# Defense: FY2007 Authorization and Appropriations > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3ARL33405 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** October 19, 2006 - **Citation:** RL33405 ## Text Defense: FY2007 Authorization and Appropriations (name redacted) Specialist in Defense Policy and Budgets October 19, 2006 Congressional Research Service 7-.... www.crs.gov RL33405 CRS Report for Congress Prepared for Members and Committees of Congress Defense: FY2007 Authorization and Appropriations Summary In the week before Congress adjourned for recess on September 30, the House and Senate passed conference agreements on both the FY2007 national defense authorization bill, H.R. 5122, and the FY2007 defense appropriations bill, H.R. 5631. The President signed the appropriations bill into law, P.L. 109-289, on September 29, and he signed the authorization bill into law, P.L. 109364, on October 17. The conference agreement on the appropriations bill provides $436.6 billion for defense, including $366.6 billion in regular appropriations and $70 billion in additional appropriations, mainly as a “bridge fund” for operations abroad. The total of regular appropriations is $4 billion below the Administration request. The Senate-passed bill provided $9 billion less than the request, which freed that much to add to non-defense appropriations bills. The White House , however, threatened to veto the defense bill if reduced defense by more than $4 billion. In action on other key issues, the appropriations bill– • rejected the Administration proposal to terminate C-17 cargo aircraft production after FY2007 and provided funds for 22 aircraft; • approved a Navy proposal to provide partial funding for 2 DDG-1000 destroyers—formerly the DD(X)—rather than providing full funding for just one ship as in the House bill; • included funds as requested for one T-AKE cargo ship and for 2 Littoral Combat Ships (LCS), rather than eliminating T-AKE funds and procuring only one LCS, as in the Senate bill; and slowed F-35 Joint Strike Fighter procurement, with funds to buy 2 rather than the requested 5 aircraft, but did not eliminate FY2007 aircraft procurement funds as had the Senate bill. • On key defense policy issues, the authorization bill • • provided a 2.2% pay raise, as requested, rather than or a 2.7% raise as in the House bill; approved access for all reservists, except Federal employees with Federal health insurance, to the DOD TRICARE medical insurance program with a premium of 28% of the cost of the program; • rejected House language permitting chaplains to use denominational prayers according to each chaplain’s conscience, but, instead, in report language, required the Army and Navy to rescind recent directives on prayer and return to earlier policies; • agreed to a substantially amended Senate change in the Buy American Act to allow use of foreign-supplied specialty metals in U.S.-built systems; and did not agree to a Senate provision giving the head of the National Guard fourstar rank and the authority to make independent budget requests, but assigned these issues to a commission on the reserves. • Congressional Research Service Defense: FY2007 Authorization and Appropriations Contents Most Recent Developments.........................................................................................................1 Status of Legislation....................................................................................................................2 Facts and Figures: Congressional Action on the FY2007 Defense Budget Request.......................3 Overview of the Administration Request .....................................................................................9 Highlights of the FY2007 Defense Budget Request ...............................................................9 Key Issues in Congress ............................................................................................................. 14 Congressional Action on Major Issues....................................................................................... 19 Bill-by-Bill Synopsis of Congressional Action to Date ........................................................ 19 Congressional Budget Resolution.................................................................................. 19 FY2007 National Defense Authorization ....................................................................... 20 FY2007 Defense Appropriations ................................................................................... 20 FY2007 Defense Authorization—Highlights of the House Armed Services Committee Bill ................................................................................................................ 20 FY2007 Defense Authorization—Highlights of House Floor Action .................................... 25 FY2007 Defense Authorization—Highlights of the Senate Armed Services Committee Bill ................................................................................................................ 26 FY2007 Defense Authorization—Highlights of Senate Floor Action.................................... 30 House Appropriations Committee 302(b) Allocations .......................................................... 35 FY2007 Defense Appropriations—Highlights of the House Appropriations Committee Bill ................................................................................................................ 36 FY2007 Defense Appropriations—Highlights of House Floor Action .................................. 38 Senate Appropriations Committee 302(b) Allocations.......................................................... 39 FY2007 Defense Appropriations—Highlights of the Senate Appropriations Committee Bill ................................................................................................................ 40 Funding Cuts and Caps on Discretionary Spending and on Emergency Spending........... 41 Other Issues in the Senate Defense Appropriations Bill ................................................. 42 FY2007 Defense Appropriations—Highlights of Senate Floor Action.................................. 44 FY2007 Defense Appropriations—Highlights of the Conference Agreement ....................... 50 FY2007 Defense Authorization—Highlights of the Conference Agreement ......................... 53 Figures Figure 1. DOD Discretionary Budget Authority, FY2000-FY2011, Excluding Supplementals ....................................................................................................... 11 Tables Table 1. Status of FY2007 Defense Authorization, H.R. 5122, S. 2766 ........................................2 Table 2. Status of FY2007 Defense Appropriations, H.R. 5631 ....................................................2 Table 3. FY2007 Department of Defense Appropriations, House and Senate Action by Bill and Title............................................................................................................................4 Congressional Research Service Defense: FY2007 Authorization and Appropriations Table 4. FY2007 National Defense Authorization, House and Senate Action by Title, H.R. 5122, S. 2766...................................................................................................................6 Table 5. Congressional Budget Resolution, Recommended National Defense Budget Function Totals ............................................................................................................7 Table 6. Administration Request for National Defense for FY2007, Budget Authority, Discretionary and Mandatory ...................................................................................................8 Table 7. House Floor Action on Selected Amendments: Defense Authorization Bill, H.R. 5122................................................................................................. 26 Table 8. Senate Floor Action on Selected Amendments: Defense Authorization Bill, S. 2766..................................................................................................... 31 Table 9. Initial House 302(b) Subcommittee Allocations............................................................ 36 Table 10. Initial vs. Latest Senate 302(b) Subcommittee Allocations.......................................... 40 Table 11. Senate Floor Action on Selected Amendments: Defense Appropriations Bill, H.R. 5631............................................................................................... 47 Table 12. Side-by-Side Comparison of House, Senate, and Conference Action on Major Policy Issues in the FY2007 Defense Authorization Bill, H.R. 1522/S. 2766........................... 55 Table A-1. Administration Projection of National Defense Funding, FY2007-FY2011 ............... 60 Table A-2. Proposed Missile Defense Funding, FY2007-FY2011 .............................................. 61 Table A-3. Authorized and Actual Active Duty End-Strength, FY2004-FY2007......................... 63 Table A-4. House and Senate Action on Selected Weapon Programs: Authorization ................... 64 Table A-5. House and Senate Action on Selected Weapon Programs: Appropriations ................. 69 Table A-6. Emergency Funding, Authorization and Appropriations............................................ 75 Table A-7. Appropriation of Emergency Funds for Procurement: Line Item Detail..................... 76 Appendixes Appendix. Additional Tables ..................................................................................................... 60 Contacts Author Contact Information ...................................................................................................... 83 Key Policy Staff........................................................................................................................ 84 Congressional Research Service Defense: FY2007 Authorization and Appropriations Most Recent Developments On September 26, 2006, by a vote of 394-22, the House approved a conference agreement on the FY2007 defense appropriations bill, H.R. 5631. The Senate approved the agreement on September 29 by a vote of 100-0, and the President signed the bill into law, P.L. 109-289, on the same day. The bill includes a continuing resolution to run the rest of the government through November 17, after Congress returns from its election recess. Also on September 29, the House approved a conference agreement on the FY2007 national defense authorization bill, H.R. 5122 by a vote of 398-23. The Senate approved the agreement on September 30 by unanimous consent. The President signed the authorization bill into law, P.L. 109-364, on October 17. The conference agreement on the appropriations bill provides $436.6 billion in new appropriations for defense, including $366.6 billion1 in regular appropriations and $70 billion in additional appropriations as a “bridge fund” for operations abroad and for some other purposes. The total of regular appropriations is $4 billion below the Administration request. The total amount in the bill was a key issue. The Senate-passed bill provided $9 billion less than the request, which, in turn, allowed increases above the Administration request in non-defense appropriations while remaining within the budget resolution cap on total discretionary spending. But the White House threatened to veto the bill if it trimmed defense by more than $4 billion as a means of providing additional funds for non-security-related programs. The $70 billion in additional funds approved in the conference agreement is $20 billion higher than the $50 billion that each appropriations committee originally provided. In floor action, the Senate had added $16.2 billion in emergency funding. Of that amount, $13.1 billion was added by a Stevens-Inouye amendment to provide funds for the Army and Marine Corps to repair, upgrade, and replace equipment used in overseas operations in Iraq and Afghanistan. The Senate also added $1.8 billion for border security, $700 million for counter drug operations in Afghanistan, $200 million for enhanced intelligence to track down Osama bin Laden, $65 million for Predator UAVs, $20 million for peacekeepers in Sudan, and $175 million for wildfire suppression. In the conference agreement, the $20 billion added to the original $50 billion, is mainly to reset Army and Marine units. In all, according to the House Appropriations Committee, the bill provides over $17.1 billion to fully fund Army and $5.8 billion to fully fund Marine Corps reset costs. The agreement also provides $100 million for Afghan counter-drug operations and $200 million for wildfire suppression, but does not include the other Senate additions. Key issues resolved in the authorization conference agreement included whether, as in the House bill, to alter DOD provisions that require non-denominational prayer, whether, as in the Senate bill, to promote the head of the National Guard to four-star rank, and whether to approve multiyear procurement of the F-22 fighter aircraft. The authorization bill also approves Senate amendments to the Insurrection Act to allow the President substantially expanded authority to used the armed forces in response to domestic emergencies, allows all off-duty reservists, except Federal employees with Federal health insurance, to enroll in the TRICARE health insurance 1 An additional $11.2 billion is counted as part of the bill under budgetary rules agreed to by the House and Senate Budget Committees, the Congressional Budget Office, and the Office of Management and Budget. This is the cost of contributions DOD must make to the military retirement fund to cover the actuarially determined cost of future 65-andover retiree medical benefits for current uniformed personnel. These contributions are considered to be permanent appropriations which count against caps on discretionary spending. Congressional Research Service 1 Defense: FY2007 Authorization and Appropriations program with a premium or 28% of the program’s cost, and provides expanded authority for the Defense Department to use its funds for security assistance to foreign governments. Status of Legislation The House and Senate have reached final agreements on the FY2007 defense appropriations bill, and on the FY2007 national defense authorization bill. Tables 1 and 2 track congressional action on those measures. Table 1. Status of FY2007 Defense Authorization, H.R. 5122, S. 2766 Full Committee Markup House Senate 5/3/06 5/4/06 House Report House Passage Senate Report Senate Passage Conf. Report H.Rept. 109-452 5/5/06 5/11/06 396-31 S.Rept. 109-254 5/9/06 6/22/06 96-0 H.Rept. 109-702 9/29/06 Conference Report Approval House Senate 9/29/06 398-23 9/30/06 U.C. Public Law P.L. 109-364 10/17/06 Table 2. Status of FY2007 Defense Appropriations, H.R. 5631 Subcommittee Markup House Senate 6/7/06 7/13/06 House Report House Passage Senate Report Senate Passage Conf. Report H.Rept. 109-504 6/16/06 6/20/06 407-19 S.Rept. 109-292 7/25/06 9/7/06 98-0 H.Rept. 109-676 9/25/06 Conference Report Approval House Senate 9/26/06 394-22 9/29/06 100-0 Public Law P.L. 109-289 9/29/06 Earlier in the year Congress began, but never completed, action on the annual congressional budget resolution. The Senate passed its version of the resolution, S.Con.Res. 83, on March 16. The House Budget Committee reported its version of the resolution, H.Con.Res. 376, on March 31, and floor action began on April 6. But the leadership halted debate in the face of internal Republican opposition to the measure. On May 18, a compromise was announced, and the House approved the measure by a vote of 218-210. There has been no conference agreement on the budget resolution, however. In the absence of an agreement, on May 18, the House also approved a measure “deeming” the provisions of its version of the budget resolution, including a cap of $872.8 billion on total discretionary spending, to be in effect for purposes of subsequent House action. The “deeming” resolution was included in the rule (H.Res. 818) governing debate on the FY2007 Interior and Environment appropriations bill (H.R. 5386). The Senate attached a “deeming” measure to the FY2006 supplemental appropriations bill (H.R. 4939). In action on related legislation, the House passed the Military Quality of Life/Veterans Affairs appropriations bill, H.R. 5385, on May 19. The bill provides $58 billion for the Department of Defense, including funds for military construction and family housing, for some military personnel accounts, for some military operation and maintenance accounts, and for the defense health program. In the Senate, the military personnel, O&M, and defense health funds are provided in the regular defense appropriations bill, and the military construction and family Congressional Research Service 2 Defense: FY2007 Authorization and Appropriations housing funds are provided in the Military Construction/Veterans Affairs appropriations bill. That bill, also H.R. 5385, was reported by the Senate Appropriations Committee on July 20, but has not been taken up on the Senate floor. As reported, it provides $16.3 billion for Department of Defense military construction and family housing. Facts and Figures: Congressional Action on the FY2007 Defense Budget Request The following series of tables show congressional action on defense budget. Additional details will be added as congressional action proceeds. Table 3 shows congressional action on the FY2007 appropriations bills that provide funding for the Department of Defense. These are (1) the defense appropriations bills in the House and the Senate (H.R. 5631) and (2) the military quality of life/Veterans Affairs appropriations bill in the House and the military construction/VA bill in the Senate (both H.R. 5385). The House military quality of life/VA appropriations bill includes about $42 billion for Military Personnel and for Operation and Maintenance accounts that are provided in the defense appropriations bill in the Senate. Table 3 shows the total in these accounts by bill. The conference agreement on the defense appropriation bill this year follows the organization of the House-passed bill – last year, the conference followed the Senate. So the totals shown in Table 3 for the conference agreement do not include amounts for military personnel, for operation and maintenance, and for defense health that will be provided in the military quality of live/VA appropriations bill, when it is completed. Please note that while this table shows all appropriations for the Department of Defense, it does not show funding provided in other appropriations bills for defense-related activities of other agencies. The largest amount of non-DOD defense-related funding is for Department of Energy nuclear weapons programs, for which the Administration has requested about $17 billion in FY2007. Funding for DOE defense programs is provided in the annual energy and water appropriations bill (H.R. 5427). Other amounts for national defense not show here include FBI counterintelligence activities financed in appropriations for the Department of Justice and smaller amounts in other bills. Congressional Research Service 3 Table 3. FY2007 Department of Defense Appropriations, House and Senate Action by Bill and Title (budget authority in billions of dollars) FY2006 Enacted House Request House Passed House Versus Request Senate Request Senate Passed Senate Versus Request Military Personnel 96.0 86.1 84.9 -1.2 99.6 99.0 -0.6 86.4 +0.3 Operation and Maintenance 122.4 122.4 120.5 -1.9 130.1 126.3 -3.8 119.8 -2.7 Procurement 75.8 82.9 81.8 -1.1 82.9 81.0 -1.9 80.9 -2.0 RDT&E 71.4 73.2 75.3 +2.2 73.2 73.0 -0.2 75.7 +2.6 Revolving and Management Funds 2.2 2.4 2.4 — 2.4 2.0 -0.4 2.4 — Other Defense Programsa 22.5 2.4 2.4 — 23.4 23.9 0.4 2.5 +0.1 Related Agencies 0.7 0.9 0.9 — 0.9 0.9 — 0.9 — General Provisions -2.2 0.1 -1.9 -2.0 0.1 -2.5 -2.6 -2.2 -2.2 388.9 370.4 366.3 -4.1 412.6 403.6 -9.0 366.4 -4.0 50.0 50.0 50.0 — 50.0 66.2 16.2 70.0 +20.0 438.9 420.4 416.3 -4.1 462.6 469.8 7.2 436.4 +16.0 10.7 11.2 11.2 — 11.2 11.2 — 11.2 +0.1 Total Regular w/ Accrual 399.6 381.6 377.5 -4.1 423.8 414.8 -9.0 377.6 -4.0 Total w/ War and Accrual 449.6 431.6 427.5 -4.1 473.8 481.0 7.2 447.6 +16.0 Conf. Conf Versus Request Department of Defense Appropriations Bill, H.R. 5631 Total Regular Appropriations Additional Appropriations for War Total with Additional for War 65+ Retiree Medical Accrualb DOD Programs in Military Quality of Life/VA and Military Construction/VA Appropriations Bills, H.R. 5385 Military Construction 9.6 12.6 11.9 -0.7 12.6 12.3 -0.3 — — Family Housing 4.5 4.1 4.0 -0.1 4.1 4.0 -0.1 — — Basic Allowance for Housing — 13.5 13.5 — — — — — — Facilities Sustainment — 6.2 6.2 — — — — — — Environmental Restoration — 1.4 1.4 — — — — — — Defense Health Program — 21.0 21.0 — — — — — — 14.0 58.9 58.1 -0.8 16.7 16.3 -0.4 — — Total Department of Defense CRS-4 FY2006 Enacted House Request House Passed House Versus Request Senate Request Senate Passed Senate Versus Request Conf. Conf Versus Request Grand Total in Defense and Military Construction Appropriations Bills Total Regular Appropriations 413.6 440.5 435.6 -4.9 440.5 431.1 -9.4 — — Total With Additional for War 463.6 490.5 485.6 -4.9 490.5 497.3 7.2 — — FY2006 Supplemental, June 2006 67.7 — — — — — — — — Total With Supplemental 531.3 — — — — — — — — Sources: Office of Management and Budget, House and Senate reports on respective bills, CRS and CBO for Senate floor action; conference report on the defense appropriations bill, H.Rept. 109-676. Note: Totals may not add due to rounding. a. Other Defense Programs include Defense Health, Drug Interdiction, Chemical Weapons Demilitarization, and DOD Inspector General in the Senate bill and all but Defense Health in the House bill. In DOD briefing charts, Chemical Weapons Demilitarization is shown in Procurement and the other accounts are shown in Operation and Maintenance. b. Annual funding for accrual payments by DOD for age-65-and-over Medicare-eligible military retirees is considered a permanent appropriation. The amounts to be contributed to military retirement funds for the cost of these benefits are not technically subject to annual appropriations, but they are scored as DOD discretionary funds. As such, they count against the defense subcommittee’s 302(b) allocation and against the total amount of discretionary funds available for appropriation. CRS-5 Defense: FY2007 Authorization and Appropriations Table 4 shows congressional action on the House and Senate versions of the FY2007 defense authorization bill by title. It is important to note that the authorization bill does not directly provide funds for most defense programs (the exception being some mandatory programs). Rather, it authorizes the appropriation of funds. In the appropriations bills, Congress may provide more than, less than, or the same as the amounts authorized to be appropriated, and it may provide funds for programs never specifically mentioned in authorization bills or associated report language. Table 4. FY2007 National Defense Authorization, House and Senate Action by Title, H.R. 5122, S. 2766 (budget authority in billions of dollars) Request HousePassed House Versus Request Senate Passed Senate Versus Request Military Personnel 110.8 109.8 -1.0 111.9 +1.1 110.1 -0.7 Operation & Maintenance 130.1 129.8 -0.3 129.5 -0.6 129.0 -1.1 Procurement 82.9 84.6 +1.7 85.7 +2.8 84.2 +1.3 RDT&E 73.2 74.1 +0.9 74.3 +1.1 73.6 +0.5 Military Construction 12.6 12.8 +0.2 13.2 +0.6 13.0 +0.4 Family Housing 4.1 4.1 -0.0 4.1 -0.0 4.1 -0.0 Revolving & Management 2.4 2.5 +0.1 2.4 0.0 2.4 0.0 Other Defense Programsa 23.4 23.6 +0.2 23.4 -0.1 23.8 +0.4 Other Military Discretionary 0.0 0.1 +0.1 0.1 +0.1 0.1 +0.1 Mandatory Programs 1.9 1.9 -0.0 4.7 +2.7 1.9 -0.0 Rescissions/Inflation Savings 0.0 -1.6 -1.6 -1.0 -1.0 -0.8 -0.8 441.5 441.7 +0.2 448.3 +6.8 441.5 +0.0 Atomic Energy Defense Activities 17.0 16.5 -0.5 16.4 -0.6 16.5 -0.5 Other Defense-Related Activities 4.8 4.7 -0.0 4.7 -0.0 4.7 -0.0 Total National Defense 463.3 462.9 -0.4 469.4 +6.2 462.8 -0.5 Emergency Authorization 50.0 50.0 0.0 50.0 0.0 70.0 +20.0 Total Including Emergency 513.3 512.9 -0.4 519.4 +6.2 532.8 +19.5 Total Department of Defense Conf. Conf. Versus Request Source: Office of Management and Budget; H.Rept. 109-452, S.Rept. 109-254; H.Rept. 109-702. Note: Totals may not add due to rounding. a. Other Defense Programs include Defense Health Program; Drug Interdiction; Chemical Weapons Demilitarization; and Office of the Inspector General. Congressional Research Service 6 Defense: FY2007 Authorization and Appropriations Table 5 shows congressional recommendations for defense budget authority and outlays in versions of the annual budget resolution—S.Con.Res. 83 as passed by the Senate and H.Con.Res. 376 as passed by the House. These amounts are not binding on the appropriations committees, however. Table 5. Congressional Budget Resolution, Recommended National Defense Budget Function Totals (billions of dollars) FY2007a FY2008 FY2009 FY2010 FY2011 Administration Request Budget Authority 513.0 485.2 505.3 515.3 526.1 Outlays 527.4 494.4 494.3 507.4 522.7 Senate Budget Committee Reported Budget Authority 545.4 481.7 501.8 511.9 522.8 Outlays 550.5 514.8 508.1 511.2 521.9 Budget Authority 549.4 483.0 502.8 512.9 523.9 Outlays 554.5 516.0 509.1 512.2 523.0 Senate Passed House Budget Committee Reported Budget Authority 512.9 484.7 504.8 514.9 525.8 Outlays 534.9 505.5 505.9 512.6 524.9 Sources: Office of Management and Budget; S.Con.Res. 83; H.Con.Res. 376. a. For FY2007, the Administration request includes $50 billion for a planned budget amendment for overseas operations. The Senate recommended levels for FY2007 assume $82 billion for overseas operations. The House committee-reported level assumes $50 billion, as in the request. Table 6 shows the Administration’s FY2007 national defense request, by appropriations title, separating discretionary and mandatory amounts. The total for FY2006 includes a $70 billion placeholder for supplemental appropriations. The final FY2006 supplemental appropriations bill, however, H.R. 4239, which was signed into law on June 15, P.L. 109-234, provides $67.7 billion for national defense programs, $2.3 billion less. The total for FY2007 includes a $50 billion placeholder for a budget amendment for overseas operations. If the $50 billion placeholder is removed, the total discretionary request for the Department of Defense is $439.3 billion. This was the amount most often referred to in DOD press releases as the FY2007 Department of Defense request when the budget was released in February. Congressional Research Service 7 Defense: FY2007 Authorization and Appropriations Table 6. Administration Request for National Defense for FY2007, Budget Authority, Discretionary and Mandatory (billions of dollars) 2005 Actual 2006 Estimate 2007 Request Military personnel 119.7 113.5 110.8 Operation and maintenance 178.6 177.7 152.0 Procurement 96.6 86.2 84.2 — 70.0 50.0 Research, development, test and evaluation 68.8 71.0 73.2 Military construction 7.3 8.9 12.6 Family housing 4.1 4.4 4.1 Revolving, management, and trust funds and other 3.8 4.8 2.4 478.9 536.6 489.3 Department of Energy defense-related activities 17.0 16.2 15.8 Formerly utilized sites remedial action 0.2 0.1 0.1 Defense nuclear facilities safety board 0.0 0.0 0.0 17.2 16.4 16.0 Federal Bureau of Investigation 1.2 2.3 2.3 Other discretionary programs 2.4 3.0 2.2 3.7 5.3 4.5 499.8 558.3 509.7 Concurrent receipt accrual payments 1.5 2.3 2.4 Research, development, test, and evaluation — — 0.3 Revolving, trust and other DoD mandatory 5.0 0.8 0.8 Offsetting receipts -1.5 -1.6 -1.5 5.0 1.5 1.9 0.7 1.7 1.0 Radiation exposure compensation trust fund 0.1 0.1 0.0 Other mandatory programs 0.2 0.2 0.3 0.3 0.3 0.3 National Defense Discretionary (Function 050) Department of Defense—Military Discretionary (Subfunction 051) Anticipated funding for the Global War on Terrora Total, Department of Defense—Military Discretionary Atomic Energy Defense Activities (Subfunction 053) Total, Atomic Energy Defense Activities Discretionary Defense-Related Activities (Subfunction 054) Total, Defense-Related Activities Discretionary Total, National Defense Discretionary National Defense Mandatory (Function 050) Department of Defense—Military Mandatory (Subfunction 051) Total, Department of Defense—Military Mandatory Atomic Energy Defense Activities Mandatory (Subfunction 053) Energy employees occupational illness compensation program and other Defense-Related Activities Mandatory (Subfunction 054) Total, Defense-Related Activities Mandatory Congressional Research Service 8 Defense: FY2007 Authorization and Appropriations 2005 Actual 2006 Estimate 2007 Request 6.0 3.6 3.3 505.8 561.8 513.0 Total, National Defense Mandatory Total, National Defense (Function 050) Source: Office of Management and Budget, Analytical Perspectives: Budget of the U.S. Government, FY2007, Table 27-1. a. These are placeholder amounts for a request for supplemental appropriations for FY2006 and for a budget amendment for FY2007, not yet submitted. The final FY2006 supplemental provided $67.7 billion for national defense programs. Overview of the Administration Request On February 6, 2006, the White House formally released its FY2007 federal budget request to Congress. The request included $513.0 billion in new budget authority for national defense in FY2007, of which $50 billion was a placeholder for a later budget amendment to cover costs of overseas military operations, $441.2 billion was for regular operations of the Department of Defense (DOD), $17.0 billion was for Department of Energy (DOE) nuclear weapons programs, and $4.8 billion was for defense-related activities of other agencies (see Table 6 above). The $50 billion placeholder is not intended to cover the full costs of military operations in Iraq, Afghanistan, and elsewhere in FY2007. Rather, it is a “bridge fund” to cover costs in the initial months of FY2007. Remaining costs for the rest of the year will, if Congress agrees, be covered by a later supplemental appropriations bill.2 Along with the FY2007 budget request, the Pentagon released the results of the congressionallymandated Quadrennial Defense Review (QDR) of defense policy. The year-long QDR was not a budget exercise, but it identified the kinds of military capabilities that senior DOD officials believe should be emphasized in years to come, and it endorsed a few budget decisions that were reflected in the FY2007 DOD request to Congress. Highlights of the FY2007 Defense Budget Request Aspects of the Defense Department’s FY2007 request that appear to be of most immediate concern to Congress include: 2 On its own initiative, Congress provided a $25 billion bridge fund in the FY2005 defense appropriations act and a $50 billion bridge fund in FY2006. In each year, the White House later requested additional supplemental funds. In February 2006, the Defense Department requested $67 billion for overseas military operations in FY2006 in addition to the $50 billion appropriated last fall and $5 billion for DOD for domestic disaster costs. In the FY2006 supplemental appropriations act, H.R. 4939, P.L. 109-234, Congress provided $66.0 billion for overseas operations and $1.7 billion for DOD domestic disaster relief and repair. For a full discussion of the FY2006 supplemental, see CRS Report RL33298, FY2006 Supplemental Appropriations: Iraq and Other International Activities; Additional Hurricane Katrina Relief, by (name redacted) et al. Congressional Research Service 9 Defense: FY2007 Authorization and Appropriations (1) The Administration continues to request large amounts for Iraq and Afghanistan through “additional” or “emergency supplemental” appropriations not subject to limits on total discretionary federal spending and not subject to the full congressional authorization and appropriations review process In the FY2007 budget, the Administration has, for the first time, requested part of the funding to carry on military operations in Iraq and Afghanistan before the start of the fiscal year in the form of a $50 billion budget amendment to the FY2007 request. In this, the Administration has followed Congress’s lead—Congress provided a “bridge fund” of $25 billion for Iraq and Afghanistan in the FY2005 defense appropriations bill and of $50 billion in FY2006. By submitting a budget amendment, the Administration gains a more direct and formal voice in proposing how to allocate the additional funds. The Administration will continue, however, to request more additional funding in an emergency supplemental appropriations bill to be submitted next year. Both the “bridge fund” and later supplemental appropriations will be requested over and above proposed limits on overall discretionary spending. The key point remains this: Either in the form of a bridge fund or of emergency supplemental appropriations, the Administration is requesting that additional war funding not count against restrictive caps on regular annual defense and non-defense appropriations. War expenditures, however, have become a very large part of total annual defense spending, and, for that matter, of total defense and non-defense appropriations. For FY2006, Congress approved a $50 billion bridge fund for war costs last fall, and, in June of 2006, it approved additional supplemental appropriations of $66 billion, for a total of $116 billion. A few comparisons may help put this amount into perspective. • Regular DOD appropriations for FY2006 were $411 billion, so the $116 billion for war increases defense funding by 28%. • In last year’s budget resolution, the FY2006 cap on total “non-emergency” appropriations, both for defense and for non-defense programs, was $843 billion, which was subsequently trimmed by 1% to $835 billion. The $116 billion for war adds 14% to federal discretionary funding. • At the end of last year’s budget cycle, Congress imposed an across-the-board cut of 1% in all appropriations bills, which trimmed federal spending by $8.4 billion, 7% of the amount it is providing for war costs. An equally important point is that DOD requests for “additional” or “emergency” war appropriations are not subject to nearly the extent of review that Congress exercises over regular defense spending. The Administration decision to submit a budget amendment for a bridge fund is, at most, only a limited step in the direction of greater oversight. The amendment has not been submitted in advance of House action on the FY2007 defense authorization bill. Moreover, neither supplemental appropriations requests nor budget amendments are supported by the kind of detailed budget justification material that Congress expects to be provided with regular DOD funding requests. In part because of that, there appears to be a growing sentiment in Congress to the effect that full funding for ongoing military operations should be considered through the regular, annual defense authorization and appropriations process. Congressional Research Service 10 Defense: FY2007 Authorization and Appropriations Figure 1. DOD Discretionary Budget Authority, FY2000-FY2011, Excluding Supplementals (2) The regular DOD appropriations request for FY2007 is for $439.3 billion, $28.5 billion above the FY2006 enacted amount, an increase of 7% Viewed in this way, the FY2007 budget appears to carry on the substantial defense buildup that has been underway for the past several years. But the story is a bit more complicated than that. The increase appears so large in part because Congress cut the FY2006 request by $8.5 billion—a $4.4 billion cut in the regular process and an additional across-the-board reduction of $4.1 billion at the end of the appropriations process.3 Moreover, in an effort to stay within tight limits on overall appropriations for FY2007, the Office of Management and Budget trimmed DOD’s FY2007 budget by $3.8 billion compared to the amount that was planned last year for FY2007. Out-year budget projections for the regular defense budget show spending leveling off to very modest rates of growth. The average increase between FY2005 and FY2011 is 1.7% per year above inflation, far below the 5% per year growth between FY2001 and FY2005 (see Figure 1). That said, when additional and supplemental appropriations for war are included, total defense spending is continuing to grow. The total increase in defense between FY2005 and FY2006 will be about $56 billion if Congress approves the pending FY2006 supplemental. The increase between FY2006 and FY2007 could be as great. So, the summary story line might be termed the “tale of two budgets.” The budget is getting very tight for programs that are funded strictly within the regular defense budget—military service officials have testified that the congressional cuts in the FY2006 defense budget are requiring 3 For a full discussion, see CRS Report RL32924, Defense: FY2006 Authorization and Appropriations, by (name re dacted). Congressional Research Service 11 Defense: FY2007 Authorization and Appropriations substantial reductions in some operations. At the same time, supplemental appropriations are soaring, and money is readily available for programs that are tied to the war effort. (3) The Administration’s FY2007 request rejects congressional proposals to increase Army and Marine Corps end-strength and cuts Air Force and Navy personnel levels For FY2006 Congress authorized active duty end-strength of 512,400 for the Army of 179,000 for the Marine Corps. By the end of FY2007, however, the Defense Department plans to restore Army and Marine Corps end-strength to the pre-FY2004, pre-Iraq, “base-line” level—482,400 for the Army, which is 30,000 troops lower than the current authorization, and 175,000 for the Marine Corps, which is 4,000 lower. Many Members of Congress have urged that the current authorized levels be made permanent in order to ease the pace of operations on ground forces. The Administration vigorously opposes a permanent increase, however, arguing that costs are high and that forces can be organized more efficiently to provide required combat troops. Meanwhile, the Air Force plans to eliminate at least 40,000 full-time equivalent positions over the next five years through a mixture of reductions in active duty, reserve, and civilian personnel. And the Navy is cutting 12,000 active duty personnel between FY2006 and FY2007. Though no additional Navy cuts have been announced formally, it is widely expected that the Defense Department will trim an additional 20,000 or so positions from the Navy over the next few years. (4) The Administration’s FY2007 request provides funds for 333,000 Army National Guard (ARNG) troops rather than the 350,000 authorized and reflects a decision to reduce the number of combat brigades in the ARNG from 34 to 28 The Army has been unable to recruit and retain enough troops in the National Guard to reach its authorized end-strength. In the FY2007 request, the Army has requested funding only for 333,000 troops, though, after the budget was released, Army officials said that they would shift money into personnel and other related accounts if recruitment and retention improves. In its future plans, however, the Army projects ARNG end-strength of 333,000. A more controversial issue is the Army plan to reduce the number of new, modularized ARNG combat brigades. As Army officials explain, the purpose of the change is to fully man the new brigades within authorized ARNG end-strength and to fully equip the combat units within available budget constraints. The change will likely mean that ARNG units in some states that will not, as had been planned, be outfitted as new, more capable combat brigades, will lose personnel. The units that remain, therefore, will also likely have less ability to carry out state disaster response and homeland defense missions. As a result, state governors and some National Guard leaders have been very critical of the plan. (5) The FY2007 request includes only a modest 2.2% pay raise for troops and proposes increases in medical care fees and co-pays for under-age-65 military retirees Since 1999, Congress has approved substantial increases in military pay and benefits. Compared to economy-wide indices, uniformed military personnel now cost as much as 33% more, above Congressional Research Service 12 Defense: FY2007 Authorization and Appropriations inflation, than in the late 1990s.4 In the FY2007 budget, the Administration is proposing measures to rein in the growth of pay and benefits. The proposed 2.2% military pay raise is the lowest since 1994. And the Administration has proposed increasing fees and co-pays for under-age-65 military retirees who are eligible for medical care through the military Tricare program. This is the first proposed increase in medical co-pays since the current Tricare medical care system for retirees and dependents was established in 1995. (6) The FY2007 request proposes a few reductions in major weapons programs, some of which have been controversial in Congress With the Defense Department carrying out its Quadrennial Defense Review in 2005, many expected some substantial changes in long-term budget priorities, including some cuts in major weapons programs. The QDR did not, however, make many far-reaching changes in on-going programs, and only a few reductions in weapons plans are reflected in the FY2007 budget request. Two have so far been controversial in Congress— • A decision to halt procurement of the C-17 cargo plane in FY2007 after buying 180 of the aircraft since the program began in the mid-1980s; and • A decision to drop plans to develop and buy engines for the F-35 joint strike fighter from two manufacturers and, instead, just to buy engines from one company. (7) The Quadrennial Defense Review did not result in decisions on major, ongoing defense budget and program-related issues The official Department of Defense report on the 2005-2006 Quadrennial Defense Review, 5 which was released along with the Administration’s budget request in February, stated plainly that the year-long QDR exercise was not intended to be a systematic assessment of major defense programs. Instead, it was designed to provide a vision of the national security challenges facing the nation and to identify the kinds of military capabilities that are needed. True to its word, the QDR report announced very few major program decisions, though it did mention some. Perhaps the most significant is to add 15,000 special operations troops, though without increasing overall military end-strength. For the most part, the QDR report simply endorsed ongoing initiatives, though often with wording carefully designed to keep options for policy-makers open. The result is to leave undecided some very far-reaching defense policy issues. • For the Navy, the QDR report endorsed increasing “green” and “brown” water capabilities, construction of new prepositioning ships, 11 rather than 12 deployable aircraft carriers, construction of two attack submarines per year at lower than current prices, and the conversion of a number of Trident II submarine-launched missiles to carry conventional (non-nuclear) warheads. But 4 For a discussion, see CRS Report RL32877, Defense Budget: Long-Term Challenges for FY2006 and Beyond, by (name redacted). 5 Department of Defense, Quadrennial Defense Review Report, February, 2006. Available at http://www.defenselink.mil/qdr/report/Report20060203.pdf. Congressional Research Service 13 Defense: FY2007 Authorization and Appropriations the report said nothing about other naval force issues. Notably, it did not mention the recently-released Navy shipbuilding plan for a combat fleet of 313 ships. Many question whether that plan is affordable. • Regarding fighter aircraft acquisition plans in the Air Force, Navy, and Marine Corps, the QDR report endorsed a revised Air Force plan to stretch out F-22 procurement, but otherwise did not mention the number of short-range fighter and ground attack aircraft needed in the long term. The report put a great deal of emphasis on the need for long-range, prompt, global strike capabilities. This may appear to be at odds with plans to continue large investments in shorter-range strike aircraft that may have limited access to areas of combat in future conflicts, but the report did not address the issue. • The report endorsed the Army’s plan to reorganize into more deployable, modular combat brigades, but notably did not make an explicit commitment to provide the full funding needed to modularize all active and reserve combat units as the Army has planned. 6 The report also endorsed the capabilities being developed in the Army’s Future Combat System development program, but, notably, did not explicitly endorse the program as a whole. • The report said very little at all about satellites and other space programs. The only mention of a space program was to endorse an Air Force plan to restructure the Transformational Communications Satellite (TSAT) program to incorporate less risky technology. Other space programs have experienced problems like those in the TSAT program, but these are not mentioned. Space programs overall have grown dramatically as a share of the defense budget, and cost growth in major programs has been pandemic. And a major policy issue is how to protect space based systems from future threats and whether the U.S. security will be advanced by developing offensive space capabilities. The QDR discusses none of these issues. Key Issues in Congress Last year, congressional action on the annual defense authorization and appropriations bills featured extensive debates, first, over policy toward treatment of military detainees, and, toward the end of the year, over the pace of troop withdrawals from Iraq. This year, a continued debate over Iraq policy reemerged in congressional consideration of the FY2006 supplemental appropriations bill (H.R. 4939). That debate was renewed first in the House on June 15-16, when the leadership brought up a resolution (H.Res. 861) declaring “that it is not in the national security interest of the United States to set an arbitrary date for the withdrawal or redeployment of United States Armed Forces from Iraq.” The House approved the resolution by a vote of 256-153. The following week the Senate debated Iraq policy in floor action on the FY2007 defense authorization bill. On June 22, the Senate rejected two amendments on Iraq policy, one by Senator Levin calling for a phased reduction of troops to begin this year (rejected by a vote of 39- 6 For an overview of Army modularization, see CRS Report RL32476, U.S. Army’s Modular Redesign: Issues for Congress, by (name redacted). Congressional Research Service 14 Defense: FY2007 Authorization and Appropriations 60) and another by Senator Kerry calling for withdrawal of most forces by July 1, 2007 (rejected by a vote of 13-86). In addition to Iraq policy, other issues have emerged. What follows is a list of selected issues that have come up as debate about the FY2007 defense budget has progressed. • Funding cuts in the regular FY2007 defense appropriations bill: Last year, Congress trimmed $4.4 billion from the regular FY2006 defense appropriations bill and applied the money to non-defense appropriations. Later, at the end of the process, Congress trimmed defense appropriations by an additional $4.1 billion as part of an across-the-board 1% cut in all appropriations, as an offset for Katrina-related funding. This year, the Senate took a step to avoid similar guns versus butter trade-offs in the FY2007 budget by adding $3.7 billion to the budget resolution (S.Con.Res. 83) cap on total discretionary spending. As last year, there appears to a considerable amount of opposition in Congress to proposed cuts in non-defense appropriations, and the defense bill may be seen as a source of offsetting funds because of the amount of money available for defense in emergency funding for overseas operations. • Limits on emergency funding: The Senate-passed FY2007 budget resolution (S.Con.Res. 83) puts a cap of $90 billion on total emergency funding. War costs, including $50 billion that the Administration plans to request as an attachment to the regular FY2007 defense appropriations bill, plus a later emergency FY2007 supplemental request expected next February, together with requests for funds for Katrina-recovery, bird flu, border security, agricultural disaster relief, and other purposes, will almost surely exceed the cap by a substantial amount. If Congress ultimately approves such a cap, anything above $90 billion would require offsetting rescissions, including, quite likely, cuts in regular defense funding. • Providing full funding for overseas operations in regular defense funding bills: Both last year and the year before, the Senate added “Sense of the Senate” language to the defense appropriations bill urging the Administration to request full funding for ongoing military operations in the regular authorization and appropriations bills. The Administration did not concur. But there appears to be more support in Congress for that approach now. On June 14, the Senate approved by 98-0 an amendment by Senator McCain to require the President to request funding for Iraq in its regular, annual budget submission. • Army and Marine Corps end-strength: The Administration is proposing ground force active duty end-strengths at the pre-2004 baseline level. Congress added 30,000 to Army and 4,000 to Marine Corps end-strength in FY2006, and there appears to be a great deal of support in Congress, particularly, but not only, among Democrats, for a permanent end-strength increase. • Funding for Army National Guard end-strength: The FY2007 Army request trims about $500 million from Army personnel accounts and additional amounts from operation and maintenance accounts to reflect a troop level of 333,000 in the Army National Guard rather than the 350,000 authorized. Congress may mandate a higher force level. • 2.2% pay raise: Every year between 2001 and 2006, Congress approved an increase in basic pay of ½% above the employment cost index (ECI), a measure of the average growth of nationwide pay and benefits. An increase of ECI + ½% Congressional Research Service 15 Defense: FY2007 Authorization and Appropriations was mandated for 2004, 2005, and 2006 in the FY2004 national defense authorization act (P.L. 108-136). Now that provision has expired, and the normal pay raise, established in Section 1009 of Title 37, U.S.C., is equal to the ECI. The Administration, accordingly, has requested a pay raise equal to the ECI, which, for calendar year 2007, is 2.2%. If approved, that would be the lowest pay raise since 1994. There is considerable sentiment in Congress to provide more. • Increased TRICARE fees and co-pays for under-65 retirees: There is also considerable sentiment in Congress against the Administration’s proposed increases in fees and co-pays for TRICARE for retirees. The Administration argues, however, that rising medical benefits threaten to drive up military personnel costs substantially, and that concern has gained some traction in Congress.7 • Flexibility for the Defense Department to provide support to foreign nations: The Defense Department made a number of legislative proposals to expand its flexibility to provide various kinds of support to foreign nations that, in the past, have generally been provided through foreign assistance programs. Several of these proposals expand or make permanent temporary measures that Congress has approved in bills providing funds for operations in Iraq and Afghanistan. The most expansive DOD proposal is to permit the Secretary of Defense, with the approval of the Secretary of State, to use up to $750 million of defense funds per year to build the capacities of foreign militaries to engage in counterterrorist operations or to participate in or support stability operations in which the United States is engaged.8 • Funding for National Guard and reserve equipment: Funding for Guard and reserve units has become a more contentious issue in recent years, particularly as states look to National Guard units as the front line in possible homeland defense missions. • Adding a representative of the Guard and reserve components to the Joint Chiefs of Staff: Several Senators have sponsored a bill to establish a 4-star rank reserve officer to serve on the JCS. The services have opposed such a measure. • Retiring an aircraft carrier: The Defense Department wants to reduce the number of deployable aircraft carriers from 12 to 11. Last year, Congress included a provision in the FY2006 defense authorization act to prohibit such a reduction. Senator Warner, the Chairman of the Senate Armed Services Committee, now supports retiring a carrier, but there is still some opposition. The issue was initially addressed in action on the FY2006 supplemental 7 For a full discussion, see CRS Report RS22402, Increases in Tricare Costs: Background and Options for Congress, by (name redacted). 8 DOD’s legislative proposals for inclusion in annual defense authorization bills are formally sent to Congress by the DOD Office of Legislative Counsel. The FY2007 proposals are posted on the internet at http://www.defenselink.mil/dodgc/olc/ legispro.html. The proposal for authority to build the capacity of foreign military forces is in the third package of proposals, dated April 13, 2006. In the FY2007 National Defense Authorization Act, P.L. 109-163, Congress provided one-year authority for DOD to spend up to $200 million to build the capacity of foreign militaries. DOD’s FY2007 legislative proposal would change the FY2006 provision in some ways. It would make the authority permanent, it would increase the maximum funding to $750 million, it would require concurrence of the Secretary of State rather than of the President, and it would allow the waiver of provisions in other laws that would otherwise prohibit assistance to specific countries or for specific purposes. Congressional Research Service 16 Defense: FY2007 Authorization and Appropriations appropriations bill, H.R. 4939, when Senator Warner proposed an amendment to permit retirement of the U.S.S. Kennedy aircraft carrier. That measure was not approved in the conference agreement on the bill, however. As a result, the Senate addressed the issue in the FY2007 appropriation authorization—see below. • Halting C-17 production: The Defense Department did not request funds for new C-17 cargo aircraft in FY2007, and instead asked for funding only to terminate production after 180 aircraft have been produced. The Air Force, however, included in its FY2007 unfunded priorities list (UPL) a proposal for 7 C-17s as replacements for aircraft that may be worn out due to excessive wartime use. Some legislators want to keep production lines open for the foreseeable future. • B-52, F-117, and U-2 retirements: The Air Force has proposed cutting the number of active B-52s from 94 to 56 and retiring F-117 stealth attack aircraft and U-2 reconnaissance planes. In the past, Congress has repeatedly rejected Air Force proposals to retire B-52s. • Stretching out F-22 procurement: The Air Force has requested stretching out F22 production almost until F-35 procurement begins. The financing mechanism that it has proposed, however, violates long-standing DOD and Office of Management and Budget policy that requires full funding of complete end-items of equipment in annual appropriations for procurement programs. The stretch-out will increase total procurement costs, even though the Air Force wants to negotiate a multi-year contract for the remaining production. In the past, Congress has rejected Air Force proposals that violate the full funding policy, though it has supported incremental funding for more costly Navy ships.9 • Eliminating funds to develop a second engine supplier for the F-35 Joint Strike Fighter: DOD has proposed eliminating development of an alternate engine for the F-35. This would save about $1.7 billion in development costs through FY2011, according to the Air Force,10 but it would also eliminate the benefits of ongoing competition between engine producers. Congress has held several hearings on the issue. Even senior DOD officials testifying on the matter have acknowledged being unenthusiastic about the proposal. • A new refueling aircraft for the Air Force: While studies have found that current KC-135 refueling aircraft remain reliable, the Air Force wants a new tanker, arguing that possible corrosion of KC-135 air frames is a danger. Most recently, DOD has approved an initial request for information from industry about tanker options, the first step in acquiring a new aircraft.11 • Converting Trident II missiles to carry non-nuclear warheads: The Quadrennial Defense Review placed a new, high priority on capabilities to strike 9 For a full discussion, see CRS Report RL31404, Defense Procurement: Full Funding Policy—Background, Issues, and Options for Congress, by Ronald O’Rourke and (name redacted). 10 Jon Steinman and Tony Capaccio, “Pentagon Plans To Scrap F-35 Backup Engine, Cut Costs,” Bloomberg.com, Dec. 29, 2005. 11 Megan Scully, “Air Force Launches Latest Effort To Replace Aging Tankers,” National Journal Congress Daily PM, Apr. 25, 2006 Congressional Research Service 17 Defense: FY2007 Authorization and Appropriations targets promptly at long range. In the short term, DOD is proposing to convert several Trident II missiles to carry non-nuclear warheads for rapid strike missions.12 Congress has balked at providing the funds requested for the program until it can address key questions. In addition, beginning some time after 2015, DOD is proposing to build a new, long-range strike system, which could be a manned or unmanned bomber. • Satellite and other space program acquisition: For the past several years, Congress has expressed its displeasure with large cost growth and extensive schedule delays in a number of DOD space programs. Congress has cut funds substantially and mandated restructuring of some programs, including the Transformational Communications Satellite (TSAT) and Space Radar programs. Press accounts have also reported large changes in the highly classified Future Imagery Architecture program. 13 The Administration has announced a plan to restructure the TSAT program to rely on less risky technology.14 The continuing issue for Congress is whether recent changes in space programs have reduced risk sufficiently and how fast new programs should proceed. • Missile defense funding and testing: Missile defense remains the largest acquisition program in the defense budget. Congress has been reluctant to cut funding in the past, though it has trimmed some programs and defense committees have expressed concern about the testing program. The Missile Defense Agency now deploying ground-based interceptors in Alaska though the deployed system has not been tested as an integrated whole. One issue for Congress may be whether to tie funding to the test program. • Acquisition reform: Last year, Congress approved a measure intended to improve tracking of cost growth in weapons programs by requiring that the Defense Department report changes compared to original estimates of the costs rather compared to periodically rebaselined program estimates. The result has been to show a substantial number of acquisition programs with cost growth exceeding or approaching levels that would trigger a program review under the requirements of the Nunn-McCurdy amendment. Last year Congress rejected, however, a requirement that programs with excessive cost growth be reevaluated compared to alternatives. 12 For a thorough discussion and extensive background on the program, see CRS Report RL33067, Conventional Warheads for Long-Range Ballistic Missiles: Background and Issues for Congress, by (name redacted). Also see Michael R. Gordon, “Pentagon Seeks Nonnuclear Tip For Sub Missiles,” New York Times, May 29, 2006, pg. 1. 13 Andy Pasztor, “U.S.’s Lofty Plans For Smart Satellites Fall Back To Earth: Big Delays and Cost Overruns Give Washington Pause; Technical Setbacks Loom; Reconsidering 1970s Designs,” Wall Street Journal, Feb. 11, 2006, pg. 1. 14 The Government Accountability Office raised some questions about the restructured program—Government Accountability Office, Space Acquisitions: DOD Needs Additional Knowledge as it Embarks on a New Approach for Transformational Satellite Communications System, GAO-06-537, May 24, 2006, available on line at http://www.gao.gov/cgi-bin/getrpt?GAO-06-537. Congressional Research Service 18 Defense: FY2007 Authorization and Appropriations Congressional Action on Major Issues Bill-by-Bill Synopsis of Congressional Action to Date Congressional Budget Resolution In March, Congress began action on the annual congressional budget resolution, but did not reach a conference agreement. In its place both the House and the Senate approved measures “deeming” a cap of $827.8 billion on total discretionary funds to be in place. For amounts recommended for national defense in the House and Senate resolutions, see Table 5 above. The Senate Budget Committee reported its version of the budget resolution on March 10, and the full Senate approved the measure, S.Con.Res. 83, with amendments, on March 16. The committee recommended a level of defense spending about $3.7 billion below the Administration request. In floor action, the Senate adopted amendments that added $4 billion to the recommended defense total. The Senate also approved an amendment by Senator Lott to add $3.7 billion to the enforceable cap on total discretionary funding. This was intended to avoid cuts in defense appropriations as offsets for higher levels of non-defense spending. The Senate measure also put a limit of $90 billion on total emergency funding in FY2007, which is substantially below the amount that appears likely to be requested to finance ongoing military operations and domestic disaster-response commitments. This effort in the Senate to place constraints on emergency spending may become a major issue when Congress takes up an expected FY2007 supplemental appropriations request early in calendar year 2007. The House Budget Committee reported its version of the budget resolution, H.Con.Res. 376, on March 31. The committee measure recommended the Administration-requested level of defense spending. The leadership did not bring the measure to the floor in April in the face of internal Republican opposition. In May, however, Republicans agreed on a measure that may provide room for a substantial increase in funding for some domestic discretionary programs while officially still adhering to the Administration’s proposed cap on total discretionary spending. The House passed the revised measure on May 18 after rejecting several alternative budget resolutions. The House resolution includes a cap only on non-defense emergency funding. In the end, the House and Senate did not reach a conference agreement on the budget resolution. In its place, both the House and the Senate passed measures “deeming” all or parts of their different resolutions to be in effect for purposes of subsequent action on appropriations bills. The House deeming measure was attached to House Resolution 818, approved on May 18, which was the rule for floor consideration of the Department of the Interior appropriations bill. The House deeming language adopted the House-passed budget resolution in its entirety. The Senate deeming measure was attached to the FY2006 emergency supplemental appropriations bill, H.R. 4939, P.L. 109-234, which was signed into law on June 15, 2006. The Senate deeming language adopted only Sections 401 and 402 of the Senate-passed budget resolution. Section 401 established caps on regular appropriations and Section 402 permitted additional emergency appropriations for specified circumstances and within specified limits. Congressional Research Service 19 Defense: FY2007 Authorization and Appropriations FY2007 National Defense Authorization The House Armed Services Committee marked up its version of the FY2007 defense authorization bill, H.R. 5122, on May 3, and the House passed the measure on May 11. Highlights of the committee’s bill and of floor action follow. The Senate Armed Services Committee marked up its version of the bill, S. 2766, on May 4 and reported it on May 9. Floor action in the Senate began on June 12, and the Senate passed by measure on June 22. Highlights of the committee’s bill and of floor action are discussed below. Also Table 4, above, shows the amounts authorized in each version of the defense authorization bill by title. Table A-4 in the Appendix to this report compares House and Senate authorized funding for selected major weapons programs. The House approved a conference agreement on the bill on September 29, and the Senate approved it on September 30. It is important to note that the defense authorization act does not provide funding for most defense programs, only the appropriations acts do. The appropriations acts may provide more than, less than, or the same as the amounts authorized for various programs; may provide money for programs not authorized, including new starts of programs; and may put restrictions on the use of funds that are not in the authorization or that are at odds with provisions in the authorization. FY2007 Defense Appropriations The House Appropriations Committee marked up its version of the FY2007 defense appropriations bill, H.R. 5631, on June 13, and the full House debated and approved the measure on June 20. The Senate Appropriations Committee marked up its version of the bill on July 20, and the full Senate began debate on the bill on August 1 and finally approved the bill on September 7. A conference agreement on the bill was announced on September 21, reported on September 25, and approved in the House on September 26 and in the Senate on September 29. Table 3, above, shows funding provided in the bill and in the Military Quality of Life/VA appropriations bill in the House and in the Military Construction/VA bill in the Senate. FY2007 Defense Authorization—Highlights of the House Armed Services Committee Bill Among the very broad range of issues that the House authorization bill addressed a few major points stand out. One is that the House Armed Services Committee appeared to have put somewhat more emphasis than DOD on maintaining current military capabilities than on pursuing long-term defense transformation. This was particularly true for some programs in which the risk of delays and cost growth in weapons development appears high. The committee seemed more inclined to support the current Army modularization program, for example, than to continue investing increasing amounts in the Future Combat System. Similarly, the committee slightly trimmed higher risk missile defense technologies in favor of more immediately deployable systems. And the committee continued, as it did in past years, to cut funding for satellite programs that may be seen as reaching too far ahead with technologically Congressional Research Service 20 Defense: FY2007 Authorization and Appropriations risky approaches, though cuts in the Transformational Communications Satellite (TSAT) and the Space Radar were not nearly as large as congressional cuts in the past two years. Another key point is that the committee supported larger Army, Marine Corps, and Army National Guard end-strength than the Administration wants. This may have very large long-term budget implications. Also, as in the past, the committee was reluctant to support proposed cuts in weapons programs. It did not agree to halt production of the C-17 cargo aircraft, for example, and it restored funds to develop an alternative, second engine supplier for the F-35 Joint Strike Fighter. The committee also did not fully support Administration proposals to rein in the cost of personnel pay and benefits, and it added a substantial new health benefit for reservists. The committee increased the proposed military pay raise from 2.2% to 2.7%, it rejected the DOD proposal to reduce health care costs by increasing under-65 retiree medical fees and co-pays, and it made all reservists, except federal employees covered by the government health insurance program, eligible to enroll in the TRICARE medical insurance program with a fee of 28% of the cost. The committee did approve one measure to increase co-pays for some prescription drug purchases. Significantly, the Committee did not approve a number of Administration proposals to give regional combatant commanders greater authority and resources to build the capabilities of foreign military forces. The Senate Armed Services Committee, in contrast, approved most of the Administration’s proposals, although with some restrictions. Finally, the committee slowed down two programs that might be seen to have negative international diplomatic consequences—one to develop a laser that might be used as an antisatellite weapon and the other a high-profile Administration proposal to convert some Trident II missiles to carry conventional (non-nuclear) warheads. Highlights of committee action include: • $50 billion bridge fund for overseas operations: The committee approved $50 billion in emergency funding for costs of military operations in Iraq, Afghanistan, and elsewhere in FY2007. In FY2006, total costs of overseas operations were almost $120 billion, so average monthly $12 billion. If that rate continues, the bridge fund will cover costs for the first five months of FY2006—that is, through January, 2007. Additional funds will then be needed to cover costs for the remaining seven months of the year. • Ground force end-strength: The committee bill increased Army end-strength by 30,000 (to 512,400), and Marine Corps end-strength by 5,000 (to 180,000). The bill also authorizes funding for an end-strength of 350,000 for the Army National Guard, 17,000 above the request. End-strength may be a major dispute between Congress and the Administration this year. • Pay raise: The bill provided a pay raise of 2.7% for uniformed personnel, rather than the 2.2% requested. • Tricare fees and co-pays for under-65 retirees: The bill rejected increases in retiree fees and co-pays through December 31, 2007 and established a task force to consider ways to control DOD medical costs. Congressional Research Service 21 Defense: FY2007 Authorization and Appropriations • Tricare for reservists: The committee added an amendment in full committee markup to allow all reservists—except federal employees eligible for the government health insurance system—to enroll in Tricare by paying 28% of the cost of the program (the same cost share as federal employees pay). Last year, in the conference on the FY2006 authorization bill, Congress rejected a similar Senate amendment. Instead, Congress made Tricare available, with a fee of 50% of the cost, to reservists who were unemployed or who did not have access to employer-provided health insurance. The committee action is especially significant because the House, for the first time, approved Tricare for reservists in its version of the defense authorization—the Senate approved it for the past two years. • Budget scoring of TRICARE-for-Life costs: In the FY2001 national defense authorization act, P.L. 106-398,Congress made over-65 military retirees eligible to receive medical care through the DOD TRICARE program as a supplement to Medicare. This has proved to be an expensive increase in benefits. In FY2007, the DOD budget includes more than $11 billion for contributions to the Medicare Eligible Retiree Health Care Fund to cover the actuarially determined cost of future benefits for current uniformed personnel. In the FY2005 defense authorization, P.L. 108-375, Congress approved a measure intended to count those costs not as expenses of the Defense Department, but as costs to the general treasury. The provision expressed the sense of Congress that the shift in costs should not reduce the defense budget, but should, instead, permit an increase in funding for weapons programs and other defense priorities. The Office of Management and Budget (OMB), however, continued to score the contributions as discretionary funds in the Department of Defense budget, though as permanent rather than as annual appropriations.15 OMB also urged the chairmen of the House and Senate Budget Committees to direct the Congressional Budget Office to score the contributions in the same way, and both chairmen agreed. In its version of the FY2007 authorization, the House Armed Services Committee included a provision directly mandating that the costs of TRICARE-for-Life contributions not be scored as part of the DOD budget after FY2007. • Death gratuity for federal civilian personnel: The bill provided the same death gratuity for civilian personnel killed in support of a military operation as for uniformed personnel. The FY2006 National Defense Authorization Act (P.L. 109163) increased the military death gratuity from $12,000 to $100,000. • Funding for readiness: The committee objected to cuts in ship steaming days, flying hours, and depot maintenance and shifted $856 million from other programs in service operation and maintenance accounts to finance increases in these readiness-related activities. • Army Future Combat System development: The committee expressed concern about cost growth, schedule delays, and the long-term affordability of the FCS program, cut $326 million from the $3.7 billion requested, and mandated a formal DOD review of program with a go/no go decision to be made by the end of 2008. 15 For OMB’s rationale, see Office of Management and Budget, Analytical Perspectives: Budget of the U.S. Government, FY2006, Chapter 6, pp. 422-425, on line at http://www.whitehouse.gov/omb/budget/fy2006/pdf/spec.pdf. Congressional Research Service 22 Defense: FY2007 Authorization and Appropriations • Army modularization: The committee expressed concern about the affordability of the Army’s program to build a new modular brigade-centered force structure in view of potentially competing costs of the FCS and of resetting the force after Iraq. The committee added funds for M-1 tank and Bradley Fighting Vehicle upgrades, saying that these programs were required to support modularization. It also required the Army to provide a long-term funding profile. • Guard and reserve equipment: The committee added $318 million for Army National Guard (ARNG) equipment to support its addition of 17,000 to ARNG end-strength. • Navy shipbuilding: The committee added $400 million in advance procurement to support building two Virginia-class submarines in FY2009, rather than the one now planned. The Navy has objected on the grounds that it will require too much money in FY2009 for submarines at the expense of other programs. The committee also mandated a submarine fleet of 48 boats, which is what the Navy currently plans. The committee approved the same amount of funding that the Navy requested for DD(X)/DDG-1000 destroyer procurement, but allocated all the funds to buy one ship rather than split the funding between two ships. This is of concern to some shipyard proponents, who want to begin providing funding to two shipyards. Last year, the committee had proposed eliminating the DD(X). Notably, the committee rejected an amendment in the full committee markup by Representative JoAnne Davis to provide advance funding for common long-lead items for three new aircraft carriers. Though the committee appears to support the Navy’s 313 ship plan, it does not seem ready to lock in funding for some aspects of the Navy program. • F-22 procurement profile: The committee rejected the Air Force plan for incremental procurement of the F-22 and added $1.4 billion in FY2007 ($2 billion was requested) to cover the full cost of buying 20 complete aircraft. • F-35 alternate engine and development concurrency: The committee rejected the Air Force proposal to halt development of an alternate engine for the F-35 Joint Strike Fighter and added $408 million for second engine R&D. The committee also trimmed $241 million from long-lead funding for aircraft to be procured in FY2008, citing excessively concurrent development and procurement in the program. • C-17 procurement: The committee added $300 million for three C-17s in Title IX of the bill, which authorizes emergency funding for overseas operations. The committee also required the Air Force to operate at least 299 heavy-lift cargo aircraft. So the committee would mandate at least seven more C-17s, rejecting the Administration’s plan to terminate C-17 production after FY2007. • B-52 and U-2 retirements: The committee prohibited any B-52 retirements until a replacement capability is available (which is not planned until some time after 2015) and prohibited retirement of any U-2s unless DOD certifies that the aircraft are not needed to mitigate any reconnaissance gaps identified in the Quadrennial Defense Review. • Missile defense: The committee cut a net total of $185 million from missile defense R&D. It added $20 million for ground-based mid-course defense (GMD) testing and $40 million for Navy ship-based interceptor systems. It cut $100 Congressional Research Service 23 Defense: FY2007 Authorization and Appropriations million from the boost-phase Kinetic Energy Interceptor (KEI) program, $56 million for activating a third GMD site in Europe since no site has been agreed to, $65 million from the multiple kill vehicle program, and $41 million for a high-altitude airship sensor program. The committee also prohibited expenditure of $200 million for the GMD program until the system has completed two successful intercept tests. The committee also included a policy provision requiring a report on the purpose, costs, vulnerability, and international diplomatic implications of space-based interceptors. 16 • Space systems: The committee cut $80 million from the Transformational Communications Satellite (TSAT) program and $30 million from the Space Radar, reflecting continued congressional concern about technical risks in both programs. The committee provided $20 million and established a new office to promote development of new, low-cost, rapidly deployable satellites. • Anti-satellite weapons: The committee included a policy provision that prohibits the use of funds to develop laser space technologies for anti-satellite weapons. This provision may be a response to Air Force development of such capabilities at a laser and optics test facility in New Mexico. 16 • Trident II missile conversion: The committee included a policy provision requiring consultations with allies about the Quadrennial Defense Review decision to convert Trident II missiles to carry conventional warheads. • Information technology funding cut: The committee cut $341 million from DOD information technology programs, which total $31 billion, as one means of offsetting increases in other programs. • VH-71 Presidential helicopter funding cut: The committee trimmed $39 million from the program due to development delays. • Department of Energy nuclear weapons programs: The committee required the Energy Department to submit a report on plans to transform the nuclear weapons production complex and specified a number of policy objectives. • Cooperative threat reduction with the former Soviet Union: The committee cut $35 million for a U.S. supported Russian system to convert plutonium to nonweapons-grade fuel because of concerns that the system could, in fact, produce more plutonium. And the committee cut another $115 million from $290 million requested for another plutonium conversion technology. • Acquisition of programs with large cost growth: The committee approved an amendment in full committee markup that would require DOD to allow competing contractors to make challenge bids for work on programs that exceed critical cost growth ceilings—currently 25% growth over original estimates. • DOD support for foreign nations: The committee included in the bill a DOD proposal to allow up to $200 million a year to be used for logistical support of foreign nations engaged in combined military operations with the United States and to permit DOD to provide equipment temporarily to foreign military forces in combined operations. It did not include the DOD proposal to use defense funds William J. Broad, “Administration Conducting Research Into Laser Weapon,” New York Times, May 3, 2006. Congressional Research Service 24 Defense: FY2007 Authorization and Appropriations to build the capacity of foreign militaries for counterterrorism or stability operations, as the Senate Armed Services Committee did (see below for a discussion), nor did it approve other, related Administration proposals. • Provisions restricting acquisition of foreign-made items in defense acquisition: As it has in the past, the House Armed Services Committee included a number of provisions in its version of the authorization bill to limit defense acquisition of foreign-made goods. One provision, Section 812, would prohibit defense contracts with a foreign company that has received government subsidies. Another, Section 831, would prohibit procurement of a specialty metal or item critical to national security unless it is reprocessed, reused, or produced n the United States. Section 832 would establish a board to identify items critical to national security. • Prohibition on procurement of items from companies that provide defense goods to China: The House committee also included a provision, Section 1211, that would prohibit defense purchases from any company that provides material on the U.S. Munitions List to China. FY2007 Defense Authorization—Highlights of House Floor Action On May 9, the House Rules Committee considered almost 100 proposed floor amendments to the authorization bill. In an initial rule on the bill, it permitted just eight of them, and in a second rule, permitted 27 more—12 as part of three en bloc amendments and another 15 amendments that were debated separately. Democrats objected to the Rules Committee’s refusal to permit several amendments, including an amendment by Representative Skelton, the ranking Democrat on the Armed Services Committee, that would have reversed a measure in the committee bill that increased co-pays for some prescription drug purchases. Perhaps the most high profile amendment to pass (by a vote of 252-171) was a proposal by Representative Goode to permit the Secretary of Defense to assign military personnel to support the Department of Homeland Security in border protection. Mr. Goode has offered a similar amendment for the past several years, and before that, Representative Traficante perennially offered a similar measure. The amendment has often passed in the House but has never been accepted in the final conference agreement. This year, there was an extensive floor debate. And after its approval, the President proposed a program to deploy 6,000 National Guard troops to support border operations. The House repeated another perennial debate over an amendment by Representatives Andrews, Davis (CA), Sanchez (CA), and Harman to permit privately funded abortions for U.S. military personnel or their dependents at military hospitals overseas. It was rejected by a vote of 191-237. The House also rejected, by a vote of 124-301, an amendment by Representative Tierney to cut $4.7 billion from the Missile Defense Agency budget and allocate the funds to other defense priorities. And the House rejected, by a vote of 202-220, a motion by Representative Salazar to recommit the bill to committee with instructions to report back a measure that includes an amendment to change current procedures under which Survivor Benefit Plan benefits are reduced. Under current law, benefits to survivors of those who die while in service are reduced by the amount of Veterans Affairs benefits. Congressional Research Service 25 Defense: FY2007 Authorization and Appropriations Other amendments permitted by the rule were all approved by voice vote. One measure that passed was to require a study of the health impact of past ocean dumping of chemical weapons.17 In general debate on the bill, both Democrats and Republicans on the Armed Services Committee repeated lauded the committee bill as a bipartisan measure that was approved in the committee by a vote of 62-1. Table 7 summarizes House floor action on selected amendments. Table 7. House Floor Action on Selected Amendments: Defense Authorization Bill, H.R. 5122 Sponsor Purpose/Congressional Record Page Reference Outcome Andrews Requires a study to determine effects of ocean disposal of munitions (pp. H2447-48). Agreed, voice vote Andrews, for Davis (CA), Harmon, Sanchez (CA) Lifts the current ban on privately funded abortions at U.S. military facilities overseas (pp. H2448-51, H2466-67). Rejected, 191-237 Tanner Expresses a Sense of Congress that the Army should consider converting to six-month deployments in Iraq and Afghanistan (p. H2453). Agreed, voice vote Franks (AZ) Transfers $1 mn to provide health care for Iraqi children (pp. H2467-68). Agreed, voice vote McDermott Directs a comprehensive study of the health effects of exposure to depleted uranium munitions (pp. Pages H2531-32) Agreed, voice vote Lewis (KY) Provides that no more than 20% of a service member’s paycheck can be garnished to recover overpayments through no fault of the service member (pp. H2537-40). Agreed, in en bloc amendment, voice vote Taylor (MS) Requires DOD to equip 100% of U.S. military vehicles in Iraq and Afghanistan with IED jammers (pp. H2541-42). Agreed, voice vote Goode Authorizes the Secretary of Defense to assign members armed services to border security (pp. H2526-28, H2542-43). Agreed, 252-171 Tierney Reduces missile defense agency funding from $9.3 bn to $4.47 bn, prohibits deployment of space-based interceptors (pp. H2532-37, H2543-44). Rejected, 124-301 FY2007 Defense Authorization—Highlights of the Senate Armed Services Committee Bill The Senate Armed Services Committee marked up its version of the defense authorization, S. 2769, on May 4. A few themes stand out in the markup. One is that the Senate committee approved 30,000 more troops than requested for the Army and 5,000 more for the Marine Corps and also authorized 350,000 troops for the Army National Guard (ARNG), 17,000 above the number for which the Army requested funding. The House also approved the same, higher end-strength for ground forces. So Congress did not agree with Administration plans to reduce active ground forces to the pre-Iraq level. 17 For a discussion of this issue, see CRS Report RL33432, U.S. Disposal of Chemical Weapons in the Ocean: Background and Issues for Congress, by (name redacted). Congressional Research Service 26 Defense: FY2007 Authorization and Appropriations The Senate committee also undertook a number of initiatives to strengthen government-wide capabilities to engage in counterterrorism and stability operations. One potentially far-reaching initiative is to agree to an Administration proposal to expand the authority of regional military commanders to train and equip foreign military forces and to provide humanitarian and other assistance to foreign nations. These activities have traditionally been managed by the State Department under legal authorities that include, among other things, human rights conditions. In bills funding operations in Afghanistan and Iraq, Congress has temporarily provided some of this authority, but the Administration wants Congress to write it into permanent law. The committee restricted funding for the most far-reaching measure to two years, saying that the program it should be regarded as a pilot project with an assessment to follow. The committee also required consultations with ambassadors and did not agree to allow waivers of human rights and other restrictions on assistance. The Senate committee appeared more supportive of the Army Future Combat System (FCS) than the House committee, and provided the full $3.7 billion requested for the program. The committee did, however, mandate a review of the program, including an independent cost estimate of the program itself and of all associated Army programs. If the most recent Army cost estimates for the FCS appear unstable, Congress may consider ending or substantially restructuring the program. Highlights of the committee markup include: • Total funding: The Committee authorized $517.7 billion for defense discretionary programs, including $50.0 billion in emergency funding overseas operations and $467.7 billion in budget including authority for DOD, DOE and other non-emergency programs. The total is $4 billion above the request and above the House authorization. • Army and Marine Corps end-strength: The committee authorized endstrengths of 512,400 for the Army, 30,000 above the request, and of 180,000 for the Marine Corps, 5,000 above the request. • Army National Guard end-strength: The committee also approved an endstrength of 350,000 for the ARNG, 17,000 above the request, and stipulated that, if the Army fails to recruit and retain enough personnel to meet the authorized level, and money saved may be used only to procure ARNG equipment. • Military pay raise: The committee approved the requested pay raise of 2.2% rather than the 2.7% raise the House authorized. • TRICARE fees and co-pays for under-65 retirees: As did the House, the Committee rejected increases in retiree TRICARE fees and co-pays. The Committee also required the Government Accountability Office to carry out a full audit of DOD health care costs, including comparisons of the Administration’s proposed fee increases with increases in federal civilian health insurance fees. • Flexibility for DOD to support foreign nations for counterterrorism operations: The Senate committee agreed to a number DOD’s proposals to allow regional combatant commanders flexibility to use DOD funds to train and equip foreign militaries and to provide humanitarian and reconstruction assistance to foreign governments in support of counterterrorism operations, though with some amendments. In particular, the committee agreed to make available $200 million per year for the next two years, rather than $750 million per year indefinitely, to Congressional Research Service 27 Defense: FY2007 Authorization and Appropriations build the capabilities of foreign militaries. The committee specified that no more than $50 million per year could be used by any one regional combatant commander, and required detailed consultations with U.S. ambassadors. The committee also required the President to develop a plan to better coordinate interagency counterterrorism practices. With the appropriations committees cutting foreign operations funding for the State Department and AID, the Defense Department is, in effect taking on many roles that the State Department formerly carried on. • Detainee treatment: The committee required an official government-wide coordinated legal opinion on whether specified interrogation techniques constitute cruel and inhuman treatment. • Use of armed forces for domestic activities: The committee proposed amendments to the Insurrection Act that would make it easier for the President to employ the armed forces to respond to domestic emergencies, such as the aftermath of Hurricane Katrina. • UAV policy: The committee directed the Secretary of Defense to develop a comprehensive policy on UAVs and to give UAVs a preference in developing new systems. • Navy shipbuilding: The committee added $1.5 billion to the shipbuilding request for a total of $12 billion. Increases include accelerating LPD procurement, increased advance procurement funds for the CVN-21 carrier and the LHA(R) amphibious ship. The committee included $50 million in advance procurement funding for long-lead items for three new CVN-21-class carriers, a measure that the House committee specifically rejected in a vote in the full committee markup. • Permitting a reduction from 12 to 11 deployable aircraft carriers: The committee bill includes a provision repealing last year’s requirement that the Navy maintain 12 deployable carriers. If approved this would allow retirement of the USS Kennedy. • Continued C-17 production: As in the House bill, the committee bill rejects the DOD proposal to terminate C-17 production. The Senate bill authorizes funds for 2 aircraft in FY2007 and advance procurement for continued production later. • Army Future Combat System (FCS) funding: As opposed to the House, the Senate committee authorized the full $3.7 billion requested for FCS development. The committee also, however, required a review of the program, including an independent cost estimate, though not with a view to a go/no go decision, as the House mandated. • Readiness: The committee used the $50 billion emergency “bridge” fund as a means of adding funds to regular service accounts to correct some readinessrelated shortfalls. The committee added $515 million in the emergency funds, for example, for Navy operations, $231 million for Army operations, and $106 million for Marine Corps operations. So, in effect, the committee is ameliorating constraints on the regular service budgets by adding funds for regular military operations to the emergency fund. Congressional Research Service 28 Defense: FY2007 Authorization and Appropriations • Acquisition reform: The committee approved several measures to reform defense acquisition procedures, though none nearly so far-reaching as the House committee measure to recompete projects with excessive cost growth. One Senate committee measure is to align the tenure of program managers with the progress of their programs and another to require that incentive payments be more directly linked to acquisition outcomes. • Land exchanges to build buffers around military facilities: The Defense Department has long been concerned about the encroachment of civilian development on military facilities. The Senate committee approved a measure to allow DOD to exchange excess land for other land that would be a buffer for military sites. • Cooperative threat reduction with former Soviet states: In contrast to the House authorization, the Senate committee made no reductions in the $1.7 billion requested for Department of Energy nonproliferation programs (which finance plutonium purchases and reprocessing, for example) or the $372 million for the Department of Defense Cooperative Threat Reduction program. • R&D science and technology funding target: Congress has required that the Defense Department invest 3% of the overall budget in basic science and technology (S&T) R&D programs. DOD has perennially fallen short of that target. The Senate committee included a provision requiring annual growth of 2% per year above inflation in S&T accounts. • Missile defense funding: The Senate committee approved the full $9.3 billion requested for Missile Defense Agency (MDA) R&D programs (see Table A-2 for details of the request), but, like the House, shifted funds away from longer-term, more risky programs to near term projects. The committee added $200 million for Ground-based Midcourse Defense (GMD) flight testing and $100 million for the Navy interceptor system. It cut $200 million from the $406 million requested for the boost-phase Kinetic Energy Interceptor. • Space systems: The committee expressed support for DOD’s restructuring of the Transformational Communications Satellite (TSAT) program, but trimmed $70 million from the program (an 8% cut) saying that it could not be executed. The committee also cut $66 million (a 24% cut) from the Space Radar program and expressed concern about the lack of a cost sharing agreement with the intelligence community. • Long-range strike/Trident II missile conventional warhead: The committee expressed support for DOD’s plan to develop prompt global strike capabilities, and provided the full $127 million requested to convert Trident II missiles to carry non-nuclear warheads. But, like the House committee, the Senate committee was concerned about the international diplomatic issues and prohibited expenditure of more than $32 million on conversion until the Secretary of Defense, after consulting with the Secretary of State, provides a report on the matters at issue. • B-52 retirements: The committee prohibited the proposed retirement of B-52 bombers until the Air Force reports on force requirements, but also approved a measure that (1) permits the retirement of up to 18 B-52H aircraft, (2) requires Congressional Research Service 29 Defense: FY2007 Authorization and Appropriations that remaining B-52Hs all be equipped with the specific upgrades, and (3) says the committee expects no additional B-52H retirements. • F-35 Joint Striker Fighter alternative engine: Like the House, the Senate committee added $400 million to continue development of an alternate second engine for the F-35. • F-35 schedule delays: The committee cut $1.2 billion from F-35 procurement funds due to schedule delays. • F-22 funding: Like the House, the Senate committee rejected the Air Force plan to stretch out F-22 production and to provide funding incrementally rather than financing the full cost of deployable aircraft in the year for which funding is requested. The committee added $1.4 billion for full funding for the requested 20 F-22s. FY2007 Defense Authorization—Highlights of Senate Floor Action The Senate began floor consideration of its version of the defense authorization bill, S. 2766, on June 12. On June 15, the Senate began a debate over Iraq policy. By a vote of 93-6, the Senate agreed to a motion by Senate Minority Leader Reid to table an amendment by Senator McConnell, SA 4269, requiring the President to establish a schedule for withdrawing U.S. combat troops from Iraq by December 31, 2006, leaving only troops needed to stand up Iraqi security forces. Senator McConnell brought up the measure that was originally authored by Senator Kerry, though Senator Kerry himself had not offered it, to force a debate on the matter. Later, on June 21 and 22, the Senate considered two other Iraq policy amendments, one by Senator Levin to require that troop reductions begin this year and another by Senator Kerry requiring that most troops be withdrawn from Iraq by July 1, 2007. The Senate rejected both measures on June 22. The Senate considered one other measure related to the war, an amendment by Senator McCain, SA 4242, to require the President to request funding for ongoing military operations with the regular federal budget request submitted in February of each year (approved by a vote of 98-0 on June 13). For the past two years, the Senate has approved amendments by Senator Byrd expressing the Sense of the Senate urging this, but the Administration has continued to request funding in supplementals.18 In the past, in bill signing statements Presidents have, on several occasions, rejected as unconstitutional, legislative provisions that direct the Administration to include particular programs or activities in budget requests. Administrations have, nonetheless, sometimes adhered to such congressional requirements. In the conference report on the FY1996 defense appropriations act, P.L. 104-61, Congress required the Administration to request funding for Southwest Asia operations in the regular FY1997 defense request, though it did so not in the bill, but only in report language. The Clinton Administration agreed and requested funding for ongoing operations in Southwest and Bosnia in its FY1997 request.19 The McCain amendment, 18 See Section 8138 of the FY2005 defense appropriations act, P.L. 108-287, and Section 8117 of the FY2006 defense appropriations act, P.L. 109-148. 19 For a discussion of precedents for funding operations in regular or in supplemental bills from Korea on, see CRS Report RS22455, Military Operations: Precedents for Funding Contingency Operations in Regular or in Supplemental Appropriations Bills, by (name redacted). Congressional Research Service 30 Defense: FY2007 Authorization and Appropriations like the Byrd amendments to the FY2005 and FY2006 defense appropriations bills, would mean that the full cost of ongoing military operations—almost $120 billion in FY2006—would be considered along with the rest of the federal budget at the start of next year’s Congress. Table 8 briefly reviews Senate floor action on selected amendments. Table 8. Senate Floor Action on Selected Amendments: Defense Authorization Bill, S. 2766 Sponsor/ Number Purpose/Congressional Record Page Reference Outcome Lautenberg/Stabenow #4205 To prohibit increased retail pharmacy co-payments, pages S5837, S5839-40. Agreed voice vote Dorgan #4230 To eliminate fraud and abuse and improve competition in Federal contracting, pages S5845-47, S5852-53, S5854-57, S5861. Tabled 55-43 McCain #4242 To require budgeting for ongoing military operations in regular requests, pages S5859-61, S5862-65. Agreed 98-0 Feingold #4256 To strengthen the Special Inspector General for Iraq Reconstruction, pages S5914-17. Agreed voice vote Biden #4257 To state the policy of the United States on the nuclear programs of Iran, pages S5917, S5921-22 Agreed 99-0 Warner/ Levin #4280 To repeal the statutory requirement in place since FY1985 that the Defense Department submit an annual report on Allied Contributions to the Common Defense, page 5933 Agreed voice vote Inhofe #4284 To modify the American Servicemembers’ Protection Act of 2002 to permit certain military cooperation with and aid to nations that have not exempted U.S. troops from the jurisdiction of the International Criminal Court, page 5936. Agreed voice vote Lugar #4285 To repeal restrictions on funding for chemical weapons demilitarization programs in Russia under the Cooperative Threat Reduction Program, page S5936. Agreed voice vote Santorum #4234 To authorize assistance for pro-democracy programs and activities inside and outside Iran and to enhance the Iran-Libya Sanctions Act of 1996, pages S5917-21. Rejected 45-54 Warner #4286 To amend Buy American Act provisions regarding acquisition of certain specialty metals, page S5936. Agreed voice vote McConnell #4265 To require the withdrawal of United States Armed Forces from Iraq and urge the convening of an Iraq summit, pages S5927-29. Tabled 93-6 Feingold #4192 To provide for the redeployment of United States forces from Iraq by December 31, 2006, pp. S5913-14. Withdrawn Sessions #4295 To require a report on reporting requirements applicable to the Department of Defense, pages S5995-96. Agreed voice vote Obama/ Coburn #4254 To require the use of competitive procedures for Federal contracts worth over $500,000 related to hurricane recovery, subject to existing exceptions, pages S5995-96. Agreed voice vote June 14, 2006 June 15, 2006 June 16, 2006 Congressional Research Service 31 Defense: FY2007 Authorization and Appropriations Sponsor/ Number Purpose/Congressional Record Page Reference Outcome McConnell #4272 To affirm the Iraqi Government position of no amnesty for terrorists who have attacked U.S. forces, pages S6110-17. Agreed 64-34 Nelson (FL)/ Menendez #4265 To express the sense of Congress that the Government of Iraq should not grant amnesty to persons known to have attacked, killed, or wounded members of the Armed Forces of the United States, page S6117 Agreed 97-19 Ensign/Reid #4308 To provide for expansion of the Junior Reserve Officers’ Training Corps program, pages S6117-18 Agreed voice vote Bond/Leahy #4271 Bond/Leahy) Amendment No. 4271, to increase the grade of the Chief of the National Guard Bureau from 3 to 4 stars and to enhance the Chief’s authority to over certain budget requirements, pages S6117, S6118-19 Agreed voice vote Ensign #2352 To authorize the temporary use of the National Guard to provide support for border security along the southern land border of the United States, pages S6117, S6119-20 Agreed voice vote Ensign #4354 To require a report on technologies to defeat the threat to military rotary wing aircraft posed by portable air defense systems and rocket propelled grenades, pages S6117, S6120 Agreed voice vote Jeffords #4215 To provide for 2 programs to authorize the use of leave by caregivers for family members of certain individuals performing military service, pages S6117, S6121-22 Agreed voice vote Warner/ Levin #4355 To increase authorized FY2006 general transfer authority from $3.75 to $5 billion, Pages S6117, S6122 Agreed voice vote Warner/ Levin #4356 To authorize additional emergency supplemental appropriations for FY2006, pages S6117, S6122 Agreed voice vote Thune #4217 To require a report on the future aerial training airspace requirements, pages S6117, S6122 Agreed voice vote Warner #4360 To require a report on the desirability and feasibility of joint officer promotion selection boards, pages S6117, S6122 Agreed voice vote Dorgan #4292 To establish a special committee of the Senate to investigate the awarding and carrying out of contracts for activities in Afghanistan and Iraq, pages S6108-10 Rejected 44-52 Frist #4323 (To Amendment No. 4322), to amend title 18, United States Code, to prohibit taking minors across State lines in circumvention of laws requiring the involvement of parents in abortion decisions, page S6105 Withdrawn Kennedy #4322 To provide for an increase in the Federal minimum wage, pages S6191-S6203 Withdraw after vote of 52-46 Enzi #4376 To promote job creation and small business preservation in the adjustment of the Federal minimum wage, pages S6191, S6203-04 Withdrawn after vote of 45-53 Kerry #4442 To require the redeployment of United States Armed Forces from Iraq in order to further a political solution in Iraq, encourage the people of Iraq to provide for their own security, and achieve victory in the war on terror, pages S6324-35 Rejected 13-86 June 20, 2006 June 21, 2006 Congressional Research Service 32 Defense: FY2007 Authorization and Appropriations Sponsor/ Number Purpose/Congressional Record Page Reference Outcome Levin #4320 To state the sense of Congress on the United States policy on Iraq, pages S6324, S6335 Agreed 98-1 Senate agreed to the motion to close further debate on the bill, page S6335 Agreed voice vote Hutchison #4377 To include a delineation of the homeland defense and civil support missions of the National Guard and Reserves in the Quadrennial Defense Review, page S6336 Agreed voice vote Harkin Modified #4266 To require semiannual reports on efforts to investigate and prosecute cases of waste, fraud, and abuse in Iraq, Afghanistan, and throughout the war on terror, pages S6346, S6347 Agreed voice vote Inhofe #4495 To require annual reports on United States contributions to the United Nations, pages S6346, S6347 Agreed voice vote Reid Modified #4307 To appoint a coordinator for policy toward North Korea and require reports to Congress, pages S6346, S6347-48 Agreed voice vote Lott Modified #4326 To make funds available for the Arrow ballistic missile defense system, pages S6346, S6348 Agreed voice vote Allard #4497 To provide for an independent review of the organization and management of the Department of Defense for national security in space, pages S6346, S6349 Agreed voice vote Cantwell Modified #4202 To require reports on the diversion of equipment from reserve units, pages S6346, S6350 Agreed voice vote Martinez #4500 To give priority in allocating replacement equipment to states that have suffered a natural disaster, pages S6346, S6350 Agreed voice vote Menendez/Lautenberg #4441 To require a plan to replace equipment withdrawn or diverted from the reserve components for Operation Iraqi Freedom or Operation Enduring Freedom, pages S6346, S6350 Agreed voice vote Feingold #4502 To require an annual report on the amount of the acquisitions made by the Department of Defense from outside of the United States, pages S6346, S6351 Agreed voice vote McCain #4503 To require an annual report on foreign military sales and direct sales to foreign customers of significant military equipment manufactured inside the United States, pages S6346, S6351 Agreed voice vote Graham/ Nelson (NE) #4504 To expand the authority of the Secretaries of the military departments to remit or cancel indebtedness of members of the Armed Forces, pages S6346, S6351-52 Agreed voice vote Reid #4197 To modify the effect date of the termination of the phase-in of concurrent receipt of retired pay and veterans disability compensation for veterans with service-connected disabilities rated as total by virtue of unemployability, pages S6346, S6354 Agreed voice vote Chambliss #4365 To reduce the eligibility age for receipt of non-regular military service retired pay for members of the Ready Reserve in active federal status or on active duty for significant periods and to expand eligibility of members of the Selected Reserve for coverage under the TRICARE program, pages S6346, S6355-56, S6373-7 Agreed voice vote McCain #4241 To name the Act after John Warner, a Senator from Virginia, pages S6346, S6356 Agreed voice vote Coburn #4371 To improve the provisions relating to the linking of award and incentive fees to acquisition outcomes, pages S6346, S6356 Agreed voice vote Congressional Research Service 33 Defense: FY2007 Authorization and Appropriations Sponsor/ Number Purpose/Congressional Record Page Reference Outcome Biden #4244 Relating to military vaccination matters, pages S6346, S6356-57 Agreed voice vote Coburn Modified #4491 To reform the Department of Defense’s Travel System into Pay-ForUse-of-Service System, pages S6370-73, S6376 Agreed voice vote Coburn #4370 To require the Secretary of Defense to report on and classify congressional earmarks of funds available to the Department of Defense, pages S6374, S6376 Agreed voice vote Chambliss #4261 To authorize multiyear procurement of F-22A fighter aircraft and F-119 engines, pages S6336-45, S6376-77 Agreed 70-28 Sessions #4471 To provide, with an offset, additional funding for missile defense testing and operations. Agreed 98-0 Warner #4520 To require a report before taking steps to reduce the number of Minuteman III Intercontinental Ballistic Missile from 500 to 450, pages S6377-78 Agreed voice vote Cantwell #4374 To provide for a study of the health effects of exposure to depleted uranium, pages S6377-78 Agreed voice vote Biden #4458 To ensure payment of United States assessments for United Nations peacekeeping operations in 2005, 2006, and 2007, pages S6677-78 Agreed voice vote Clinton #4264 To enhance the services available to members of the Armed Forces returning from deployments to assist them and their family members, in transitioning to civilian life, pages S6377, S6379-81 Agreed voice vote Bayh #4489 To add an independent panel as part of the Quadrennial Defense Review, pages S6377, S6381-82 Agreed voice vote Feingold #4526 To require the President to develop a comprehensive strategy toward Somalia, pages S6377, S6382 Agreed voice vote Feingold #4527 To require a report on the feasibility of establishing a United States military regional combatant command for Africa, pages S6377, S6383 Agreed voice vote McCain/ Warner #4434 To ensure proper education, training, and supervision of personnel providing special education services for dependents of members of the Armed Forces under extended benefits under TRICARE, pages S6377, S6383 Agreed voice vote Akaka Modified #4393 To transfer custody of the Air Force Health Study assets to the Medical Follow-up Agency, pages S6377, S6383 Agreed voice vote Warner/ Levin #4529 To require the Defense Department to submit Supplemental and Cost of War Execution reports, pages S6377, S6384 Agreed voice vote Reed #4311 To provide that acceptance by a military officer of appointment to the position of Director of National Intelligence or Director of the Center Intelligence Agency shall be conditional upon retirement of the officer after the assignment, rages S6377, S6384 Agreed voice vote Reid Modified #4439 To require reports on the implementation of the Darfur Peace Agreement, pages S6377, S6385 Agreed voice vote Clinton #4361 To require that Congress be apprised periodically on implementation of the Darfur Peace Agreement, pages S6377, S6386 Agreed voice vote Levin #4533 To make available an additional $450,000,000 for RDT&E Defense-wide and provide an offsetting reduction for a certain military intelligence program, pages S6377, S6386 Agreed voice vote Congressional Research Service 34 Defense: FY2007 Authorization and Appropriations Sponsor/ Number Purpose/Congressional Record Page Reference Outcome Vitter #4534 To authorize prepositioning of Department of Defense assets to improve support to civilian authorities, pages S6377, S6386 Agreed voice vote Domenici #4451 To require annual reports on the expanded use of unmanned aerial vehicles in the national airspace system, pages S6377, S6387 Agreed voice vote Burns/Dole #4538 To provide for the enhancement of funeral ceremonies for veterans, pages S6377, S6388 Agreed voice vote Biden #4423 To provide that not funds may be used to establish a permanent U.S. military base in Iraq, or to exercise control over the oil resources of Iraq, pages S6377, S6388 Agreed voice vote Allard #4366 To require an independent review of the organization and management of the Department of Defense for national security in space, pages S6377, S6389 Agreed voice vote Kerry #4204 Stating the Sense of Congress that the President should convene an international summit o promote a comprehensive political agreement in Iraq, pages S6377, S6389 Agreed voice vote Obama #4541 To require a report on Air Force plans for the realignment of aircraft, weapons systems, and functions at active and Air National Guard bases as a result of the 2005 round of defense base closure and realignment, pages S6377, S6390 Agreed voice vote House Appropriations Committee 302(b) Allocations Ultimately, the total amount provided for national defense in the regular appropriations bills (not including emergency appropriations) is determined by the allocation of funds among appropriations subcommittees. Under Section 302(a) of the Congressional Budget Act of 1974, the annual congressional budget resolution allocates a specific amount of discretionary budget authority to the appropriations committees. Under Section 302(b) of the Budget Act, the appropriations committees are required to report back on the allocation of the total to the subcommittees. The House-committee-passed FY2007 budget resolution, H.Con.Res. 376, approves a total of $872.8 billion in discretionary budget authority, which is $475 million below the Administration request, and the resolution allocated that amount to the appropriations committee under Section 302(a) of the Budget Act. The Senate-passed budget resolution approves $877.0 billion in discretionary spending, $3.7 billion above the Administration request, and allocates the total to the appropriations committee. On May 4, the House Appropriations Committee reported its initial subcommittee allocations under Section 302(b) of the Budget Act. Table 9 shows the committee action. It is important to note that these allocations may be revised periodically as congressional action on the appropriations bills proceeds. The initial House allocations trim $4.0 billion from the defense subcommittee, compared to the Administration request, $824 million from the Military Quality of Life/VA subcommittee, and $2.4 billion from the foreign operations subcommittee. These cuts, compared to the request, in defense and foreign affairs allow increases, again compared to the Administration request, mainly in Labor-HHS appropriations and homeland security appropriations. Last year, Congress trimmed Congressional Research Service 35 Defense: FY2007 Authorization and Appropriations $4.4 billion from DOD programs in the regular appropriations bills. The initial House allocations appear to follow the same approach. Table 9. Initial House 302(b) Subcommittee Allocations (budget authority in billions of dollars) FY2006 Enacted FY2007 Request Allocation Allocation Versus Request Agriculture 16.8 17.3 17.8 +0.5 Defense 358.3 381.4 377.4 -4.0 Energy and Water Development 30.2 29.5 30.0 +0.5 Foreign Operations 20.7 23.7 21.3 -2.4 Homeland Security 30.3 31.0 32.1 +1.1 Interior/Environment 25.9 25.5 25.9 +0.4 Labor, HHS, Education 141.1 137.8 141.9 +4.1 Legislative 3.8 4.2 4.0 -0.2 Military Quality of Life/VA 85.0 95.5 94.7 -0.8 Science, State, Justice, Comm 57.2 59.7 59.8 +0.1 Transportation, Treasury, HUD 64.1 67.6 67.8 +0.2 Total 302(a) Allocation 833.3 873.3 872.8 -0.5 Source: House Appropriations Committee. FY2007 Defense Appropriations—Highlights of the House Appropriations Committee Bill The House Defense Appropriations Subcommittee marked up its version of the FY2007 defense appropriations bill on June 7, and the full committee marked up the bill, which became H.R. 5631, on June 13. Among the committee’s decisions, a few themes stand out. First, in accordance with the committee’s 302(b) allocations, the committee approved a total $377.6 billion in the bill, $4.1 billion below the Administration request. The committee made about $2 billion of the cuts in “General Provisions” of the bill. Of these cuts $823 million are in rescissions of prior year funds (amounts identified by the committee in cooperation with the Defense Department), $949 million in revised inflation estimates, and $100 million in savings from foreign currency fluctuations. These are perennial sources of savings in appropriations bills. They have generally been used, however, to offset congressional additions to the budget rather than to trim the total amount in the bill. The committee also cut a net of $1.1 billion from procurement, $1.9 billion from operation and maintenance (O&M), and $1.2 billion from military personnel accounts, while it added $2.1 billion to R&D accounts. Of the cuts in military personnel, $784 million are from projected underexecution of approved personnel levels as reported by the Government Accountability Office (GAO) and $288 million from the Air Force to reflect a shift of Operation Noble Eagle Congressional Research Service 36 Defense: FY2007 Authorization and Appropriations costs (which provides security at milita [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3ARL33405. Public record. Not legal advice.