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Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (H.R. 4909, S. 2943)

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Fact Sheet: Selected Highlights of the FY2017 National Defense Authorization Act (H.R. 4909, S. 2943)

May 12June 8, 2016 (R44497)

FollowingIntroduction Following are selected highlights of H.R. 4909,the version of the FY2017 National Defense Authorization Act (NDAA) passed by the House on May 18, 2016 (H.R. 4909), and the version reported by the Senatereported by the House Armed Services Committee on May 4, 2016 (H.Rept. 114-537). the same date (S. 2943). Table 1 provides a summary of amounts recommended for authorization. Table 2 provides a summary of selected congressional budget reductions and restrictions, and Table 3 provides a summary of selected Administration policy and cost-cutting proposals. Table 4 provides a summary of elected congressional budget increases and policy initiatives. This CRS Fact Sheet is designed as a time-urgent product offering Members the best available information pending publication of a CRS report on the FY2017 defense funding legislation.

Background

Budget Cap Issue

Congressional action on the FY2017 National Defense Authorization Act (NDAA) has been fundamentally shaped by the legally binding caps on discretionary spending for defense programs and for non-defense programs, which were established by P.L. 114-74, the Bipartisan Budget Act of 2015 (BBA). The caps apply to what is commonly referred to as the "base" budget but not to amounts designated for "emergency" or for "overseas contingency/global war on terror" requirements. A central issue before Congress is the extent to which Congress and the President will approve Department of Defense (DOD) funding for FY2017 that (1) exceeds the relevant BBA cap; and (2) is exempt from that spending cap because it is classifieddesignated as funding for so-called Overseas Contingency Operations (OCO).

The OCO category of funding—which is not defined in law—was adopted by the Obama Administration in 2009 to encompass funding associated with operations in Iraq and Afghanistan. In subsequent budgets, the number of operations funded has increased and the scope of funding designated as OCO has expanded. The 2015 BBA increased binding caps on defense and non-defense discretionary appropriations for FY2016 and FY2017, which originally hadhad originally been codified by the Budget Control Act (BCA) of 2011 (P.L. 112-25). Those spending caps are enforced by a process of "sequestration."1

However, the BCA caps do not apply to appropriations designated both byby both Congress and by the President as funding either (1) for an emergency, or (2) for OCO purposes. The "non-OCO" share of the annual DOD budget is referred to as the "base" budget. The OCO category—which is not defined in law—was adopted by the Obama Administration in 2009 to encompass funding associated with operations in Iraq and Afghanistan. In subsequent budgets, the number of operations funded has increased and the scope of funding designated as OCO has expanded.

In addition to raising the binding caps on defense and non-defense spending, the 2015 BBA identified non-binding target levels of OCO funding for FY2016 and FY2017 for both the DOD budget and international affairs budget2 (which falls into the non-defense category).

The FY2017 NDAA debate may focus, in part, on the differencedifferences between the Administration and the House committeeCongress over how much of the FY2017 DOD budget designated as OCO funding—and thus exempt from the budget caps—would be used for base budget purposes. The Administration's DOD budget request included $5.1 billion in OCO funding to support base budget requirements and the House committee bill would increase that amount to $23.1 billion.

H.R. 4909 as Reported by the House Armed Services Committee

In comparing the Administration's FY2017 defense budget request and H.R. 4909 as reported by the House Armed Services Committee, the total amounts designated for base budget requirements are very similar and are in alignment with the BBA cap for FY2017. Likewise, the total OCO amounts reflect the BBA—the Administration request and the House committee-reported bill each designate $58.8 billion of the amount authorized for DOD as OCO funding. (See Table 1.)

Table 1. FY2017 National Defense Authorization Act (H.R. 4909An underlying issue is whether defense spending and non-defense spending for base budget purposes are both allowed to exceed the budget caps by roughly similar amounts—without triggering sequestration—through use of OCO-designated funding. The Administration and the congressional minority leadership have objected to providing defense funding for base budget requirements in excess of the spending cap unless it is accompanied by a comparable increase in funding for non-defense, base budget programs.3

The Administration's DOD budget request included $5.1 billion in OCO funding to support what it considers base budget requirements. Its budget justification material makes several references to a similar enhancement of the non-defense foreign affairs budget, although the State Department published no estimate of the amount of funding involved. A comparison of the foreign affairs agencies' OCO budget for FY2016 and their OCO request for FY2017 with their OCO budget for FY2015—the last year of funding not affected by BBA—suggests that the international affairs budget's "OCO-for-base" amount is in excess of $5.0 billion—roughly the same as in the DOD budget request.4

In comparing the Administration's FY2017 defense budget request and H.R. 4909 as reported by the House Armed Services Committee, the total amounts designated for base budget requirements are very similar and are in alignment with the BBA cap for FY2017. Likewise, the total OCO amounts reflect the BBA—the Administration request and the House committee-reported bill each designate $58.8 billion of the amount authorized for DOD as OCO funding. (See Table 1.)

However, the House-passed bill would dedicate $23.1 billion of OCO-designated funding to DOD base budget purposes—$18.0 billion more than the Administration proposed. According to the House Armed Services Committee, the remaining OCO funds authorized by H.R. 4909—amounting to $35.7 billion—would cover the cost of OCO through April 2017.5 By then, the committee says, the newly elected President could request a supplemental appropriation to cover OCO funding requirements through the remaining months of FY2017.

Senator John McCain, chairman of the Senate Armed Services Committee, has proposed an amendment to S. 2943 that would authorize an additional $17 billion designated as OCO funding but to be used for base budget purposes. If the amendment were adopted, it would align the Senate bill more closely with the House-passed version.

Table 1. FY2017 National Defense Authorization Act (H.R. 4909, S. 2943)

amounts in millions of dollars of discretionary budget authority

Bill Title

Budget Request

HASC reported billHouse-Passed Bill (H.R. 4909)

Senate committee- reported bill

Committee-Reported Bill

Conference Report

National Defense Base Budget

Procurement

101,971.6

103,062.3

 

102,435.0
 

Research and Development

71,391.8

71,629.8

 

71,227.2
 

Operation and Maintenance

171,318.5

169,325.3

 

171,389.8
 

Military Personnel

135,269.2

134,849.8

 

134,018.4
 

Defense Health Program and Other Authorizations

36,557.0

37,025.6

 

37,398.0
 

Military Construction/Family Housing

7,444.1

7,694.0

 

7,477.5
 

Subtotal: DOD Base Budget

523,952.1

523,586.9

 

523,945.8
 

Atomic Energy Defense Activities

19,240.5

19,512.1

 

19,167.6
 

Other Defense-Related Agencies

Defense-related Maritime Administrationa

211.0

300.0

 

n/a
 

TOTAL: National Defense Budget Function (050) Base Budget

543,403.6

543,399.0

 

543,113.4
 

DOD OCO Budget

58,798.0

58,793.5

 

58,890.5
 

GRAND TOTAL: FY2017 NDAA

602,201.6

602,192.5

 

602,004.0
 

Source: H.R. 4909 and H.Rept. 114-537, Report of the House Armed Services Committee to accompany H.R. 4909.

Note: Funds appropriated for defense are exempt from the budget caps only if both Congress and the President designate them as OCO or emergency funds. (See 2 U.S.C. Section 901 b.)

In the Administration's budget request, DOD and the foreign affairs agencies (the latter falling under the "non-defense" BBA spending caps) were slated to use certain OCO-designated funds for base budget purposes—$5.1 billion in the case of DOD and a similar amount for the international affairs agencies.3 If approved by Congress, the practical effect of this would be to allow both defense and non-defense spending to exceed the FY2017 BBA caps (by those amounts) without triggering sequestration.

For FY2017, the House Armed Services Committee bill would dedicate $23.1 billion of OCO-designated funding to DOD base budget purposes—$18.0 billion more than the Administration proposed. Heretofore, the Administration and the minority leadership in both chambers have objected to providing defense funding for base budget requirements in excess of the spending cap unless it is accompanied by comparable increase in funding for non-defense programs. It was on these grounds that President Obama explained his veto in 2015 of H.R. 1735, the first version of the FY2016 NDAA.4

According to the House committee, the remaining OCO funds authorized by H.R. 4909—amounting to $35.7 billion—would cover the cost of OCO through April 2017.5 By then, the committee says, the newly elected President could request a supplemental appropriation to cover OCO funding requirements through the remaining months of FY2017.

; S. 2943 and S.Rept. 114-255, Report of the Senate Armed Services Committee to accompany S. 2943.

Note:

a. Funding authorization for this program, provided in Title XXXV of the House bill, is outside the jurisdiction of the Senate Armed Services Committee.

Table 2. Selected Congressional Budget Reductions and Prohibitions

efforts to close the detention facility at Guantanamo Bay, Cuba  

Issue

House committee-reportedCommittee-Reported Bill (H.R. 4909)

Senate committee- reported bill

Committee- Reported Bill

Conference Report

Administration's allocation to base budget purposes of $5.1 billion designated as OCO (thus increasing the amount of base budget spending exempt from the budget caps while decreasing the amount of funding for OCO purposes).

Allocates for base budget purposes $23.1 billion designated as OCO funding (to avoid breaking the budget caps)—$18.0 billion more than the Administration proposed; Remainder of OCO authorization would cover OCO costs through April 2017, after which supplemental appropriations would be required for OCO costs.

 

 

Administration efforts to close the detention facility at Guantanamo Bay, Cuba

Prohibits transferring detainees to the United States (Section 1032)

 

 

Prohibits transferring detainees to the United States (Section 1032) or to certain other countries (Section 1034)

Prohibits permanently transferring detainees to the United States or to certain other countries (Sections 1021, 1026, 1029); allows temporary transfer to U.S. for medical treatment (Section 1024)

Funds cut from the request on grounds that unobligated balances from prior budgets (or anticipated slower-than-planned obligations in FY2017) will make up the difference

Cuts $1.77 billion

 

, of which $1.12 billion comes from the Operation and Maintenance accounts

Cuts $935 million, of which $880 million comes from the Military Personnel accounts

 

Fuel prices assumed in the budget request

Cuts $1.45 billion on the assumption that actual prices in FY2017 will be lower

 

Cuts $822 million on the assumption that actual prices in FY2017 will be lower

 

Foreign currency exchange rate assumptions

Cuts $429 million on the assumption that the goods and services bought by U.S. forces abroad will cost less than budgeted due to value of the dollar

 

Cuts $121 million on the assumption that the goods and services bought by U.S. forces abroad will cost less than budgeted due to value of the dollar

 

Source: H.R. 4909 and H.Rept. 114-537, Report of the House Armed Services Committee to accompany H.R. 4909.

; S. 2943 and S.Rept. 114-255, Report of the Senate Armed Services Committee to accompany S. 2943.

Table 3. Selected Administration Policy and Cost-Cutting Proposals

Administration Proposal

House committee-reportedCommittee-Reported Bill (H.R. 4909)

Senate committee- reported bill

Committee- Reported Bill

Conference Report

1.6% raise in Military Basic Pay in lieu of the 2.1% raise that otherwise would occur by lawa

Requires that pay be increased by 2.1% (Section 601); adds to the budget request $330 million (in OCO funds)

 

Mandates 1.6% basic pay increase, as requested (Section 601)

 

Reduce military end-strength by 27,015 active and 9,800 reserve component personnel

Adds to the Administration's end-strength request for 28,715 active and 25,000 reserve personnel; adds to the request $3.24 billion (in OCO funds)

 

Authorizes end-strength totals at the level requested in the budget

 

Introduce some new TRICARE fees and increase some existing fees and copays

Establishes TRICARE fees and copays similar to Administration's proposal (Section 701)

 

Significant changes to TRICARE system (Title VII, Subtitle A); would consolidate the medical departments of the Army, Navy, and Air Force with the Defense Health Agency (Section 721)

 

Remove from service seven7 (of the 22) Aegis cruisers for modernization and eventual 1-for-1 replacement of cruisers now in service

Requires that no more than six6 cruisers be inactivated at one time and that contracts be signed for their modernization (Section 1024); adds $202 million for operation (in OCO funds)

 

Requires that at least 11 (of the 22) cruisers be in service at all times, with 11 to be modernized and the other 11 replaced when they reach the end of their service lives (Section 1011)

 

Disband 1 (of 10) active-duty carrier air wings (requiring change in current law)

Rejects proposed amendment to current law; adds $86 million for wing operations (in OCO funds)

 

Incorporates the proposed change in law, allowing reduction to 9 active-duty carrier air wings (Section 1088)

 

To meet BBA budget caps, reduce FY2017 aircraft procurement funding by 12% ($4.34 billion) below amount projected in early 2015

Adds a total of $5.9 billion to the requested aircraft procurement authorization accounts (using OCO funds to avoid breaking budget caps)

 

Adds a total of $353 million to the requested aircraft procurement accounts

 

Plan a Base Realignment and Closure (BRAC) roundb

Prohibits the use of funds for a BRAC round (Section 2707); cuts $3.5 million slated for BRAC planning

 

Prohibits the use of funds for a BRAC round (Section 2702); cuts $4 million slated for BRAC planning

 

Source: H.R. 4909 and H.Rept. 114-537, Report of the House Armed Services Committee to accompany H.R. 4909; S. 2943 and S.Rept. 114-255, Report of the Senate Armed Services Committee to accompany S. 2943.

Notes:

a. For background, see CRS In Focus IF10260, Military Pay Raise, by [author name scrubbed].

b. For background, see CRS In Focus IF10362, The President's FY2017 Military Construction Budget Request, by [author name scrubbed].

Table 4. Selected Congressional Budget Increases and Policy Initiatives

  Security Cooperation with partner countriesa   Organization of DOD and Strategic Planningb  

Adds $839 million (in base budget)

to accelerate construction of an aircraft carrier

Issue

House committee-reportedCommittee-Reported Bill (H.R. 4909)

Senate committee- reported bill

Committee- Reported Bill

Conference Report

Registration of Women for the Military Draft

RequiredHad been required by Section 528, adopted as a committee amendment by a vote of 32-30

 

; provision was deleted by the rule governing floor debate

Required by Section 591

 

Troop levels in Afghanistan

Adds $2.33 billion to support deployment of 9,800 U.S. troops (rather than 5,500 as proposed by the Administrationin the budget)

 

No change to request

 

Ballistic Missile Defense of U.S. Territory

Adds $300 million (using OCO funds to avoid breaking budget caps); directs DOD to demonstrate space-based missile defense by 2025 (Section 1656)

 

 

Israeli Missile Defense Systems

Adds $455 million

 

Adds $115 million (in base budget); would also amend current law, which states that it is the goal of the missile defense system to protect U.S. territory against a "limited" missile attack; Section 1665 would delete the word limited

 

Ship Procurement

Increases shipbuilding procurement accountauthorization by a total of $2.3 billion (in OCO funds); Includes funds for one Littoral Combat Ship ($385 million), partial funding for a destroyer ($433 million) and an amphibious landing transport, and funds ($856 million), and $263 million to accelerate construction of an aircraft carrier

Adds $100 million; includes partial funding for a destroyer ($50 million) and an amphibious landing transport ($50 million); cuts $28 million from request for Littoral Combat Ship

Recodifies several existing authorities to train and assist partner countries (Sections 1201-1206)

Broadens the range of purposes for which DOD can train, equip, and assist partner countries (Sections 1251-65)

Revises existing law governing the scope and frequency of high-level strategic reviews (Sections 901-906)

Mandates wide-ranging changes in DOD organization (Sections 941 and 942)

Maintenance and Repair of Facilities

Adds $2.4 billion (in OCO funds)

 

 

Maintenance and Repair of Facilities

Adds $2.4 billion (in OCO funds)

 

 

Navy and Air Force Depot Maintenance and Readiness

Adds $955 million

 

 

Army Recruiting and Advertising

Adds $357 million

 

 

National Guard and Reserve Equipment

Adds $250 million

 

No change to request

 

Source: H.R. 4909 and H.Rept. 114-537, Report of the House Armed Services Committee to accompany H.R. 4909.

; S. 2943 and S.Rept. 114-255, Report of the Senate Armed Services Committee to accompany S. 2943.

Note:

a. For additional background, see CRS Report R44313, What Is "Building Partner Capacity?" Issues for Congress, coordinated by [author name scrubbed] b. For additional background, see CRS Report R44474, Goldwater-Nichols at 30: Defense Reform and Issues for Congress, by [author name scrubbed]


Table 5. CRS Defense Analysts

Area of Expertise

Name

Phone

Email

Specialist in National Defense

Else, Daniel

[phone number scrubbed]

[email address scrubbed]

Specialist in Military Ground Forces

Feickert, Andy

[phone number scrubbed]

[email address scrubbed]

Specialist in Military Aviation

Gertler, Jeremiah

[phone number scrubbed]

[email address scrubbed]

Specialist in Specialist in U.S. & Foreign National Security Programs

Hildreth, Steven A.

[phone number scrubbed]

[email address scrubbed]

Analyst in Defense Health Care Policy

Jansen, Don

[phone number scrubbed]

[email address scrubbed]

Analyst in Military Manpower Policy

Kamarck, Kristy

[phone number scrubbed]

[email address scrubbed]

Specialist in Military Manpower Policy

Kapp, Lawrence

[phone number scrubbed]

[email address scrubbed]

Specialist in Nonproliferation

Kerr, Paul

[phone number scrubbed]

[email address scrubbed]

Analyst in International Security

McInnis, Kathleen J.

[phone number scrubbed]

[email address scrubbed]

Analyst in Intelligence and National Security Policy

Miles, Anne Daugherty

[phone number scrubbed]

[email address scrubbed]

Specialist in Nonproliferation

Nikitin, Mary Beth D.

[phone number scrubbed]

[email address scrubbed]

Specialist in Naval Affairs

O'Rourke, Ron

[phone number scrubbed]

[email address scrubbed]

Specialist in Defense Acquisition

Schwartz, Moshe

[phone number scrubbed]

[email address scrubbed]

Specialist in National Security Policy and Information Operations

Theohary, Catherine A.

[phone number scrubbed]

[email address scrubbed]

Specialist in U.S. Defense Policy and Budget

Towell, Pat

[phone number scrubbed]

[email address scrubbed]

Analyst in U.S. Defense Budget Policy

Williams, Lynn

[phone number scrubbed]

[email address scrubbed]

Specialist in Nuclear Weapons Policy

Woolf, Amy F.

[phone number scrubbed]

[email address scrubbed]

Author Contact Information

[author name scrubbed], Specialist in U.S. Defense Policy and Budget ([email address scrubbed], [phone number scrubbed])
[author name scrubbed], Analyst in U.S. Defense Budget Policy ([email address scrubbed], [phone number scrubbed])

Footnotes

1.

See CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions, by [author name scrubbed].

2.

This is designated the State Department, Foreign Operations and Related Programs (SFOP) budget.

3.

The Administration's FY2017 budget justification material for the Department of State, Foreign Operations, and Related Programs makes several references to the transfer of some funding from the base budget to OCO in accord with the provisions of the 2015 BBA. In contrast to DOD, the State Department published no estimate of the amount of funding involved. However, comparing the OCO budget for FY2016 and the OCO request for FY2017 with the OCO budget for FY2015—the last year of funding not affected by BBA – the international affairs budget's "OCO-for-base" amount appears to be in excess of $5.0 billion—roughly the same as in the DOD budget request. See Congressional Budget Justification Material for the Department of State, Foreign Operations, and Related Agencies http://www.state.gov/documents/organization/252179.pdf, pp. 137-38See OMB, "Statement of Administration Policy on H.R. 4909, National Defense Authorization Act for Fiscal Year 2017," May 16, 2016, https://www.whitehouse.gov/sites/default/files/omb/legislative/sap/114/saphr4909r_20160516.pdf; and Senator Harry Reid, "Reid: Senate Must Give Defense Bill Deliberative Approach It Deserves," press release, May 25, 2016, http://www.reid.senate.gov/press_releases/2016-05-25-reid-senate-must-give-defense-bill-deliberative-approach-it-deserves#.V1GXYE0UVFo.

4.

See U.S. Department of State, Congressional Budget Justification Material for the Department of State, Foreign Operations, and Related Agencies, pp. 137-38, http://www.state.gov/documents/organization/252179.pdfU.S. President (Barack Obama), "Veto Message—H.R.1735," at https://www.whitehouse.gov/the-press-office/2015/10/22/veto-message-hr-1735.

5.

H.R. 4909's authorization for Operation and Maintenance (O&M) funding designated as OCO would expire on April 20, 2017 (Section 1504).