Order Code RL33405
CRS Report for Congress
Received through the CRS Web
Defense: FY2007 Authorization and
Appropriations
May 5, 2006
Stephen Daggett
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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Defense: FY2007 Authorization and Appropriations
Summary
On February 6, 2006, the White House formally released its FY2007 federal
budget request to Congress. The request included $513.0 billion in new budget
authority for national defense in FY2007, of which $50 billion was a placeholder for
a later budget amendment to cover costs of overseas military operations, $441.2
billion was for regular operations of the Department of Defense (DOD), $17.0 billion
was for Department of Energy (DOE) nuclear weapons programs, and $4.8 billion
was for defense-related activities of other agencies.
The House Armed Services Committee completed full committee markup of its
version of the FY2007 defense authorization bill, H.R. 5122, on May 3. The Senate
Armed Services Committee marked up its version of the bill, S. 2507 on May 4. This
report is based on extensive, but still preliminary reports by the House Armed Services
Committee on its markup and on only a press release from the Senate Armed Services
Committee on its markup. Additional details will be provided when the formal committee
reports on the two bills are released. House defense appropriations subcommittee markup
of the defense appropriations bill is tentatively scheduled for June 7.
In action on key issues —
! Both the House and the Senate Armed Services Committees added
substantially to proposed troop levels for ground forces, including
30,000 to active duty Army end-strength, 5,000 in the House and
10,000 in the Senate to Marine Corps end-strength, and 17,000 to
Army National Guard end-strength.
! The House committee did not support Administration proposals to
rein in the cost of personnel pay and benefits. It increased the
proposed military pay raise from 2.2% to 2.7%, it rejected a proposal
to reduce DOD medical costs by increasing retiree medical fees and
copays, and it expanded reservists’ access to the TRICARE medical
insurance program. The Senate committee agreed to a 2.2% raise,
but, as in the House, rejected increased TRICARE fees and copays.
! Also, as in the past, the committees were unwilling to support
proposed cuts in weapons programs. Neither committee agreed to
halt production of the C-17 cargo aircraft, and both restored funds
to develop an alternative, second engine supplier for the F-35 Joint
Strike Fighter.
Some additional major issues may emerge as congressional consideration of the
annual defense authorization and appropriations bills proceeds. At the end of last
year, Iraq policy became a focus of congressional debate, and it may come up again
as mid-term elections near. The overall level of defense spending may also be a
matter of debate. Last year Congress cut $8.5 billion from the request for regular
defense programs, but additional funding for Iraq and Afghanistan mitigated at least
some of the impact of those reductions.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Status of Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Facts and Figures: Congressional Action on the FY2007 Defense Budget
Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Brief Overview of the Administration Request . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Highlights of the FY2007 Defense Budget Request . . . . . . . . . . . . . . . . . . . 6
Headlines: Brief Summaries of Potential Issues in Congress . . . . . . . . . . . . . . . 11
Congressional Action on Major Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Congressional Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
FY2006 National Defense Authorization . . . . . . . . . . . . . . . . . . . . . . 15
FY2007 Defense Authorization — Highlights of House Armed
Services Committee Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
FY2007 Defense Authorization — Highlights of Senate Armed
Services Committee Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Appendix A: Additional Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

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Defense: FY2007 Authorization and
Appropriations
Most Recent Developments
The House Armed Services Committee completed full committee markup of its
version of the FY2007 defense authorization bill, H.R. 5122, on May 3. The Senate
Armed Services Committee completed mark up of its version of the bill, S. 2507 on
May 4. This report is based on extensive, but still preliminary reports by both
committees on their markups. Additional details will be provided when the formal
committee reports on the bill are released. House defense appropriations
subcommittee markup of the defense appropriations bill is tentatively scheduled for
June 7. On May 5, the House Appropriations Committee released its initial
allocation of funds to appropriations subcommittees. The allocation to the defense
subcommittee is $4 billion below the Administration request.
Status of Legislation
Congress has begun action on the annual defense authorization bill with House
markup of its version of the measure on May 3 and Senate markup on May 4. Tables
1A and 1B track congressional action on the FY2007 defense authorization and
appropriations bills.
Table 1A. Status of FY2007 Defense Authorization
Full Committee
Conference
Markup
Report Approval
House
House
Senate
Senate
Conf.
Public
House
Senate
Report
Passage
Report
Passage
Report
House
Senate
Law
5/3/06
5/4/06
Table 1B. Status of FY2007 Defense Appropriations
Subcommittee
Conference Report
Markup
Approval
House
House
Senate
Senate
Conf.
Public
House
Senate
Report
Passage
Report
Passage
Report
House
Senate
Law
6/7/06
(sched.)

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CRS-2
Earlier this year Congress began, but did not complete, action on the annual
congressional budget resolution. The Senate passed its version of the resolution,
S.Con.Res. 83, on March 16. The House Budget Committee reported its version of
the budget resolution, H.Con.Res. 376, on March 31, but the leadership did not bring
the measure to the floor in the face of internal Republican opposition.
Facts and Figures: Congressional Action on the
FY2007 Defense Budget Request
The following series of tables provides a quick reference to congressional action
on defense budget totals. Additional details will be added as congressional action on
the FY2007 defense funding bills proceeds.
! Table 2 shows the Administration’s FY2007 national defense
request, by appropriations title, separating discretionary and
mandatory amounts. The total for FY2006 includes a $70 billion
placeholder amount for supplemental appropriations. That amount
will be adjusted when Congress completes action on the pending
supplemental bill (H.R. 4939). The total for FY2007 includes a $50
billion placeholder for a budget amendment for overseas operations.
If the $50 billion placeholder is removed, the total discretionary
request for the Department of Defense is $439.3 billion. This is the
amount most often referred to in DOD press releases, when the
budget was released in February.
! Table 3 shows congressional recommendations on defense budget
authority and outlays in versions of the annual budget resolution —
S.Con.Res. 83 as passed by the Senate and H.Con.Res 376. These
amounts are not in any way binding on the appropriations
committees, however.
! Table 4 shows congressional action on the FY2007 defense
authorization bill by title. It is important to note that the
authorization bill does not directly provide funds for most defense
programs (the exception being some mandatory programs). Rather,
it authorizes the appropriation of funds. In the appropriations bills,
Congress may provide more, less, or the same as the amounts
authorized to be appropriated.
! Table 5 shows congressional action on the FY2007 defense and
military construction/VA appropriations bills. This table does not
show funding for defense-related activities of agencies other than the
Defense Department, except for about $600 million for intelligence.
Notably, it excludes about $17 billion requested for Department of
Energy nuclear weapons programs.

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CRS-3
Table 2. Administration Request for National Defense for FY2007,
Budget Authority, Discretionary and Mandatory
(millions of dollars)
2005
2006
2007
Actual
Estimate
Request
National Defense Discretionary (Function 050)
Department of Defense — Military Discretionary (Subfunction 051)
Military personnel
119,740
113,481
110,778
Operation and maintenance
178,566
177,737
152,037
Procurement
96,613
86,185
84,197
Anticipated funding for the Global War on Terror*
—
70,000
50,000
Research, development, test and evaluation
68,826
71,046
73,156
Military construction
7,260
8,936
12,613
Family housing
4,099
4,439
4,085
Revolving, management, and trust funds and other
3,807
4,782
2,436
Total, Department of Defense — Military
478,911
536,606
489,302
Discretionary
Atomic Energy Defense Activities (Subfunction 053)
Department of Energy defense-related activities
17,034
16,224
15,818
Formerly utilized sites remedial action
164
139
130
Defense nuclear facilities safety board
20
22
22
Total, Atomic Energy Defense Activities Discretionary
17,218
16,385
15,970
Defense-Related Activities (Subfunction 054)
Federal Bureau of Investigation
1,240
2,276
2,308
Other discretionary programs
2,426
2,989
2,155
Total, Defense-Related Activities Discretionary
3,666
5,265
4,463
Total, National Defense Discretionary
499,795
558,256
509,735
National Defense Mandatory (Function 050)
Department of Defense — Military Mandatory (Subfunction 051)
Concurrent receipt accrual payments
1,539
2,343
2,369
Research, development, test, and evaluation
—
—
288
Revolving, trust and other DoD mandatory
4,975
788
789
Offsetting receipts
-1,499
-1,587
-1,498
Total, Department of Defense — Military Mandatory
5,015
1,544
1,948
Atomic Energy Defense Activities Mandatory (Subfunction 053)
Energy employees occupational illness compensation
672
1,716
1,047
program and other
Defense-Related Activities Mandatory (Subfunction 054)
Radiation exposure compensation trust fund
92
54
44
Other mandatory programs
222
245
251
Total, Defense-Related Activities Mandatory
314
299
295
Total, National Defense Mandatory
6,001
3,559
3,290
Total, National Defense (Function 050)
505,796
561,815
513,025
Source: Office of Management and Budget, Analytical Perspectives: Budget of the U.S. Government,
FY2007, Table 27-1.
*Note: These are placeholder amounts for a request for supplemental appropriations for FY2006, now
pending before Congress, and for a budget amendment for FY2007, not yet submitted.

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CRS-4
Table 3. Congressional Budget Resolution, Recommended
National Defense Budget Function Totals
(billions of dollars)
FY2007*
FY2008
FY2009
FY2010
FY2011
Administration Request
Budget Authority
513.0
485.2
505.3
515.3
526.1
Outlays
527.4
494.4
494.3
507.4
522.7
Senate Budget Committee Reported
Budget Authority
545.4
481.7
501.8
511.9
522.8
Outlays
550.5
514.8
508.1
511.2
521.9
Senate Passed
Budget Authority
549.4
483.0
502.8
512.9
523.9
Outlays
554.5
516.0
509.1
512.2
523.0
House Budget Committee Reported
Budget Authority
512.9
484.7
504.8
514.9
525.8
Outlays
534.9
505.5
505.9
512.6
524.9
Sources: Office of Management and Budget; S.Con.Res. 83; H.Con.Res. 376.
*Note: For FY2007, the Administration request includes $50 billion for a planned budget amendment
for military operations abroad. The Senate committee- and floor-passed recommended levels for
FY2007 assume a total of $82 billion for overseas operations. The House committee-reported level
assumes $50 billion, as in the request.
Table 4. FY2007 National Defense Authorization,
House and Senate Action by Title
(budget authority in billions of dollars)
House
Senate
Conf.
Request
House
Versus
Senate
Versus
Conf.
Versus
Request
Request
Request
Military Personnel
110.8
—
—
—
—
—
—
Operation & Maintenance
152.0
—
—
—
—
—
—
Procurement
84.2
—
—
—
—
—
—
RDT&E
73.2
—
—
—
—
—
—
Military Construction
12.6
—
—
—
—
—
—
Family Housing
4.1
—
—
—
—
—
—
Revolving & Management
2.4
—
—
—
—
—
—
Mandatory Programs
1.9
—
—
—
—
—
—
Total Department of Defense
441.2
—
—
—
—
—
—
Atomic Energy Defense Activities
17.0
—
—
—
—
—
—
Other Defense-Related Activities
4.8
—
—
—
—
—
—
Total National Defense
463.0
—
—
—
—
—
—
Emergency Authorization
50.0
—
—
—
—
—
—
Total Including Emergency
513.9
Totals may not add due to rounding.
Source: Office of Management and Budget.

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CRS-5
Table 5. FY2007 Department of Defense Appropriations,
House and Senate Action by Bill and Title
(budget authority in billions of dollars)
House
Senate
Conf
Request
House
Versus
Senate
Versus
Conf.
Versus
Request
Request
Request
Department of Defense Appropriations Bill
Military Personnel
110.8
—
—
—
—
—
—
Operation and Maintenance
130.1
—
—
—
—
—
—
Procurement
82.9
—
—
—
—
—
—
RDT&E
73.2
—
—
—
—
—
—
Revolving and Management Funds
12.6
—
—
—
—
—
—
Other Defense Programs*
21.9
—
—
—
—
—
—
Related Agencies
0.9
—
—
—
—
—
—
Total Regular Appropriations
432.4
—
—
—
—
—
—
Additional Appropriations for War
50.0
—
—
—
—
—
—
Total with Additional for War
482.4
—
—
—
—
—
—
DOD Programs in Military Construction/VA Appropriations Bill
Military Construction
12.6
—
—
—
—
—
—
Family Housing
4.1
—
—
—
—
—
—
Total Department of Defense
16.7
—
—
—
—
—
—
Grand Total for Department of Defense in Defense and Military Construction Appropriations
Total Regular Appropriations
449.1
—
—
—
—
—
—
Total Including Additional for War
499.1
—
—
—
—
—
—
Totals may not add due to rounding.
Source: Office of Management and Budget.
*Note: Other Defense Programs include Defense Health, Drug Interdiction, Chemical Weapons Demilitarization, and
DOD Inspector General. In the authorization bill and in DOD briefing charts, Chemical Weapons Demilitarization is
shown in Procurement and the other accounts are shown in Operation and Maintenance.
Brief Overview of the Administration Request
On February 6, 2006, the White House formally released its FY2007 federal
budget request to Congress. The request included $513.0 billion in new budget
authority for national defense in FY2007, of which $50 billion was a placeholder for
a later budget amendment to cover costs of overseas military operations, $441.2
billion was for regular operations of the Department of Defense (DOD), $17.0 billion
was for Department of Energy (DOE) nuclear weapons programs, and $4.8 billion
was for defense-related activities of other agencies (see Table 2 above).
The $50 billion placeholder is not intended to cover the full costs of military
operations in Iraq, Afghanistan, and elsewhere in FY2007. Rather, it is a “bridge
fund” to cover costs in the initial months of FY2007. Remaining costs for the rest
of the year will, if Congress agrees, be covered by a later supplemental appropriations

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CRS-6
bill. On its own initiative, Congress provided a $25 billion bridge fund in the
FY2005 defense appropriations act and a $50 billion bridge fund in FY2006. In each
year, the White House later requested additional supplemental funds. In February
2006, the Defense Department requested $67 billion for overseas military operations
in FY2006 in addition to the $50 billion appropriated last fall and $5 billion for DOD
for domestic disaster costs. Congress is now considering that request.1
Along with the FY2007 budget request, the Pentagon released the results of the
congressionally-mandated Quadrennial Defense Review (QDR) of defense policy.
The year-long QDR was not a budget exercise, but it identified the kinds of military
capabilities that senior DOD officials believe should be emphasized in years to come,
and it endorsed a number of budget decisions that were reflected in the FY2007 DOD
request to Congress.
Highlights of the FY2007 Defense Budget Request
Aspects of the Defense Department’s FY2007 request that appear to be of most
immediate concern to Congress include:
(1) The Administration continues to request large amounts for Iraq
and Afghanistan through “additional” or “emergency supplemental”
appropriations not subject to limits on total discretionary federal
spending and not subject to the full congressional authorization and
appropriations review process. In the FY2007 budget, the Administration has,
for the first time, requested part of the funding to carry on military operations in Iraq
and Afghanistan before the start of the fiscal year in the form of a $50 billion budget
amendment to the FY2007 request. In this, the Administration has followed
Congress’s lead — Congress provided a “bridge fund” of $25 billion for Iraq and
Afghanistan in the FY2005 defense appropriations bill and of $50 billion in FY2006.
By submitting a budget amendment, the Administration gains a more direct and
formal voice in proposing how to allocate the additional funds. The Administration
will continue, however, to request more additional funding in an emergency
supplemental appropriations bill to be submitted next year. Both the “bridge fund”
and later supplemental appropriations will be requested over and above proposed
limits on overall discretionary spending.
The key point remains this: Either in the form of a bridge fund or of emergency
supplemental appropriations, the Administration is requesting that additional war
funding not count against restrictive caps on regular annual defense and non-defense
appropriations. War expenditures, however, have become a very large part of total
annual defense spending, and, for that matter, of total defense and non-defense
appropriations. For FY2006, Congress approved a $50 billion bridge fund for war
costs last fall and is now considering supplemental appropriations of $67 billion, for
a total of $117 billion. A few comparisons may help put this amount into
perspective.
1 For a full discussion, CRS Report RL33298, FY2006 Supplemental Appropriations: Iraq
and Other International Activities; Additional Katrina Hurricane Relief, Paul M. Irwin and
Larry Nowels, coordinators.

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CRS-7
! Regular DOD appropriations for FY2006 were $411 billion, so the
$117 billion for war increases defense funding by 28%.
! In last year’s budget resolution, the FY2006 cap on total “non-
emergency” appropriations, both for defense and for non-defense
programs, was $843 billion, which was subsequently trimmed by 1%
to $835 billion. So the $117 billion for war adds 14% to federal
discretionary funding.
! At the end of last year’s budget cycle, Congress imposed an across-
the-board cut of 1% in all appropriations bills, which trimmed
federal spending by $8.4 billion, just 7% of the amount it is
providing for war costs.
An equally important point is that DOD requests for “additional” or
“emergency” war appropriations are not subject to the normal, extensive review
process applied to other defense spending. The Administration decision to submit
a budget amendment for a bridge fund is, at most, only a limited step in the direction
of greater oversight. The amendment has not been submitted in advance of House
action on the FY2007 defense authorization bill. Moreover, neither supplemental
appropriations requests nor budget amendments are supported by the kind of detailed
budget justification material that Congress expects to be provided in support of
regular DOD funding requests. In part because of that, there appears to be increased
concern in Congress that full funding for ongoing military operations should be
considered through the regular, annual defense authorization and appropriations
process.
(2) The regular DOD appropriations request for FY2007 is for $439.3
billion, $28.5 billion above the FY2006 enacted amount, an increase of
7%. Viewed in this way, the
FY2007 budget appears to
Figure 1. DOD Discretionary Budget
carry on the substantial
Authority, FY2000-FY2011, Excluding
defense buildup that has been
Supplementals
underway for the past several
years. But the story is a bit
more complicated than that.
The increase appears so large
in part because Congress cut
the FY2006 request by $8.5
billion — a $4.4 billion cut in
the regular process and an
additional across-the-board
reduction of $4.1 billion at
the end of the appropriations
process.2 Moreover, in an
effort to stay within tight
l i m i t s o n o v e r a l l
appropriations for FY2007,
2 For a full discussion, see CRS Report RL32924, Defense: FY2006 Authorization and
Appropriations, by Stephen Daggett.

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CRS-8
the Office of Management and Budget trimmed DOD’s FY2007 budget by $3.8
billion compared to the amount that was planned last year for FY2007. Out-year
budget projections for the regular defense budget show spending leveling off to very
modest rates of growth. The average increase between FY2005 and FY2011 is 1.7%
per year above inflation, far below the 5% per year growth between FY2001 and
FY2005 (see Figure 1).
That said, when additional and supplemental appropriations for war are
included, total defense spending is continuing to grow. The total increase in defense
between FY2005 and FY2006 will be about $56 billion if Congress approves the
pending FY2006 supplemental. The increase between FY2006 and FY2007 could
be as great. .
So, summary story line might be termed the “tale of two budgets.” The budget
is getting very tight for programs that are funded strictly within the regular defense
budget — military service officials have testified that the congressional cuts in the
FY2006 defense budget are requiring substantial reductions in some operations. At
the same time, supplemental appropriations are soaring, and money is readily
available for programs that are tied to the war effort.
(3) The Administration’s FY2007 request rejects congressional
proposals to increase Army and Marine Corps end-strength and cuts
Air Force and Navy personnel levels. For FY2006 Congress authorized
active duty end-strength of 512,400 for the Army of 175,000 for the Marine Corps.
By the end of FY2007, however, the Defense Department plans to restore Army and
Marine Corps end-strength to the pre-FY2004, pre-Iraq, “base-line” level — 482,400
for the Army, which is 30,000 troops lower than the current authorization, and
170,000 for the Marine Corps, which is 5,000 lower. Many Members of Congress
have urged that the current authorized levels be made permanent in order to ease the
pace of operations on ground forces. The Administration vigorously opposes a
permanent increase, however, arguing that costs are high and that forces can be
organized more efficiently to provide required combat troops.
Meanwhile, the Air Force plans to eliminate at least 40,000 full-time equivalent
positions over the next five years through a mixture of reductions in active duty,
reserve, and civilian personnel. And the Navy is cutting 12,000 active duty personnel
between FY2006 and FY2007. Though no additional Navy cuts have been
announced formally, it is widely expected that the Defense Department will trim an
additional 20,000 or so positions from the Navy over the next few years.
(4) The Administration’s FY2007 request provides funds for 333,000
Army National Guard (ARNG) troops rather than the 350,000 authorized
and reflects a decision to reduce the number of combat brigades in the
ARNG from 34 to 28. The Army has been unable to recruit and retain enough
troops in the National Guard to reach its authorized end-strength. In the FY2007
request, the Army has requested funding only for 333,000 troops, though, after the
budget was released, Army officials said that they would shift money into personnel
and other related accounts if recruitment and retention improves. In its future plans,
however, the Army projects ARNG end-strength of 333,000.

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CRS-9
A more controversial issue is the Army plan to reduce the number of new,
modularized ARNG combat brigades. As Army officials explain, the purpose of the
change is to fully man the new brigades within authorized ARNG end-strength and
to fully equip the combat units within available budget constraints. The change will
likely mean that ARNG units in some states that will not, as had been planned, be
outfitted as new, more capable combat brigades, will lose personnel. The units that
remain, therefore, will also likely have less ability to carry out state disaster response
and homeland defense missions. As a result, state governors and some National
Guard leaders have been very critical of the plan.
(5) The FY2007 request includes only a modest 2.2% pay raise for
troops and proposes increases in medical care fees and copays for
under-age-65 military retirees. Since 1999, Congress has approved substantial
increases in military pay and benefits. Compared to economy-wide indices,
uniformed military personnel now cost as much as 33% more, above inflation, than
in the late 1990s.3 In the FY2007 budget, the Administration is proposing measures
to rein in the growth of pay and benefits. The proposed 2.2% military pay raise is the
lowest since 1994. And the Administration has proposed increasing fees and copays
for under-age-65 military retirees who are eligible for medical care through the
military Tricare program. This is the first proposed increase in medical copays since
the current Tricare medical care system for retirees and dependents was established
in 1995.
(6) The FY2007 request proposes a few reductions in major
weapons programs, some of which have been controversial in
Congress. With the Defense Department carrying out its Quadrennial Defense
Review in 2005, many expected some substantial changes in long-term budget
priorities, including some cuts in major weapons programs. The QDR did not,
however, make many far-reaching changes in on-going programs, and only a few
reductions in weapons plans are reflected in the FY2007 budget request. Two have
so far been controversial in Congress —
! A decision to halt procurement of the C-17 cargo plane in FY2007
after buying 180 of the aircraft since the program began in the mid-
1980s; and
! A decision to drop plans to develop and buy engines for the F-35
joint strike fighter from two manufacturers and, instead, just to buy
engines from one company.
(7) The Quadrennial Defense Review did not result in decisions on
major, ongoing defense budget and program-related issues. The official
Department of Defense report on the 2005-2006 Quadrennial Defense Review,4
which was released along with the Administration’s budget request in February,
stated plainly that the year-long QDR exercise was not intended to be a systematic
3 For a discussion, see CRS Report RL32877, Defense Budget: Long-Term Challenges for
FY2006 and Beyond, by Stephen Daggett.
4 Department of Defense, Quadrennial Defense Review Report, February, 2006. Available
at [http://www.defenselink.mil/qdr/report/Report20060203.pdf].

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CRS-10
assessment of major defense programs. Instead, it was designed to provide a vision
of the national security challenges facing the nation and to identify the kinds of
military capabilities that are needed.
True to its word, the QDR report announced very few major program decisions,
though it did mention some. Perhaps the most significant is to add 15,000 special
operations troops, though without increasing overall military end-strength. For the
most part, the QDR report simply endorsed ongoing initiatives, though often with
wording carefully designed to keep options for policy-makers open. The result is to
leave undecided some very far-reaching defense policy issues.
! For the Navy, the QDR report endorsed increasing “green” and
“brown” water capabilities, construction of new prepositioning
ships, 11 rather than 12 deployable aircraft carriers, construction of
two attack submarines per year at lower than current prices, and the
conversion of a number of Trident submarine-launched missiles to
carry conventional (non-nuclear) warheads. But the report said
nothing about other naval force issues. Notably, it did not mention
the recently-released Navy shipbuilding plan for a combat fleet of
313 ships. Many question whether that plan is affordable.
! Regarding fighter aircraft acquisition plans in the Air Force, Navy,
and Marine Corps, the QDR report endorsed a revised Air Force
plan to stretch out F/A-22 procurement, but otherwise did not
mention the number of short-range fighter and ground attack aircraft
needed in the long term. The report put a great deal of emphasis on
the need for long-range, prompt, global strike capabilities. This may
appear to be at odds with plans to continue large investments in
shorter-range strike aircraft that may have limited access to areas of
combat in future conflicts, but the report did not address the issue.
! The report endorsed the Army’s plan to reorganize into more
deployable, modular combat brigades, but notably did not make an
explicit commitment to provide the full funding needed to
modularize all active and reserve combat units as the Army has
planned. The report also endorsed the capabilities being developed
in the Army’s Future Combat System development program, but,
notably, did not explicitly endorse the program as a whole.
! The report said very little at all about satellites and other space
programs. The only mention of a space program was to endorse an
Air Force plan to restructure the Transformational Communications
Satellite (TSAT) program to incorporate less risky technology.
Other space programs have experienced problems like those in the
TSAT program, but these are not mentioned. Space programs
overall have grown dramatically as a share of the defense budget,
and cost growth in major programs has been pandemic. Finally, a
major policy issue is how to protect space based systems from future
threats and whether the U.S. security will be advanced by developing

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CRS-11
offensive space capabilities.. The QDR discusses none of these
issues.
Headlines: Brief Summaries of
Potential Issues in Congress
Last year, congressional action on the annual defense authorization and
appropriations bills featured extensive debates, first, over policy toward treatment of
military detainees, and, toward the end of the year, over the pace of troop
withdrawals from Iraq. This year, a continued debate over Iraq policy has reemerged
in congressional consideration of the FY2006 supplemental appropriations bill (H.R.
4939). An amendment to the bill in the Senate proposes accelerated withdrawals if
the Iraqi government fails to meet established deadlines in the political process. The
debate over Iraq may well be renewed when Congress takes up FY2007 bills.
In addition to Iraq policy, other issues may emerge. What follows is a very brief
list of some of the issues that may come up, based on early debate about the FY2007
defense budget.
! Funding cuts in the regular FY2007 defense appropriations bill:
Last year, Congress trimmed $4.4 billion from the regular FY2006
defense appropriations bill and applied the money to non-defense
appropriations. Later, at the end of the process, Congress trimmed
defense appropriations by an additional $4.1 billion as part of an
across-the-board 1% cut in all appropriations, as an offset for
Katrina-related funding. This year, the Senate took a step to avoid
similar guns versus butter trade-offs in the FY2007 budget by adding
$3.7 billion to the budget resolution (S.Con.Res. 83) cap on total
discretionary spending. But, as last year, there appears to a
considerable amount of opposition in Congress to proposed cuts in
non-defense appropriations, and the defense bill may be seen as a
source of offsetting funds because of the amount of money available
for defense in emergency funding for overseas operations.
! Limits on emergency funding: The Senate-passed FY2007 budget
resolution (S.Con.Res. 83) puts a cap of $90 billion on total
emergency funding. War costs, including $50 billion that the
Administration plans to request as an attachment to the regular
FY2007 defense appropriations bill, plus a later emergency FY2007
supplemental request expected next February, together with requests
for funds for Katrina-recovery, bird flu, border security, agricultural
disaster relief, and other purposes, will almost surely exceed the cap
by a substantial amount. If Congress ultimately approves such a cap,
anything above $90 billion would require offsetting rescissions,
including, quite likely, cuts in regular defense funding.
! Providing full funding for overseas operations in regular defense
funding bills: Both last year and the year before, the Senate added

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CRS-12
advisory language to the defense appropriations bill urging the
Administration to request full funding for ongoing military
operations in the regular authorization and appropriations bills. The
Administration did not concur. But there may be more support in
Congress for that approach now, and Congress may try to ensure that
full funding for operations is in next year’s FY2008 request.
! Army and Marine Corps end-strength: The Administration is
proposing ground force active duty end-strengths at the pre-2004
baseline level. Congress added 30,000 to Army and 5,000 to Marine
Corps end-strength in FY2006, and there appears to be a great deal
of support in Congress, particularly, but not only, among Democrats,
for a permanent end-strength increase.
! Funding for Army National Guard end-strength: The FY2007
Army request trims about $500 million from Army personnel
accounts and additional amounts from operation and maintenance
accounts to reflect a troop level of 333,000 in the Army National
Guard rather than the 350,000 authorized. Congress may mandate
a higher force level.
! 2.2% pay raise: Every year between 2001 and 2006, Congress
approved an increase in basic pay of ½ percent above the
employment cost index (ECI), a measure of the average growth of
nationwide pay and benefits. An increase of ECI + ½% was
mandated for 2004, 2005, and 2006 in the FY2004 national defense
authorization act (P.L. 108-136). Now that provision has expired,
and the normal pay raise, established in Section 1009 of Title 37,
U.S.C., is equal to the ECI. The Administration, accordingly, has
requested a pay raise equal to the ECI, which, for calendar year
2007, is 2.2%. If approved, that would be the lowest pay raise since
1994. There is considerable sentiment in Congress to provide more.
! Increased TRICARE fees and copays for under-65 retirees:
There is also considerable sentiment in Congress against the
Administration’s proposed increases in fees and copays for
TRICARE for retirees. The Administration argues, however, that
rising medical benefits threaten to drive up military personnel costs
substantially, and that concern has gained some traction in
Congress.5
! Funding for National Guard and reserve equipment: Funding for
Guard and reserve units has become a more contentious issue in
recent years, particularly as states look to National Guard units as the
front line in possible homeland defense missions.
5 For a full discussion, see CRS Report RS22402, Increases in Tricare Fees: Background
and Options for Congress, by Richard Best.

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CRS-13
! Adding a representative of the Guard and reserve components
to the Joint Chiefs of Staff: Several Senators have sponsored a
bill to establish a 4-star rank reserve officer to serve on the JCS.
The services have opposed such a measure.
! Retiring an aircraft carrier: The Defense Department wants to
reduce the number of deployable aircraft carriers from 12 to 11. Last
year, Congress included a provision in the FY2006 defense
authorization act to prohibit such a reduction. Senator Warner, the
Chairman of the Senate Armed Services Committee, now supports
retiring a carrier, but there is still some opposition. The issue may
be resolved in action on the pending FY2006 supplemental
appropriations bill, if Congress approves a Warner amendment to
permit retirement of the U.S.S. Kennedy aircraft carrier. If not, the
issue may come up in action on the FY2007 defense bills.
! Halting C-17 production: The Defense Department has not
requested funds for new C-17 cargo aircraft in FY2007, which
would end production after 180 aircraft have been produced. The
Air Force, however, included in its FY2007 unfunded priorities list
(UPL) a proposal for 7 C-17s as replacements for aircraft that may
be lost due to excessive wartime use. Some legislators want to keep
production lines open for the foreseeable future.
! B-52, F-117, and U-2 retirements: The Air Force has proposed
cutting the number of active B-52s from 94 to 56 and retiring F-117
stealth attack aircraft and U-2 reconnaissance planes. In the past,
Congress has repeatedly rejected Air Force proposals to retire B-52s.
! Stretching out F-22 procurement: The Air Force has requested
stretching out F-22 production until F-35 procurement begins. The
financing mechanism that it has proposed, however, violates long-
standing DOD and Office of Management and Budget policy that
requires full funding of complete end-items of equipment in annual
appropriations for procurement programs. The stretch-out will
increase total procurement costs, even though the Air Force wants
to negotiate a multi-year contract for the remaining production. In
the past, Congress has rejected Air Force proposals that violate the
full funding policy, though it has supported incremental funding for
more costly Navy ships.6
! Eliminating funds to develop a second engine supplier for the
F-35 Joint Strike Fighter: DOD has proposed eliminating
development of an alternate engine for the F-35. This would save
about $1.7 billion in development costs through FY2011, according
6 For a full discussion, see CRS Report RL31404, Defense Procurement: Full Funding
Policy — Background, Issues, and Options for Congress, by Ronald O’Rourke and Stephen
Daggett.

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CRS-14
to the Air Force,7 but it would also eliminate the benefits of ongoing
competition between engine producers. Congress has held several
hearings on the issue. Even senior DOD officials testifying on the
matter have acknowledged being unenthusiastic about the proposal.
! A new refueling aircraft for the Air Force: While studies have
found that current KC-135 refueling aircraft remain reliable, the Air
Force wants a new tanker, arguing that possible corrosion of KC-135
air frames is a danger. Most recently, DOD has approved an initial
request for information from industry about tanker options, the first
step in acquiring a new aircraft.8
! Long-range, prompt, global strike capabilities: The Quadrennial
Defense Review placed a new, high priority on capabilities to strike
targets promptly at long range. In the short term, DOD is proposing
to convert several Trident missiles to carry non-nuclear warheads for
rapid strike missions. And beginning some time after 2015, DOD
is proposing to build a new, long-range strike system, which could
be a manned or unmanned bomber.
! Satellite and other space program acquisition: For the past
several years, Congress has expressed its displeasure with large cost
growth and extensive schedule delays in a number of DOD space
programs. Congress has cut funds substantially and mandated
restructuring of some particular programs, including the
Transformational Communications Satellite (TSAT) and Space
Radar programs. Press accounts have also reported large changes in
the highly classified Future Imagery Architecture program.9 The
Administration has announced a plan to restructure the TSAT
program to rely on less risky technology. The continuing issue for
Congress is whether changes in space programs have reduced risk
sufficiently and how fast new programs should proceed.
! Missile defense funding and testing: Missile defense remains the
largest acquisition program in the defense budget. Congress has
been reluctant to cut funding in the past, though it has trimmed some
programs and defense committees have expressed concern about the
testing program. The Missile Defense Agency now deploying
ground-based interceptors in Alaska though the deployed system has
not been tested as an integrated whole. One issue for Congress may
be whether to tie funding to the test program.
7 Jon Steinman and Tony Capaccio, “Pentagon Plans To Scrap F-35 Backup Engine, Cut
Costs,” Bloomberg.com, December 29, 2005.
8 Megan Scully, “Air Force Launches Latest Effort To Replace Aging Tankers,” National
Journal Congress Daily PM, April 25, 2006
9 Andy Pasztor, “U.S.’s Lofty Plans For Smart Satellites Fall Back To Earth: Big Delays
and Cost Overruns Give Washington Pause; Technical Setbacks Loom; Reconsidering 1970s
Designs,” Wall Street Journal, February 11, 2006, pg. 1.

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CRS-15
! Acquisition reform: Last year, Congress approved a measure
intended to improve tracking of cost growth in weapons programs
by requiring that the Defense Department report changes compared
to original estimates of the costs rather compared to periodically
rebaselined program estimates. The result has been to show a
substantial number of acquisition programs with cost growth
exceeding or approaching levels that would trigger a program review
under the requirements of the Nunn-McCurdy amendment. Last
year Congress rejected, however, a requirement that programs with
excessive cost growth be reevaluated compared to alternatives.
Congressional Action on Major Issues
Congressional Budget Resolution. In March, Congress began, but has
not yet completed, action on the annual congressional budget resolution. For
amounts recommended for national defense in the House and Senate resolutions, see
Table 3 above.
The Senate passed its version of the resolution, S.Con.Res. 83, on March 16.
The Senate Budget Committee recommended a level of defense spending about $3.7
billion below the Administration request. In floor action, the Senate adopted
amendments that added $4 billion to the recommended defense total. The Senate
also approved an amendment by Senator Lott to add $3.7 billion to the enforceable
cap on total discretionary funding. This was intended to avoid cuts in defense
appropriations as offsets for higher levels of non-defense spending.
The Senate measure also put a limit of $90 billion on total emergency funding
in FY2007, which is substantially below the amount that appears likely to be
requested to finance ongoing military operations and domestic disaster-response
commitments. This first effort in the Senate to place constraints on emergency
spending may be harbinger of battles later in this year’s appropriations process and
in next year’s budget debate.
The House Budget Committee reported its version of the budget resolution,
H.Con.Res. 376, on March 31, but the leadership did not bring the measure to the
floor in the face of internal Republican opposition. The committee measure
recommends the Administration-requested level of defense spending.
FY2006 National Defense Authorization. The House Armed Services
Committee marked up its version of the FY2007 defense authorization bill on May 3,
and the Senate Armed Services committee marked up on May 4. When available,
total amounts authorized in each version of the bill will be provided in Table 4,
above. Based on information available from House subcommittee markups the week
of April 24 and full committee markup on May 4, highlights of the House markup
follow. Information about the Senate markup is available from committee summary
released to the press on May 5. Additional details will be added when committee
reports are issued

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CRS-16
FY2007 Defense Authorization — Highlights of House Armed
Services Committee Markup
Amidst the various detailed matters reported below, a few major points stand
out. One is that the committee appears to have put somewhat more emphasis than
DOD on maintaining current military capabilities rather than on pursuing long-term
defense transformation. This is particularly true where the risk of delays and cost
growth in weapons development appears high. The committee seems more inclined
to support the current Army modularization program, for example, than to continue
investing increasing amounts in the Future Combat System. Similarly, the committee
trimmed higher risk missile defense technologies in favor of more immediately
deployable systems, and it continued, as it has in past years, to cut funding for
satellite programs that may be seen as reaching too far ahead with technologically
risky approaches.
Another key point is that the committee supports a larger Army, Marine Corps,
and Army National Guard force level than the Administration wants. This may be
a major policy issue this year, and it has very large long-term budget implications.
Also, as in the past, the committee has been reluctant to support proposed cuts
in weapons programs. It did not agree to halt production of the C-17 cargo aircraft,
for example, and it restored funds to develop an alternative, second engine supplier
for the F-35 Joint Strike Fighter.
The committee also did not support Administration proposals to rein in the cost
of personnel pay and benefits. The committee increased the proposed military pay
raise from 2.2% to 2.7%, it rejected a proposal to reduce DOD medical costs by
increasing under-65 retiree medical fees and copays, and it expanded reservists’
access to the TRICARE medical insurance program.
Finally, the committee slowed down two programs that might be seen to have
negative international diplomatic consequences — one to develop a laser that might
be used as an anti-satellite weapon and the other a high-profile Administration
proposal to convert some Trident missiles to carry conventional (non-nucleaMay 4,
2006r) warheads.
Highlights of committee action include:
! Ground force end-strength: The committee bill increases Army
end-strength by 30,000 (to 512,400), and Marine Corps end-strength
by 5,000 (to 175,000). The bill also authorizes an end-strength of
350,000 for the Army National Guard, 17,000 above the request.
End-strength may be a major dispute between Congress and the
Administration this year.
! Pay raise: The bill provides a pay raise of 2.7% for uniformed
personnel, rather than the 2.2% requested.

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CRS-17
! Tricare fees and copays for under-65 retirees: The bill rejects
increases in retiree fees and copays through December 31, 2007 and
establishes a task force to consider ways to control DOD medical
costs.
! Tricare for reservists: The committee added an amendment in full
committee markup to expand reservists’ access to the military
provided Tricare program. Last year, Congress made the program
available to reservists who were unemployed or did not have access
to employer-provided health insurance.
! Death gratuity for federal civilian personnel: The bill provides
the same death gratuity for civilian personnel killed in support of a
military operation as for uniformed personnel. The FY2006
National Defense Authorization Act (P.L. 109-163) increased the
military death gratuity from $12,000 to $100,000.
! Funding for readiness: The committee objected to cuts in ship
steaming days, flying hours, and depot maintenance and shifted $856
million from other programs to finance increases in these readiness-
related activities.
! Army Future Combat System development: The committee
expressed concern about cost growth, schedule delays, and the long-
term affordability of the FCS program, cut $326 million from the
$3.7 billion requested, and mandated a formal DOD review of
program with a go/no go decision to be made by the end of 2008.
! Army modularization: The committee expressed concern about the
affordability of the Army’s program to build a new modular brigade-
centered force structure in view of potentially competing costs of the
FCS and of resetting the force after Iraq. The committee added
funds for M-1 tank and Bradley Fighting Vehicle upgrades, saying
that these programs were required to support modularization. It also
required the Army to provide a long-term funding profile.
! Guard and reserve equipment: The committee added $318 million
for Army National Guard (ARNG) equipment to support its addition
of 17,000 to ARNG end-strength.
! Navy shipbuilding: The committee added $400 million in advance
procurement to support building two Virginia-class submarines in
FY2009, rather than the one now planned. The committee also
mandated a submarine fleet of 48 boats, which is what the Navy
currently plans. The committee also approved funding for 2 DD(X)
destroyers and provided that contracts may be signed simultaneously
with two shipyards. Last year, the committee had proposed
eliminating the DD(X). Notably, the committee rejected an
amendment in the full committee markup by Representative JoAnne
Davis to provide advance funding for common long-lead items for

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CRS-18
three new aircraft carriers. Though the committee appears to support
the Navy’s 313 ship plan, it does not seem ready to lock in funding
for some aspects of the Navy program.
! F-22 procurement profile: The committee rejected the Air Force
plan for incremental procurement of the F-22 and added $1.4 billion
in FY2007 ($2 billion was requested) to cover the full cost of buying
20 complete aircraft.
! F-35 alternate engine and development concurrency: The
committee rejected the Air Force proposal to halt development of an
alternate engine for the F-35 Joint Strike Fighter and added $408
million for second engine R&D. The committee also trimmed $241
million from long-lead funding for aircraft to be procured in
FY2008, citing excessively concurrent development and
procurement in the program.
! C-17 procurement: The committee added $300 million for three C-
17s, which would keep production lines open. The committee also
required the Air Force to operate at least 299 heavy-lift cargo
aircraft. Currently, the Air Force plans to maintain 122 C-5s and
180 C-17s, for a total of 292. So the committee would mandate at
least seven more C-17s.
! B-52 and U-2 retirements: The committee prohibited any B-52
retirements until a replacement capability is available (which is not
planned until some time after 2015) and prohibited retirement of any
U-2s unless DOD certifies that the aircraft are not needed to mitigate
any reconnaissance gaps identified in the Quadrennial Defense
Review.
! Missile defense: The committee cut a net total of $185 million from
missile defense R&D. It added $20 million for ground-based mid-
course defense (GMD) testing and $40 million for Navy ship-based
interceptor systems. It cut $100 million from the boost-phase
Kinetic Energy Interceptor (KEI) program, $56 million for activating
a third GMD site in Europe since no site has been agreed to, $65
million from the multiple kill vehicle program, and $41 million for
a high-altitude airship sensor program. The committee also
prohibited expenditure of $200 million for the GMD program until
the system has completed two successful intercept tests. The
committee also included a policy provision requiring a report on the
purpose, costs, vulnerability, and international diplomatic
implications of space-based interceptors.
! Space systems: The committee cut $80 million from the
Transformational Communications Satellite (TSAT) program and
$30 million from the Space Radar, reflecting continued
congressional concern about technical risks in both programs. The

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CRS-19
committee provided $20 million and established a new office to
promote development of new, low-cost, rapidly deployable satellites.
! Anti-satellite weapons: The committee included a policy provision
that prohibits the use of funds to develop laser space technologies
for anti-satellite weapons. This provision may be a response to Air
Force development of such capabilities at a laser and optics test
facility in New Mexico.10
! Trident missile conversion: The committee included a policy
provision requiring consultations with allies about the Quadrennial
Defense Review decision to convert Trident missiles to carry
conventional warheads.
! Information technology funding cut: The committee cut $341
million from DOD information technology programs, which total
$31 billion, as one means of offsetting increases in other programs.
! VH-71 Presidential helicopter funding cut: The committee
trimmed $39 million from the program due to development delays.
! Department of Energy nuclear weapons programs: The
committee required the Energy Department to submit a report on
plans to transform the nuclear weapons production complex and
specified a number of policy objectives.
! Cooperative threat reduction with the former Soviet Union: The
committee cut $35 million for a U.S. supported Russian system to
convert plutonium to non-weapons-grade fuel because of concerns
that the system could, in fact, produce more plutonium. And the
committee cut another $115 million from $290 million requested for
another plutonium conversion technology.
FY2007 Defense Authorization — Highlights of Senate Armed
Services Committee Markup
The Senate Armed Services Committee marked up its version of the defense
authorization, S. 2507, on May 4. The following review of the committee bill is
based on the committee press release on the markup. Additional details will be
provided when the committee report is issued.
A few themes stand out in the Senate Armed Services Committee markup. One
is that the Senate committee approved 30,000 more troops than requested for the
Army and 10,000 more for the Marine Corps and also authorized 350,000 troops for
the Army National Guard (ARNG), 17,000 above the number for which the Army
requested funding. The House committee also approved higher end-strength for
10 William J. Broad, “Administration Conducting Research Into Laser Weapon,” New York
Times, May 3, 2006.

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CRS-20
ground forces. Congress and the Administration may be on a collision course over
the issue.
The Senate committee also undertook a number of initiatives to strengthen
government-wide capabilities to engage in counter-terrorism and stability operations.
One potentially far-reaching initiative is to expand the authority of regional military
commanders to train and equip foreign military forces and to provide humanitarian
and other assistance to foreign nations. These activities have traditionally been
managed by the State Department under legal authorities that include, among other
things, human rights conditions.
The Senate committee appeared more supportive of the Army Future Combat
System (FCS) than the House committee, and provided the full $3.7 billion requested
for the program. The committee did, however, mandate a review of the program,
including an independent cost estimate of the program itself and of all associated
Army programs. If the most recent Army cost estimates for the FCS appear unstable,
Congress may consider ending or substantially restructuring the program.
Highlights of the committee markup include:
! Total funding: The Committee authorized $517.7 billion for
defense, including $50.0 billion in emergency funding overseas
operations and $467.7 billion in budget authority for DOD, DOE and
other non-emergency programs. The total is $3.7 billion above the
request and above the House authorization.
! Army and Marine Corps end-strength: The committee authorized
end-strengths of 512,400 for the Army, 30,000 above the request,
and of 180,000 for the Marine Corps, 10,000 above the request.
! Army National Guard end-strength: The committee also approved
an end-strength of 350,000 for the ARNG, 17,000 above the request,
and stipulated that, if the Army fails to recruit and retain enough
personnel to meet the authorized level, and money saved may be
used only to procure ARNG equipment.
! Military pay raise: The committee approved the requested pay raise
of 2.2% rather than the 2.7% raise the House authorized.
! Flexibility for DOD to support foreign nations for counter-
terrorism operations: The Senate committee included a number of
provisions to allow regional combatant commanders flexibility to
use DOD funds to train and equip foreign militaries and to provide
humanitarian and reconstruction assistance to foreign governments
in support of counter-terrorism operations. The committee also
required the President to develop a plan to better coordinate
interagency counter-terrorism practices. With the appropriations
committees cutting foreign operations funding for the State
Department and AID, the Defense Department may, in effect be
taking on many roles that the State Department formerly carried on.

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CRS-21
! Detainee treatment: The committee required an official
government-wide coordinated legal opinion on whether specified
interrogation techniques constitute cruel and inhuman treatment.
! Use of armed forces for domestic activities: The committee
proposed amendments to the Insurrection Act that would make it
easier for the President to employ the armed forces to respond to
domestic emergencies, such as the aftermath of Hurricane Katrina.
! UAV policy: The committee directed the Secretary of Defense to
develop a comprehensive policy on UAVs and to give UAVs a
preference in developing new systems.
! Navy shipbuilding: The committee added $1.5 billion to the
shipbuilding request for a total of $12 billion. Increases include
accelerating LPD procurement, increased advance procurement
funds for the CVN-21 carrier and the LHA( R) amphibious ship.
The committee included $50 million in advance procurement
funding for long-lead items for three new CVN-21-class carriers, a
measure that the House committee specifically rejected in a vote in
the full committee markup.
! Permitting a reduction from 12 to 11 deployable aircraft
carriers: The committee bill includes a provision repealing last
year’s requirement that the Navy maintain 12 deployable carriers.
If approved this would allow retirement of the USS Kennedy.
! Continued C-17 production: As in the House bill, the committee
bill rejects the DOD proposal to terminate C-17 production. The
Senate bill authorizes funds for 2 aircraft in FY2007 and advance
procurement for continued production later.
! Army Future Combat System (FCS) funding: As opposed to the
House, the Senate committee authorized the full $3.7 billion
requested for FCS development. The committee also, however,
required a review of the program, including an independent cost
estimate, though not with a view to a go/no go decision, as the
House mandated.
! Readiness: The committee used the $50 billion emergency “bridge”
fund as a means of adding funds to regular service accounts to
correct some readiness-related shortfalls. The committee added
$515 million in the emergency funds, for example, for Navy
operations, $231 million for Army operations, and $106 million for
Marine Corps operations. So, in effect, the committee is
ameliorating constraints on the regular service budgets by adding
funds for regular military operations to the emergency fund.

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CRS-22
! Acquisition reform: The committee approved several measures to
reform defense acquisition procedures, though none nearly so far-
reaching as the House committee measure to recompete projects
with excessive cost growth. One Senate committee measure is to
align the tenure of program managers with the progress of their
programs and another to require that incentive payments be more
directly linked to acquisition outcomes.
! Land exchanges to build buffers around military facilities: The
Defense Department has long been concerned about the
encroachment of civilian development on military facilities. The
Senate committee approved a measure to allow DOD to exchange
excess land for other land that would be a buffer for military sites.
! Cooperative threat reduction with former Soviet states: In
contrast to the House authorization, the Senate committee made no
reductions in the $1.7 billion requested for Department of Energy
nonproliferation programs (which finance plutonium purchases and
reprocessing, for example) or the $372 million for the Department
of Defense Cooperative Threat Reduction program.
! R&D science and technology funding target: Congress has
required that the Defense Department invest 3% of the overall
budget in basic science and technology (S&T) R&D programs.
DOD has perennially fallen short of that target. The Senate
committee included a provision requiring annual growth of 2% per
year above inflation in S&T accounts.
! Missile defense funding: The Senate committee approved the full
$9.3 billion requested for Missile Defense Agency (MDA) R&D
programs (see Table A2 for details of the request), but, like the
House, shifted funds away from longer-term, more risky programs
to near term projects. The committee added $200 million for
Ground-based Midcourse Defense (GMD) flight testing and $100
million for the Navy interceptor system. It cut $200 million from the
$406 million requested for the boost-phase Kinetic Energy
Interceptor.
! Space systems: The committee expressed support for DOD’s
restructuring of the Transformational Communications Satellite
(TSAT) program, but trimmed $70 million from the program (a 7%
cut) saying that it could not be executed. The committee also cut
$66 million from the Space Radar program and expressed concern
about the lack of a cost sharing agreement with the intelligence
community.
! Long-range strike/Trident missile conventional warhead: The
committee expressed support for DOD’s plan to develop prompt
global strike capabilities, and provided the full $127 million
requested to convert Trident missiles to carry non-nuclear warheads.

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CRS-23
But, like the House committee, the Senate committee was concerned
about the international diplomatic issues and prohibited expenditure
of more than $32 million on conversion until the Secretary of
Defense, after consulting with the Secretary of State, provides a
report on the matters at issue.
! B-52 retirements: The committee prohibited retirement of B-52
bombers until the Air Force reports on force requirements.
! F-35 Joint Striker Fighter alternative engine: Like the House, the
Senate committee added $400 million to continue development of
an alternate second engine for the F-35.
! F-35 schedule delays: The committee also cut $1.2 billion from
F 35 development funds due to schedule delays.
! F-22 funding: Like the House, the Senate committee rejected the
Air Force plan to stretch out F-22 production and to provide funding
incrementally rather than financing the full cost of deployable
aircraft in the year for which funding is requested. The committee
added $1.4 billion for full funding for the requested F-22s.
For Additional Reading
CRS Report RL33110, The Cost of Iraq, Afghanistan, and Other Global War on
Terror Operations Since 9/11, by Amy Belasco.
CRS Report 98-756, Defense Authorization and Appropriations Bills:
FY1970-FY2006, by Thomas Coipuram Jr.
FY2007 Defense Budget Issues for Congress: Slides from a CRS Seminar, February
10, 2006, by Stephen Daggett, Ronald O’Rourke, and Charles A. Henning. Available
on line at [http://www.crs.gov/products/browse/documents/WD00005.pdf].
CRS Report RS20851, Naval Transformation: Background and Issues for Congress,
by Ronald O’Rourke.
CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background
and Issues for Congress, by Ronald O’Rourke.
CRS Report RL32513, Navy-Marine Corps Amphibious and Maritime
Prepositioning Ship Programs: Background and Oversight Issues for Congress, by
Ronald O’Rourke.
CRS Report RL32418, Navy Attack Submarine Force-Level Goal and Procurement
Rate: Background and Issues for Congress, by Ronald O’Rourke.

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CRS-24
CRS Report RL33161, The Joint Tactical Radio System (JTRS) and the Army’s
Future Combat System (FCS): Issues for Congress, by Andrew Feickert.
CRS Report RL32888, The Army’s Future Combat System (FCS): Background and
Issues for Congress, by Andrew Feickert.
CRS Report RL32476, U.S. Army’s Modular Redesign: Issues for Congress, by
Andrew Feickert.
CRS Report RL33390, Proposed Termination of Joint Strike Fighter (JSF) F136
Alternate Engine by Christopher Bolkcom.
CRS Issue Brief IB92115, Tactical Aircraft Modernization: Issues for Congress, by
Christopher Bolkcom.
CRS Report RS20859, Air Force Transformation, by Christopher Bolkcom.
CRS Report RL30563, F-35 Joint Strike Fighter (JSF) Program: Background,
Status, and Issues, by Christopher Bolkcom.
CRS Report RL30685, Military Airlift: C-17 Aircraft Program, by Christopher
Bolkcom.
CRS Report RS21754, Military Forces: What is the Appropriate Size for the United
States?, by Edward F. Bruner.
CRS Report RS22402, Increases in Tricare Fees: Background and Options for
Congress, by Richard A. Best Jr.
CRS Issue Brief IB10089, Military Pay and Benefits: Key Questions and Answers,
by Charles A. Henning.

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CRS-25
Appendix A: Additional Tables
Table A1. Proposed National Defense Funding, FY2007-FY2011
(budget authority in millions of dollars)
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
Military Personnel
115,824
113,147
114,603
117,879
121,166
124,589
Operation and Maintenance
178,346
152,646
159,338
165,260
171,925
174,523
Procurement
86,185
84,197
99,776
108,622
111,708
117,722
Research, Development, Test, and
71,046
73,444
74,388
75,128
73,232
70,626
Evaluation
Military Construction
8,936
12,613
12,872
12,592
11,957
10,644
Family Housing
4,439
4,085
3,182
3,108
2,960
2,967
Other
3,374
1,118
31
1,178
949
3,150
Anticipated Funding for War on
70,000
50,000
-
-
-
-
Terror
051 Subtotal, Department of
538,150
491,250
464,190
483,767
493,897
504,221
Defense — Military
053 Atomic energy defense
18,101
17,017
16,238
16,608
16,388
16,736
activities
054 Defense-related activities
5,564
4,758
4,794
4,878
4,979
5,150
Total, National defense
561,815
513,025
485,222
505,253
515,264
526,107
Sources: Office of Management and Budget, Historical Tables: Budget of the United States Government, FY2007,
February 2006; Department of Defense, National Defense Budget Estimates, Fiscal Year 2007, March 2006.

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CRS-26
Table A2. Proposed Missile Defense Funding, FY2007-FY2011
(budget authority in millions of dollars)
Total
PE Number and Title
FY2007
FY2008
FY2009
FY2010
FY2011
FY07-11
Missile Defense Agency (MDA) RDT&E
0603175C Ballistic Missile Defense
207
183
214
223
228
1,055
Technology
0603881C Ballistic Missile Defense
1,038
904
682
754
469
3,847
Terminal Defense Segment
0603882C Ballistic Missile Defense
2,877
2,650
2,397
2,148
1,685
11,758
Midcourse Defense Segment
0603883C Ballistic Missile Defense Boost
632
577
456
457
687
2,809
Defense Segment
0603884C Ballistic Missile Defense Sensors
515
589
647
326
220
2,298
0603886C Ballistic Missile Defense System
406
425
895
1,202
1,675
4,603
Interceptors
0603888C Ballistic Missile Defense Test
600
595
629
635
656
3,114
and Targets (includes MILCON)
0603889C Ballistic Missile Defense
507
506
510
507
513
2,542
Products
0603890C Ballistic Missile Defense System
473
501
524
555
573
2,626
Core
0603891C Special Programs - MDA
375
715
630
725
695
3,140
0603892C Ballistic Missile Defense Aegis
1,032
952
980
973
799
4,736
0603893C Space Tracking & Surveillance
391
427
772
958
885
3,433
System
0603894C Multiple Kill Vehicle
165
286
357
413
505
1,726
0603895C BMD System Space Program
-
45
151
167
207
570
0901598C/ 0901585C Management
103
93
92
75
75
438
Headquarters / PRMRF
0207998C Base Realignment and Closure
-
85
19
3
-
107
(BRAC)
Total Missile Defense Agency R&D
9,318
9,536
9,956
10,121
9,873
48,803
RDT&E Army
0604869A PATRIOT/MEADS Combined
330
460
517
592
422
2,320
Aggegate Program
0203801A PATRIOT Product Improvement
11
11
11
12
13
58
Program
RDT&E The Joint Staff
0605126J Joint Theater Air and Missile
52
54
55
56
58
275
Defense Organization
Total Army, Joint Staff R&D
393
524
583
660
492
2,653
Procurement Army
PATRIOT PAC-3
489
473
479
0
0
1,441
PATRIOT/MEADS Combined Aggregate
0
90
65
430
674
1,259
Program
PATRIOT Modifications
70
77
50
54
56
307
Subtotal, Army Procurement
559
639
594
484
731
3,006

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CRS-27
Total
PE Number and Title
FY2007
FY2008
FY2009
FY2010
FY2011
FY07-11
Operation and Support
PE Air Force Military Personnel
8
8
9
9
9
42
PE Air Force Operations and Maintenance
12
34
33
34
35
148
PE Air Force Other Procurement
1
11
0
18
26
57


PE Army Op

erations and Maintenance
68
70
71
73
75
358
PE Army Natl Guard Military Personnel
24
25
26
26
26
126
PE Army Natl Guard Operations and
0
0
0
0
0
1
Maintenance
PE Navy Operations and Maintenance
24
24
25
23
24
120
Subtotal Operation & Support
138
173
164
183
195
852
Grand Total Missile Defense R&D,
10,409
10,871
11,296
11,448
11,291
55,314
Procurement, O&S
Sources: Department of Defense, RDT&E Program Descriptive Summaries: Missile Defense Agency, and other budget
justification material.

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