Quick Hit – June 13, 2018

Highlights: This week, The HAC convened to consider the FY19 defense appropriations bill, while the FY19 NDAA is being debated on the Senate floor. SAC-D defense appropriations markup is on track for completion in June.

Senator Bob Corker (R-TN) on Wednesday heading into the Senate (Source: Joshua Roberts)

FY19 Defense Appropriations Bill Markup in the House

Earlier today, June 13th, the House Appropriations Committee (HAC) marked the FY19 defense appropriations bill, after the Subcommittee on Defense approved its markup last Thursday, June 7th. The bill was ordered to be reported favorably, 48-4, and includes funding for operations, readiness, equipment modernization, and health and quality-of-life programs for troops and military families. The markup has DOD receiving $674.6 billion to defense for FY19.

The HAC released “tables” late last night to accompany the draft released last week, which includes a breakdown in numbers on the appropriations procurements. 

  • Military Personnel and Pay: $144b ($139.3b base requirements and $4.7b OCO).
  • Operation and Maintenance:  $245.9b ($197.6b base requirements and $48.3b OCO). This includes $1b above the request to fill readiness shortfalls, $1.05b above the request to invest in facility sustainment, restoration, and modernization programs, and $20.6b total for depot maintenance.
  • Research and Development: The bill contains $92.4b ($91.2b base requirements and $1.2b OCO). Specifically, this supports R&D for the F-35 Joint Strike Fighter; space security programs; nuclear force modernization; the Ohio-class submarine replacement; Future Vertical Lift; and the Israeli Cooperative Programs. It also supports continuation of the E-8 JSTARS recapitalization program, rejecting the Air Force’s strategy to replace them.
  • Equipment Procurement: $145.7b ($133b base requirements and $12.7b OCO).
    • $22.7b for Shipbuilding and Conversion, Navy, including:
      • Three Littoral Combat Ships (made in two versions by Lockheed Martin and Austal Ltd)
      • Three DDG-51 guided missile destroyers
      • Two Virginia-class submarines
      • Two TAO fleet oilers,
      • One Expeditionary Sea Base,
      • One Towing, Salvage, and, Rescue Ship
      • Continued procurement of the Columbia Class submarine
    • $9.4b for 93 F-35 Joint Strike Fighter aircraft (Lockheed Martin)
    • $1.9b for 24 F/A-18E/F Super Hornet aircraft (Boeing)
    • $1.5b for the upgrade of 85 Abrams tanks (General Dynamics)
  • Savings and Cuts: $870m in savings from rescissions of unused prior-year funding. (TAKE NOTE – nearly $1b in unobligated funding from prior year appropriations!)
    • Cuts $115.7m of FY18 funds from Tomahawk program due to mismanagement of the program by the U.S. Navy, according to the report.

NDAA Passage Looming in the Senate; Subcommittee Hearings in SAC-D

The Senate resumed consideration of the FY19 National Defense Authorization Act (NDAA) earlier today, and is expected to pass the bill as early as this week. Yesterday, a major block to NDAA passage was removed by acting chair Senator Jim Inhofe (R-OK), who shelved an amendment sponsored by Senator Bob Corker (R-TN) limiting President Trump’s authority to issue tariffs on the basis of national security. According to Inhofe, Corker was blocking consideration of all amendments to the FY19 defense authorization bill until guaranteed a vote on his provision. Even so, other Republicans are still posing more blocks, like Senators Rand Paul (R-KY) and Mike Lee (R-UT) as they try to secure a vote on a provision prohibiting indefinite detention of U.S. citizens. The White House is also at odds with a bipartisan amendment that would restore penalties on the Chinese telecommunications giant ZTE Corp.

As for the FY19 defense appropriations, the Senate Appropriations Subcommittee on Defense (SAC-D) is continuing the appropriations process with budget request hearings. Most recently, there was a classified hearing to review defense innovation and research funding, which took place last Wednesday, June 6th. The pace for the process this year has been faster than in previous years, as all markups are expected to be completed by the end of June.

The Bottom Line: Top Line numbers and next steps for FY19 defense spending are as follows

President’s BudgetBase: $617.1 billionOCO: $69 billionTimeline


Base: $616.7 billionOCO: $69 billionWaiting on Senate Vote
Next: Conference Committee


Base: $617.6 billionOCO: $68.5 billionFloor Action – Debate
Next: Passage (as early as this week)
HAC-DBase: $606.5 billionOCO: $68.1 billionFull Committee Markup
Next: Introduction in House
SAC-DBase $607 billion [302(b) allocation]OCO: $67.9 billion [302(b) allocation]In Subcommittee
Next: Markup (late June)

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