By Matt Vallone, Director of Research & Analysis
Main Story: After Health Care and a Spending Deal, a Quiet Week in Washington
After a busy week that saw the passage of a critical spending deal and major movement on repealing and replacing the Affordable Care Act, this week should allow for a breather as the House is in recess and the Senate will be working through nominations. While we wait for more information on the FY2018 budget, rumored to be coming out by the end of the month, we can provide some analysis based on the FY2017 appropriations and the numbers available in the ‘skinny budget’ released earlier this year.
First, as we highlighted last week, for those expecting a substantial boost in defense spending, the increases we’ve seen so far in the FY17 appropriations and FY18 budget fall short of expectations. The Trump administration had requested a $30 billion supplemental and ended up getting just shy of $15 billion for FY17. Additionally, the request for FY18 comes in below the SASC proposals outlined this winter.
A significant amount of this proposed spending will be going towards O&M. When the December 2016 supplemental is factored in, O&M received over $12 billion in additional funding above the FY16 level, more than both procurement and RDT&E combined. While procurement and RDT&E did, both see major increases over FY16 levels (4.1% and 6.1% respectively), in total dollar terms O&M is so far the big winner. This may reflect an increase in operational tempo over the past year or is simply an attempt to resolve readiness issues. Either way, rising O&M costs may continue to eat into future budget increases.
House Activity – The House is on recess this week.
Senate Activity – The Senate will vote on the nomination of Heather Wilson as Secretary of the Air Force and on the nomination of Scott Gottleib to head the FDA. In addition, the chamber may consider additional resolutions under the Congressional Review Act in the run-up to the May 12th deadline.
- 5/9 ‘United States Cyber Command’, Full Committee Hearing, SD-G50 Dirksen, 930am
- 5/9 ‘Nominations – Norquist, Daigle, McCusker’, Full Committee Hearing, SD-G50 Dirksen, 230pm
- 5/10 ‘CLOSED: U.S. Special Operations Capabilities to Counter Russian Influence and Unconventional Warfare Operations in the “Grey Zone”, Subcommittee on Emerging Threats and Capabililties, SVC-217, 10am
- HASC – The House is in recess this week
- HAC-D – The House is in recess this week
- SAC-D – No hearing scheduled
Government Activity Round-Up
Nothing much new at the CBO, so we’ll just relink to the report on the costs of a 355 ship navy. The CBO estimates that the earliest the Navy could achieve its goal would be in 2035. The cost to build 355-ship fleet would average $102 billion per year through 2047, CBO estimates, or more than one-third greater than the amount appropriated for fiscal year 2016 for today’s 275-ship fleet. CBO concluded that shipbuilding costs would be at their highest point over the next 10 years, while operating costs would be highest between 2037 and 2047, once the fleet numbered 355 ships.
Only one report of interest from the GAO as well. The GAO looked at Army and USMC procurement of items worn or carried into combat and how to reduce the weight of these items.
Lastly, Avascent Analytics released a new white paper that analyzes how countries in Europe in Asia would fare if President Trump executes an “America First” defense policy. In “Allied Preparedness in an ‘America First’ World,” we use data from our proprietary GPS database to create a scorecard for nine countries based on threat environment, platform age, U.S. presence, defense spending, industrial base, and political will. Take a look.
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