With just weeks to go before Congress disperses for a month-long break lawmakers have yet to finalize either a defense funding bill or legislation authorizing military spending for fiscal year 2016. The way forward looks particularly rocky as enacting both bills will require resolving a yearslong fight over spending caps.
With just weeks to go before Congress disperses for a month-long break lawmakers have yet to finalize either a defense funding bill or legislation authorizing military spending for fiscal year 2016. The way forward looks particularly rocky as enacting both bills will require resolving a yearslong fight over spending caps.
The Budget Control Act of 2011 set the caps with painful sequestration measures kicking in if the limits are exceeded. The limitations were eased for fiscal years 2013, 2014, and 2015, but now Congress is wrestling with the original sequestration strictures in handling the FY16 legislation, and no one is happy with their choices.
To get around the caps on defense spending lawmakers added $38 billion to the account for Overseas Contingency Operations. The OCO money is intended to fund actual warfighting and is considered to be an emergency fund. As such is not counted in the budget so it doesn’t come under the caps. This makes adding OCO money one way to bump the Pentagon’s budget while keeping it off the books.
Democrats are opposed to the maneuver and the White House has said it would veto the measure because they want to see an actual easing of the caps, including those on nondefense spending. Final action is still pending as the Senate has yet to pass its appropriations measure.
Both houses of Congress have, however, passed their defense authorization bills, and conferees are now meeting to hammer out a unified version. The extra OCO money is an issue here as well, and Sen. John McCain, R-Arizona, said on Friday (July 17, 2015) that the president had threatened to veto the authorization bill as well.
Not that this is the only controversy in the authorization language. Besides the extra funding, lawmakers have proposed to make changes to acquisition policy and military retirement, add funds to programs beyond that requested by the Department of Defense (DoD) and avoid base closures. McCain is leading the conferees working out the details and hopes to wrap that process up before the recess.
GPS III
Fortunately, though many hard-fought battles remain ahead, there are unlikely to be any spats over funding for DoD’s GPS programs. The House and Senate largely agreed with each other and with the White House on appropriations for the defense side of the nation’s satellite navigation efforts.
Congress would fully fund the administration’s 2016 fiscal year request for the GPS III program at $199.2 million for procurement and $180.9 million for development. While that sounds very positive, it is a significant reduction from the $315.8 million allocated in the current fiscal year for procurement, even when counting the $30 million Congress took back this summer in a rescission maneuver.
The FY16 total is also considerably less than the $212.6 million earmarked in FY15 for development. Lawmakers and the Administration were even more generous in FY14 when they gave $450.6 million to the program for procurement and $201.3 million for development; about 9 percent less than the $221.3 million requested.
Scaling back next year makes sense, however, given the uncertainty surrounding the GPS III program. Officials are weighing whether to select a new contractor for as many as 22 GPS III satellites in an apparent maneuver to force down the cost and incorporate new technology including an all-digital payload.
The agency also slashed the money it had initially said DoD would offer firms to do the initial design work for the new GPS III spacecraft — from $200 million to just $6 million. In effect, the agency expects companies to finance the work themselves in hopes of winning a deal. It is not clear how many companies are willing to entertain this approach.
Other Programs
Interestingly, GPS IIF procurement program is set to get a boost next year with the House shaving just $2.0 million off the $66.1 million request and the Senate agreeing to the full amount. This year the program received $50 million, after a slight cut of four percent. In FY14 the fully funded request was for $56.0 million
Congress also concurred with the Obama administration to put $350.2 million into the Next Generation Operational Control System (OCX). That is a substantial boost from the $299.8 million allocated for FY15 although not as generous as the $373.5 million budgeted in FY14.
The military GPS User Equipment (MGUE) program will be funded at $142.3 million, down from FY15 when the White House asked for and got $156.7 million, but it is better than the $127.2 million lawmakers allocated in FY14 after cutting the administration’s request by seven percent.
The decisions Congress has made so far on the authorization bill (H.R. 1735) support fully funding each aspect of the program with one key exception. Senate authorizers zeroed out money for GPS III procurement entirely saying in their report that the money, which would pay for the 10th of the new space vehicles, was “early to need” or premature.
One expert, who spoke on background to be able to discuss the closely held deliberations, said they predicted that the GPS III money would be fully authorized in conference.
New PNT Council
Congress is also proposing some half a dozen new reporting and oversight requirements, but these will not be clear until after the conferees finish, which will move forward for White House approval.
The Senate authorizers, for example, want the secretary of the Air Force to report quarterly on the GPS III program, the OCX ground system, and the MGUE program. Congress is concerned about delays and cost overruns. They also said in the report accompanying the bill that information from the GAO suggested that progress in the MGUE program had been overstated.
One of the most intriguing of the new proposals would create a new Council on Oversight of the Department of Defense Positioning, Navigation, and Timing Enterprise within DoD. The council would comprise top Pentagon decision makers including the under secretary of defense for policy, the under secretary of defense for acquisition, technology, and logistics; the vice chairman of the Joint Chiefs of Staff; the commanders of Strategic Command, Northern Command, and Cyber Command; as well as the director of the National Security Agency and DoD’s chief information officer.
The new council, which would have a limited life of 10 years, would oversee performance assessments of the various GPS programs (including those addressing interoperability) and identify vulnerabilities and mitigations. They would also be responsible for architecture development and the prioritization of resources, including reporting if funding shortfalls occur.
Most interestingly, the new group will oversee the “positioning, navigation, and timing services provided to civil, commercial, scientific, and international users” as well as “the Department of Defense positioning, navigation, and timing enterprise.” The language and budgetary responsibility appears sufficiently loosely worded that the council could potentially bridge some of the holes created by the current split-funding structure, which has the Department of Transportation funding a civil portion of the OCX ground system. Those monies have been cut consistently over the last half-dozen years helping put the new ground system in a bind.
All of these decisions could be put in limbo however, if Congress cannot get its appropriation and authorization work done before the recess. Budget watchers are expecting that Congress will once again be forced to pass a continuing resolution (CR) to keep the government open come October 1. In that case all new programs and mandates will be put on hold until Congress and the White House work out their issues. Although the details of any CR can vary, they generally continue funding at the current levels.
