	Most Recent Legislative Action

On December 11, 2013, Representative Paul C. Ryan and Senator Patty Murray, chairs of the House and Senate budget committees, respectively, and co-chairs of the group appointed to develop a budget compromise to avoid a sequester in mid-January 2014, introduced the Bipartisan Budget Act of 2013, which raises defense and nondefense budget spending limits under the Budget Control Act (BCA) for FY2014 and FY2015. For FY2014, the bill raised the original BCA budget limit for National Defense (budget function 050) by $22 billion to a total of $520 billion, or $2 billion above the level set in the Continuing Resolution (CR) of 2014. For the Department of Defense (DOD), the new FY2014 limit was set at $497 billion rather than the current limit of $476 billion, just above the CR. The House and Senate Appropriations Committees are drafting FY2014 funding bills for DOD and other agencies that would conform to the newly revised budget caps. Similarly, for DOD, the new FY2015 limit would be $498 billion compared to $489 billion in current law, or $9 billion higher than the current limit, and $1 billion above the new limit for FY2014. Altogether, over the FY2012-FY2021 decade, National Defense spending would total $5.447 trillion, or $32 billion (or 6%) above the current limit. DOD spending would total $5.206 trillion rather than $5.176 trillion, a $30 billion or 6% increase over current limits. On January 15, 2014, the current CR ( P.L. Earlier, on October 17, 2013, the FY2014 Continuing Resolution (CR, P.L. 113-46 ) appropriated funds allowing the DOD and all other federal agencies to resume their normal operations through January 15, 2014, after a 16-day government shutdown went into effect because no FY2014 appropriations had been provided for the new fiscal year. In general, the CR allows DOD and other agencies to spend—during that period—at the rate at which each appropriations account was funded by P.L. Before passage of the CR, DOD, like most other agencies, was subject to a lapse in appropriations during which agencies are generally required to shut down because Congress had not acted on legislation to fund the federal government in FY2014 prior to the start of the fiscal year on October 1, 2013. 113-44 ; H.J.Res. For military activities of the Department of Defense that are covered by the FY2014 National Defense Authorization Act (NDAA), the Obama Administration requested authorizations for discretionary budget authority (BA) totaling $632.7 billion, including the following:
$526.6 billion for the so-called "base budget"—that is, for costs not associated with combat activities; $80.7 million for war costs, officially designated overseas contingency operations (OCO); $18.9 billion for defense-related nuclear energy programs conducted by the Department of Energy; and $7.4 billion for other defense-related activities. For DOD's base budget, both the version of the FY2014 NDAA passed by the House ( H.R. 1960 ) and the version of the bill reported by the Senate Armed Services Committee on June 20, 2013, ( S. 1197 ), differ from the President's overall request by less than $50 million. Enacted in 2011 to resolve the impasse that summer about raising the debt limit, the BCA required reductions in discretionary spending totaling about $2.1 trillion through FY2021 in return for raising the debt limit by the same amount. The FY2013 appropriations for DOD and all other federal agencies were not enacted until March 26, 2013, when the President signed the Consolidated and Further Continuing Appropriations Act of 2013 ( H.R. If current law had not been amended by the Bipartisan Budget Act of 2013 to change the BCA spending caps, the Administration's $552 billion national defense budget request for FY2014 (excluding war costs) would have to be reduced by $53.8 billion (about 9.8%) to a total of $498.1 billion in order to comply with BCA limits. As a part of the Administration's overall program, the BCA would be amended to defer application of the spending caps, thus accommodating the President's FY2014 defense budget request. 25 ) proposed $552 billion for national defense (excluding war costs). But, within that total, the BCA establishes separate limits (or caps) for defense and nondefense spending. Similarly, the Senate's FY2014 budget resolution ( S.Con.Res. However, if the level of national defense spending allowed by the Senate resolution were to be enacted, there would have been a $53.8 billion sequester cut to discretionary spending in early January 2014—if the original BCA caps had not been amended by law. 113-46 ) slated to expire on January 15, 2014, Congress might pass individual appropriations bills, an omnibus funding bill, or another CR by that time. If DOD complies with the current FY2014 BCA caps, annual funding would decrease by an additional $20 billion or about 4% from the FY2013 post-sequester level. The remaining $7.41 billion of discretionary funding for National Defense is requested for defense-related activities in other agencies, the largest share of which ($4.80 billion) is for FBI activity, including counterintelligence operations. Most of the proposed changes would yield savings of less than $150 million each over the five-year period, but 10 of the changes—each projected to save more than $500 million—account for nearly 60% of the projected five-year savings, namely:
$2.06 billion would come from dropping plans to develop a "Block IIB" version of the SM-3 anti-ballistic missile interceptor (FY2014 savings of $216 million); $1.72 billion would come from cancellation of the Precision Tracking Space System, a satellite network intended to provide targeting data on incoming ballistic missiles (FY2014 savings of $270 million); $1.35 billion would be saved by deferring until FY2019 the construction of a new "IIIB" version of the Apache attack helicopter (upgrading existing Apaches to that standard, in the meantime) (FY2014 savings of $475 million); $1.09 billion would come from using Atlas rockets for some planned satellite launches instead of more expensive Delta rockets (FY2014 savings of $106 million); $684 million would be saved in the near term by slowing procurement of the Navy's SM-6 anti-cruise missile interceptor until more ships are equipped with a new version of the Aegis weapons control system that is needed to fully exploit the capabilities of the SM-6 (FY2014 savings of $58 million); $683 million would come from a reduction in the overhead cost budgeted for the carrier-launched version of the F-35 Joint Strike Fighter (FY2014 savings of $8 million); $598 million would come from reducing the number of the Navy's F/A-18 fighters that would be rebuilt to like-new condition (FY2014 savings of $48 million); $593 million would be saved by reducing the Marine Corps ammunition inventory consistent with the retirement of one of three flotillas of pre-positioned supply ships carrying supplies and equipment for Marine combat units (FY2014 savings of $229 million); $528 million would come from savings as a result of buying DDG-51-class destroyers on a multi-year contract (FY2014 savings of $67 million); and $526 million would come from savings as a result of buying C-130J cargo planes on a multi-year contract (FY2014 savings of $83 million). 3304 , the version of the FY2014 National Defense Authorization Act signed into law by President Obama on December 31, 2013,—like Administration's budget request and earlier versions of the NDAA passed by the House ( H.R. 1960 ) and reported by the Senate Armed Services Committee ( S. 1197 )—exceeded by more than $30 billion the cap on national defense spending in FY2014 that was established by the FY2014 Continuing Appropriations Resolution ( H.J.Res. 59 ), which the President also signed into law on December 26, 2013. 112-239 ), the final version of the FY2014 NDAA—like the versions of the FY2014 bill that earlier had been passed by the House and reported by the Senate committee—makes relatively few individual additions to the authorization levels proposed by the Administration for specific procurement and R&D programs, compared with the annual defense authorization bills enacted in the first decade of this century. But it also would add to the amounts requested funds that would roughly offset the funds removed by sequester from the destroyer programs in FY2013:
For two DDG-51-class ships, the budget requested $1.62 billion; the Senate bill would have increased the authorization by $100 million, while the House bill and the final version added $332 million (which is nearly the amount cut from this program in FY2013 by sequestration); To complete construction of three DDG 1000-class destroyers, authorized in FY2007-FY2009, the Senate bill would have authorized $231.7 million, as requested, while the House bill and H.R. Naval Station at Guantanamo Bay, Cuba. The detainee-related provisions in H.R. Base Budget

For the FY2014 base budget, H.R. Defense Health Program (including TRICARE)

The FY2014 DOD appropriations bills passed by the House and reported by the Senate Appropriations Committee each would add upwards of $500 million to the $33.1 billion requested in the base budget for DOD's health care system, which serves 9.6 million beneficiaries (active-duty and retired military personnel and their dependents).
Congressional action on DOD's FY2014 budget was hobbled by the prevailing uncertainty over the entire federal budget that dissipated only in mid-December, when Congress passed and the President signed H.J.Res. 59, which set binding caps on discretionary spending for defense and nondefense programs in FY2014. The bill's defense cap, while about $31 billion below the amount requested for defense programs by President Obama, was more than $20 billion higher than the FY2014 defense cap that had been set by the Budget Control Act (BCA) of 2011 (P.L. 112-25).
President Obama's FY2014 base budget request of $552.0 billion in discretionary budget authority for the Department of Defense (DOD) and defense-related programs of other agencies (excluding war costs), exceeded by $53.9 billion the legally binding cap on defense funding for FY2014 that was enacted in 2011 as part of the BCA. Similarly, in their initial actions on the annual defense funding bills for FY2014, the House and the Armed Services and Appropriations Committees of the Senate approved defense funding totals (excluding war costs) that were very close to President Obama's so-called "base budget" (i.e., nonwar) request, regardless of the BCA cap.
For DOD's base budget, both the version of the FY2014 National Defense Authorization Act passed by the House (H.R. 1960) and the version reported by the Senate Armed Services Committee (S. 1197) also exceeded the BCA cap, differing from the President's request by less than $50 million. For war-related operations ("overseas contingency operations" or OCO), the Senate committee version of the authorization bill made few changes to the Administration's $80.7 billion request, while the House-passed bill added $5.4 billion.
Similarly, the versions of the FY2014 DOD Appropriations Bill (H.R. 2397) passed by the House and reported by the Senate Appropriations Committee—in conjunction with funding for military construction and for defense-related spending in other agencies in other appropriations bills passed by the House and reported by the Senate committee—would result in total DOD base budget appropriations that would exceed the BCA defense limit for FY2014 by nearly as much as President Obama's initial request.
Because legislation to fund the federal government in FY2014 had not been enacted prior to the start of the fiscal year on October 1, 2013, DOD, like most other agencies, was then subject to a lapse in appropriations during which agencies are generally required to shut down. Under an OMB-defined exception for "national security activities," all active-duty military personnel and many DOD civilian employees remained on their jobs through October 17, 2013, when H.J.Res. 59, the FY2014 Continuing Resolution (P.L. 113-46) was enacted, allowing DOD and all other federal agencies to resume their normal operations through January 15, 2014. The resolution set funding at an annualized level equal to that provided by the FY2013 Consolidated and Further Continuing Appropriations Act (P.L. 113-6) after reductions made on March 15, 2013, by the BCA-mandated sequestration process. Excluding war costs, the FY2014 CR funds DOD and defense-related programs of other agencies (which comprise the "National Defense" budget function) at an annual budget of $518 billion for about one-quarter of the year . That annual total amounts to a $34 billion or 6.2% decrease from the President's request for the FY2014 DOD base budget. However, it would exceed the BCA cap on National Defense spending in FY2014 by $21 billion (or about 4%).
If the BCA had not been amended, Congress would have had to cut the Administration's National Defense request by $53.9 billion (about 9.8%) to meet the BCA cap of $498.1 billion. But the FY2014 Continuing Resolution (H.J.Res. 59), which President Obama signed into law on December 26, 2013, raised the BCA caps on defense and nondefense discretionary spending for FY2014 and FY2015 in addition to funding the operations of the federal government through January 15, 2014.
For National Defense, the new FY2014 budget limit is $520 billion rather than the original BCA limit of $498 billion. DOD's share of this new, higher total amounts to about $497 billion rather than $476 billion DOD would have been allowed under the original BCA cap. If Congress appropriates to these new limits, there would no longer be a need for an additional $20 billion sequester in January 2014.
For FY2015, the new limit, higher limits set by H.R. 59 (compared with the original BCA caps) are $521 billion rather $512 billion for National Defense and $498 billion rather than $489 billion for DOD. In each case, the FY2015 spending limit is increased by $9 billion over the original BCA limits. The spending cap in FY2015 thus would be $1 billion above the FY2014 level. In subsequent years, the original BCA spending limits would remain in force, rising by FY2021 to $590 billion for National Defense and $564 billion for DOD in nominal dollars.
In sum, the effect of the Murray-Ryan budget agreement embodied in H.J.Res. 59 is to set a cumulative limit for National Defense spending in FY2012-FY2021 totaling $5.447 trillion, which is $32 billion higher than the original BCA limit for that period. For DOD, the spending caps would total $5.202 trillion rather than $5.176 trillion, a $30 billion increase over the current limit. The FY2014 Administration's DOD budget plan for that decade totals $5.533 trillion, exceeding the proposed new limits by $326 billion or 6%.
On December 26, 2013, the President signed into law H.R. 3304, a compromise version of the FY2014 NDAA. It authorizes appropriation of nearly the amount the Administration originally requested for the DOD base budget, taking no account of the new BCA defense spending limit, which it would exceed by more than $30 billion. Like the earlier versions of the NDAA passed by the House and reported by the Senate committee, H.R. 3304 also includes provisions bearing on several controversial policy issues including the armed services' handling of sexual assault cases and the treatment of detainees currently held at the U.S. naval base at Guantanamo Bay, Cuba.
DOD and the House and Senate Appropriations Committees are drafting FY2014 appropriations bills that would comply with the new spending caps by cutting about $32 billion from the Administration's FY2014 DOD budget request. Pending enactment of those bills, funding for DOD (and all other federal agencies) currently is slated to expire on January 15, 2014.