# Defense: FY2008 Authorization and Appropriations > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3ARL33999 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** January 23, 2008 - **Citation:** RL33999 ## Text Defense: FY2008 Authorization and Appropriations (name redacted) Specialist in U.S. Defense Policy and Budget (name redacted) Specialist in Defense Policy and Budgets (name redacted) Specialist in U.S. Defense Policy and Budget January 23, 2008 Congressional Research Service 7-.... www.crs.gov RL33999 CRS Report for Congress Prepared for Members and Committees of Congress Defense: FY2008 Authorization and Appropriations Summary The President’s FY2008 federal budget request, released February 5, 2007, included $647.2 billion in new budget authority for national defense including $483.2 billion for the regular operations of the Department of Defense (DOD), $141.8 billion for military operations in Iraq and Afghanistan, $17.4 billion for the nuclear weapons and other defense-related programs of the Department of Energy, and $4.8 billion for defense-related activities of other agencies. On July 31, 2007, the President requested an additional $5.3 billion for war-fighting costs, and on October 22 he requested an additional $42.3 billion for that purpose, bringing his total request for FY2008 war costs to $189.3 billion and the total national defense request to $694.8 billion. The Congressional Budget Office (CBO) estimated the cost of the President’s proposal as $696.4 billion. The House passed on May 17 its version of the defense authorization bill, H.R. 1585, approving $1.2 billion more than the President’s then-pending request. The Senate passed its version of the bill October 1. The conference report on the bill, authorizing $696.4 billion—$21 million less than the request—was adopted by the House on December 12 and by the Senate on December 14. On December 28, the White House announced that the President would “pocket veto” the authorization bill—a procedure that would preclude efforts by Congress to override the veto. The President objected to a provision of the bill that would allow lawsuits in U.S. courts against the current Iraqi government for damages resulting from acts of the Saddam Hussein regime. On January 16, the House passed H.R. 4986, a version of H.R. 1585 that was modified to allow the President to waive application to Iraq of the provision that he had cited as grounds for his veto. The new version of the bill also would make retroactive to January 1, 2008 a 3.5% pay raise for military personnel and the renewal of authorization for several types of bonuses, including enlistment and re-enlistment bonuses. The Senate passed the bill January 22. Reportedly, the President is expected to sign the bill. The House passed its version of the FY2008 defense appropriations bill on August 5. The bill, H.R. 3222, provided $448.7 billion in discretionary budget authority for DOD’s “base” budget, $3.6 billion less in discretionary budget authority than the $452.2 billion the President requested for operations within the scope of that legislation. The Senate version of H.R. 3222, passed by voice vote on October 4, 2007, provided $449.5 billion in discretionary DOD budget authority plus $3 billion to better protect U.S. borders. Each version of the bill also included $10.9 billion required by a permanent appropriation for military retirees’ medical care. House-Senate conferees on H.R. 3222 concluded on November 6 a conference report that would appropriate $448.7 billion plus $11.6 billion to acquire MRAPs. The House and Senate each adopted the conference report on November 8. On November 13, the President signed the appropriations bill into law (P.L. 110-116). This report will be updated as events warrant. Congressional Research Service Defense: FY2008 Authorization and Appropriations Contents Most Recent Developments.........................................................................................................1 Lawsuits Against Terrorist States...........................................................................................1 Veto Impact on Military Pay and Bonuses .............................................................................2 Pocket Veto or Regular..........................................................................................................2 FY2008 Defense Funding Status .................................................................................................4 Overview of Administration FY2008 Budget Request .................................................................5 Status of Legislation....................................................................................................................5 Facts and Figures: Congressional Action on the FY2008 Defense Budget Request.......................6 FY2008 Defense Budget Request and Outyear Plans: Questions of Affordability and Balance.................................................................................................................................. 13 Issues in the FY2008 Global War on Terror Request .................................................................. 16 Additional FY2008 War Funding Request ........................................................................... 17 Congressional Action on Administration’s War Requests ..................................................... 18 Authorizers Categorize “War” Funding Differently ....................................................... 18 Authorizers Shift Funds to Mine-Resistant Ambush Protected Vehicles ......................... 19 Administration Proposes More Funding for MRAP Vehicles ......................................... 20 Appropriations Action................................................................................................... 20 Other War-Related Provisions ....................................................................................... 22 FY2008 GWOT Request ..................................................................................................... 22 Congressional Action .................................................................................................... 23 Broad Definition of Reconstitution or Reset ........................................................................ 25 Congressional Action .................................................................................................... 26 Force Protection Funding .................................................................................................... 27 Congressional Action .................................................................................................... 28 Questions Likely About Funding For Joint Improvised Explosive Device Defeat Fund ........ 28 Congressional Action .................................................................................................... 28 Oversight Concerns About Cost to Train and Equip Afghan and Iraqi Security Forces ......... 29 Congressional Action .................................................................................................... 29 Coalition Support and Commanders Emergency Response Program .................................... 29 Congressional Action .................................................................................................... 30 Military Construction Overseas and Permanent Basing Concerns ........................................ 30 Congressional Action .................................................................................................... 30 Potential Issues in the FY2008 Base Budget Request................................................................. 31 Bill-by-Bill Synopsis of Congressional Action to Date .............................................................. 37 Congressional Budget Resolution........................................................................................ 37 FY2008 Defense Authorization: Highlights of the House Bill.............................................. 38 Operations in Iraq and Afghanistan ............................................................................... 38 Other FY2008 Defense Budget Issues ........................................................................... 39 Defense Authorization: Highlights of House Floor Action ................................................... 44 Administration Objections to the House Version of H.R. 1585............................................. 47 FY2008 Defense Authorization: Highlights of the Senate Armed Services Committee Bill .................................................................................................................................. 47 Operations in Iraq and Afghanistan ............................................................................... 48 Force Expansion and Pay Raise..................................................................................... 49 Congressional Research Service Defense: FY2008 Authorization and Appropriations Tricare and Other Health Issues..................................................................................... 49 Ballistic Missile Defense............................................................................................... 50 FCS and Other Ground Combat Systems ....................................................................... 51 Nuclear Weapons and Long-range Strike ....................................................................... 51 Acquisition Reform....................................................................................................... 52 Other Provisions ........................................................................................................... 52 Defense Authorization: Highlights of Senate Floor Action................................................... 53 July Floor Debate.......................................................................................................... 53 Troop Deployment Duration Amendments .................................................................... 54 Improving Health Care for Wounded Warriors............................................................... 55 Other Amendments Acted on in July ............................................................................. 56 Iraq Debate Resumed in September ............................................................................... 56 Petraeus Advertisement Amendments ............................................................................ 57 Habeas Corpus for Detainees ........................................................................................ 58 Federal Role in Prosecuting Hate Crimes ...................................................................... 58 Selected Other Amendments Acted on in September...................................................... 58 Defense Authorization: Final Senate Debate and Passage .................................................... 60 Conference Report on H.R. 1585 (FY2008 Defense Authorization Bill)............................... 61 Conference Report Highlights ....................................................................................... 62 Military Pay and Benefits.............................................................................................. 62 Health Care................................................................................................................... 63 ‘Wounded Warrior’ Provisions ...................................................................................... 63 Readiness Improvements............................................................................................... 63 Roles and Missions Review........................................................................................... 64 Civilian Employees ....................................................................................................... 64 National Guard and Reserve Issues ............................................................................... 64 Shipbuilding ................................................................................................................. 65 Long-Range Strike and Nuclear Weapons...................................................................... 65 Contract Management ................................................................................................... 65 Amendments to the “Insurrection Act” .......................................................................... 65 Defense Appropriations: Highlights of the House Bill ......................................................... 66 Force Expansion ........................................................................................................... 67 Tricare Fee Hikes Rejected............................................................................................ 67 Other Quality of Life Initiatives .................................................................................... 67 Facilities Improvements ................................................................................................ 68 Shipbuilding Increase.................................................................................................... 68 Selected Other Major Weapons Program Changes ......................................................... 68 Defense Appropriations: Highlights of House Floor Action ................................................. 69 Selected Floor Amendments .......................................................................................... 69 Defense Appropriations: Highlights of Senate Committee Action ........................................ 70 Personnel Increase and Pay Raise.................................................................................. 70 Tricare Fees and the Defense Health Program ............................................................... 70 Long-Range Strike and Nuclear Weapons...................................................................... 71 Shipbuilding Costs and the Littoral Combat Ship .......................................................... 71 Selected Other Weapons Programs ................................................................................ 72 Defense Appropriations: Highlights of Senate Floor Action ................................................. 73 Iraq Deployment ........................................................................................................... 73 Border Security............................................................................................................. 74 Other Amendments ....................................................................................................... 74 Defense Appropriations: Conference Report.............................................................................. 75 Congressional Research Service Defense: FY2008 Authorization and Appropriations War-Fighting Costs Excluded ........................................................................................ 75 Personnel Costs and Medical Care................................................................................. 76 Shipbuilding ................................................................................................................. 77 Ground Combat Vehicles............................................................................................... 77 Long-Range Strike and Nuclear Weapons...................................................................... 78 Ballistic Missile Defense............................................................................................... 78 Other Issues .................................................................................................................. 79 For Additional Reading ............................................................................................................. 79 Overall Defense Budget ...................................................................................................... 79 Military Operations: Iraq, Afghanistan, and Elsewhere ........................................................ 79 U.S. Military Personnel and Compensation ......................................................................... 80 Defense Policy Issues.......................................................................................................... 80 Defense Program Issues ...................................................................................................... 81 Tables Table 1. Status of FY2008 Defense Authorization, H.R. 1585/S. 1547 .........................................6 Table 2. Status of FY2008 Defense Appropriations Bill ...............................................................6 Table 3. FY2008 National Defense Budget Request.....................................................................7 Table 4. Congressional Budget Resolution, H.Con.Res. 99/ S.Con.Res. 21, Recommended National Defense Budget Function (050) Totals................................................9 Table 5. FY2008 Defense Authorization, House and Senate Action by Title.................................9 Table 6. FY2008 Department of Defense Base Budget Within the Scope of the Defense Appropriations Bill, House and Senate Action by Title ........................................................... 11 Table 7. House and Senate 302(b) Allocations of FY2008 Total Discretionary Budget Authority, Defense vs Non-Defense ....................................................................................... 12 Table 8. Expected Adjustments to FY2008 War Request ............................................................ 17 Table 9. DOD’s Global War on Terror, FY2006-FY2008 by Function ........................................ 24 Table 10. House Floor Action on Selected Amendments: FY2008 Defense Authorization Bill, H.R. 1585....................................................................................................................... 45 Table A-1. Congressional Action on Selected Army and Marine Corps Programs: FY2008 Authorization......................................................................................................................... 83 Table A-2. Congressional Action on Shipbuilding: FY2008 Authorization ................................. 89 Table A-3. Congressional Action on Selected Aircraft Programs: FY2008 Authorization............ 91 Table A-4. Congressional Action on Missile Defense Funding: FY2008 Authorization............... 94 Table A-5. Congressional Action on Selected Army and Marine Corps Programs: FY2008 Appropriations ....................................................................................................................... 97 Table A-6. Congressional Action on Shipbuilding: FY2008 Appropriations ............................. 100 Table A-7. Congressional Action on Selected Aircraft Programs: FY2008 Appropriations........ 102 Table A-8. Congressional Action on Missile Defense Funding: FY2008 Appropriations........... 104 Congressional Research Service Defense: FY2008 Authorization and Appropriations Appendixes Appendix. Funding Tables......................................................................................................... 83 Contacts Author Contact Information .................................................................................................... 107 Key Policy Staff...................................................................................................................... 107 Congressional Research Service Defense: FY2008 Authorization and Appropriations Most Recent Developments On January 22, the Senate passed H.R. 4986, a revised version of H.R. 1585, the FY2008 National Defense Authorization Act, thus clearing the bill for the President, who had vetoed the original version of the bill on December 28. The President vetoed the initial version because of one section which would allow victims of terrorist actions perpetrated by Saddam Hussein’s regime to sue the current Iraqi government for damages in U.S. courts. The President said this provision would allow plaintiffs to tie up in lawsuits billions of dollars worth of Iraqi assets, thus hamstringing that country’s efforts at economic reconstruction and political reconciliation. The revised defense bill, which would allow the President to exempt Iraq from the provision at issue, would authorize all but $215 million of the $696.4 billion that was the President’s amended request for national defense-related funding in FY2008—the same amount as was authorized the vetoed bill. The only other differences between H.R. 1585 and H.R. 4986 were provisions added to the later bill that would make retroactive to January 1, 2008 a 3.5% pay raise for military personnel and the reauthorization of various bonuses, including enlistment and reenlistment bonuses. According to press reports, White House officials have said the President will sign the revised defense bill, H.R. 4986. Lawsuits Against Terrorist States The section of H.R. 1585 to which the President objected is Section 1083, which would amend the Foreign Sovereign Immunities Act (28 U.S.C. 1602), the legislation that regulates the conditions under which foreign countries or their instrumentalities can be sued in U.S. courts. Section 1083 is based on a Senate floor amendment to H.R. 1585 sponsored by Senators Frank R. Lautenberg, Arlen Specter, and 20 others. Among the section’s many provisions were one that would allow monetary claims against a foreign state for damages (including punitive damages), one that would nullify certain legal defenses currently available to a foreign government being sued, and one that would allow a claimant to freeze assets under U.S. jurisdiction of a state being sued, as soon as a suit was filed. The Administration contended that these provisions could result in billions of dollars in Iraqi funds being tied up by court proceedings, thus undermining efforts to rebuild Iraq and train Iraqi security forces.1 (For background on the issue, see CRS Report RS22094, Lawsuits Against State Supporters of Terrorism: An Overview, by (name redacted), and CRS Report RL31258, Suits Against Terrorist States by Victims of Terrorism, by (name redacted).) The revised version of the defense bill, H.R. 4986, retained Section 1083 but added to it a provision that would allow the President to waive its application to Iraq, provided the waiver is in the national security interest and will “promote the reconstruction of, the consolidation of democracy in, and the relations of the United State with, Iraq,” and provided that Iraq continues to be a reliable ally in combating international terrorism. Such a presidential waiver would expire 1 White House, Office of the Press Secretary, “Fact Sheet: National Defense Authorization Act Section 1083: A Danger to Iraq’s Progress,” December 28, 2007. Congressional Research Service 1 Defense: FY2008 Authorization and Appropriations 30 days after it is made, unless the President gives Congress written notice of the basis for the waiver. The revised Section 1083 also expresses the sense of Congress that the U.S. and Iraqi governments should negotiate compensation for meritorious claims based on terrorist acts by the Saddam Hussein regime against U.S. citizens or members of the U.S. armed forces if a presidential waiver under this section bars lawsuits for this purpose. Veto Impact on Military Pay and Bonuses Because the President signed the FY2008 Defense Appropriations Bill (H.R. 3222, P.L. 110-116) into law on December 26, the budget authority thus provided has been available for most ongoing Pentagon operations, notwithstanding the absence of a companion authorization bill. However, because legal authority for more than 20 enlistment and re-enlistment bonuses expired on January 1, 2008, the armed services have temporarily halted payments of those bonuses, pending enactment of authorizing legislation. New bonus agreements signed by the Army, Navy and Air Force on or after January 1, 2008 include an addendum which provides that, while the contracting service member will receive the bonus if and when it is legislatively authorized, payment is not guaranteed. The Marine Corps has suspended its use of bonuses altogether pending enactment of authorizing legislation, directing units to temporarily extend the current enlistments of Marines who intend to reenlist and who would be eligible for a reenlistment bonus. Also as a result of the delay in enacting a defense authorization bill, the basic pay of military personnel increased by 3% on January 1 rather than 3.5%, as was approved in the conference report on H.R. 1585 (and as has taken effect for civilian federal employees). The revised authorization bill, H.R. 4986, would authorize the 3.5% pay raise and the various bonuses, retroactive to January 1. Pocket Veto or Regular2 House and Senate negotiators had filed the conference report on the initial version of the defense bill (H.R. 1585, H.Rept. 110-477) on December 6. The House adopted the conference report December 12 by a vote of 370-49. The Senate adopted it December 14 by a vote of 90-3, clearing the bill for the President. On December 28, Administration officials announced that the President would not sign the bill and that, since the House had adjourned, the bill thus would die as the result of a so-called “pocket veto.” However, Democratic congressional leaders contended that Congress was not adjourned and, therefore, that the President could not invoke that procedure under the circumstances. 2 The following section was written with the assistance of (name redacted), a Legislative Attorney in the American Law Division of CRS. Congressional Research Service 2 Defense: FY2008 Authorization and Appropriations The Constitution provides that, once a bill is passed by Congress and sent to the President, if he neither (a) signs the measure nor (b) vetoes it and returns it to Congress within 10 days (not counting Sundays), then the bill will become law without his signature, “unless the Congress by their adjournment prevent its return, in which case it shall not be a law” (Article I, Section 7, Clause 2). This last contingency was first referred to in 1812 as a “pocket veto.” The practical significance of the issue is that, while Congress can try to override a regular veto with a twothirds majority in each chamber (thus enacting the vetoed legislation over the President’s objection), it has no recourse in the case of a pocket veto except to pass a new bill. For decades, a constitutional debate has been underway over whether the President can exercise the pocket veto after an adjournment between the two sessions of a Congress or only after the adjournment at the end of a two-year Congress.3 Congress has adopted various procedures to designate agents to whom the President could return a vetoed bill during an inter-session adjournment, thus appearing to provide an opportunity for Congress to try to override the veto. However, several recent presidents, including George W. Bush and William J. Clinton have argued that none of those devices block the use of a pocket veto during an adjournment within a two-year Congress.4 In the case of H.R. 1585, a White House spokesman told reporters December 31 that the Administration regarded Congress as being in a state of adjournment and, thus, that the defense authorization bill would die by pocket veto at midnight that date. However, the President also returned the bill to the House accompanied by a “Memorandum of Disapproval,” stating his reasons for withholding approval of the bill.5 This so-called “protective return” procedure—both invoking the pocket veto power and returning the bill to Congress—has been used by previous Administrations in similar circumstances. 6 After the House reconvened in January, it committed the vetoed defense bill, H.R. 1585, and the President’s accompanying “Memorandum of Disapproval” to the House Armed Services Committee, thus upholding the constitutional position that the House did not acknowledge that the President’s action was a pocket veto. On January 16, Armed Services Chairman Ike Skelton then introduced the new bill, H.R. 4986, consisting of the text of the vetoed bill with the changes required to address the issues of Section 1983 and the need to make the pay raise and bonus authorities retroactive. On the same day, the revised bill was passed by the House 369-46 under suspension of the rules, a procedure requiring a two-thirds majority to pass the bill. The Senate passed the bill January 22 by a vote of 91-3, thus clearing the bill for the President. 3 The Supreme Court has addressed the pocket veto issue twice, but those decisions do not appear to have definitively resolved the dispute. See Pocket Veto Case, 279 U.S. 655 (1929) and Wright vs. U.S., 302 U.S. 583 (1938). 4 For additional information, see CRS Report RL30909, The Pocket Veto: Its Current Status, by (name redacted). 5 President George W. Bush, “Memorandum of Disapproval [concerning H.R. 1585],” December 28, 2007. White House, “Press Gaggle by Scott Stanzel,” December 31, 2007. 6 CRS Report RL30909, pp. 6-7. Congressional Research Service 3 Defense: FY2008 Authorization and Appropriations FY2008 Defense Funding Status On November 13, the President signed into law the conference report on the FY2008 Defense Appropriations bill (H.R. 3222, P.L. 110-114), which would provide $460.3 billion in new budget authority for activities of the Department of Defense. The House had approved the compromise version of the bill November 8 by a vote of 400-15 and the Senate adopted it by voice vote the same day. In general, the appropriations bill funds only DOD’s base budget—its activities other than the conduct of ongoing military operations in Iraq and Afghanistan. The only exception to that rule is the conference report’s inclusion of $11.6 billion to purchase Mine-Resistant, Ambush-Protected (MRAP) vehicles, which are designed to better protect their occupants against land-mines than conventional vehicles. The conference report also includes a continuing resolution that would allow federal agencies to continue operating, through December 14, 2007, even if their regular appropriations bills for FY2008 have not been enacted. Because none of the regular FY2008 appropriations bills had been enacted by October 1, when the new fiscal year began, a continuing resolution (H.J.Res. 52), passed by the House September 26 by a vote of 404-14 and by the Senate September 27 by a vote of 94-1, provided for continued funding the government through November 16. Funding for DOD under that continuing resolution is based on the amount appropriated in the FY2007 DOD Appropriations Act (P.L. 109289), which funded both the DOD base budget and a so-called bridge fund of $70 billion to pay for war costs in the opening months of the fiscal year. H.J.Res. 52 also provided an additional $5.2 billion to purchase MRAP vehicles. Neither the House-passed nor the Senate-passed versions of H.R. 3222 addressed the President’s request to fund ongoing military operations in Iraq and Afghanistan in FY2008, which will be dealt with in a separate bill. Budget amendments in July and October increased the President’s initial request for $141.7 billion to cover war-fighting costs in FY2008 to $189.3 billion. On November 14, by a vote of 218-203, the House passed H.R. 4156, a bill that would provide $50 billion to cover war costs pending congressional action early next year on the balance of the President’s request. The bill also would require DOD to begin withdrawing U.S. forces from a combat role in Iraq and would set a non-binding goal of removing U.S. forces in that country from all but a few supporting roles by December 2008, for which reason the President said he would veto the bill7. On November 16, the Senate rejected a motion to end debate on the H.R. 4156 by a vote of 53-45 (with 60 votes required to invoke cloture). Earlier the same day, the Senate rejected by a vote of 45-53 a cloture motion relating to a Republican-sponsored bill, S. 2340, that would provide $70 billion for war costs with no limitations on U.S. deployments. House-Senate conferees also have agreed on a conference report to the FY2008 Military Construction and Veterans Affairs appropriations bill (H.R. 2642/S. 1645) that includes $21.4 billion for DOD military construction and family housing programs. However, the agreement on 7 In May of 2007, the President successfully resisted congressional efforts to put similar limitations on the FY2007 war-cost supplemental appropriations bill (H.R. 1591). (See CRS Report RL33900, FY2007 Supplemental Appropriations for Defense, Foreign Affairs, and Other Purposes, coordinated by (name redacted).) Congressional Research Service 4 Defense: FY2008 Authorization and Appropriations that bill was incorporated into the conference report on H.R. 3043, the FY2008 Labor, HHS and Education appropriations bill. The House approved the combined conference report November 6 by a vote of 269-142, but the Senate rejected it November 7 on a point of order. (For full coverage, see CRS Report RL34038, Military Construction, Veterans Affairs, and Related Agencies: FY2008 Appropriations, by (name redacted), (name redacted), and (name redacted) .) Overview of Administration FY2008 Budget Request On February 5, 2007, the White House formally released to Congress its FY2008 federal budget request, which included $647.2 billion in new budget authority for national defense. In addition to $483.2 billion for the regular operations of the Department of Defense (DOD), the request includes $141.7 billion for continued military operations abroad, primarily to fund the campaigns in Iraq and Afghanistan, $17.4 billion for the nuclear weapons and other defense-related programs of the Department of Energy, and $5.2 billion for defense-related activities of other agencies. (Note: The total of $647.2 billion for national defense includes an adjustment of -$275 million for OMB scorekeeping. DOD figures for the base budget do not add to the formal request in OMB budget documents.) The requested “base” budget of $483.2 billion for DOD—excluding the cost of ongoing combat operations—is $46.8 billion higher than the agency’s base budget for FY2007, an increase of 11% in nominal terms and, by DOD’s reckoning, an increase in real purchasing power of 7.9%, taking into account the cost of inflation. In requesting an additional $141.7 billion to cover the anticipated cost for all of FY2008 of ongoing operations in Iraq and Afghanistan, the Administration has complied with Congress’s insistence that it be given time to subject that funding to the regular oversight and legislative process. Nevertheless, since the Administration has requested that these funds be designated as “emergency” appropriations, they would be over and above restrictive caps on discretionary spending, even though the FY2008 combat operations funding request of $141.7 billion is 29% as large as the regular FY2008 DOD request. On July 31, the Administration increased its request for DOD war-fighting costs in FY2008 by $5.3 billion to procure MRAP vehicles. On October 22, the Administration increased its war-costs request by an additional $42.3 billion, bringing the total to $189.3 billion. Status of Legislation Congress began action on the annual defense authorization bill with the House Armed Services Committee approving its version of the bill (H.R. 1585) in a session that began May 9, and with House passage on May 17. The Senate Armed Services Committee marked up its version, S. 567, on May 24 and reported the measure as a clean bill (S. 1547) on June 5. Congressional Research Service 5 Defense: FY2008 Authorization and Appropriations Table 1. Status of FY2008 Defense Authorization, H.R. 1585/S. 1547 Full Committee Markup House Senate 5/9/07 5/24/07 House Report House Passage Senate Report Senate Passage Conf. Report H.Rept. 110-146 5/11/07 5/17/07 397-27 S.Rept. 110-77 6/5/07 10/1/07 92-3 H.Rept. 110-477 12/6/07 Conference Report Approval House Senate Public Law Table 2. Status of FY2008 Defense Appropriations Bill Subcommittee Markup House Senate 7/12/07 9/11/07 House Report House Passage Senate Report Senate Passage Conf. Report H.Rept. 110-279 7/30/07 8/5/07 395-13 S.Rept. 110-155 9/14/07 10/4/07 (Voice Vote) H.Rept. 110-434 11/6/07 Conference Report Approval House Senate Public Law 11/8/07 400-15 11/8/07 (Voice vote) P.L. 110116 11/13/07 Facts and Figures: Congressional Action on the FY2008 Defense Budget Request The following tables provide a quick reference to congressional action on defense budget totals. Additional details will be added as congressional action on the FY2008 defense funding bills proceeds. • Table 3 shows the Administration’s FY2008 national defense budget request by budget sub-function and, for the Department of Defense, by appropriations title. The total for FY2007 also represents, in part, requested funding. It includes $93.4 billion in FY2007 supplemental appropriations that the Administration requested in February 2007. In May, however, Congress actually approved $99.4 billion for the Department of Defense, $6.0 billion more than the Administration had asked for. • Table 4 shows the recommendations on defense budget authority and outlays in the House and Senate versions of the annual budget resolution, H.Con.Res. 99 and S.Con.Res. 21. These amounts are not binding on the Armed Services or Appropriations committees. • Table 5 shows congressional action on the FY2008 defense authorization bill by title. Technically, this table shows the budget authority implications of the provisions of the bill. For mandatory programs, the budget authority implication is the amount of budget authority projected to be required under standing law. The table also follows the common practice of the House and Senate Armed Services Committees, which is to show as the “budget authority implication” of the bill, the amounts expected to be available for programs within the national defense budget function not subject to authorization in the annual defense authorization bill. Except for some mandatory programs, the authorization bill does not provide funds but rather authorizes their appropriation. Appropriations bills may provide more than authorized, less than authorized, or the same as Congressional Research Service 6 Defense: FY2008 Authorization and Appropriations authorized, either in total or for specific programs. Appropriations bills may provide no funds for programs authorized and may provide funds for programs not authorized. In practice, defense appropriations bills often follow the amounts authorized, however. • Table 6 shows congressional action on the FY2008 defense and military construction appropriations bills. The table does not show funding for defenserelated activities of agencies other than the Defense Department, except for about $1.0 billion for the intelligence community. In particular, it does not include $17.4 billion requested for defense-related nuclear energy programs (nuclear weapons and warship propulsion) of the Energy Department. • Table 7 shows House and Senate Appropriations Committee allocations of funds under Section 302(b) of the Congressional Budget Act, for defense and military construction/veterans affairs appropriations bills compared to allocations for other, non-defense bills. The “302(b)” allocations are a key part of the appropriations and budget process. A point of order holds against any bill that exceeds its 402(b) allocation. In recent years, appropriations have trimmed allocations for the defense appropriations bill, freeing up more money for nondefense appropriations. The effect on defense was mitigated by the available of emergency appropriations for defense. In effect, emergency appropriations for war costs have been used indirectly to finance higher non-defense appropriations. Table 3. FY2008 National Defense Budget Request (billions of dollars) FY2007 Total with Supp FY2007 Supp Requesta FY2007 Enacted FY2008 Request Department of Defense Base Budget Military Personnel 111.1 — 111.1 118.9 Operation and Maintenance 127.7 — 127.7 143.5 Procurement 81.1 — 81.1 100.2 Research, Development, Test, & Evaluation 75.7 — 75.7 75.1 Military Construction 8.8 — 8.8 18.2 Family Housing 4.0 — 4.0 2.9 Revolving & Management Funds 2.4 — 2.4 2.5 Other Defense Programsa 23.7 — 23.7 23.3 Offsetting Receipts/Interfund Transactions -1.8 -1.8 -1.4 General Provisions/Allowances 3.6 — 3.6 -0.3 436.4 — 436.4 483.2 5.4 12.1 17.5 17.1 Subtotal—DOD Base Budget War-Related Funding Military Personnel Congressional Research Service 7 Defense: FY2008 Authorization and Appropriations FY2007 Total with Supp FY2007 Supp Requesta FY2007 Enacted FY2008 Request Operation and Maintenance 39.1 37.5 76.6 73.1 Procurement 19.8 25.3 45.2 36.0 Research, Development, Test, & Evaluation 0.4 1.4 1.9 2.9 Military Construction — 1.9 1.9 0.9 Family Housing — — — 0.0 Revolving & Management Funds — 1.3 1.3 1.7 Other Defense Programsa 0.1 1.3 1.4 1.3 Intelligence Community Management 0.0 0.1 0.1 — Iraqi Freedom Fund 0.1 0.2 0.3 0.1 Afghanistan Security Forces Fund 1.5 5.9 7.4 2.7 Iraq Security Forces Fund 1.7 3.8 5.5 2.0 Joint IED Defeat Funda 1.9 2.4 4.4 4.0 Mine Resistant Ambush Prot., vehicles 0.0 0.0 0.0 5.3 Subtotal—DOD War-Related 70.0 93.4 163.4 146.9 OMB vs DOD Scorekeeping Adjustment — — — -0.3 Total DOD (Base and War-Related) 506.4 93.4 599.8 629.9 Department of Energy Defense Related 17.0 — 17.0 17.4 Department of Energy 15.8 — 15.8 15.9 Formerly utilized sites remedial action 0.1 — 0.1 0.1 Defense nuclear facilities safety board 0.0 — 0.0 0.0 Energy employees occupational illness comp. 1.1 — 1.1 1.4 5.2 — 5.2 5.2 FBI Counter-Intelligence 2.5 — 2.5 2.5 Intelligence Community Management 0.9 — 0.9 1.0 Homeland Security 1.5 — 1.5 1.4 Other 0.3 — 0.3 0.3 528.6 93.4 622.0 652.5 Other Defense Related Total National Defense Sources: FY2007 enacted calculated by CRS based on congressional conference reports and Department of Defense data; FY2007 supplemental from Department of Defense; FY2008 request from Department of Defense and Office of Management and Budget. DOD Base and War-Related Total and National Defense Total reflect OMB figures that differ slightly from DOD estimates. The FY2008 request does not reflect an anticipated budget amendment adding $42 billion to the request. a. FY2007 supplemental amount is shown here as requested. Congressional Research Service 8 Defense: FY2008 Authorization and Appropriations Table 4. Congressional Budget Resolution, H.Con.Res. 99/ S.Con.Res. 21, Recommended National Defense Budget Function (050) Totals (billions of dollars) FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 Budget Authority 622.4 647.2 584.7 545.0 551.5 560.7 Outlays 571.9 606.5 601.8 565.3 556.4 549.5 Administration Projection House-Passed (H.Con.Res. 99) National Defense Base Budget (Function 050) Budget Authority 525.8 507.0 534.7 545.2 550.9 559.8 Outlays 534.3 514.4 524.4 536.4 547.6 548.2 Allowance for Overseas Operations and Related Activities (Function 970) Budget Authority 124.3 145.2 50.0 — — — Outlays 31.5 114.9 109.4 42.3 13.6 4.5 Budget Authority 619.4 648.8 584.8 545.3 551.1 559.9 Outlays 560.5 617.8 627.0 572.9 558.4 551.8 Senate-Passed (S.Con.Res. 21) Conference Report (S.Con.Res. 21) National Defense Base Budget (Function 050) Budget Authority 525.8 507.0 534.7 545.2 550.9 559.8 Outlays 534.3 514.4 524.4 536.4 547.6 548.2 Overseas Deployments and Other Activities (Function 970) Budget Authority 124.2 145.2 50.0 — — — Outlays 31.9 115.9 109.8 41.7 13.6 4.5 Sources: CRS from H.Con.Res. 99; S.Con.Res. 21; Office of Management and Budget. Table 5. FY2008 Defense Authorization, House and Senate Action by Title (budget authority in millions of dollars) House Request House Passed House vs Request Senate Request Senate Reported Senate vs Request Department of Defense Base Budget Military Personnel 116,279.9 115,489.9 -790.0 116,279.9 120,228.0 +3,948.1 Operation and Maintenance 142,854.0 142,514.1 -339.9 142,854.0 143,492.2 +638.2 Procurement 100,223.0 102,678.6 +2,455.6 100,223.0 109,859.5 +9,636.5 Research, Development, Test, & Evaluation 75,117.2 73,456.3 -1,660.9 75,117.2 74,659.0 -458.2 Military Construction & Family Housing 21,165.2 21,224.3 +59.1 21,165.2 21,781.4 +616.2 Congressional Research Service 9 Defense: FY2008 Authorization and Appropriations House Request House Passed House vs Request Senate Request Senate Reported Senate vs Request Other Programsa 23,530.9 25,162.6 +1,631.7 25,149.7 25,220.2 +70.5 Revolving & Management Funds 2,453.1 2,887.2 +434.1 2,496.0 2,458.2 -37.8 Unallocated Reductions/Inflation Savings — -205.0 -205.0 — -1,627.0 -1,627.0 Subtotal, Discretionary 481,623.3 483,208.1 +1,584.8 483,285.0 496,071.5 +12,786.5 Offsetting Receipts/Interfund/Trust Funds 1,791.0 1,707.0 -84.0 2,586.5 2,586.5 — Subtotal—DOD Base Budget 483,414.3 484,915.1 +1,500.8 485,871.5 498,658.0 +12,786.5 17,319.3 17,027.3 -292.0 16,927.1 16,925.2 -1.9 — — — 4,159.0 4,159.0 — Department of Homeland Security 1,142.0 1,142.0 — — — — Department of Justice (FBI) 2,437.0 2,437.0 — — — — Selective Service 22.0 22.0 — — — — Intelligence Community Management 705.4 705.4 — — — — Maritime Administration 154.4 154.4 — — — — National Science Foundation 67.0 67.0 — — — — Department of Commerce 14.0 14.0 — — — — CIA Retirement & Disability 262.5 262.5 — — — — Radiation Exposure Trust Fund 31.0 31.0 — — — — Subtotal—Other Defense-Related 22,154.6 21,862.6 -292.0 21,086.2 21,084.3 -1.9 505,568.8 506,777.7 +1,208.8 506,957.7 519,742.3 +12,784.6 Other Defense-Related Atomic Energy DefenseRelated Defense-Related Activities Total National Defense Base Budget War-Related Funding (Title IV of H.R. 1585; Titles XV and XXIX of S. 1547) Military Personnel 17,070.3 17,471.8 +401.5 17,070.3 12,922.0 -4,148.3 Operation and Maintenance 73,099.1 72,219.1 -880.0 72,867.5 72,015.5 -852.0 Procurement 35,956.6 36,327.5 +370.9 35,956.6 28,303.4 -7,653.1 Congressional Research Service 10 Defense: FY2008 Authorization and Appropriations House Request House Passed House vs Request Senate Request Senate Reported Senate vs Request Research, Development, Test, & Evaluation 2,857.4 2,151.1 -706.2 2,857.4 1,950.3 -907.0 Military Construction 907.9 695.5 -212.4 907.9 752.7 -155.3 Revolving & Management Funds 1,681.4 1,681.4 — 1,690.4 1,689.6 -0.8 Defense Health Program 1,022.8 1,022.8 — 1,022.8 1,022.8 — Drug Interdiction 257.6 257.6 — 257.6 257.6 — Inspector General 4.4 4.4 — 4.4 4.4 — Iraqi Freedom Fund 107.5 107.5 — 107.5 107.5 — Afghanistan Security Forces Fund 2,700.0 2,700.0 — 2,700.0 2,700.0 — Iraq Security Forces Fund 2,000.0 2,000.0 — 2,000.0 2,000.0 — Joint IED Defeat Fund 4,000.0 4,000.0 — 4,000.0 4,500.0 +500.0 — 1,000.0 +1,000.0 — — — 151.1 151.1 — 373.7 323.7 -50.0 141,816.1 141,789.8 -26.2 141,816.1 128,549.6 -13,266.5 647,384.9 648,567.5 +1,182.6 648,773.7 648,291.9 -481.9 Strategic Readiness Fund Other Subtotal—WarRelated Total Including WarRelated Sources: CRS, from H.Rept. 110-146, DOD, OMB, House Armed Services Committee, S.Rept. 110-77. Neither the “House Request” nor “Senate Request” column reflects budget amendments that increased War-Related Funding. a. Shows “Budget Authority Implication” amounts in committee reports. “Other Programs” includes defense health, drug interdiction, chemical demilitarization. Table 6. FY2008 Department of Defense Base Budget Within the Scope of the Defense Appropriations Bill, House and Senate Action by Title (budget authority in millions of dollars) Request House Senate Conference Title I: Military Personnel 105,404 105,018 105,522 105,292 Title II: Operation and Maintenance 142,854 137,135 142,679 140,062 Title III: Procurement 99,623 99,608 98,225 98,202 Title IV: Research, Development, Test, & Evaluation 75,117 76,231 75,382 77,271 Title V: Revolving & Management Funds 2,454 3,842 2,397 2,702 Title VI: Other Programsa 25,750.0 26,099.0 26,316 26,316 Title VII: Related Agencies 968.0 946.0 972 988 Title VIII: General Provisions (Net, excluding emergency funding for MRAPs) 53.0 -205.0 -2,026 -2,160 Defense Appropriations Bill Congressional Research Service 11 Defense: FY2008 Authorization and Appropriations Request House Senate Conference 452,223 448,671 449,467 448,673 MRAP Emergency Funds — — — 11,630 Border Security Improvements (non-DOD) — — 3,000 — 452,223.0 448,673.0 452,467 460,303 10,876.0 10,876.0 10,876 10,871 463,045.0 459,556.0 463,343.0 471,592.0 subtotal – DOD Base Budget (included in scope of FY2008 Defense Appropriations Bill, H.R. 3222) Total, reported in the conference report on H.R. 3222 (H.Rept. 110-434, p. 487) with the President’s request adjusted to reflect exclusion from this bill of $187 billion requested for the cost of the war in Iraq and Afghanistan Tricare-for-Life accrual payments Total including MRAP and Tri-Care Accrual, but excludes non-DOD Border Security Sources: House Appropriations Committee, conference report on the FY2008 Defense Appropriations Bill (H.Rept. 110-434); House Appropriations Committee, “Conference Report with Outlays,” unpublished computer printout, November 6, 2007. Notes: Table excludes amounts requested for War-Related Funding. Totals may not add due to rounding. a. “Other Programs” include defense health, chemical agents and munitions destruction, drug interdiction, joint improvised explosive device defeat fund, rapid acquisition fund, and office of the inspector general. Table 7. House and Senate 302(b) Allocations of FY2008 Total Discretionary Budget Authority, Defense vs Non-Defense (millions of dollars) Appropriations Subcommittee/Bill FY2008 House 6/8/2007 House vs. Request FY2008 Senate 6/14/2007 Senate vs. Request FY2007 Enacted FY2008 Request Defense 419,612 462,879 459,332 -3,547 459,332 -3,547 Military Construction, Veterans Affairs 49,752 60,745 64,745 +4,000 64,745 +4,000 Total Defense and Mil Con/VA 469,364 523,624 524,077 +453 524,077 +453 Total Other/NonDefense Discretionary 403,354 409,225 428,976 +19,751 428,976 +19,751 Total Discretionary 872,718 932,849 953,053 +20,204 953,053 +20,204 Source: House Appropriations Committee, “Report on the Suballocation of Budget Allocations for Fiscal Year 2008,” H.Rept. 110-183, June 8, 2007; Senate Appropriations Committee, “Allocation to Subcommittees of Budget Totals from the Concurrent Resolution for Fiscal Year 2008,” S.Rept. 110-86, June 18, 2007. Congressional Research Service 12 Defense: FY2008 Authorization and Appropriations FY2008 Defense Budget Request and Outyear Plans: Questions of Affordability and Balance Several aspects of the Department’s FY2008 budget request and its projected budgets through FY2013 raise questions about the affordability of DOD’s plan as a whole and about the balance of spending among major elements of the defense budget. (1) DOD’s funding plan for FY2008-FY2013, excluding the cost of military operations in Iraq and Afghanistan, projects that the department’s base budget will increase in real purchasing power, after adjusting for inflation, by 8.0% between FY2007 and FY2008 and by another 3.5% in FY2009 before declining slightly over each of the following four years. But the tightening fiscal squeeze on the federal government may put strong downward pressure on the defense budget; and the unbudgeted funds needed for ongoing military operations abroad may compound the problem. The Office of Management and Budget (OMB), the Congressional Budget Office (CBO) and the Government Accountability Office (GAO) agree that the current mix of federal programs is fiscally unsustainable for the long term. 8 The nation’s aging population combined with rising health costs are driving an increase in spending for federal entitlement programs which, in turn, will fuel rising deficits compounded by a steadily increasing interest on the national debt. The upshot is that, if total federal outlays continue to account for about 20% of the GDP and federal revenues remain at about their current level, total federal spending on discretionary programs, in terms of real purchasing power, would have to be sharply reduced to meet the goal of a balanced federal budget by 2012 and then to cover the rising costs of Medicare, Medicaid and Social Security resulting partly from the retirement of baby boomers. To protect DOD from this fiscal vise, some have recommended that the defense budget (excluding the cost of ongoing operations in Iraq and Afghanistan) be sustained at 4% of GDP—a share of the national wealth that DOD last claimed in FY1994.9 But that proposal would have to overcome the thus far intractable political challenges of increasing federal revenues, reducing discretionary non-defense spending, and/or restraining the growth of entitlement costs. (2) Although the Administration has submitted a budget proposal to cover the cost of ongoing operations in Iraq and Afghanistan in FY2008 that is separate from its “base” budget request for the year, it may be difficult, as a practical matter, for Congress to subject the request for cost-ofwar appropriations to the same oversight it applies to regular, annual defense spending requests. If the congressional defense committees mark up the FY2008 defense funding bills on their usual schedules, as the House and Senate Armed Services committees are doing with respect to the annual defense authorization bill, they will have had to review in less than four months both the President’s $482 billion request for the base DOD budget and the additional $142 billion requested for operations in Iraq and Afghanistan. The burden may be compounded by the fact that the congressional defense committees may not have time-tested analytical tools with which to scrutinize the request for ongoing combat operations, as they do for reviewing the base budget. 8 See CRS Report RL33915, The Budget for Fiscal Year 2008, by (name redacted). See also OMB, Budget of the United States Government for Fiscal Year 2008, February 2007, pp. 16-21; CBO, The Budget and Economic Outlook: Fiscal Years 2008-2017, January 2007, pp. 10-11; GAO, The Nation’s Long-Term Fiscal Outlook: January 2007 Update, GAO-07-510R. 9 Baker Spring, “Defense FY2008 Budget Analysis: Four Percent for Freedom,” The Heritage Foundation, Backgrounder no. 2012, March 5, 2007. Congressional Research Service 13 Defense: FY2008 Authorization and Appropriations Moreover, for most of that four month period, Members of Congress, and the defense funding committees in particular, have been deeply preoccupied with debate over the Administration’s FY2007 Emergency Supplemental Appropriations Bill (H.R. 1591) to pay for combat operations in Iraq and Afghanistan, legislation that has become the vehicle for congressional efforts to reduce the involvement of U.S. troops in Iraq. In addition, since DOD does not include the forecast cost of ongoing operations in its projections of defense budget requests in future years, except for a $50 billion placeholder for FY2009 included in the FY2008 request, Congress has not been given a clear sense of how severely the federal government’s overall fiscal squeeze may constrain future defense budgets. (3) DOD projects that its total budget will remain approximately constant, in real terms, from FY2009 through FY2013. But for years, most of the major components of the defense budget have shown a steady cost growth, in excess of the cost of inflation. Thus, the relatively flat defense budgets planned would have to accommodate other types of costs that also seem to be escalating almost uncontrollably, notably including (1) the rising cost of health care for personnel still on active service, retirees and their dependents, (2) operations and maintenance costs that have been increasing since the Korean War at an average of 2.5% per year above the cost of inflation, and (3) new weapons that are expected to dramatically enhance the effectiveness of U.S. forces, but which carry high price tags to begin with and then, all too often, substantially overrun their initial cost-estimates.10 (4) One of the most powerful drivers of DOD’s internal cost squeeze, the steady increase in the cost of military personnel, would be compounded by the President’s recommendation—in line with congressional proposals—to increase active-duty Army and Marine Corps end-strength. Between FY1999 and FY2005, the cost of active-duty military personnel, measured per-servicemember, grew by 33% above inflation, largely because of congressional initiatives to increase pay and benefits. A large fraction of the increased cost is due to increases in retired pay and greatly expanded medical benefits for military retirees. This year, the Administration has proposed (and the congressional defense committees have urged for years) an increase in active-duty end-strength that would add 92,000 soldiers and Marines to the rolls, thus increasing the services’ fixed costs by at least $12 billion annually (once the startup costs of the policy have been absorbed). At the same time, the Navy and Air Force are cutting personnel levels to safeguard funds for weapons programs. The Air Force is cutting about 40,000 full-time equivalent positions and the Navy about 30,000. One issue is whether these cuts will be used, directly or indirectly, not to pay for Air Force and Navy weapons programs, but for Army and Marine Corps end-strength increases. (5) The Navy’s ability to sustain a fleet of the current size within realistically foreseeable budgets may especially problematic. After years of criticism from Members of Congress who contended that the Navy was buying too few ships to replace vessels being retired, the service released in February a long-range shipbuilding plan that would fall just short of the Navy’s current goal of 10 In a review of 64 major weapons programs, the GAO found that their total cost had grown by more than 4.9% annually, in real terms. The total estimated cost of the 64 programs in FY2007 was $165 billion more (in FY2007 dollars) than had been projected in FY2004. See GAO-07-406SP, Defense Acquisitions: Assessments of Selected Weapons Programs, March 2007, p. 8. According to the GAO analysis, a major reason for that unbudgeted cost increase was that many programs depend on technologies that promise transformative combat effectiveness, but which have not been adequately developed before they are incorporated into the design of a new weapon. Ibid., p. 9. Congressional Research Service 14 Defense: FY2008 Authorization and Appropriations maintaining a fleet of 313 ships. But the plan assumes that the Defense Department, which bought seven ships in FY2007 and is requesting the same number in FY2008, would buy between 11 and 13 ships in each of the following five years. The plan assumes that amount appropriated for new ship construction would rise from a requested $12.5 billion in FY2008 to $17.5 billion in FY2013 (in current-year dollars).11 Considering the fiscal demands likely to put downward pressure on future defense budgets, funding the Navy’s plan may be challenging. But even if the Navy got the annual shipbuilding budgets it plans to request, it might not be able to buy all the ships it plans as quickly as it plans to do so, because of escalating costs and delays in some of the new types of ships slated to comprise the future fleet. In the past, Navy cost and schedule forecasts later proven to be overly optimistic have led to long-range shipbuilding plans that promised increases in shipbuilding budgets in the “out-years” that have not been realized. Unachievable shipbuilding plans may discourage the Navy and Congress from weighing potential tradeoffs between, on the one hand, construction of promising new designs and, on the other hand, building additional ships of types already in service and upgrading existing vessels. (6) The services’ plans to modernize their tactical air forces suffer from the type of excessive budgetary and technological optimism that also afflicts the shipbuilding plan. Roughly midway through a 40-year, $400 million effort to replace the post-Vietnam generation of Air Force, Navy and Marine Corps fighter planes with versions of the Air Force’s F-22A, the Navy’s F/A-18E/F, and the tri-service F-35 (or Joint Strike Fighter), the services’ plans have been buffeted by escalating costs, slipping schedules and external budget pressures. In the case of the F-22A, this produced a current budget plan that will buy only 183 planes rather than the 381 the Air Force says it needs. Similarly, the Navy and Marine Corps have reduced the total number of F-35s they plan to buy from 1,089 to 680. Adjustments like this are easier to make with aircraft budgets that fund dozens of units annually costing tens of millions of dollars apiece than it is with shipbuilding budgets that fund a handful of units each year, many of which cost upwards of a billion dollars apiece. But while it may be easier for the services to deal with the consequences of optimistic tactical aircraft recapitalization plans than it is for the Navy to manage the shipbuilding program, there is a similar underlying problem. If the services’ long-range plans assume budgets, costs, technical breakthroughs and production schedules that will not be realized, a service may delay and, ultimately, increase the cost of upgrades to planes already in service that will have to be kept combat-ready until the new craft are fielded: The military services accord new systems higher funding priority, and the legacy systems tend to get whatever funding is remaining after the new systems’ budget needs are met. If new aircraft consume more of the investment dollars than planned, the buying power and budgets for legacy systems are further reduced to remain within DOD budget limits. However, as quantities of new systems have been cut and deliveries to the warfighter delayed, more legacy aircraft are required to stay in the inventory and for longer periods of time than planned, requiring more dollars to modernize and maintain aging aircraft.12 11 Although most Defense Department shipbuilding is funded in the “Shipbuilding and Conversion, Navy” (SCN) appropriation, certain types of non-combatant vessels are funded in other appropriation accounts, particularly the National Defense Sealift Fund, which is under Revolving and Management Funds. 12 Government Accountability Office, Tactical Aircraft: DOD Needs a Joint and Integrated Investment Strategy, GAO07-415, April 2007, p. 13. Congressional Research Service 15 Defense: FY2008 Authorization and Appropriations Issues in the FY2008 Global War on Terror Request13 For the seventh year of war operations since the 9/11 attacks, DOD originally requested $141.7 billion, 29% of the amount it is requesting for all routine DOD activity in FY2008. For the first time since the 9/11 attacks, the Administration has submitted a request for war funding for the full year to meet a new requirement levied in the FY2007 John Warner National Defense Authorization Act (P.L. 109-364).14 Since FY2003, Congress has funded war costs in two bills, typically a bridge fund included in the regular DOD Appropriations Act to cover the first part of the fiscal year and a supplemental enacted after the fiscal year has begun. 15 On July 31, 2007, the Administration requested an additional $5.3 billion to purchase Mine Resistant Ambush Program vehicles (MRAPs), bringing the total to $147 billion for FY2008. On September 26, Secretary of Defense Robert Gates announced that the administration would be requesting an additional $42.3 billion. With those funds, the total request for FY2008 would be $189.3 billion, 14% above the FY2007 enacted level and 62% above the FY2006 enacted level. The Administration’s original FY2008 Global War on Terror (GWOT) request of $141.7 billion is similar to its FY2007 funding request for FY2007 war costs with certain exceptions: funds are not included to support the higher troop levels announced by the president in January 2007 or to increase the size of the Army and Navy (included in the baseline) and lesser amounts are requested to train Afghan and Iraqi security force (see Table 8). In testimony, Secretary of Defense Gates characterized the FY2008 GWOT request as “a straightline projection for forces of 140,000 in Iraq” because funding for the surge is only included through September 30, 2007, the end of FY2007.16 In mid-September 2007, General Petraeus recommended and the President decided to extend the current troop increase of about 30,000 in Iraq for an additional four months in FY2008. On September 26, 2007, Secretary Gates announced that the Administration will be submitting a request for an additional $42 billion for war costs in FY2008, including about $6 billion for the extension of the troop surge. If troop levels were to fall further later in the year—as Secretary Gates recently suggested might occur—less funds might be needed. On September 26, 2007, the House passed H.J.Res. 52, a continuing resolution to fund government operations temporarily until passage of the regular appropriations acts. That resolution includes funds for both DOD’s baseline program and war costs, as well as the $5.3 billion requested for MRAPS in late July. Both the House and Senate are expected to pass a continuing resolution to fund FY2008 government operations before the end of the fiscal year on September 30, 2007. 13 Prepared by (name redacted), Specialist in the U.S. Defense Budget. Section 1008, P.L. 109-364. 15 See Table A1 in CRS Report RL33110, The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations Since 9/11, by (name redacted); in FY2003, war funds were provided in the FY2003 Consolidated Appropriations (P.L. 108-7) as well as the FY2003 Supplemental see also CRS Report RS22455, Military Operations: Precedents for Funding Contingency Operations in Regular or in Supplemental Appropriations Bills, by (name redacted). 16 Senate Appropriations Committee, Hearing on Supplemental War Funding, February 27, 2007, transcript, p. 11. 14 Congressional Research Service 16 Defense: FY2008 Authorization and Appropriations According to DOD, the original FY2008 war request includes $109.7 billion for Iraq and $26.0 billion for Afghanistan and other counter-terror operations.17 That request supports a total of 320,000 deployed personnel including 140,000 in Iraq and 20,000 in Afghanistan. DOD does not explain the difference between the 160,000 military personnel deployed in Iraq and in Afghanistan and the additional 160,000 deployed elsewhere supporting those missions.18 Additional FY2008 War Funding Request In testimony to the Senate Appropriations Committee, Secretary Gates announced some of the major elements that would be part of the Administration’s new request had not yet been submitted. Table 8 below shows the additional amounts beyond the levels currently being considered by Congress. The main elements of the anticipated request reportedly will be • $6.3 billion for operations (presumably to extend the surge for four months); • $13.9 billion more for force protection including additional MRAPs; • $8.9 billion more for reconstituting the force; • $6.4 billion to enhance ground forces; • $3.3 billion in emergency requests; • $1.0 billion for military construction; • $1.0 billion for training and equipping Iraq security forces; • $.9 billion for military intelligence; and • $.2 billion for coalition support and Commanders Emergency Response Program. Additional details are not currently available. At the Senate Appropriations Committee hearing on September 26, 2007, Senator Byrd stated that the committee expected DOD to submit detailed justification material for the new request. Table 8. Expected Adjustments to FY2008 War Request (in billions of dollars) Category Operations Factory Restart Force Protection (including MRAP) Original Request & MRAP Amdt. New Request Total FY2008 Request 70.6 6.3 76.9 — 0.1 0.1 16.6 13.9 30.5 17 DOD, FY2008 Global War on Terror Request, February 2007, p. 74. http://www.dod.mil/comptroller/defbudget/ fy2008/fy2007_supplemental/FY2008_Global_War_On_Terror_Request.pdf. 18 DOD, FY2007 Emergency Supplemental Request for the Global war on Terror, February 2007, pp. 15-16, pp. 76-80; http://www.dod.mil/comptroller/defbudget/fy2008/fy2007_supplemental/ FY2007_Emergency_Supplemental_Request_for_the_GWOT.pdf; DOD, FY2008 Global War on Terror Request, February 2007, pp. 15-16, and pp. 63-67; http://www.dod.mil/comptroller/defbudget/fy2008/fy2007_supplemental/ FY2008_Global_War_On_Terror_Request.pdf. Congressional Research Service 17 Defense: FY2008 Authorization and Appropriations Original Request & MRAP Amdt. New Request Total FY2008 Request Improvised Explosive Device Defeat Fund 4.0 .3 4.3 Security Forces 4.7 1.0 5.7 Coalition Support & Cmdrs. Emergency Response Program 2.7 0.2 2.9 Military Construction 0.7 1.0 1.7 Military Intelligence 2.7 .9 3.7 Reconstituting the Force 37.6 8.9 46.5 Enhancing Ground Forces 1.6 6.4 8.0 Emergency Requests 5.9 3.3 9.2 147.0 42.3 189.3 Category TOTAL Sources: FY2008 DOD Global War on Terror Request, including Army, Navy, Marine Corps, and Air Force adjustment requests, August 2007. Note: Numbers may not add due to rounding. Congressional Action on Administration’s War Requests Both the House and Senate include funds for DOD’s war or Global War on Terror (GWOT) request in a separate title in their respective versions FY2008 authorization bills (H.R. 1585 and S. 1547). The House passed its bill on May 17, 2007, and the Senate began consideration of the bill on July 9, 2007, pulled the bill from the floor after several days of debate over Iraq amendments, and resumed consideration of the bill on September 17. House Appropriations Committee Chair Congressman Murtha has announced that the House will consider war funding in a separate bill. The timing of the FY2008 supplemental is unclear. The President has not formally submitted a request for the additional $42.3 billion that Secretary Gates announced in a Senate Appropriations Committee hearing on September 26, 2007. If H.J.Res. 52, the continuing resolution passed by the House is enacted, then DOD’s $5.3 billion request for 1,520 MRAPs would be funded. In its report on DOD’s FY2008 Appropriation (H.Rept. 110-279), the House Appropriations Committee deferred consideration of some $2.0 billion in DOD’s baseline request to the GWOT bill on the grounds that these were war-related requests, a move that could increase the amount of emergency war funding. Authorizers Categorize “War” Funding Differently The House and Senate bills adopt different approaches to war funding. The House accepts DOD’s designation of funds requested for GWOT and provides the full $141.7 billion requested while the Senate bill approves the full amount but transfers some $13.4 billion of the GWOT-requested funds to DOD’s baseline program. Thus, the Senate-reported version—currently on hold after several days of floor consideration in July—provides $128.3 billion for GWOT, ostensibly a cut of some $13.4 billion to the GWOT request. In fact, however, almost all of the programs in DOD’s GWOT request are included in the baseline program. The SASC report recommends the transfer from GWOT to the baseline program on the grounds that funds provided for military personnel, procurement, and military construction that are Congressional Research Service 18 Defense: FY2008 Authorization and Appropriations dedicated to “growing the force,” and funds for weapon system upgrades that pre-date the Afghan and Iraq conflicts should both be considered part of DOD’s baseline or regular program rather than valid war-related requirements. According to its report, the SASC transfers are intended to identify the full amount of funding for the expansion of the Army and Marine Corps that was originally justified by the Administration as a way to meet the need for more military personnel for the conflicts in Iraq and Afghanistan. Originally rationalized as a way to lengthen periods between deployments, it is now being proposed as a permanent long-term expansion of the Army and Marine Corps. The FY2008 GWOT request includes $4.1 billion for military personnel, $689 million in operating and maintenance costs, and $169 million for military construction to pay, equip and house an increase of 92,000 Army and Marine Corps troops by 2012.19 If the United States significantly decreases the number of troops in Iraq, it is not clear that the Army and Marine Corps would need to be larger unless additional large-scale deployments are anticipated for the future. The weapon system upgrades transferred by the Senate authorizers—for example, $515 million for upgrades to CH-47 Army helicopters, $1.4 billion for Bradley fighting vehicles, and $1.3 billion for Abrams tanks—are programs that were underway before 9/11 and could be considered part of the Army’s ongoing modernization efforts. DOD also includes funds for these programs in its baseline request. DOD has argued that much of its war-related procurement request is for reconstitution or reset—the replacement of equipment that is expected to wear out sooner because of the stress of combat action. These replacements are typically upgraded versions rather than strictly replacements and hence contribute to modernization. At the same time as the SASC transfers GWOT funds to the baseline program, the Committee expresses some concern that growth in the size of the Army and Marine Corps may “come too late to impact the war in Iraq.” Nevertheless, the SASC endorses the transfers to the base budget as a way to capture “integrated” costs and not obscure the “true cost that the actual end strength presents.”20 Authorizers Shift Funds to Mine-Resistant Ambush Protected Vehicles The two authorizing bills largely endorse DOD’s request with one major exception—both recommend an increase of $4.1 billion for Mine Resistant Ambush Protected Vehicles (MRAP), a troop transport vehicle considered to be more effective than uparmored HMMWVs in withstanding attacks from Improvised Explosive Devices (IEDs) and now deemed an urgent new war requirement. This increase would be offset by cuts to GWOT programs deemed of lower priority. On July 31, 2007—after the House and Senate authorizers reported—the Administration requested an additional $5.36 billion for MRAP—including testing and transportation as well as procurement costs—but did not propose any offsets from either DOD’s baseline or GWOT requests. Although there appears to be widespread agreement that the MRAP is more effective against IED attacks, the vehicle is still undergoing operational testing and the first 100 vehicles produced 19 20 CRS calculations based on S.Rept. 110-77. S.Rept. 110-77, pp. 433 and 325. Congressional Research Service 19 Defense: FY2008 Authorization and Appropriations failed testing. Testing is continuing on the original configuration and a second phase of testing is underway at Aberdeen Test Center for MRAP II that is to be capable of stopping explosively formed projectiles (EFPs), the newest threat in Iraq. About 200 vehicles are currently in theater. According to press reports, the services are planning a rapid expansion of production to meet a requirement estimated to be from 18,000 to 23,000 vehicles, enough to replace every uparmored HMMWV in theater. Several variants are being tested and as many as 20 contractors may compete for the large buy. Of the estimated requirement in theater, about 60% are slated for the Army and 30% for the Marine Corps. The Army and Marine Corps have not yet decided whether MRAPs are a long-term or temporary requirement.21 Administration Proposes More Funding for MRAP Vehicles On July 31, 2007, the Administration requested an additional $5.3 billion for the FY2008 Global War on Terror (GWOT) in order to purchase 1,520 Mine Resistant Ambush Protected (MRAP) vehicles and provide additional parts for other MRAPs already on order. According to the Administration, this would enable DOD to ramp up to the maximum feasible production rate and deliver about 8,000 vehicles in theater by May 2008.22 DOD is expected to request an additional $10 billion more for MRAPs.23 Currently, DOD has a total of about $4.3 billion in funding for MRAP vehicles and associated testing and support including some $3.2 billion in the FY2007 Supplemental (including $1.2 billion added by Congress) and a recently-approved $1.1 billion reprogramming of FY2007 funds. If the Administration’s new request for FY2008 is approved, DOD would have a total of $10.2 billion for MRAP vehicles. 24 DOD has not yet indicated the total number of MRAPs, presumably because the services have not yet decided the mix of the different variants undergoing testing to be purchased; current figures suggest that an individual MRAP would cost over $1 million apiece compared to about $350,000 for an uparmored HMMWV. Appropriations Action As passed by the House on August 5, 2007, the FY2008 DOD Appropriations Act, H.R. 3222, does not address DOD’s war request. House leaders plan to propose a separate bill at a later date. In their report, the House appropriators promises to address the following issues as part of its consideration of FY2008 war funding: • Funding for additional C-17 transport aircraft (included in earlier supplementals but not considered a war cost by DOD); • Funding for Mine Resistant Ambush Protected vehicles; 21 Inside the Navy, “CENTCOM, SOCOM and Pentagon Direct Bulk of New MRAP fleet to Army,” August 6, 2007; Inside the Navy, “Aberdeen Commander Says MRAP II won’t Slow Ongoing MRAP I Testing,” August 6, 2007; Inside Defense, “Congress OKs MRAP Reprogramming; Additional production orders Expected;” Inside Defense, “Pentagon Eyes More than A Dozen New Potential Vendors for MRAP II,” August 1, 2007. 22 White House, Letter from President George W. Bush to Speaker of the House, Nancy Pelosi transmitting OMB Estimate No. 5, “FY2008 Revised Emergency Proposals,” July 31, 2007. 23 Testimony by Secretary Robert Gates before Senate Appropriations Committee, September 26, 2007. 24 CRS calculations based on H.Rept. 110-279, H.Rept. 110-146, and S.Rept. 110-77, and OMB request of July 31, 2007. Congressional Research Service 20 Defense: FY2008 Authorization and Appropriations • Funding for additional Blackhawk MEDEVAC helicopters; • Funding for the Global train and Equip Program, a new program to train foreign security forces facing insurgencies in countries other than Iraq or Afghanistan; • Funding to enhance the readiness of stateside units in the strategic reserve that would be available for contingencies other than Iraq and Afghanistan; • Shortfalls in funding for the Defense Health Program because of “efficiency” wedges included in DOD’s request; • Shortfalls in funding for Basic Allowance for Housing.25 The House appropriators did, however, defer some $2.0 billion in baseline requests to the war bill slated for September, characterizing some requests for ammunition, modifications and tactical vehicles as war rather than baseline requirements, a mirror image of Senate authorization action that transferred funds from DOD’s war request to its baseline program. The actions by Senate authorizers and House appropriators underline one of the dilemmas in war funding that has continued for several years—how to distinguish between programs that are necessary because of war requirements and those that are dedicated to enhancing capabilities that DOD considers necessary to meet longer-term requirements, including potential future counterinsurgency struggles. One sign of this concern is the requirement by the HAC for a DOD report that outlines the assumptions underlying reset requirements to repair and replace war-worn equipment and explains “how recapitalization and upgrade requirements are related to war needs rather than ongoing modernization.”26 Both the Senate authorizers and the HAC appropriators show concern about potential overlaps between war and baseline requirements, with the Senate authorizers concerned that DOD’s definition of war costs is too broad and the House appropriators suggesting that DOD defined war requirements too narrowly. The HAC cut $2.0 billion from DOD’s baseline request, arguing these items should be considered war-related. The items include: • $180 million for special pay for language skills and hardship duty; • $1.1 billion in procurement for heavy Army trucks and night vision devices, Marine Corps Unmanned Aerial Vehicles (UAV), upgrades to C-130 aircraft and war consumable, Hellfire missiles for Predator (armed) UAVs, Air Force ammunition and trucks; • $500 million for the Global Train and Equip program, a program to equip and train foreign security forces other than Iraq or Afghanistan who face counterinsurgency threats; and • $100 million for a “Rapid Acquisition Fund,” intended to make it easier for DOD to procure urgently needed items. This $2.0 billion that the HAC proposes to transfer from DOD’s baseline request to GWOT effectively frees up funding for other programs desired by the appropriators and makes it easier for DOD to cut $3.5 billion from the DOD request as is required by each appropriation committee 25 26 H.Rept. 110-279, p. 3. H.Rept. 110-279, p. 163. Congressional Research Service 21 Defense: FY2008 Authorization and Appropriations to comply with the overall caps on discretionary spending set in S.Con.Res. 21, the FY2008 Budget Resolution (see Table 4).27 Although DOD’s GWOT request is also addressed in the budget resolution, the amount can be adjusted more easily than for DOD’s baseline program. Other War-Related Provisions As part of its markup of the H.R. 3222, the House appropriators include several general provisions related to war, several of which have been included in previous appropriations acts. These provisions include: • a prohibition on spending any funds in the act to train foreign security forces who engage in gross violations of human rights (Sec. 8060); • a requirement for separate budget justification materials for named operations costing more than $100 million (Sec. 8085); • a requirement for written notification of the period of mobilization for all activated reservists (Sec. 8089); • a provision prohibiting spending funds for permanent bases in Iraq or to control Iraqi oil resources (Sec. 8103); • a 90% limitation on operation and maintenance obligations until DOD submits a report on contractor services; and • a requirement that the cost of ongoing operations be included in the budget request; and • a new requirement that DOD provide monthly reports of “boots on the ground,” in Iraq and Afghanistan or military personnel deployed in-country.28 FY2008 GWOT Request In its original request, DOD’s justification language and funding levels for the FY2008 GWOT request are almost identical to those included in its FY2007 Supplemental request in several categories such as military operations and reconstitution of war-worn equipment, citing the same force levels and the same examples. For example, DOD’s request for $70.6 billion in FY2008 funds special pays, benefits, subsistence, the cost of activating reservists, and the cost of conducting operations and providing support for about 320,000 deployed military personnel serving in and around Iraq and Afghanistan assuming the same operating tempo as in FY2007.29 The original FY2008 GWOT request did not include the roughly $4 billion additional cost for the “plus-up” or increase of five Army brigades or about 30,000 troops announced by the president on January 10, 2007 completed in June 2007.30 27 Each appropriation committee sets 302 (b) allocations for its subcommittees that together meet the total for discretionary spending set by the 302(a) levels set in the budget resolution. 28 See sections of H.R. 3222 listed and H.Rept. 110-279, p. 27. 29 DOD, FY2008 Global War on Terror Request, February 2007, pp. 15 and 17; online at http://www.dod.mil/ comptroller/defbudget/fy2008/fy2007_supplemental/FY2008_Global_War_On_Terror_Request.pdf. 30 This CRS estimate includes adjustment to DOD’s estimate of $5.6 billion to reflect later reprogrammings by DOD for excess costs for activating reservists and depot maintenance and excludes the cost of an additional Marine (continued...) Congressional Research Service 22 Defense: FY2008 Authorization and Appropriations The revised DOD request announced by Secretary Gates includes an additional $6.3 billion for operations, presumably to cover the costs of the retaining the additional five combat brigades in country in the first part of the year and then redeploying those forces home by July 2008. Should force levels decline later in the year—a decrease of 30,000 or five additional brigades was broached by Secretary Gates in mid-September and in testimony to the Senate Appropriations Committee—some of these additional funds might not be necessary.31 In July testimony, the Congressional Budget Office projected that a four-month surge as proposed by the President could cost about $10 billion between FY2007 and FY2010 and that a 12 month surge would cost about $22 billion. 32 These estimates are substantially higher than DOD estimates because CBO assumed a greater number of support troops would be required than did DOD and CBO projected its cost estimates farther into the future. Congressional Action The House authorizers cut $881 million from DOD’s $6 billion request for the Logistics Civil Augmentation Program, or LOGCAP, which provides base camp services on the grounds that a 14% increase was not justified given the fact that the FY2008 request is predicated on a straightline projection from FY2007—without the temporary increase in military personnel this year. At the same time, the HASC added $401 million to the Military Personnel request to cover the cost of an additional 36,000 Army and 9,000 Marine Corps personnel suggesting that the committee expects the higher levels in FY2007 to persist.33 Reflecting readiness concerns, the HASC sets up a Defense Readiness Production Board whose mission is to identify critical readiness requirements. DOD is also given authority to use multiyear procurement contracts of up to $500 million authority for items deemed of critical readiness importance without statutory approval and even if DOD would not save money (Section 1701 to Section 1708, H.R. 1585). The bill also authorizes $1 billion for these purposes.34 The SASC transfers $4.1 billion from DOD’s GWOT request in Title XV for higher Army and Marine Corps force levels adopted originally to meet OIF/OEF needs to the base budget, with the rationale that these increases or “over strength” are no longer appropriately considered temporary emergency expenses. The committee reduces the DOD O&M request from $72. 9 billion to $72.0 billion with the change reflecting a transfer of $712 million to the base budget to “grow the force.”35 (...continued) Expeditionary Force in FY2007. 31 Philadelphia Inquirer, “Bush Says U.S. Will Shift More Troops to Support Role,” September 14, 2007, and Secretary Robert Gates testimony before the Senate Appropriations Committee, September 26, 2007. 32 CBO, Testimony to the House Budget Committee, July 31, 2007; available at http://www.cbo.gov/ftpdocs/84xx/ doc8497/07-30-WarCosts_Testimony.pdf. 33 H.Rept. 110-146, p. 469. 34 H.Rept. 110-146, pp. 481-482. 35 S.Rept. 110-77, p. 489 and pp. 515-516, and DOD, FY2008 Global War on Terror Request, February 2007, p. 75. Congressional Research Service 23 Defense: FY2008 Authorization and Appropriations Table 9. DOD’s Global War on Terror, FY2006-FY2008 by Function (billions of dollars) FY2007 Total Request vs FY06 FY2008 Request FY2008 Request vs. FY2007 Total w/ Request FY2006 Enacted FY2007 Bridge Enacted FY2007 Supp. Request FY2007 Total with Request Incremental Pay and Benefits and operating and support Costs 67.2 30.5 39.2 69.8 2.6 70.6 0.8 Temporary Troop Plus-up and Increased Naval Presence 0.0 0.0 5.6 5.6 5.6 0.0 -5.6 Reconstitution or Reset 19.2 23.6 13.9 37.5 18.4 37.6 0.0 Force Protection 5.4 3.4 8.0 11.3 6.0 11.2 -0.1 Joint Improvised Explosive Device Defeat Fund 3.3 1.9 2.4 4.4 1.0 4.0 -0.4 Accelerating Modularity 5.0 0.0 3.6 3.6 -1.4 1.6 -2.1 Infrastructure & equipment for Perm. Inc. in Size of Army and MC 0.0 0.0 1.7 1.7 1.7 0.0 -1.7 Equip and Train Afghan and Iraq Security Forces 4.9 3.2 9.7 12.9 8.0 4.7 -8.2 Coalition Support 1.2 0.9 1.0 1.9 0.7 1.7 -0.2 Commanders Emergency Response Fd 0.9 0.5 0.5 1.0 0.1 1.0 0.0 Military Construction Overseas in Iraq and Afghanistan 0.2 0.0 1.1 1.1 0.9 0.7 -0.4 Military Intelligence 1.5 0.8 2.7 3.5 2.0 2.7 -0.8 Non-DOD Classified and Non-GWOT 5.6 5.1 3.6 8.8 3.2 5.9 -2.8 Regional War on Terror 0.0 0.0 0.3 0.3 0.3 0.0 -0.3 GRAND TOTAL 114.4 70.0 93.4 163.4 49.0 141.7 -21.7 Type of Expense Sources: DOD, FY2008 Global War on Terror Request, February 2007, Table 2, p. 75, at http://www.dod.mil/ comptroller/defbudget/fy2008/fy2007_supplemental/FY2008_Global_War_On_Terror_Request.pdf. Table 2 does not reflect budget amendments that increased the Administration’s request for War-Related Funding. Congressional Research Service 24 Defense: FY2008 Authorization and Appropriations Broad Definition of Reconstitution or Reset As in FY2007, DOD is requesting $37.6 billion for reconstitution which appears to encompass a broader set of requirements than the standard definition of reset—the repair and replacement of war-worn equipment when troops and equipment are re-deployed or rotated.36 Within reconstitution, DOD includes not only equipment repair and replacement of battle losses and munitions, but also replacement of “stressed” equipment, upgrading of equipment with new models, additional modifications, and new or upgraded equipment as well an expansion of the supply inventory ($900 million) that assumes that currently high stock levels will need to be continued. Of the $37.6 billion reconstitution request, $8.9 billion is for equipment repair including $7.8 billion for the Army $1.3 billion for the Marine Corps, amounts similar to DOD’s request in FY2007 and fairly similar to earlier DOD projections.37 The remaining $28.7 billion is for procurement. In a report to Congress in September 2006, DOD estimated that equipment replacement in FY2008 would be about $5.0 billion for the Army and about $500 million for the Marine Corps, levels substantially below the $21.1 billion for the Army and $7.2 billion for the Marine Corps requested for FY2008. This four-fold increase in Army and ten-fold increase in Marine Corps reconstitution requirements in FY2008 may reflect both an expanded definition of what constitutes war-related equipment replacement and a DOD decision to request more than one year’s requirement in FY2008 as occurred in the FY2007 Supplemental where requirements were front loaded according to OMB Director, Rob Portman.38 With the exception of force protection equipment (much of which is funded in O&M), DOD appears to characterize all of its FY2008 war procurement request as reconstitution (see Table 9) including upgrades and replacement of current equipment that would normally considered part of peacetime modernization. With over $8 billion in war-related procurement funds from previous years still to be put on contract, Congress could choose to delay some of the items requested by DOD, as was the case in Congressional action on the FY2007 where some requests were deemed “premature” or not emergencies. 39 The FY2008 war request may also reflect a response to the concerns of Service 36 For DOD definition, see DOD, Financial Management Regulation, Volume 12, Chapter 23, pp. 23-21; http://www.defenselink.mil/comptroller/fmr/12/12_23.pdf; CBO defines reset as the repair or replacement of war-worn equipment; see CBO, Letter to Rep. Skelton, “The Potential Costs Resulting from Increased Usage of Military Equipment from Ongoing Operations,” March 18, 2005; available at http://www.cbo.gov/ftpdocs/61xx/doc6160/03-18WornEquip.pdf. 37 In a September 2006 report to Congress, DOD estimated repair requirements at $8.0 billion for the Army and $830 million for the Marine Corps in FY2008, see Office of the Secretary of Defense, Long-Term Equipment Repair Costs: Report to the Congress, September 2006, pp. 24-25; DOD, Fiscal Year (FY) 2008, Global War on Terror Request, Exhibits for FY2008, all appropriations, Military Personnel, Operation and Maintenance, Construction, Revolving and Management Funds, Procurement, Research, Development, Test & Evaluation, February 2007; http://www.defenselink.mil/comptroller/defbudget/fy2008/fy2007_supplemental/ FY2008_Global_War_On_Terror_Request/FY_2008_GWOT_Request__Funding_Summary_(All_Appropriations).pdf Department of the Army, Fiscal Year (FY) 2008 Emergency Supplemental, Global War on Terrorism (GWOT)/Regional War on Terrorism (RWOT), Exhibit O-1, pp. 2 and 7. 38 Testimony of OMB Director Rob Portman before the House Budget Committee, Hearing on the FY2008 DOD Budget, February 6, 2007, p. 41 of transcript. 39 CRS calculation based on BA appropriated and Defense Finance Accounting Service, Supplemental & Cost of War Execution reports as of February 28, 2007; see CRS Report RL33900, FY2007 Supplemental Appropriations for Defense, Foreign Affairs, and Other Purposes, coordinated by (name redacted). Congressional Research Service 25 Defense: FY2008 Authorization and Appropriations witnesses raised in testimony over the last year or two that Congress would need to appropriate funds for equipment replacement for two years after forces are withdrawn. 40 In both FY2007 and FY2008, the services request includes replacement for various aircraft and helicopters—both battle losses and anticipated replacements for “stressed” aircraft. Under DOD’s standard budget guidance, the services are only to request new major weapon systems for combat losses that have already been experienced unless they get specific approval for an exception, which appears to be the case for both the FY2007 and the FY2008 requests where the services have requested replacements for “stressed” aircraft rather than combat losses. In the case of the FY2008 request, particularly, DOD would not have information about combat losses. In response to congressional doubts, the administration withdrew its request for six new EA-18 electronic warfare aircraft and two JSF aircraft in the FY2007 Supplemental. Another issue is whether replacing older aircraft no longer in production with new aircraft just entering or scheduled to enter production is a legitimate emergency requirement since systems would not be available for several years. Under their expanded definition, DOD’s request includes replacement of MH-53 and H-46 helicopters with the new V-22 tilt rotor aircraft, replacement of an F-16 with the new F-35 JSF, and replacement of older helicopters with the Armed Reconnaissance Helicopter, a troubled program not yet in production which the Army is considering terminating.41 In addition, the FY2008 request includes replacement of stressed aircraft with 17 new C-130Js, modification upgrades to C-130 aircraft, F-18 aircraft, AH-1W and CH-46 helicopters. Congressional Action With a few exceptions, the House authorizers supported the Administration’s procurement request. The exceptions include the transfer of funds from various programs deemed lower priority to provide an additional $4.1 billion for the Mine Resistant Ambush program (see below) as well as cuts to the Air Force’s F-35 and C130J aircraft requests and the Army’s request for Armed Reconnaissance helicopters. On the other hand, the House added $2.4 billion for additional C-17 cargo aircraft that will keep the production line open, an issue raised in previous years. In its report, the SASC reduces GWOT funding for procurement from $36.0 billion to $28.3 billion including the following. • $4.6 billion in transfers to the base budget; • $1.9 billion in program cuts, primarily delays in troubled programs such as the V22 (-$493 million), UH-1Y/Ah-1Z (-$123 million), and C-130J aircraft (-$468 million); and 40 House Armed Services Committee, Costs and Problems of Maintaining Military equipment in Iraq, January 31, 2007, hearing transcript; House Armed Services Committee, Army and Marine Corps Reset Strategies for Ground Equipment and Rotorcraft, hearing transcript, June 27, 2006. 41 House Armed Services Committee, Air Land Subcommittee, “Opening Statement at Markup by Chair Neil Abercrombie,” May 2, 2007. Congressional Research Service 26 Defense: FY2008 Authorization and Appropriations • $4.7 billion in program adds, echoing House action by adding $4.1 billion for the Mine Resistant Ambush Program (MRAP), now a high priority because of its success in protecting soldiers against Improvised Explosive Devices (IEDs). The programmatic cuts also reflect committee questions about DOD’s plan for rapid production buildups for these programs.42 The committee’s transfer of procurement to the base budget may be designed to give greater visibility to the full spending on individual programs. Since most of DOD’s FY2008 GWOT procurement request reflects anticipated replacement needs and upgrades rather than war losses, and with production lead times of two to three years, the committee may believe that the war-related connection for the requests are less clear. Force Protection Funding DOD’s original FY2008 request includes about $11 billion in funding for force protection in both FY2007 and FY2008 primarily for body armor, armored vehicles, protecting operating bases and surveillance operations. The original FY2008 request is almost identical to FY2007 and includes: • $3.5 billion to purchase an additional 320,000 body armor sets reaching a cumulative total of 1.7 million original and upgraded sets meeting 100% of total requirements as well as the new Advanced Combat helmet, earplugs, gloves and other protective gear; • $7.0 billion for protection equipment and activities including munitions clearance, fire-retardant NOMEX uniforms, unmanned aerial vehicles, aircraft survivability modifications, route clearance vehicles; and • funding for more uparmored HMMWVs ($1.3 billion), armored security ($301 million) and mine protection vehicles ($174 million); and • $585 million for Mine-Resistant Ambush Protected Vehicles (MRAPs), a truck with a V-shaped hull which has proven effective against IEDs.43 There has been considerable controversy in Congress about whether DOD has provided adequate force protection in a timely fashion with Congress typically adding funds for more body armor, more uparmored HMWWVs, and other force protection gear. In the FY2007 Supplemental, Congress added $1.2 billion to DOD’s request for the Mine Resistant Ambush Protected Vehicles (MRAP) providing a total of $3.0 billion.44 In response to this controversy, the Administration recently submitted an amended GWOT request for an additional $5.3 billion for MRAPS in order to ramp up production sooner (see discussion above). 42 S.Rept. 110-77, pp. 511 and 513. DOD lists $700 million in force protection funding for armored vehicles in its justification but this appears to be an understatement; see FY2008, Exhibit P-1 for listing of individual items; DOD, Fiscal Year (FY) 2008, Global War on Terror Request, Exhibits for FY2008, all appropriations, February 2007; http://www.defenselink.mil/comptroller/ defbudget/fy2008/fy2007_supplemental/FY2008_Global_War_On_Terror_Request/FY_2008_GWOT_Request__Funding_Summary_(All_Appropriations).pdf. For MRAP funding, see Other Procurement accounts of each service and Defensewide and Procurement, Marine Corps in Office of the Secretary of Defense, Fiscal Year (FY) 2008 Global War on Terror Request, Exhibits for FY2008, Exhibit P-1, Procurement, February 2007; http://www.defenselink.mil/ comptroller/defbudget/fy2008/fy2007_supplemental/FY2008_Global_War_On_Terror_Request/ FY_2008_GWOT_Request_-_Funding_Summary_(All_Appropriations).pdf. 44 CRS calculation based on H.Rept. 110-107, conference report on H.R. 1591, April 24, 2007; see Congressional Record, April 24, 2007. 43 Congressional Research Service 27 Defense: FY2008 Authorization and Appropriations Congressional Action The House bill authorizes $4.6 billion for MRAPS, an increase of $4.1 billion over the request to be financed by taking funds from programs deemed lower priority such as a $1 billion transfer from Bridge to Future Networks, an upgraded command and communication support system that has experienced problems. In addition, the HASC requires DOD to submit reports every 30 days on MRAP requirements, contracting strategy, and other matters.45 Like the House, the SASC adds $4.1 billion to DOD’s request for MRAP. At the same time, the committee raises concerns about the differences between the Army and Marine Corps MRAP strategies with the Army envisioning 1:7 replacements of MRAPS for uparmored HMMWVs and the Marine Corps 1:1 replacements. The SASC endorses most of DOD’s force protection request and increases funding for night vision devices to meet an unfunded Army requirement. 46 Questions Likely About Funding For Joint Improvised Explosive Device Defeat Fund In FY2008, DOD is requesting an additional $4.0 billion for the Joint Improvised Explosive Device Defeat Fund, similar to the FY2007 level, for a special new transfer account set up in recent years to coordinate research, production and training of ways to combat Improvised Explosive Devices (IEDs), the chief threat to U.S. forces. With the funding approved in the FY2007 Supplemental (H.R. 2206/P.L. 110-28), the Joint IED Defeat Fund would receive a total of $7.6 billion. If the FY2008 request is approved, the total would reach $12.1 billion, including both the $500 million in DOD’s base budget and $4 billion in the GWOT request. Although Congress has been supportive of this area and endorsed DOD’s request in the FY2007 Supplemental, both houses have raised concerns about the management practices of the Joint Improvised Explosive Device Defeat Organization (JIEDDO) including its financial practices, its lack of a spending plan, service requests that duplicate JIEDDO work, and its inability to provide specific information to Congress. In the original FY2007 Supplemental conference report, the conferees note that Congress “will be hard-pressed to fully fund future budget requests unless the JIEDDO improves its financial management practices and its responses” suggesting that the FY2008 request could be met with some skepticism.47 The FY2008 GWOT justification is almost identical to that for the FY2007 Supplemental. Congressional Action The House authorizers endorse DOD’s request for an additional $4 billion for the Joint IED Defeat Fund included in the GWOT request. At the same time, the SASC also transfers $500 million funded in the base budget for that fund to Title XV classifying all JIEDD funds as warrelated. In response to concerns raised by the GAO as well as the appropriators about the 45 H.Rept. 110-146, pp. 427 and 466-467. S.Rept. 110-77, pp. 509-510. 47 H.Rept. 110-107, p. 133; H.Rept. 110-60, p. 106; S.Rept. 110-37, pp. 25-27; in the Congressional Record, May 24, 2007 (p. H5806), House Appropriations Chair Obey includes materials instructing DOD to follow the committee reports for H.R. 1591 unless the final version of H.R. 2206 differs; there was no conference report on the final version of H.R. 2206. 46 Congressional Research Service 28 Defense: FY2008 Authorization and Appropriations management of the funds, including duplication with service programs, lack of an overall strategy, and organizational structure, the SASC requires a management plan for the office from DOD within 60 days of enactment. The SASC also calls on the office to provide $50 million in funds and work with other DOD offices on blast injury research and treatment on medical responses to IEDs as well as requiring a report on these efforts by March 1, 2008.48 Oversight Concerns About Cost to Train and Equip Afghan and Iraqi Security Forces For training and equipping, the FY2008 GWOT request includes an additional $2.7 billion to expand Afghanistan’s 31,000 man Army and 60,000 man police force and an additional $2.0 billion for more equipment and training for Iraq’s 136,000 man Army and 192,000 man police force. Including the funds in the FY2007 Supplemental would bring the total to $19.2 billion for Iraq and $10.6 billion for Afghanistan. Although the FY2008 GWOT requests are considerably lower than the amounts requested for FY2007—$2 billion vs. $5.5 billion for Iraq and $2.7 billion vs. $7.4 billion for Afghanistan— Congress has voiced concerns about the progress and the total cost to complete this training. While the final version of the FY2007 supplemental dropped a House-proposal to set a 50% limit on obligations until various reports were submitted, OMB is required to submit report every 90 days on the use of funds and estimate of the total cost to train Iraq and Afghan Security forces within 120 days of enactment. The FY2007 Supplemental also requires that an independent organization assess the readiness and capability of Iraqi forces to bring “greater security to Iraq’s 18 provinces in the next 12-18 months....” 49 Congressional Action In the authorization act, the House endorses the funding request but requires various reports on progress in training Iraqi security forces within 90 days of enactment and every three months thereafter (Sec. 1225, Title XII) as well as requiring a report on progress toward security and stability in Afghanistan within 90 days of enactment (Sec. 1232, Title XII). Like the House, the SASC approves DOD’s funding request but requires quarterly reports, prior congressional notification of transfers from the funds, and the concurrence of the Secretary of State for assistance provided from the Afghanistan Security Forces Fund or the Iraq Security Forces Fund.50 Coalition Support and Commanders Emergency Response Program In FY2008, DOD requests $1.7 billion for coalition support for U.S. allies like Pakistan and Jordan which conduct border counter-terror operations, and for the U.S. to provide lift to its allies. DOD also requests $1 billion for the Commanders Emergency Response Program (CERP) 48 S.Rept. 110-77, pp. 516-517 and Sec. 1510, S. 1547. 49 H.Rept. 110-107, Sec. 1313 and Sec. 1320 of H.R. 1591 and H.Rept. 110-60, p. 101; see also Congressional Record, May 24, 2007, p. H5776ff. 50 S.Rept. 110-77, p. 506, sections 1511 and 1512. Congressional Research Service 29 Defense: FY2008 Authorization and Appropriations where individual commanders can fund small-scale development projects, in both cases funding levels similar to FY2007. While Congress has consistently supported the CERP program, it has voiced skepticism about the amounts requested for coalition support. In FY2007, for example, Congress has proposed cutting the Administration’s request for $950 million to $500 million on the grounds that DOD has not defined the use of these funds for a new “Global train and equip” program authorized in FY2006.51 Congressional Action In H.R. 1585, the House reauthorize CERP but do not set a funding limit on the program and do not address coalition support limits. Unlike the House, the SASC sets a $977 million cap for the Commanders’ Emergency Response Program (CERP), DOD’s request. The SASC also supports the $1.4 billion limit on coalition support to reimburse allies and a $400 million limit on “lift and sustain” funds to provide support services to nations supporting OIF and OEF operations as requested (see S. 1510, Sec. 1532 and Sec. 1533). Military Construction Overseas and Permanent Basing Concerns For war-related military construction and family housing, DOD requests $908 million in FY2008 compared to $1.8 billion in FY2007. Although the funding level is lower than the previous year, the same concerns about permanent basing in Iraq continue to be voiced. Some of the FY2008 projects requested—such as building bypass roads, power plants and wastewater treatment plants in Iraq and providing relocatable barracks to replace temporary housing and constructing fuel storage facilities to replace temporary fuel bladders—have been rejected previously as either lacking sufficient justification.52 Although Congress approved most of the projects requested in the FY2007 supplemental, the FY2007 supplemental included a prohibition on obligating or expending any funds for permanent stationing of U.S. forces in Iraq. In the past, Congress has rejected projects similar to those requested in FY2008 as insufficiently justified or as implying some kind of permanency. Congressional Action In H.R. 1585, the House reduces the FY2008 GWOT request for military construction by $212 million, rejecting utility projects such as power plants and wastewater collection facilities perceived as indicating a permanent presence. 53 The House also extends the congressional prohibition on using funds for permanent basing in Iraq or to control Iraqi oil resources (Sec. 1222, H.R. 1585). 51 H.Rept. 110-107, p. 126; see also H.Rept. 110-37, p. 22. 52 DOD, FY2008 Global War on Terror Request, February 2007, p. 58-60; available at http://www.dod.mil/comptroller/ defbudget/fy2008/fy2007_supplemental/FY2008_Global_War_On_Terror_Request.pdf. 53 H.Rept. 110-146, p. 470. Congressional Research Service 30 Defense: FY2008 Authorization and Appropriations The SASC approves all DOD’s requests for projects in Iraq and Afghanistan but transfers $169 million requested for state-side projects to the base budget.54 Like the House, the SASC also extends the provision prohibiting the United States from establishing permanent bases in Iraq or taking control of Iraqi oil resources (Sec. 1531, S. 1547). In its appropriations bill, the House includes the same prohibition. Potential Issues in the FY2008 Base Budget Request Following is a brief summary of some of the other issues that may emerge during congressional action on the FY2008 defense authorization and appropriations bills, based on congressional action on the FY2007 funding bills and early debate surrounding the President’s FY2008 budget request. 54 • Military Pay Raise. The budget request would give military personnel a 3% pay raise effective January 1, 2008, thus keeping pace with the average increase in private-sector wages as measured by the Department of Labor’s Employment Cost Index (ECI). Some, contending that military pay increases have lagged civilian pay hikes by a cumulative total of 4% over the past two decades or so, have called for a 3.5% raise to close that so-called pay-gap. Defense Department officials deny any such pay-gap exists, maintaining that their proposed 3% increase would sustain their policy of keeping military pay at about the 70th percentile of pay for civilians of comparable education and experience. Congress mandated military pay-raises of ECI plus ½% in FY2000-FY2006. But for FY2007, the Administration requested an increase of 2.2%, equivalent to ECI, and Congress ultimately approved it, rejecting a House-passed increase to 2.7%. • Army and Marine Corps End-Strength Increases. The budget request includes $12.1 billion in the FY2008 base budget and an additional $4.9 billion in the FY2008 war-fighting budget toward the Administration’s $112.3 billion plan to increase active-duty end-strength by 65,000 Army personnel and 27,000 Marines by 2013. Most of the additional personnel are slated for assignment to newly created combat brigades and regiments, which would expand the pool of units that could be rotated through overseas deployments, thus making it easier for the services to sustain overseas roughly the number of troops currently deployed in Iraq and Afghanistan. This recommendation marks a new departure for the Administration, which has resisted for several years calls by the congressional defense committees for such an increase in troop-strength. On the other hand, the proposal might be challenged by Members who wonder how the services, in a time of tightening budgets, will afford the roughly $13 billion annual cost of the additional troops. The proposal also might be opposed by Members skeptical of future extended deployments on the scale of the current missions in Iraq and Afghanistan. • Tricare Fees and Co-pays. For the second year in a row, the Administration’s budget proposes to increase fees, co-payments and deductibles charged retirees under the age of 65 by Tricare, the Defense Department’s medical insurance program for active and retired service members and their dependents. The S.Rept. 110-77, pp. 587-588. Congressional Research Service 31 Defense: FY2008 Authorization and Appropriations increases are intended to restrain the rapid increase in the annual cost of the Defense Health Program, which is projected to reach $64 billion by FY2015. The budget request also reduces the health program budget by $1.9 billion, the amount the higher fees are expected to generate. The administration contends that these one-time increases would compensate for the fact that the fees have not be adjusted since they were set in 1995. The Administration also is requesting a provision of law that would index future increases in Tricare fees to the average rate of increase in health care premiums nationwide. As was the case last year, the Administration proposal is vehemently opposed by organizations representing service members and retirees, which contend that the Defense Department has failed to adequately consider other cost-saving moves and that retiree medical care on favorable terms is appropriate, considering the unique burdens that have been borne by career soldiers and their dependents. Any future Tricare fee increases, some groups contend, should be indexed to increases in the Consumer Price Index (CPI) rather than to the much more rapid rise in health insurance premiums. Last year, Congress blocked the proposed fee increases for one year and established a study group to consider alternative solutions to the problem of rising defense health costs. That panel is slated to issue interim recommendations in May, 2007.55 55 • National Guard Representation on the Joint Chiefs of Staff. A number of National Guard units have been stripped of equipment needed for other units deploying to Iraq, leaving the units at home ill-prepared either to train for their military mission or to execute their domestic emergency role as the agent of their state governor. Some Members of Congress and organizations that speak for the Guard contend that this situation reflects the regular forces’ dismissive attitude toward Guard units, which should be counterbalanced by making the Chief of the National Guard Bureau a member of the Joint Chiefs of Staff, and elevating him to highest military rank—general (4 stars)—from his current rank of lieutenant general (3 stars). Congress has rejected these proposals before, but in March a congressionally chartered commission studying National Guard and reserve component issues endorsed the higher rank, while opposing the Joint Chiefs membership. • National Guard Stryker Brigades. Governors, Members of Congress and National Guard officials from several states have called on Congress to equip additional Guard combat units with the Stryker armored combat vehicle, which currently equips five active-duty Army brigades and one National Guard brigade (based in Pennsylvania). Stryker brigades deployed in Iraq report the eightwheeled armored cars to be rugged under fire and agile; and because they move on oversize tires rather than metal caterpillar tracks like the big M-1 tanks and Bradley troop carriers that equip some Guard units, Strykers would be more versatile in domestic disaster-response missions, since they could travel on streets and roads without tearing them up. Perhaps as important as the Stryker units’ vehicular capability is the surveillance and information network that is part of a Stryker brigade. It cost about $1.2 billion to equip the Pennsylvania Guard unit as a Stryker brigade. See CRS Report RS22402, Increases in Tricare Costs: Background and Options for Congress, by (name redacted). Congressional Research Service 32 Defense: FY2008 Authorization and Appropriations • Future Combat Systems. The FY2008 budget request contains $3.7 billion to continue development of the Army’s Future Combat System (FCS), a $164 billion program to develop a new generation of networked combat vehicles and sensors that GAO and other critics repeatedly have cited as technologically risky. That critique may account for the fact that, last year, Congress cut $326 million from the Administration’s $3.7 billion FY2007 request for the program. Ongoing operations in Iraq and Afghanistan also highlight the concern of some that FCS will be a more efficient way to fight the kind of armored warfare at which U.S. forces already excel while offering no clear advantage in fighting the sort of counter-insurgency operations that may be a major focus of U.S. ground operations for some time to come. 56 Particularly because the FY2008 request includes the first installment of procurement money for FCS ($100 million), critics may try once again to slow the project’s pace, at least for the more technologically exotic components not slated for deployment within the next five years. • Nuclear Power for Warships. Congress may use the FY2008 bills to continue pressing the Navy to resume the construction of nuclear-powered surface warships. All U.S. subs commissioned since 1959 have had nuclear-powerplants because they give subs the extremely useful ability to remain submerged, and thus hard to detect, for weeks at a time. All aircraft carriers commissioned since 1967 also have been nuclear-powered ships. But because nuclear-powered surface ships cost significantly more to build and operate than oil-powered ships of comparable size, the Navy has built no nuclear-powered surface vessels since 1980, and has had none in commission since 1999. Proponents of nuclear power long have contended that this focus on construction costs has unwisely discounted the operational advantages of surface combatants that could steam at high speed for long distances, without having to worry about fuel consumption. In recent years, they have cited rising oil prices to argue that nuclear-powered ships may not be much more expensive to operate than oil-fueled vessels. In 2006, a Navy study mandated by the FY2006 def [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%3ARL33999. Public record. Not legal advice.