Mr. Chairman, the President requested $463.1 billion in total FY 2008 new budget authority for the Department of Defense and intelligence community programs that fall under the purview of the Defense Subcommittee. This is an increase of…
Mr. Chairman, the President requested $463.1 billion in total FY 2008 new budget authority for the Department of Defense and intelligence community programs that fall under the purview of the Defense Subcommittee. This is an increase of about $43.3 billion over last year's enacted level--a 10.3 percent increase in nominal terms. The lion's share of the increase over FY 2007, some 80 percent, was allocated to operation and maintenance and procurement programs. DoD's research and development program request is the same as last year's level, a decrease in real terms due to several major programs having completed their R&D phase and moved into full-fledged production.
The Committee's reported bill meets its budget authority allocation of $459.6 billion for FY 2008. This figure is a little more than $3.5 billion below the President's budget request. Nonetheless, the Committee bill provides an increase for Defense of $39.7 billion over the FY 2007 enacted level, or about 9.5 percent in nominal growth. With respect to outlays, the Committee bill is roughly $2.9 billion below the allocation.
In general, meeting the budget authority allocation required shifting funding for certain programs between the FY 2008 base budget bill and the FY 2008 war supplemental, to be considered in September. This largely affected appropriations for the Department's operation and maintenance activities. The bill recommends an overall reduction to the operation and maintenance accounts of some $5.7 billion below the request. Nonetheless, the bill fully funds home-station training, equipment maintenance, and other key military readiness programs covered in these accounts. Finally, notwithstanding a slight reduction to the military personnel pay accounts, all other major program activities, such as weapons procurement and R&D, are funded at or above the President's request.
Meeting the allocation also required deferring consideration of several high profile programs until the FY 2008 war supplemental is taken up. These include:
The Basic Allowance for Housing shortfall.
The ground forces' strategic reserve readiness and equipment rehabilitation and recapitalization.
The purchase of at least ten C-l7 cargo aircraft, $2.5 billion, and MRAP vehicles, $4 billion or more.
The purchase of additional Blackhawk MEDEVAC helicopters.
The Department's Global Train and Equip program.
The Defense Health Program ``efficiency wedge'' shortfall.
Funding Strategy
For some time now, the Committee has expressed considerable concern over the erosion of DoD's fiscal discipline. That erosion is reflected primarily in the Department's use of supplemental funding to cover what were once considered to be base budget costs, particularly weapons modernization and force structure costs. As such, the Committee endeavored to begin restoring traditional funding criteria to the FY 2008 Defense base bill, and will do so when considering the upcoming war supplemental. Thus, recommendations for the base bill sustain non- war-related activities and prepare for future threats by funding enduring personnel benefits, force structure initiatives, such as Army modularity and ``Grow-the- Force'' programs, infrastructure improvements, home-station training, and weapons modernization programs. Conversely, recommendations for the FY 2008 supplemental will be tailored to funding those programs and incremental costs that are arguably related to the war.
Highlights
The Committee's recommendations achieve a balance between preparing units for near-term deployments, supporting our military members and their families, and modernizing our forces to meet future threats. Highlights of the Committee's recommendations are:
Supporting Our Troops and Their Families: First and foremost, the Committee recommends robust funding for programs important to the health, well-being, and readiness of our forces. In addition, the Committee proposes several initiatives that address issues raised by troops, their families, and Department of Defense officials in testimony before the Committee and visits to military bases in the United States and overseas.
Funding of about $2.2 billion is recommended to cover the full cost of a 3.5 percent military pay raise, as approved in the House's version of the Fiscal Year 2008 National Defense Authorization bill.
Under their ``grow-the-force'' initiatives, the Army and Marine Corps propose to add 7,000 and 5,000 new troops, respectively. The personnel costs of these increases are fully covered in the bill, as are the associated equipping and outfitting costs. For the Army the equipping costs for these new troops amount to more than $4 billion; for the Marines the costs exceed $2 billion.
Home-stationing training, optempo, and flying-hour costs are funded at robust levels. All told, the Committee's recommendations provide for a 13 percent increase in funding for these activities over last year's level.
The military services' force structure and basing infrastructure are in a state of transition. The Army, in particular, has been forced to manage significant changes in force structure, known as Army Modularity, base closures, and a global repositioning of forces, all while meeting the demands of war. Based on detailed information provided by the Army, the Committee recommends an important new initiative to assist the service in meeting this challenge. The Committee proposes adding $1.3 billion to the Army's facilities sustainment and restoration budget request to offset the growing infrastructure costs associated with the global repositioning of its forces. These funds will be used to fix barracks, improve child care facilities, and enhance community services at Army bases throughout the United States, Europe, and Korea. Funding for each project is itemized in the Committee report, consistent with the information provided by the Army. This funding, however, will only partially cover the Army's needs. As such, the Committee will address additional infrastructure cost requirements--particularly military construction costs--during consideration of the fiscal year 2008 emergency supplemental request. Further, the Committee intends to work with all the military services to better understand and respond to their basing and infrastructure needs during this time of upheaval.
Another initiative proposed by the Committee directly responds to the needs of our military families. Total funding of $2.9 billion is recommended for the military's family advocacy programs, childcare centers, and dependent's education programs. This amount is an increase of $558 million over the Administration's request, with most of the increase allocated to DoD's family advocacy programs. This program provides counseling, education, and support to military families affected by the demands of war, and episodes of child or spouse abuse.
The Committee's recommendations continue its long tradition of supporting the Department's health programs. The Committee proposes several initiatives and additional funding
to address health care issues raised over the past year, including improving the Department's electronic medical records and fostering better coordination between DoD and the Department of Veterans Affairs, enhancing preventative medicine programs, and advancing military medical research. Also, the Committee bill fully covers the $1.9 billion shortfall in health funding created by the disapproval of DoD's proposed fee and premium increases by the House Armed Services Committee in its bill.
Protecting our forces abroad must be matched with a commitment to protect our forces and their families here at home. Thus, the Committee proposes a new initiative to enhance the security of military bases in the United States. Funding of $268 million is allocated for perimeter security force protection and related facility security improvements, an increase of $142 million over the President's budget request. These funds will be used to erect better perimeter fencing, provide more secure entry and exit controls, and improve situational awareness and response capabilities at military bases and hospitals.
Preparing for the Future: In 1796, President George Washington counseled the Nation to be, ``Taking care always to keep ourselves by suitable establishments on a respectable defensive posture.'' The Committee's recommendations abide by that counsel, providing robust funding for weapons systems purchases and research programs designed to meet future threats.
The Committee supports full funding, as requested, for key weapons procurements, including the F-22 and F-35 tactical fighter aircraft programs.
Increases above the President's request are allocated for development programs that address so-called ``asymmetric'' threats from weapons of mass destruction and cruise missiles. Additional funding of $15 million is provided to pursue cruise missile defense, $25 million for chemical and biological defense research programs, $26 million to improve fissile material detection systems, and $50 million for the Former Soviet Union Threat Reduction account to counter weapons proliferation and chemical/biological agents.
To support the Army's evolution to a larger, more lethal, and more rapidly deployable force, the Committee recommends adding funding of $1.1 billion to outfit a new, eighth Stryker brigade.
Testimony before the Committee revealed that our National Guard and Reserve forces continue to suffer from equipment shortfalls. To address this need, the Committee recommends providing an additional $925 million to purchase Guard and Reserve equipment. These additional funds will enhance these forces' ability to meet overseas deployment demands, and respond to natural disasters here at home.
Economic Stability: Fostering economic stability in DoD's weapons modernization programs has been a consistent theme of the Committee. Analyses completed in recent years about DoD's acquisition program all conclude that, without improving stability in these programs, it's quite likely that the military will not be able to achieve the numbers of weapons systems required to equip current force structure at the estimated costs. As such, the Committee is proposing a series of recommendations that would help stabilize certain programs by adding funds and/or adjusting procurement or development schedules.
The Navy's shipbuilding program has been beset by planning and resource instability for many years, resulting in ever-increasing costs to the American taxpayer. Clearly, at current production rates and price levels, the Navy will be unable to meet its force structure requirements in the future. The Committee has responded by providing funds for an additional 5 ships. To purchase these ships, the Committee recommends adding a total of $3.7 billion above the Navy's request for shipbuilding and sealift.
The success of the Department's Joint Strike Fighter (F-35) program is critical to our Nation's ability to field a modern, capable fighter aircraft fleet for decades to come. To maintain stability in this program--and limit the potential for cost increases over time--the Committee recommends an increase of $200 million for F-35 production enhancements. These funds are to be used to outfit facilities with the latest in production line equipment and workflow technology. In addition, the Committee recommends adding $480 million to continue development of an alternative engine for this aircraft, thereby ensuring a competitive base for engine production.
Accountability: The Committee's fiduciary responsibility to the American taxpayer requires holding accountable organizations, officials, and programs that have performed poorly. Moreover, wasted resources and procedural abuses ultimately come at the expense of our military men and women. The Committee focused attention on the following issues:
Fiscal discipline: For some time, the Committee has raised concerns about the challenges facing the Department's financial managers. Some argue that fiscal discipline within the Department has eroded over time, severely constraining the Department's senior officials and the Congress' program and financial oversight. Regarding this matter, the Committee proposes several important initiatives to improve DoD's fiscal discipline and Congressional oversight. These are described in an appendix to this memorandum.
Contracting Out: The Committee also has registered concern about the Department's unabated appetite for contracting out services and functions once performed by military members or DoD civilians. Though clearly necessary to offset reductions in military and civilian personnel levels that occurred over time, the Committee believes that the Department has failed to adequately manage and oversee the growth in and cost-effectiveness of contracting out. It is also clear that the majority of DoD's service contractors has performed and will continue to perform well. Yet, abuses by some organizations, coupled with DoD's lack of an effective contractor management and oversight regime, has cast a pall over the service contractor community writ large. This must be reversed. The Committee recommends strong steps to do so. These are described in an appendix to this memo.
Trouble procurement programs: Several of the Department's major weapons acquisition programs have experienced considerable cost growth and/or poor execution. For each of these programs--including the Navy's Littoral Combat Ship, the Air Force's combat search and rescue helicopter, and several unclassified and classified satellite purchases--the Committee recommends significant adjustments to the Pentagon's request.
Basic research: In testimony received by the Committee, and through information provided by the Department and third-party groups, the Committee learned that the percent of basic research funding allocated to Department and research organizations' overhead costs has grown to unwarranted levels. To reverse this trend and ensure that the Department's basic research dollars are being used for the purposes intended by Congress, the Committee recommends a general provision limiting the percentage of overhead costs that can be covered in basic research contracts.
Summary of Recommendations by Title
Military personnel
Military personnel pay and benefits accounts are allocated a total of $105 billion, a slight decrease of $0.4 billion to the President's FY 2008 request, but an increase of $5.2 billion or 5.2 percent over the FY 2007 level.
The military personnel pay raise funded is 3.5 percent, at a cost of $2.2 billion. This rate is 0.5 percent greater than the President requested. Also, the President requests some $2.4 billion for retention bonuses and recruiting incentives. These incentives are fully funded.
The Basic Allowance for Housing, BAH, increases 4.2 percent to $15 billion, which is $1.6 billion over the projected FY 2007 enacted level. This continues to ensure no out-of-pocket expenses for service personnel and supports the privatization of housing units for military families. Any BAH shortfall anticipated at the time the Committee marks up the FY 2008 war supplemental will be covered in that bill.
Army end-strength is increased by 7,000 in the base FY 2008 budget, to a total of 489,400, or $5.7 billion over the FY 2007 enacted budget amount. The FY 2007 and 2008 supplemental requests include funding for an additional 36,000 soldiers. By the end of FY 2008, the Army projects that its total troop strength will be 525,400.
The Marine Corps end-strength is projected to grow by 5,000. This troop increase is fully funded in the base bill.
The Navy and Air Force, on the other hand, will continue to reduce their manpower levels. Navy plans to cut 12,300 in 2007; Air Force intends to reduce their force by about 5,600.
The Special Operations Command will grow to a level of about 54,250 personnel, up about 6,400 over FY 2007 levels. By FY 2013, the Command projects its end-strength to grow to about 59,000.
Operation and maintenance
The operation and maintenance accounts are funded at a total of $137.1 billion, a decrease of $5.7 billion from the request, but an increase of $9.8 billion or 7.7 percent over the FY 2007 baseline O&M enacted level.
O&M continues to be one of the fastest growing accounts. The growth in O&M can be attributed to a number of factors, to include: outsourcing, increasing age of equipment, high OPTEMPO, and diminished Pentagon budget oversight. Note that these increasing costs are in addition to costs of our military deployments to Iraq, Afghanistan, and elsewhere.
Significant reductions are made to the military services' O&M accounts, particularly the Army and Air Force, for the following reasons:
Unjustified growth over FY 2007 funding levels, beyond amounts necessary to fully fund
all training, optempo, and maintenance activities.
Excessive buildups of spare parts inventories.
Excess cash in working capital funds, beyond levels necessary to ensure cash flow.
A 5 percent ``efficiency'' reduction to the requested amounts for contracted services.
The Committee bill fully funds a 3 percent civilian pay raise, which is scheduled to take effect January 1, 2008.
Procurement and R&D
Procurement is funded at $99.6 billion, roughly the same amount as requested and an increase of $18.7 billion over last year's level. This is an increase of 23 percent, the largest percentage increase of all the major accounts in the DoD budget. R&D is funded at a total of $76.2 billion, about $1.1 billion more than requested. Of note, funding for shipbuilding totals $17.8 billion, an increase of $3.1 billion over the President's request. The increase is a function of the Committee's recommendation to add 5 ships to the 2008 request. The total number of ships to be purchased in FY 2008 is now 10.
Funding of $3.9 billion is provided to fund the purchase of 20 F-22 aircraft, as requested. Additionally, the Committee recommends $2.7 billion for the procurement of 12 F-35 Joint Strike Fighter aircraft and $2.0 billion for the procurement of 24 F/A-18E/F aircraft.
Funding for the Missile Defense Agency decreases to $8.5 billion from last year's level of $9.4 billion.
Defense health program
The Defense Health Program is funded at $23 billion, an increase of $0.4 billion above the President's request.
Major increases for this activity include: $66 million for the Wounded Warrior Assistance program; $127.5 million for peer-reviewed breast cancer research; $80 million for prostate cancer research; and, $10 million for ovarian cancer research.
HIV/AIDS research and prevention programs receive a total increase of $20 million in the Committee's recommendations.
Notable General Provisions
A provision is included allowing the Department of Defense general transfer authority of $3.2 billion. The Department requested transfer authority of $5 billion.
A new provision is included permitting a competitive expansion of domestic VIM/VAR steel production capacity.
A provision is retained from previous Defense Appropriations acts which prohibits the sale of F-22 fighters to foreign countries.
A provision is included appropriating $15 million for Fisher Houses.
Funds are appropriated to the joint U.S.-Israeli Arrow missile defense system in Section 8077 of the bill. Also, funds are added for a study of future Israeli missile defense requirements.
A new provision is included which prohibits the Department from initiating new programs through reprogramming requests.
Another new provision is included which establishes a separate ``major force program'' budget and program designation for DoD's space programs. This will improve the Committee's oversight of these activities.
Provisions restricting the establishment of permanent bases in Iraq and prohibiting torture a carried in the Committee bill. These are consistent with ones included in previous supplemental and base bill funding appropriations acts.
The bill includes two provisions regarding contracting out: (1) A provision restricting the payment of any award fees to contractors who fail to meet contractual requirements; and (2) a provision which fences 10 percent of all O&M funds appropriated in the bill until the Pentagon submits a report on contracting out required in the FY 2007 Iraq supplemental.
A provision was approved in full committee mark-up to identify up to $30 million for the Impact Aid program.
Mr. Chairman, it is not a matter of being in opposition. We are going to work something out. It is not a matter of being in opposition. The gentleman from Michigan is going to withdraw his amendment.
Mr. Chairman, I ask unanimous consent that the remainder of the bill through page 55, line 2, be considered as read, printed in the Record, and open to amendment at any point.
I claim the time in opposition.
I appreciate what the gentleman is trying to do. We have carried this provision for years and years through both Republican and Democratic administrations. We oppose the amendment.
Mr. Chairman, I yield back the balance of my time.
Mr. Chairman, I ask unanimous consent that the remainder of the bill through page 106, line 16, be considered as read, printed in the Record, and open to amendment at any point.
Mr. Chairman, I oppose the amendment.
Mr. Chairman, we put money in where there used to be bases before it went to the Park Service to be sure they were secure for the Park Service, so I oppose the amendment.
Mr. Chairman, I yield back the balance of my time.
Mr. Chairman, will the gentleman yield?
We will accept the amendment.
Mr. Chairman, will the gentleman yield?
You can see the hearings we've had on this issue. We felt that the missile defense cuts we made were because of schedule more than anything else, and I appreciate your determination to put it in. We'll take another look at conference, but right now we are convinced, and you can see the hearings we've had this year. We started on January 17. We just don't feel this is necessary at this point. It was a cut made on schedule more than anything else.
No. What I will say to you is that we'll look at it in conference, but we believe that we did the right thing. We believe we cut it because of the schedule.
No, no. We think we made the right cut because of the schedule. You understand what I'm saying? And we'll look at it in conference.
They may very well be, but I can't assure you of that at this point. What I'm saying is we'll look at it in conference. We always negotiate these things. Right now, as we see it in the schedule after the hearings, the staff and the committee decided that this was a good cut.
I appreciate what the gentleman is saying. We don't know where the cuts would come from, whether they're critical research or not, and I would ask the gentleman, we're just as concerned as you are about missile defense. We're trying to make sure we have the adequate amount, and in conference, we will take another look at it.
I rise in opposition to the amendment.
I yield back the balance of my time.
If the gentleman would yield, we have no problem with the amendment.
Mr. Chairman, I reserve a point or order.
Mr. Chairman, will the gentleman yield?
Mr. Chairman, I agree with the gentleman. The gentleman's got an important point, and we will certainly consider it in conference.
Mr. Chairman, I appreciate what the gentleman's doing, but this cuts out all the minority contracts which have been so valuable and so important to the defense industry in saving money.
I oppose the amendment.
Mr. Chairman, I yield back my time.
This is a very worthwhile project. Let me say to the gentleman, you see the number of hearings we have had, and the number of earmarks. Our staff went over every one of these earmarks very carefully.
It's not on our highest priority list, but I'm sure that the military is interested in this kind of research, because it's so important to the military.
Let me mention to the gentleman, we have a $459 billion bill.
We look at every one. We ask the Members to vet them. Our staff vets them. We go over every single earmark.
We don't apologize for them because we think the Members know as much about what goes on in their district as much as the bureaucrats and the Defense Department.
I don't represent Sherwin-Williams. I don't know what paint company you represent, but we know they are a very qualified contractor.
Every one of these earmarks are competitively granted under the regulations of the Defense Department. We depend on them to competitively check them over, and they do.
There is no guarantee.
Absolutely.
They do it all the time.
Let me tell you, we have added, we have added all kinds of money for body armor, for paint, for the gentleman from Ohio, predecessors, one of your predecessors was always looking for new ways, new developments. Small business has been the real impetus for these things happening. Big business takes it on. We do the research and development because it benefits the troops. That's the reason we do this.
Mr. Chairman, I rise in opposition to the amendment.
I yield back the balance of my time.
Mr. Chairman, I rise in opposition to the amendment.
Mr. Chairman, in this particular case we are looking for is sensors to protect against the type of thing that happened in Yemen with the USS Cole. We have a lot of people working on this, and we hope that we will be able to develop a system that will protect against that kind of swimmers for those kinds of ships.
Mr. Chairman, I yield back the balance of my time.
If the gentleman would yield, I also oppose the amendment.
I rise in opposition to the amendment.
The Department of Defense, the intelligence and security communities, other Federal agencies, and industrial clients in the recent past, CTC was awarded the operations contract through full and open competition for both the National Defense Center for Environmental Excellence and the Navy Metalworking Center. The value of the two contracts, $250 million and $150 million respectively. The core funding for each is included in the President's budget.
Last year, CTC won over 50 competitive Federal awards, culminating in a $65 million contract from the Air Force Advanced Power Technology Office. I oppose the amendment.
I yield back the balance of my time.
Mr. Chairman, I rise in opposition to the amendment.
Let me just mention to the gentleman, 85 of the 90 members of the RSC receive, RSC which you just mentioned, receive earmarks in this total of this $436 million.
You were using this as an example, the RSC. You were using those as stopping earmarks.
I am just saying that the Members come to the committee. We have a $459 billion bill. We find all kinds of shortages. I will give you an example of what we just found.
I went down to five bases, sent the staff down later, and we found that they didn't have the money to take the troops back when they come back after BRAC. We put $3 billion in that. This is an earmark.
Years ago, we put a couple billion in for ships. That is an earmark, and the Navy didn't want them. And yet, the SL-7s, if we wouldn't have had them in 1991, we would not have been able to get there.
We have confidence in the Members. Under the Constitution, Congress is responsible for appropriations. They make recommendations, but it is a bureaucracy that makes recommendations. The President doesn't make recommendations. He sends long lists, the White House sends long lists over to OMB. And anybody that has worked at OMB will tell you, billions of dollars, as the gentleman knows, in requests go to OMB.
I expect the Members to vet them. We try to vet them the best we can. We know that very few earmarks are not of real value to military. If there is any, we take them out. We have had a few like that, and we take them out as soon as we can.
So I don't make apologies for having earmarks. As I say, $456 million went to the RSC. So I don't make apologies. That is the Congress' job. Less than 1 percent of the $459 billion budget in that sense was projects for Members of Congress. And I would think Members of Congress know, as well as the bureaucracy over in the Pentagon and White House know, what needs to be done. And I think the gentleman will have to agree with that.
I yield back the balance of my time.
I think that is a perfect example of the way things work. When we see something that we think is not as valuable as something else is, we change it.
Mr. Chairman, will the gentleman yield?
Mr. Chairman, I agree with the gentleman. The gentleman was at the forefront of Predator and many other programs which the Defense Department didn't ask for.
And I want to say to the gentleman I had to find out that the young people in the schools where the bases are needed counseling. General Casey went out and found the same thing, and then he called me and said we need to take care of it. We already took care of it. We take care of all kinds of things like that.
The people that work in the hospitals that Bill and I visit all the time were hurting so badly, they needed help. We put extra money in for it.
And when you talk about programs that you may not think directly affects the Defense Department, breast cancer research, prostate cancer research, those diseases affect military families.
Diabetes. Not long ago, I asked the Air Force, How many do you think you have with diabetes in the Air Force? And they said 40,000. The Surgeon General went back and said 150,000. That is in all the families. We started a research program to see how we get them under control because it saves not only emotional strain and physical strain but it saves money.
So we do these kinds of things all the time, changing the direction of the Defense Department with health care things, with educational facilities that are important to the military.
Mr. Chairman, I rise in opposition to the amendment.
The Center's analytical tools were developed at NDIC and are among the best in the industry, performing over 500 missions involving drug trafficking, money laundering, terrorism, fraud in the health care industry, and child abduction. Today, the NDIC document exploitation program analysts are supporting the U.S. Army to facilitate criminal investigations being conducted in Iraq.
NDIC developed computer software. It was recently adopted by the U.S. Army in Iraq to exploit valuable information from captured computers of insurgents and members of al Qaeda.
And let me say to the gentleman how this started. President Bush felt we needed a centralized place, and they wanted to put it in Washington. I felt, with a new communications, we didn't need it in Washington, and they decided to put it in Johnstown, and I think it has done very well. And we have argued this before, so I oppose the amendment.
Mr. Chairman, I yield back the balance of my time.
Let me tell you, the Bush administration made a few mistakes in the past.
The administration says a lot of things that I disagree with.