By Matt Vallone, Director of Research & Analysis
FY 2018 National Defense Authorization Act (NDAA) Agreement Reached, but Overall Spending Levels Remain Uncertain
Last week, the House and Senate Armed Services Committees released their agreement on the FY 2018 NDAA. This legislation will pass the House this week and should be signed into law before the end of the year. The announced agreement contains information on both spending and acquisition targets for FY 2018, as well as significant policy and administrative changes. We will provide a robust summary of the legislation below, but it is worth emphasizing that absent a broader deal on funding these numbers should be viewed as aspirational rather than set in stone for FY 2018. The appropriations process is the ultimate arbiter of funding and it is likely that, until a deal is reached on non-defense spending, there will be no certainty on FY 2018 defense spending. On to the summary (note that this summary is mainly drawn from HASC/SASC summary material, though it also features other data). Anyone interested in slogging through the full conference report can find it here.
Topline Discretionary Defense Spending – $692.1 billion
- Department of Defense Base – $605.5 billion
- Department of Energy Base Defense Spending – $20.6 billion
- Defense-Related Activities – $0.3 billion (Other activities in non-DoD departments)
- OCO – $65.7 billion
The topline is significantly above the budget passed in October. It is uncertain that this level of funding is achievable in a year-end funding deal. This should be viewed as the best-case scenario.
Army BCT Modernization
- $1.1 billion for 85 M1a2SEPv3 Abrams
- $311 million for 93 M2A4 Bradleys
- Authorizes bulk procurement of common manufacturing materials used in the F-35
- Fully funds RDT&E of the MQ-25
- Multiyear V-22 Osprey procurement
- 20 additional F-35
- 10 additional F/A-18
- 10 additional AH-64
- 5 additional UH-60
- 11 additional C-130 (1 HC-130, 6 MC-130, 4 KC-130)
- 6 additional V-22 aircraft
- 7 additional AH-1Z
- 8 additional CH-47
- 2 additional KC-46A
- 3 additional P-8
- 1 additional DDG-51
- 1 additional LCS
- 1 additional LPD-30 or LX(R)
- 5 additional Ship-to-Shore Connectors (SSC)
Increased End Strength
Source: House Armed Services Committee Summary
Contains White House Supplemental Request
The White House requested $4.4 billion for AMD systems above the level in the budget that is included in the NDAA. This covers a variety of expenses, including 28 additional ground-based interceptors, as well as additional SM-3, THAAD, and Patriot missiles.
This also includes $1.2 billion to support the increased deployment in Afghanistan and $674 million to repair the USS Fitzgerald and the USS John S. McCain.
Significant Policy Changes
- Additional Oversight to Service Contracts
- More specificity in service contract funding requests
- Easier commercial purchasing
- Reform contract auditing
- Support for slimming acquisition regulations
- Improved defense data sharing at DoD
After many years of delay, the DoD will undergo a full financial audit in 2018. (We are skeptical this will actually take place.)
House Activity – The House will attempt to pass H.R. 1, the Tax Cuts and Jobs Act. Leadership appears confident that they have the votes despite objections from some blue state Republicans to proposed cuts to the State and Local Tax deduction. On Tuesday, the House will also take up and pass the conference report on H.R. 2810, the FY 2018 National Defense Authorization Act.
Senate Activity – Most of the press coverage will be on the Senate Finance Committee’s tax markup, but the floor should be relatively quiet as work continues on various nominations.
- 11/14 Nominations, Full Committee Hearing, SD-G50 Dirksen, 10am
- 11/16 Nominations, Full Committee Hearing, SD-G50 Dirksen, 10am
- HASC – No hearings this week
- HAC-D – No hearings this week
- SAC-D – No hearings this week
Government Activity Round-Up
Nothing new or noteworthy on defense this week in CBO or GAO.
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