Quick Hit – February 2, 2016

What’s Coming Next Week in Defense…

On February 9 the Obama administration will release its budget proposal for the 2017 fiscal year. The expected topline defense proposal according to the October 2015 budget deal should be $583 billion, split $524 billion in base budget funding and $59 billion for Overseas Contingency Operations funding.  

The OCO Debate…

The debate now comes from Republicans who fear that the presently proposed budget will not be enough to account for today’s military threats that have evolved even since thNovember 2015 budget agreement. The main source of contention is the OCO budget. The administration opposes OCO funds as a gimmick to circumvent sequesters from the Budget Control Act of 2011. Recall sequester amounted to a $50 billion dollar cut each year to the topline defense budget. However, as the Pentagon has faced increased, shortfalls the OCO funds have become necessary to cover everyday military costs. Last year, $30 billion of the $58.8 billion OCO budget paid for base budget services. What Republicans want from next week’s budget proposal is an increased defense budget that will supply sufficient funds for everyday military operations without touching the $59 billion allocated for OCO. Senate Armed Services Chairman John McCain has stated the problem will not go away until the BCA caps are repealed. At present, the most recent budget deal in November 2015 leaves BCA caps in place through 2021, as the law is written.

Image courtesy of ibtimes.com
Image courtesy of ibtimes.com

Comments from Secretary Carter…

Today, Secretary of Defense Ash Carter foreshadowed the administration’s intention to prioritize funding a “Third Offset” agenda  over legacy programs in the upcoming FY17 defense budget proposal.The goal of “Third Offset” programs is to modernize U.S. military technology, assigning greater investment towards cyber intelligence, weapons development, and superior artificial intelligence capabilities. Specifically, funds and technologies being used to combat ISIS will be expanded, as well as funds for rotational forces in Europe and undersea weapons technology. The administration has proposed several cuts to existing programs in order to pay the $12-$15 billion cost of “Third Offset” programs over the next five years. Some of these suggested cutbacks are the Navy’s Littoral Combat Ship program, a delay to the F-35A production schedule, and shrinking active-duty Army troops by an additional 40,000 over the next few years. Overall, the FY17 defense budget is expected to preference development of new technology over upgrades to existing programs.

Secretary Carter’s budget plans are already ruffling feathers inside the Pentagon and on Capitol Hill. By prioritizing modernization over force structure, he’s setting up a showdown with lawmakers whose states and districts benefit from legacy programs.

Image courtesy of rollcall.com
Image courtesy of rollcall.com


The House Armed Services Committee is slated to mark up its FY17 National Defense Authorization Act on April 27, according to multiple sources familiar with the panel’s tentative plans. The date of the markup, subject to change, puts this year’s defense policy bill on a similar track as last year’s legislation. HASC marked up the FY16 NDAA on April 29.

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