Political Report: 6/26/2018

 In Weekly Wire

Main Story: House of Representatives to Pass Department of Defense Appropriations

This week the House of Representatives will pass the House Appropriations Committee’s Department of Defense appropriations bill (H.R. 6157). While this legislation will be subject to floor amendments (there were 139 submitted, though only 27 were made in order), it is likely that it will pass with minimal changes. It remains unlikely that the appropriations process will wrap up before September, but it is good to see bills moving steadily through both chambers.

Below, we examine trends in investment spending from the FY 2018 enacted appropriations, to the FY 2019 budget request, and finally to the House Appropriations Committee (HAC) mark-up. Overall the HAC mark-up would increase procurement spending by over $8.7 billion in FY 2019. But this would be offset with reductions to RDT&E, O&M, and Military Personnel. Even more interesting are the shifting priorities within the investment accounts (below).

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Winners:

  • National Guard and Reserve Equipment – As in previous years, Congress provides a major pot of money for the National Guard and Reserve. HAC’s bill provides $1.3 billion for purchases of equipment.
  • Aircraft Procurement, Navy – The bill adds an additional six F-35Cs, 2 F-35Bs, 4 V-22s and 2 E-2 Hawkeyes to the Navy’s request, increasing the amount allocated by $1.3 billion.
  • Aircraft Procurement, Air Force – The House appropriators would add 8 F-35As, 2 C-135Bs and 8 C-130Js to the request. While some of this would be offset through reductions in spares and other production charges, this would increase total spending in this account by $912 million.

Losers:

  • RDTE, Navy – The appropriators cut spending in this account by $823 million. While cuts are spread across a wide range of programs, big losers include research on directed energy (-$85 million), the MQ-25 (-$268 million), and the Tomahawk Mission Planning Center (-$82 million).
  • O&M – Per usual, Congress cuts significantly from O&M to provide more money for investment spending. In this case, the House would reduce O&M by $3.5 billion relative to the FY19 request.
  • Military Personnel – The House reduces spending on military personnel by $1.38 billion relative to the request.

In other defense news, the Senate Appropriations Committee is scheduled to mark-up its version of the FY 2019 Department of Defense Appropriations bill on Thursday, June 28th. In addition, the House is likely to approve a motion to go to conference with the Senate on the FY 2019 National Defense Authorization Act.

House Activity

Beyond the Defense Appropriations bill, the House is likely to vote on a proposed Republican immigration reform bill, although that legislation may be dropped in favor of a narrower bill aimed at clarifying the detention of families arriving at the border.

Senate Activity

The Senate has closed out the first minibus appropriations bill and will move on to consideration of the House-passed Farm bill. The Senate agriculture committee has been working on a bipartisan bill that would differ significantly from the House passed bill in terms of its approach to stricter requirements for the Supplemental Nutrition Assistance Program (also known as food stamps). Should the Senate move forward with the bipartisan measure, the legislation will likely move quickly (it passed out of committee 20-1). Should Senate leadership seek to negotiate on some of the SNAP provisions, the bill could bog down fairly quickly. Given that Senate Agriculture Committee Chairman Pat Roberts has been insistent on passing a bipartisan bill, it seems likely that this could move fast.

Congressional Defense Activity

  • SASC
    • 6/26 “Nominations – Lyons”, Full Committee Hearing, SD-G50 Dirksen, 930am
  • HASC
    • 6/28 “Army and Marine Corps Depot Policy Issues and Infrastructure Concerns”, Full Committee Hearing, 2212 Rayburn, 830am
  • HAC-D
    • No hearings this week
  • SAC-D
    • 6/28 “Full Committee Markup of the Defense & Labor-HHS Appropriations Bills for FY 2019”. Full Committee Markup, 106 Dirksen, 1030am

Government Activity Round-up

Nothing new from the CBO again this week. There are a couple of interesting GAO reports that are relevant to aerospace and defense. First, GAO looks at how the services could potentially take advantage of improved data collection to improve their pilot retention efforts. Given that the services have been vocal about pilot shortages, GAO’s recommendation to gather better data on post-service employment opportunities and, for the Air Force, to better “analyze staffing levels by officer grade as part of its annual business case for aviation retention bonuses.” Full report here.

The second GAO report looks at how the Army’s maintenance work on Patriot batteries has limited availability of the systems, negatively impacting training. “GAO found that of the seven Patriot battalions that underwent reset from fiscal years 2014 through 2017, only one received its equipment within 180 days, in accordance with Army policy”. Based on interviews with army personnel, GAO believes that these delays negatively impact training and unit readiness. GAO recommends that the Army examine these issues in a comprehensive manner to see what can be done to address them. Full report here.

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