Avascent Analytics | Political Report: 5/17/16
post-template-default,single,single-post,postid-15909,single-format-standard,ajax_fade,page_not_loaded,,qode-title-hidden,qode-theme-ver-11.0,qode-theme-bridge,wpb-js-composer js-comp-ver-4.6.2,vc_responsive

Political Report: 5/17/16

National Defense Authorization Act (NDAA) on the Floor of the House

By: Matt Vallone, Senior Analysis Manager

There is quite a bit of news to report concerning both defense spending and the broader budget.  Last week saw progress in both chambers on the two annual pieces of defense legislation, the National Defense Authorization Act and the Department of Defense appropriations bill. While we’re still far away from either legislation becoming law, it is clear that members in both chambers are working hard to try to get them across the legislative finish line prior to the end of July.

In the Senate, the Senate Armed Services Committee (SASC) passed its version of the FY2017 National Defense Authorization Act (full version here, summary here). Unlike it’s House counterpart, this legislation stays within the budget deal from last year, resulting in a significantly lower level of base funding (about $18 billion less in funding). However, beyond the funding levels, the Senate NDAA contains several pretty significant reforms to the Pentagon that are worth mentioning (a detailed summary from Breaking Defense is available here).

First, it contains major reforms to the Office of the Under Secretary of Defense for Acquisition, Technology & Logistics effectively breaking the office up into two separate entities — one responsible for day-to-day management and the other focused on high-tech innovation and research.

A second major reform is the elimination of the Joint Program Office managing the F-35. SASC would instead put the services on the hook for program management. In addition, the Block 4 modernization program would be broken out into a separate acquisition program.

A last major change is that SASC shakes up the chain of command by adjusting the position of the Chairman of the Joint Chiefs of Staff, and by setting up a program to try new organizational structures in the combatant commands.

While the bill still needs to go to the floor and then through conference, it is clear that significant reform of the Pentagon is at the top of the agenda for the Senate. The full Senate is likely to begin debate on the NDAA sometime later this month.

On the House side, the House Appropriations Committee, Subcommittee on Defense, marked up its version of FY2017 Appropriations (Committee Summary here). This legislation uses the topline funding levels that are found in the House Armed Services Committee (HASC)’s NDAA (which we summarized here) and includes the associated increases in shipbuilding and aircraft procurement. The full Appropriations Committee is expected to mark-up the bill this week before it heads to the floor. While Democrats in HASC supported the NDAA, it remains unclear what support the appropriations will receive on the House floor. The White House has not issued a firm statement on the bill, which would result in higher defense spending in FY2017 than explicitly stated in the Bipartisan Budget Act (whether it violates the legal act or the spirit of the act depends on who you ask).

Meanwhile, the National Defense Authorization Act will be on the floor of the House this week. The legislation, which we summarized here will likely pass sometime mid-week. It will be interesting to see what the White House Statement of Administration Policy (SAP) says about the bill’s funding level. Similarly, while the bill will almost certainly pass, the question will be the extent to which it gains Democratic support. Support levels that would override a veto may signal a willingness to support higher defense spending in an election year even without increased non-defense spending. Plus, there will be plenty of amendments to try to keep track of during floor debate (over 377 were filed with the Rules Committee, though they will almost certainly try to limit that number and adopt many en bloc).

In addition to the NDAA, the House will seek to pass emergency funding to combat the Zika virus, though it will do so at lower levels than requested by the White House and by repurposing Ebola funds. The House will also work through the Military Construction-VA appropriations legislation this week. The Senate is also taking up Zika legislation, though it will be part of a ‘minibus’ appropriations bill combining the Transportation-HUD bill with the Military Construction-VA bill. As both chambers Zika proposals are different, any deal would require some sort of conference before it could be adopted.

Congressional Defense Activity

SASC – No hearings this week

HASC –   5/17 Subcommittee on Oversight & Investigations, Assessing the Department of Defense’s Execution of Responsibilities in the U.S. Foreign Military Sales Program, 9am, 2212 Rayburn

HAC-D – 5/17 Full Committee Markup – FY 2017 Defense Bill 1030am, 2359 Rayburn

SAC-D – No announced hearing

Government Activity Round-up

While not strictly defense-related, the GAO has issued a report looking at the National Nuclear Security Administration’s attempts to develop a security infrastructure plan and has some recommendations. In addition, the GAO has looked into US security-assistance going to Egypt and recommends strengthening end-use monitoring.

No new defense-related reports from the Congressional Budget Office, so here is its score for HASC’s NDAA. Given that it is an authorization rather than an appropriation, this is less important overall, but the bill comes in as net deficit reduction (saves $206 million over ten years).

DC/Defense Activity

Avascent has a webinar this week where our own Doug Berenson, Managing Director here at Avascent Analytics, will be providing an analysis of the DoD O&M Budget for FY 2017. If you enjoyed our webinar earlier this year on the investment budget, this is a great follow-up. You can sign up here.

In the broader DC world, on Monday afternoon the American Enterprise Institute will host an event looking at ‘The Sykes-Picot Agreement at 100: Rethinking the Map of the Modern Middle East’ featuring Elliott Abrams, Scott Anderson, Ryan Crocker, Adeed Dawisha & Oliver Decottignies. On Tuesday, the Center for a New American Security will host a conversation with Deputy National Security Advisor Ben Rhodes on U.S. policy in Southeast Asia. On Wednesday, the Charles Koch Institute will host an event featuring all sorts of interesting speakers (Michael O’Hanlon, Christopher Preble, Stephen Walt, Andrew Bacevich, and more) titled ‘Advancing American Security: The Future of U.S. Foreign Policy’.