By Matt Vallone, Director of Research & Analysis
Main Story: FY 2017 Defense Appropriations Head to the House Floor
In a bit of a surprise, the House of Representatives will likely take up and pass a Defense Appropriations bill this week. The legislation would fund the Department of Defense based on the toplines in the FY 2017 NDAA that was adopted back in December and was passed by the Committee with bipartisan support. It would provide a total of $578 billion towards defense through a combination of base (just over $516 billion) and OCO (just under $62 billion). Current indications are that neither Democrats nor Republican deficit hawks will look to block the measure, clearing its path to the Senate. One thing to keep in mind is that this legislation does not contain the $30 billion supplemental the White House has said it plans on requesting for FY 2017. It is unclear what the eventual fate of such a request would be.
However, the fact that Congress is moving ahead with the Defense appropriations bill should be viewed as a sign that there will be an attempt to avoid budget drama around the end of the current continuing resolution in late April. As we documented last week, we believe this year’s budget process will likely be contentious and lead to yet another CR. If Congress starts passing FY 2017 appropriations bills prior to April, that would represent a pretty strong indicator that this is incorrect. That being said, the players and motivations that justified last week’s timeline remain in place, so it is still too early to suddenly assume Congress will now be more productive. We continue to believe that this will be another year of funding legislation passing at deadlines after deeply contentious negotiations.
As we noted last week, there are a variety of factions whose interactions will dictate the final numbers for defense spending. While Congress and the White House will have the final say on the legislation, other organizations will also have a say. Below we lay out who the key players are and what their positions will be in the upcoming negotiations.
House Activity – Beyond a floor vote on the FY 2017 Department of Defense Appropriations Act, the House will consider several pieces of legislation aimed at tort reform and a variety of suspension bills.
Senate Activity – The Senate will spend time this week on some of the legislation passed by the House under the Congressional Review Act (CRA). On Monday, the Senate will vote to pass H.J.Res.37, legislation that would overturn a rule requiring federal contractors to maintain labor violations for an extended period of time. The rule has not been implemented, as it was blocked by a court order in October. Under the terms of the CRA, this measure cannot be filibustered and will almost certainly be passed.
- 3/8 ‘Briefing on Cybersecurity from the Defense Science Board’, CLOSED, Subcommittee on Cybersecurity, SVC-217, 230pm
- 3/8 ‘Global Nuclear Weapons Environment’, Subcommittee on Strategic Forces, Russell 222, 230pm
- 3/9 ‘United States Central Command and United States Africa Command’, Full Committee, Hart 216, 930am
- 3/8 ‘Military Assessment of Nuclear Deterrence Requirements’, Full Committee, 2118 Rayburn, 10am
- 3/8 ‘An Independent Fleet Assessment of the U.S. Navy’, Seapower and Projection Forces Subcommittee, 2118 Rayburn, 330pm
- 3/9 ‘The Current State of U.S. Army Readiness’, Readiness Subcommittee, 2212 Rayburn, 2pm
- 3/9 ‘Nuclear Deterrence – The Defense Science Board’s Perspective’, Strategic Forces Subcommittee, 2118 Rayburn, 330pm
- 3/10 ‘The Effect of Sequestration and Continuing Resolutions on Marine Corps Modernization and Readiness’, Tactical Air and Land Forces Subcommittee, 2118 Rayburn, 9am
- HAC-D – Members’ Day, H-140, 930am (Members Day is an opportunity for all members of the House of Representatives to go and deliver 5 minutes of oral remarks – and longer written testimony – in support of various agencies and programs relevant to HAC-D)
- SAC-D – No hearing scheduled
Government Activity Round-Up
Nothing new from CBO of interest, so we’ll just reiterate that last week two important reports were released regarding defense spending. The first was CBO’s review of the Navy’s FY 2017 Shipbuilding Plan. As in past years, the CBO’s conclusion was that the cost of the Navy to execute its plan to get to 308 ships would be about a third more than it has historically spent on shipbuilding. Getting to 355 would be an even more difficult lift. More here. Second, the CBO released a report titled, ‘Projected Costs of U.S. Nuclear Forces, 2017 to 2026’. This piece dove into the cost of maintaining the U.S. nuclear triad and what those costs may look like in the next decade. The headline number is that it would cost over $400 billion from 2017 to 2026 to execute the current nuclear modernization plans.
The GAO has released a report on Navy shipbuilding looking at its use of fixed-price incentive contracts. GAO was not impressed with what it reviewed. From the intro: “in the 6 contracts we reviewed, we found the Navy bore the majority of additional costs. Plus, the contracts included $700 million in incentives for things that shipbuilders should have been doing anyway.’ They have plenty of recommendations at the link.
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