Quick Hit – February 12, 2016

The Defense Budget

Same headlines, different year?  Not really.

Beginning with the end in mind, we anticipate a continuing resolution (CR) at least into December. Why? You guessed it, the elections. The Congressional calendar in the beginning of the year is robust. However, after mid-July, there are only 17 scheduled legislative days in session before the election. Congress will not be able to get it all done before the election.

What does it mean for your legislative priorities? Making your case to Congressional supporters and decision makers early is as important this year as ever.
The FY17 Budget is Out…What Does it Mean?

On Tuesday, the Obama administration released its budget proposal for the 2017 fiscal year, including $582.7 billionallocated to defense spending. Although this figure is in line with the budget deal reached this past October, recent developments in the Middle East, Europe, Russia, and China have forced many Republicans to reconsider the feasibility the previously agreed plan. There are two main concerns about the budget circling Republicans and Democrats on the Hill:

        1) Determining the OCO budget is the number right and will it be used for things other than Overseas Contingency Operations?

        2) Changing the budget topline – is an increase required and can it be agreed upon? The appropriations process cannot produce a bill without the topline number agreed up front.

00000EnziPrice
Left: House Budget Committee Chairman Rep. Tom Price (R-Georgia) Right: Senate Budget Committee Chairman Sen. Mike Enzi (R-Wyoming)

Displaying Can These Things Be Fixed?

The answer is likely, yes but it will require an exciting legislative ride to get there. At present, the budget allocates $59 billion to OCO funds, but with the recent practice of using OCO money to cover day-to-day operations costs, Republicans worry and argue the figures are fundamentally too low. The problem is that the Balanced Budget Act placed caps on the amount that Congress can increase the DoD budget. As Senator John McCain has consistently pointed out, until this legislation is reversed, Congress will be forced to perform a juggling act between OCO and base budget funds.

Of note, House and Senate Budget committees would not conduct a traditional budget hearing to publicly air positions. That means any topline budget adjustment will be conducted at the leadership level and appear as another backroom deal so disliked by rank-and-file Members of Congress.
Is There Anything to Like About the Budget?

That depends. Secretary Carter has followed through on the promises he made in a speech last week, to prioritize the administration’s “Third Offset” strategy by expanding operations and maintenance spending by $6.5 billion and supporting the acceleration of a variety of technology demonstrations. However, to pay for this increase, procurement has been cut by about the same amount. This means lawmakers representing districts that rely on the weapons manufacturing economy and legacy systems will be in a tough spot to claw those funds back. As suggested in the preceding paragraph, many legislators argue that the current defense budget is simply not enough.

 

Sign up for Capitol Currency

You Need a Way to Quickly Assess the Health of the Sales Opportunity

8 Must-Know Elements of the Federal Sale will help you avoid missing your federal sales opportunity.

 

As a bonus, you’ll also receive Selling to the Federal Government, insights delivered straight to your inbox.

8 Elements of Every Federal Sale Gene Moran Free Download

Categories

Capitol Currency Logo

With Capitol Currency℠, you'll  learn how the pieces of the federal sales puzzle fuel your funding.