Quick Hit – June 29, 2018

Appropriations Update: Yesterday, the Senate took a major step in the appropriations process when the Senate Appropriations Committee approved the defense subcommittee FY19 markups (30-1), as the full House passed its version later in the day (359-49). In addition, full Senate passage of the FY19 NDAA (85-10) has paved the path forward for the bill to go to conference.  House leadership named conferees this week.

Senator Richard Shelby (R-AL), Chairman of the Senate Appropriations Committee and its Subcommittee on Defense (Source: The Hill)

Current Progress

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

HASC (NDAA)

Base: $616.7 billionOCO: $69 billionConference Committee

SASC (NDAA)

Base: $617.6 billionOCO: $68.5 billionConference Committee
HAC-DBase: $606.5 billionOCO: $68.1 billionPassed in House

Next: Waiting on Senate

SAC-DBase $607.1 billionOCO: $67.9 billionMarkup Approved

Next: Introduction to Senate

Senate and House FY19 Defense Appropriations

After approval by the defense subcommittee at the beginning of the week, the Senate Appropriations Committee (SAC) yesterday marked up the FY19 defense appropriations bill, ordering it to be reported favorably, 30-1. The markup appropriates $675 billion to defense for FY19, with a record high $95 billion for research and development. The specific breakdown reflects already released 302(b) allocations: $607.1 billion for base funding and $67.9 billion for Overseas Contingency Operations (OCO).

The House version of the FY19 defense appropriations bill, which was also passed on the House floor yesterday afternoon, is similar to the SAC version, though it does contain some key differences that will need to be hammered out during conference in the coming weeks.

Differences 

  • Shipbuilding Procurement Funds: $1b difference ($22.7b from the House; $24b from the Senate)
  • Littoral Combat Ships (LCS): 3 funded by the House, only 2 funded by the Senate
  • F-35 Joint Strike Fighter aircraft: 93 in the HAC version, 89 in the SAC version
  • Exclusive to the Senate Version:
    • Expeditionary Fast Transport (EPF), $225m
    • LHA Replacement (Advanced Procurement), $350m
    • LPD-17 (Advanced Procurement), $500m

NDAA Movement

With the passage of the FY19 NDAA in the Senate, the bill can now move to the House-Senate Conference Committee, where differences between the two versions will be addressed so that a final bill can be put forth. House leadership has already named who will serve on the committee, with notable names like Rep. Mac Thornberry (R-TX), Rep. Adam Smith (D-WA), Rep. Joe Wilson (R-SC), Rep. Frank LoBiondo (R-NJ), Rep. Joe Courtney (D-CT), and Rep. Mike Turner (R-OH). Senate conferees will be named in the coming days.


The Bottom Line: Defense bills are moving unusually fast this year for two reasons: (1) it’s an election year, and (2) there was an agreed topline number in the two-year budget agreement covering FY18-FY19.

Be alert: The current budget agreement does not cover FY20 and beyond, and budget caps associated with sequestration return in FY20. While relief may again emerge post-election, your program managers and program executive officers are working the details of FY20 now. Make sure you aren’t wedged out by an early or uninformed agency decision.

Happy Independence Day to our growing Quick Hit readership!

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