iraq rather

than those requests which propose a longer-term presence.”56 The Senate measure

cut funds for war-related military construction by $200 million providing for a total

of $278 million.

Except for an air control tower no longer needed, the Senate funded all projects

requested by DOD for Iraq, but at lower levels. The bill cut most of the funds from

a $167 million Army proposal to build roads bypassing urban areas in order to reduce

the threats from IED (-$128 million), a project also questioned by the House, and

reduces funding for two projects at Talil Air Base, a dining facility and a convoy

support center (-$43 million). The Senate measure also eliminated three projects at

Bagram Air Base in Afghanistan because DOD’s master plan did not take NATO

presence or cost-sharing into account. H.R. 4939, as passed by the Senate, funded

two projects in the U.K. that the House rejected.57

Flexibility Issues: Transfer Limits. In the supplemental, DOD requested

transfer authority that would allow the department to move funds between

appropriation accounts after enactment of up to $4 billion of the $67.9 billion

requested — with the notification and approval of the defense committees. This level

was $1 billion higher than the $3 billion level set for the $75.6 billion in the FY2005

supplemental.

The Department could also transfer up to $2.5 billion of the $50 billion in the

FY2006 bridge fund. The supplemental request also asked Congress to raise the

current transfer limit of $3.75 billion in the regular FY2006 DOD appropriations Act

to $5 billion to allow DOD to respond to unanticipated needs in the global war on

S. Rept 109-230, p. 46.

S.Rept. 109-230, p. 46-47.

CRS-41

terror. DOD also requested authority to “advance bill” the services for maintenance

or supplies, a way to generate cash reserves for working capital funds, which also

increases flexibility.

Congressional Action. To give DOD additional flexibility in managing

funds, the conference agreement raises the general transfer limit applying to FY2006

regular DOD monies from $3.75 billion to $5 billion, as requested. The new level

is higher than the levels proposed by either house — $4.35 billion in the Senate and

$3.75 billion in the House. This level also does not include a pending transfer of

regular funds to meet war-related needs.58

Like the House and Senate, conferees adopt a cap of $2 billion on transfers of

funds in this bill for war rather than the $4 billion ceiling requested, and reject

DOD’s request to allow transfers of military construction funds. Conferees adopt a

limit of $1.2 billion for advance billings, providing additional flexibility to working

capital funds which finance the purchase of supplies and services. That level is the

level proposed by the Senate, and $300 million below the House level and $800

million less than requested.

Intelligence Community Management Account. The Administration

requested $178 million, in addition to the $418 million already received for FY2006

to “accelerate the stand-up of the Office of the Director of National Intelligence

(ODNI), sustain national Counterterrorism Center (NCTC) Operations, continue

implementation of the recommendations of the Silberman-Robb Commission on U.S.

Intelligence Relating to Weapons of Mass Destruction (WMD Commission), and

rapidly deploy a global capability to warn against the outbreak of avian influenze.”59

Details were classified.

Congressional Action. Conferees endorse the $158 million funding level

for the Intelligence Community Management Account, as proposed in both the

House- and Senate-passed bills. This is a reduction of $20 million from the request.

International Affairs Supplemental

The President sought $4.2 billion in FY2006 supplemental funding supporting

a broad range of foreign policy activities:

U.S. diplomatic costs in Iraq and Afghanistan

Additional U.S. stabilization assistance to Iraq

Additional Afghanistan reconstruction aid

Public diplomacy and democracy promotion programs for Iran

Darfur humanitarian relief and peace implementation aid in Sudan

Pakistan earthquake reconstruction

Reprogramming DOD06-13PA would not count against the ceiling; see Sec. 1202 in H.R.

4939 and H.Rept. 109-494, p.

OMB, FY2006 Supplemental War Request.

CRS-42

Liberia refugee repatriation

Food assistance for east and central Africa

Table 11. State Department and Foreign Aid Funds in FY2006

Supplemental

($s — millions)

Activity (account)*

Request

House

Senate

Conf.

$1,097.5

$1,116.1 $1,037.5 $1,097.5

Iraq:a

U.S. mission operations (DCP)

Provincial reconstruction teams support (DCP)

$400.0

$208.0

$300.0

$229.8

Special Inspector General & State IGb

$25.3

USAID security and operations (OE)

$119.6

$61.6

$119.6

$101.0 c

$0.0

$1.3

$0.0

[$1.0]

U.S. Peace Institute

Subtotal, Iraq mission security and support

$1,642.4

$1,412.3 $1,482.4 $1,453.6

$675.0

$675.0 $1,485.0 e

Infrastructure security (ESF)

$287.0

Infrastructure sustainment (ESF)

$355.0

Nat’l capacity building — democracy & rule of law

(ESF)c

$172.0

Prison construction/Protection of judges (INL)

$107.7

$81.4

$104.4

$91.4

Financial integration & security promotion (IFTA)

$13.0

Provincial reconstruction teams/employment (ESF)

Subtotal, Iraq stabilization assistance

Total, Iraq

$1,609.7

$1,583.4 $1,606.4 $1,589.4

$3,252.1

$2,995.7 $3,088.8 $3,043.0

Afghanistan:f

U.S. mission security (DCP)

$50.1

USAID security (OE)

$16.0

$0.0

$16.0

$66.1

$50.1

$66.1

$50.1

Power sector projects (ESF)

$32.0

$5.0

$32.0

Debt cancellation

$11.0

$0.0

$11.0

Afghan refugees returning from Pakistan (MRA)

$3.4

$7.4

$3.4

$46.4

$8.4

$50.4

$46.4

$112.5

$58.5

$116.5

$96.5

Public diplomacy/independent TV & radio (DCP)

$5.0

Iranian student fellowships/visitor programs (ECEP)

$5.0

Broadcasting (Request = ESF;

House/Senate/Conference = BBG)

$50.0

$36.1

$30.3

$36.1

Democracy programs (Request = ESF;

House/SenateConference = Democracy Fund)

$15.0

$10.0

$34.8

$20.0

Subtotal, Afghanistan mission security

Subtotal, Afghanistan assistance

Total, Afghanistan

Iran:

CRS-43

Activity (account)*

Total, Iran

Request

House

Senate

Conf.

$75.0

$56.1

$75.1

$66.1

USAID mission in Juba (OE)

$6.0

$0.0

$6.0

Refugees returning to southern Sudan (MRA)

$12.3

Food aid for southern Sudan (PL 480)

$75.0

U.N. peacekeeping in Southern Sudan (CIPA)

$31.7

$125.0

$119.0

$125.0

$119.0

Humanitarian relief in Darfur (IDFA)

$66.3

Refugees/conflict victims in Darfur & Chad (MRA)

$11.7

Food aid for Darfur (PL480)

$150.0

African Union peacekeeping mission, Darfur (PKO)

$123.0

$173.0

U.N. peacekeeping mission in Darfur (CIPA)

$38.1

$98.1

Subtotal, Darfur

$389.1

$499.1

Total, Sudan/Darfur

$514.1

$618.1

$624.1

$618.1

Refugee repatriation (MRA)

$13.8

Economic aid (ESF)

$0.0

$50.0

Total, Liberia

$13.8

$63.8

Other Refugee Aid (MRA and ERMA) h

$0.0

$62.5

$17.5

Haiti (ESF and CSH)

$0.0

$40.0

$20.0

Congo (Democracy Fund and PKO)

$0.0

$13.2

$7.5

Jordan (ESF)

$0.0

$100.0

$50.0

Pakistan earthquake reconstruction (various) g

$126.3

Food aid, East and Central Africa (PL480)

$125.0

Drought relief for West/Horn of Africa (IFDA)

$0.0

$35.0

$25.0

Food aid for refugees through WFP (MRA)

$10.0

$20.0

$12.0

Colombia (House = INL; Senate = MRA & INL)

$0.0

$26.3

$5.8

$16.3

Hurricane Stan relief for Guatemala (DA)

$0.0

$12.0

$6.0

Burma refugees (MRA)

$0.0

$5.0

Rescission of prior aid to Egypt (ESF)

$0.0

($47.0)

$0.0

Rescission (House = Peacekeeping funds; Senate

= Export-Import Bank)

$0.0

($17.0)

($13.2)

($44.0)

Sudan/Darfur:

Subtotal, southern Sudan

Liberia:

CRS-44

Activity (account)*

TOTAL, State Dept. & Foreign Aid Funds

Request

House

Senate

Conf.

$4,228.8

$4,062.8 $4,447.9 $4,254.1

Source: Department of State and CRS calculations based on H.Rept. 109-388, S.Rept. 109-230, and

H.Rept. 109-494, with modifications to reflect House and Senate floor amendments.

* State Department appropriation account acronyms: CIPA = Contributions for International

Peacekeeping Activities; DCP = Diplomatic and Consular Programs; ECEP = Educational and

Cultural Exchange Program.

Foreign Operations appropriation account acronyms: ESF = Economic Support Fund; IDFA =

International Disaster and Famine Assistance; IFTA = Treasury Dept’s International Affairs Technical

Assistance; INL = International Narcotics & Law Enforcement; MRA = Migration and Refugee

Assistance; OE = US Agency for International Development Operating Expenses; PKO =

Peacekeeping Operations.

a. In addition to these figures for Iraq, the supplemental includes other aid-related amounts for Iraq:

- DOD train & equip Iraq security forces — $3.7 billion request; $3 billion House; $3.7

billion Senate; $3 billion conference.

- FBI operations & support in Iraq and Afghanistan — $32.5 million request; overall FBI

funds reduced in House, Senate, and conference bills, so levels for Iraq and Afghanistan

may be reduced as well, at the discretion of the Administration.

- Department of Justice’s United States Attorneys Office and the U.S. Marshals Service

for legal support for Iraq’s criminal justice system — $5.5 million request; $3 million

House; $4.5 million Senate; $4 million conference.

- Bureau for Alcohol, Tobacco, Firearms, and Explosives for firearms trafficking,

explosives, and arson operations in Iraq — $5 million request; $4.1 million House; $4

million Senate and conference.

- Treasury Department for the Iraq Finance Cell and to place a Deputy Treasury Attache

in Iraq — $1.8 million request, House, Senate, and conference.

b. Of the $25.3 million, $24 million is for the Special IG for Iraq Reconstruction and $1.3 million

supports the work of the regular State Department’s IG in Iraq and Afghanistan.

c. The conference agreement combines amounts for USAID OE expenses in Iraq, Afghanistan, and

Sudan without specifying a total for each mission. The $101 million figure for Iraq includes

some amounts for Afghanistan and Sudan.

d. In addition to new appropriations for these activities, the House bill directed that funds be

transferred from previous Iraq Relief and Reconstruction Fund (IRRF) appropriations for

Provincial Reconstruction Teams ($152 million) and for democracy and rule of law programs

($33.5 million). These amounts were the same as what the Administration had planned to spend

for these activities out of the IRRF account. The Senate bill directed that $104.5 million of ESF

for Iraq should be available for broad-based democracy programs in Iraq. The conference

agreement includes $50 million for democracy, rule of law, and reconciliation programs within

the ESF total.

e. The $1.485 billion ESF total for Iraq includes funding for all Iraq stabilization ESF activities.

f. In addition to these figures for Afghanistan, the supplemental includes other aid-related amounts

for Afghanistan:

- DOD train and equip Afghan security forces — $2.2 billion request; $1.85 billion

House; $1.91 billion Senate and conference.

- DOD counter-drug activities in Afghanistan and Central Asia — $192.8 million request;

$156.8 million House; $154.6 million Senate; $150.5 million conference.

- FBI operations and support in Iraq and Afghanistan — $32.5 million request; overall

FBI funds reduced in House, Senate, and conference bills, so levels for Iraq and

Afghanistan may be reduced as well, at the discretion of the Administration.

g. Funds would reimburse several USAID accounts — Development Aid, Child Survival,

International Disaster & Famine Assistance, and ESF — for previously reprogrammed money,

plus support ongoing reconstruction projects in Pakistan.

h. The Senate added $42.5 million in MRA funds that included Somalia ($3 million); Horn and

W.Africa ($10 million); Congo ($15 million); UNCHR ($4 million); North Caucasus ($2.5

million); North Asia ($3 million); and Burma ($5 million). In addition, the Senate bill provided

CRS-45

$20 million for Emergency Refugee and Migration Assistance (ERMA) for the Horn of Africa.

The conference agreements provides $5 million for MRA programs in Burma plus $17.5 million

for “other” MRA programs. The conference agreement provides no funds for ERMA.

U.S. Diplomatic Mission Operations in Iraq60

Currently, the U.S. Embassy in Iraq has over 1,000 American and locally

engaged staff representing about 12 agencies. Of this total, 156 U.S. direct hires and

155 locally engaged staff represent the Department of State (DOS) in the U.S.

Mission. The Bush Administration requested an FY2006 supplemental of $1.497

billion within State’s Diplomatic and Consular Programs budget account to cover

Iraq operations and security.

Available FY2006 funds for the U.S. Mission in Iraq’s regular operations

consist of $632.7 million in carryover funds from FY2005. While about $65 million

was requested for FY2006 regular operations for the U.S. Mission in Iraq, the

Department of State says much of that was lost due to rescissions. Therefore, the

Administration sought $997.5 million to cover ongoing operation and security costs

for the U.S. Mission in Iraq, $100 million for overhead protection of personnel in

facilities other than the Embassy, and $400 million for movement security of the

Provincial Reconstruction Team. State intends for the carryover and supplemental

total of $1.630 billion to cover costs for the remainder of FY2006 and the first half

of FY2007.

The Department of State estimates the FY2006 total program funding

requirement for Mission operations and security in Iraq to be $1.1 billion. This

includes $192.7 million for logistic support which includes trailer camps, food

service, maintenance of transportation facilities and equipment, and laundry; $70 .8

million for basic operations and logistics for the DOS American direct hires and local

hires; $81.8 million for operational costs for the four regional embassy offices in

Mosul, Kirkuk, Hillah, and Basrah, Provincial Reconstruction Teams and state

embedded teams, as well as contractor support for the Iraq Reconstruction

Management Office, offshore support, public diplomacy, education, and outreach

programs. According to DOS, FY2006 security budget needs total $735.4 million

and include $55 million for guards at facilities in Iraq, $617.9 million for high threat

protection provided to personnel whenever they travel outside of the protected

compound, and $62.5 million for equipment such as armored vehicles, as well as

physical and technical security measures. Additionally, $19.9 million is needed for

information technology operations for a country-wide emergency radio program for

the embassy, the State Department estimates.

Congressional Action. In total, the conference agreement for H.R. 4939

provides $1.1 billion for U.S. mission operations in Iraq, the same as the request.

Previously, the House bill had provided $1.116 billion, adding funds for logistics

support and information technology, but reducing amounts for basic operations of the

mission. The Senate measure had reduced the President’s request by $60 million, to

Prepared by Susan Epstein, Specialist in Foreign Policy and Trade.

CRS-46

a total of $1.04 billion. The reduction came on an amendment by Senator Menendez

that used this account as an offset in order to increase funds for peacekeeping in

Darfur.

In addition, the conference bill reduces the $400 million request to $229.8

million for security costs associated with the Provisional Reconstruction Teams

(PRTs) in Iraq. The House had recommended $208 million for PRTs while the

Senate measure proposed $300 million.

For USAID mission security funds in Iraq, House-Senate conferees provide

$101 million for combined additional USAID operating expenses in Iraq,

Afghanistan, and Sudan, but did not specify a precise level for Iraq. The

Administration had proposed $119.6 million for expenses in Iraq alone, and a

combined total of $141.6 million for mission operations in the three posts. While the

Senate-passed bill fully funded the USAID OE request for Iraq, the House cut the

proposal $61.6 million. The House Appropriation Committee noted that the amounts

provided in the House measure were for FY2006, and that the $58 million balance

for FY2007 would be covered by the transfer of unobligated balances remaining in

the Iraq Relief and Reconstruction Fund (IRRF) enacted in the FY2004 emergency

supplemental appropriation act.

Iraq Stabilization Assistance61

Of the total requested for non-DOD Iraq funding, roughly half — $1.6 billion

— was intended for so-called “stabilization” assistance. By entitling its effort

“stabilization” instead of “reconstruction,” the Administration appeared to be

emphasizing that the new funds were not going to be used for actual construction of

economic infrastructure, as nearly 40% of reconstruction funds from all spigots have

been employed previously. For all intents and purposes, however, these funds would

bolster many of the existing economic infrastructure programs currently being

conducted under the Iraq Relief and Reconstruction Fund (IRRF). They would also

provide continued support to the democratization and governance programs that,

along with health, education, and private sector assistance, currently account for

about 22% of all aid to Iraq. In the FY2007 Foreign Operations appropriations

request, the Administration has proposed an additional $749 million, mostly for

similar democratization and rule of law programs.62 The training and equipping of

security forces, once funded under the IRRF, and currently accounting for about 38%

of total aid to Iraq, are now supported under the DOD-managed Iraq Security Forces

Fund (ISFF).

The supplemental funding request chiefly appeared to address three major issues

of current concern to those implementing the reconstruction program:

Security. Reconstruction progress has been severely undermined by

the insurgency which has directly targeted key infrastructure for

Prepared by Curt Tarnoff, Specialist in Foreign Affairs.

The House, in H.R. 5522, reduced the FY2007 Iraq request to $522 million.

CRS-47

destruction. The supplemental proposed $287 million to help secure

oil, electricity, and water infrastructure.

Sustainability. As more large-scale construction projects have been

completed with U.S. assistance, there has been increasing concern

regarding the financial and technical capacity of Iraqis to maintain

them in the long run. The supplemental requested $355 million to

assist the Iraqis to operate, maintain, and sustain these projects. In

the past, this has been accomplished largely by providing training

and replacement parts.

Provincial Reconstruction Teams (PRTs). Following the example

established in Afghanistan, the State Department sought to set up at

least eight PRTs throughout Iraq, up from the three established in the

past few months. PRTs consist of officials from USAID, State, the

military, and other agencies who work with Iraqi local government

committees to identify economic and political development projects

that can be implemented with U.S. financing. While enabling aid

workers to escape the isolation of the “green zone” and expand

outreach to the provinces, they are also viewed as a way to improve

coordination of aid, especially of DOD-CERP funds and Statecontrolled funding. Reported concerns regarding the availability of

sufficient “volunteers” to staff the PRTs as well as questions

regarding the willingness of the U.S. military to divert personnel to

provide adequate security may hinder their planned development.

The Administration proposed $675 million to be disbursed by the

PRTs (a separate request of $400 million in PRT operational costs

is discussed above).

Table 12. Iraq Stabilization and State Department Operations

($s — millions)

FY2006

Supp.

Request

FY2006

Supp.

House

FY2006

Supp.

Enacted

FY2007

Regular

Request

Provincial reconstruction

teams/employment (ESF)b

$675.0

$675.0 $1,485.0 c

—

Infrastructure security (ESF)

$287.0

—

Infrastructure sustainment (ESF)

$355.0

$154.0

Nat’l capacity building-democracy &

rule of law (ESF)b

$172.0

$112.3

Prison construction/Protection of

judges (INCLE)

$107.7

$81.4

$104.4

$91.4

$1.0

Ministry of Finance technical

assistance (IFTA)

$13.0

—

Activity

(appropriation account)a

FY2006

Supp.

Senate

CRS-48

FY2006

Supp.

Request

FY2006

Supp.

House

FY2006

Supp.

Senate

FY2006

Supp.

Enacted

FY2007

Regular

Request

U.S. mission operations/Provincial

reconstruction teams (DCP)

$1,497.5

$1,324.1

$1,337.5

$1,327.3

$65.0

Special Inspector General & State IG

$25.3

—

USAID mission security and

operations (USAID/OE)d

$119.6

$61.6 d

$119.6

$101.0 d

—

$0.0

$1.3

$0.0

[$1.0]

—

Subtotal, Aid and State Department

Operations

$3,252.1

$2,995.7

$3,088.8

$3,043.0

$332.3

Criminal Justice System Legal Support

(DOJ)

$5.5

$3.0

$4.5

$4.0

—

Firearms Trafficking, explosives, arson

ops (BATFE)

$5.0

$4.1

$4.0

—

Iraq Threat Finance Cell and Treasury

Attache (DOT)

$1.8

—

$3,264.4

$3,004.6

$3,099.1

$3,052.8

$332.3

Activity

(appropriation account)a

U.S. Peace Institute

TOTAL, Iraq

Source: Department of State and CRS calculations based on H.Rept. 109-388, S.Rept. 109-230, and

H.Rept. 109-494, with modifications to reflect House and Senate floor amendments.

Note: Data in this table reflect ongoing and FY2007 proposed funding for programs the same as or

similar to those requested in the FY2006 supplemental. The TOTAL line does not represent total aid

or mission operations for Iraq. Excluded from this table is $32.7 million requested for FBI operations

in both Iraq and Afghanistan.

a. See Table 11 for listing of appropriation account acronyms.

b. In addition to new appropriations for these activities, the House bill directed that funds be

transferred from previous Iraq Relief and Reconstruction Fund (IRRF) appropriations for

Provincial Reconstruction Teams ($152 million) and for democracy and rule of law programs

($33.5 million). These amounts were the same as what the Administration had planned to spend

for these activities out of the IRRF account. The Senate bill directed that $104.5 million of ESF

for Iraq should be available for broad-based democracy programs in Iraq. The conference

agreement provides $50 million for democracy, rule of law, and reconciliation programs.

c. The $1.485 billion ESF total for Iraq includes funding for all Iraq stabilization ESF activities.

d. The House bill directed that $58 million be transferred from the IRRF to provide USAID mission

security in FY2007. The conference agreement combines amounts for USAID OE expenses in

Iraq, Afghanistan, and Sudan without specifying a total for each mission. The $101 million

figure for Iraq includes some amounts for Afghanistan and Sudan.

Like the FY2007 request, the FY2006 supplemental request would provide

significant funding to governance, democratization and rule of law programs at all

levels of government in Iraq. These efforts would include $125 million to help the

Iraqi ministries to improve their ability to operate, $37 million to assist the Iraqi

Special Tribunal that is investigating and trying Saddam Hussein and others, $100

million to construct correctional facilities, and $10 million for broad democracy

activities such as parliamentary and civil society development.

CRS-49

The proposed legislation would also amend the FY2004 supplemental to alter

the allocation of $18.4 billion that had been approved by Congress for each major

reconstruction sector — most recently by statute in September 2004. Periodically,

the allocations had been changed to the extent allowed by law without need for

further legislation. The amendment proposed would give the Administration greater

flexibility by aligning the legislated allocations with current needs, by making

remaining funds available for four years from the current expiration date of end of

FY2006, and by allowing any obligated funds to be reobligated regardless of sectoral

allocation restrictions.

Congressional Action. As enacted, H.R. 4939 provides $1.59 billion for

the Iraq stabilization aid, slightly higher than the House-passed level, but about $20

million less than the request and the Senate. Within the total, conferees direct that

$50 million support USAID’s Iraq Community Action Program, of which $5 million

is transferred to the Marla Ruzicka Iraqi War Victims Fund. The Senate measure had

allocated $75 million and $10 million, respectively, for these two activities. The

final bill further allocates $50 million for democracy, rule of law, and reconciliation

programs and identifies seven organizations that will administer the funds. Through

an amendment by Senator Kennedy, the Senate-passed measure had directed that

$104.5 million should be used for broad-based democracy programs, managed by

non-governmental organizations in Iraq.

The enacted bill also extends the expiration date for use of the IRRF by one year

to the end of FY2007 instead of to the end of FY2010, as requested. Conferees,

however, did not include a provision described by the House Appropriations

Committee as an effort to bring the Iraq program into the structure of a more

traditional foreign aid program. The House-passed measure had included language

that would transfer from the IRRF into ESF $185.5 million. This amount was equal

to that of IRRF funding previously allocated to projects, such as those supporting the

PRTs and Ministerial Capacity Development, which also were to be funded with new

FY2006 supplemental appropriations.

In earlier congressional action, the House-passed bill included nearly full

funding of the request, reduced primarily by an amendment offered by Representative

Burton that redirected $26.3 million from Iraq for prison construction and protection

of judges in order to increase funding for Colombia’s counter-narcotics programs.

In addition, H.R. 4939, as passed in the House, rejected the proposed re-allocation

of funds within the IRRF that would have allowed the Administration greater future

flexibility to move funds between sectors. In report language, the Committee

directed that no new funding for the PRTs is to be permitted until an assessment of

pilot PRTs, a program plan, and other reporting requirements are met by the

Department of State. The Senate bill fully funded the request at $1.6 billion.

Afghanistan63

The FY2006 supplemental request included several provisions intended to

continue U.S. efforts to stabilize Afghanistan and continue security and economic

Prepared by Kenneth Katzman, Specialist in Middle Eastern Affairs.

CRS-50

reconstruction efforts. The supplemental was in addition to about $877 million in

total foreign aid previously appropriated for Afghanistan in FY2006.

The

supplemental request further followed the Administration proposal for about $1.1

billion in FY2007 aid funds. Key elements of the supplemental request were:

$16 million for FY2007 security requirements for USAID operations

in Afghanistan;

$50 million for the State Department for security costs of protecting

U.S. facilities and personnel. This would more than double the

amount already appropriated in regular FY2006 appropriations;

$3.4 million in refugee assistance to support shelter and ensure food

supplies to Afghan refugees returning from Pakistan. UNHCR

expects that about 730,000 Afghans will return in FY2006, nearly

twice as many as previously estimated. This would augment $36.8

million already allocated to help repatriate Afghan refugees this

year;

$11 million as a subsidy appropriation that would cover the costs of

cancelling roughly $110 million in debt owed by Afghanistan to the

United States. If not provided in the supplemental spending

measure, the Administration said that it would be necessary to

reallocate existing foreign aid funds for Afghanistan in order to

provide the debt relief; and

$32 million in ESF for emergency power sector projects needed for

a larger “Northeast Transmission Project” which would supply

electricity to Kabul and other northern cities and reduce

Afghanistan’s need to import diesel fuel.

Table 13. Afghanistan Aid Supplemental

($s — millions)

FY2006 FY2006 FY2006 FY2006 FY2006 FY2007

Activity

FY2005 Regular Supp.

Supp.

Supp. Regular

(appropriation account)a Actual Enacted Request House Senate Conf. Request

Infrastructure aid (ESF)

$379.2

$145.0

$32.0

$5.0

$32.0

$230.0

—

$11.0

$0.0

$11.0

—

Afghan refugees (MRA)

$47.1

$36.8

$3.4

$7.4

$3.4

$38.0

U.S. mission security

(DCP)

$90.5

$47.0

$50.1

$82.0

USAID mission security

(OE)

$37.3

$9.7

$16.0

$0.0

$16.0

$13.3

Total

$554.1

$238.5

$112.5

$58.5

$116.5

$96.5

$363.3

Debt relief

CRS-51

Source: Department of State and CRS calculations based on H.Rept. 109-388, S.Rept. 109-230, and

H.Rept. 109-494, with modifications to reflect House and Senate floor amendments.

Note: Data in this table reflect ongoing and FY2007 proposed funding for programs the same as or

similar to those requested in the FY2006 supplemental. The total line does not represent total aid or

mission operations for Afghanistan. Excluded from this table is $32.7 million requested for FBI

operations in both Iraq and Afghanistan.

a. See Table 11 for listing of appropriation account acronyms.

b. USAID mission security funds are included in a total appropriation of $101 million available for

missions in Iraq, Afghanistan, and Sudan.

In addition to proposed foreign aid and diplomatic/security resources, the

Administration further sought substantial amounts of Defense Department funds for

security force training and counter-narcotics activities. The DOD portion of the

supplemental included $2.2 billion for an “Afghan Security Forces Fund” to continue

the effort to equip and train the 35,000-member Afghan National Army (ANA) and

55,000-person Afghan National Police (ANP). The ANP is near its target size, but

the building of the ANA has progressed more slowly than expected and it is about

half its target size. In addition, $192.8 million would support U.S. military assistance

to U.S. and Afghan counter-narcotics efforts in Afghanistan. The Defense

Department supports the effort by transporting U.S. and Afghan counter-narcotics

teams, providing search and rescue for them, and other support. Prior to FY2005,

both the security force assistance and counter-narcotics programs were funded out

of the State Department’s budget, not DOD.

Congressional Action. H.R. 4939, as enacted, fully funds the request for

State Department mission security and assistance for Afghanistan. Conferees,

however, did not specifically allocate USAID mission security funds among Iraq,

Afghanistan, and Sudan. Because the $101 million for all three operations is well

below the $141.6 million request, it is likely that funding for mission security in

Afghanistan will fall below the $19.6 million request.

In earlier actions, the Senate-passed measure funded Afghanistan aid and

operations activities at the proposed levels while the House bill proposed about half

the requested level. The House measure provided $5 million for the Northwest

Kabul Power Plant, but deferred consideration of $27 million for the Northeast

Transmission system. The House also deferred action on $11 million for cancelling

Afghanistan’s debt owed to the United States and on $16 million for USAID mission

security in the country. In reporting the bill, the House Appropriations Committee

noted that the regular FY2006 appropriation provided $205 million for infrastructure

and other reconstruction that cannot be obligated until Secretary Rice certifies that

Afghanistan is fully cooperating with poppy eradication and interdiction efforts.

Since the certification had not been issued, the Committee felt that additional funds

should not be provided until it was certain that existing appropriations will be made

available.

On related Afghan funding matters, conferees provide $1.91 billion out of DOD

funds for Afghan security force training, the same as passed the Senate. This is

higher than the House level of $1.85 billion, but below the $2.2 billion request. The

enacted measure also cuts DOD funding for Afghan counter-narcotics programs to

CRS-52

$150.5 million, well below the $193 million request, and slightly less than House and

Senate levels of $157 million and $154.6 million, respectively.

Iran64

The FY2006 supplemental request sought significant increases in funding for

pro-democracy activists in Iran. Although characterized as support for “democracy

promotion,” the funding increase appeared to some to reflect a step towards pursuing

a “regime change” option in U.S. policy toward Iran. The request appeared to

indicate that the Administration believed that international diplomacy with Iran to

curb its nuclear program was faltering, and that the risks of angering Iran’s

government had been reduced.

The United States began funding Iranian pro-democracy groups in FY2004. The

Foreign Operations appropriation for FY2004 (P.L. 108-199) earmarked up to $1.5

million for “grants to educational, humanitarian and non-governmental organizations

and individuals inside Iran to support the advancement of democracy and human

rights in Iran.” The State Department’s Bureau of Democracy and Labor (DRL) gave

$1 million of those funds to a U.S.-based organization, the Iran Human Rights

Documentation Cent

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