Quick Hit – February 23, 2015

FY16 President’s Budget delivered: The President’s base defense budget ignores the $499B sequester cap and requests $535B for the base budget and $51B for OCO. Congress must now determine how it will respond to the request. Hearing season is underway.

The House Budget Committee is preparing overall budget numbers

The allocations assigned by the Budget Committee will guide oversight committees as they attempt to “mark” their portions of the budget. Early indications suggest the House Budget Committee will not provide relief from the sequester caps as the President’s Budget requests. Should the Senate Budget Committee choose a different solution and offer some relief from sequestration, differences would be resolved in a budget conference.

Sequestration end-game

The rallying cry from the Department of Defense has become more clear; sequester is hurting readiness and undermining the nation’s future security. There will be a deal, but not until end-game as we approach the new fiscal year October 1st. Multiple high-profile and knowledgeable analysts suggest there will be sequester relief for DoD in FY16 somewhere around $14B applied to specific targeted programs. The OCO account can serve as the relief valve for Operations and Maintenance as well as some Procurement accounts across DoD. The OCO appropriation is not constrained by sequestration caps.

DHS Funding via continuing resolution expires 27 February

While it would not be a good political story for the DHS CR to expire or require extension, the impact on DHS is less dramatic than reported in the media. Tens of thousands of DHS employees are deemed “essential” and would still report to work should there be a DHS shutdown. The DHS state-level grant process suffers most under the current arrangement. No new grants are being awarded until the FY16 DHS budget is enacted.

Suppliers Take the Hill

It’s the time of year when industry responds in organized mass to advocate for their programs in Congress. Nearly all large Prime Contractors organize their supply chains to participate in highly choreographed messaging campaigns. The impending threat to the reauthorization of the Export-Import Bank brought 700 individual suppliers to Capitol Hill. Hundreds of similar campaigns unfold each year for issues and programs of interest.

Near-term dates of interest:
27 February – FY14 Homeland Security CR expires
15 March – Debt ceiling limit expires (current cap is 17.2 Trillion dollars !!)
31 March – Sustainable Growth Rate (SGR) or “doc” fix to Medicare expires
15 April – 2016 Budget Resolution is due (non-binding deadline)
31 May – Highway Trust Fund; current extension expires
1 June – USA Patriot Act; multiple provisions expire
30 June – Export-Import Bank authorization expires
30 September – FAA reauthorization expires
30 September – Children’s Health Insurance Program (CHIP) expires
30 September – Internet Tax Moratorium expires
1 October – Beginning of Fiscal Year 2016


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