Quick Hit – March 20, 2017

What should you be doing right now?

Confirm your FY17 appropriation survived the House-passed bill last week
Determine if any of your prior funding (FY15-16) suffered a rescission
Confirm the status of your program(s) in the FY17 supplemental
Maintain communication with your government customer; they know what they submitted for FY18 and should be revealed in May
Recognize that your government customer is working diligently on FY19 and FY20 planning today; engage now

What You Need to Know…

FY17 Budget

Last week the House passed the 2017 defense appropriations bill, 371-48. The bill could be the legislative vehicle that averts a much-feared yearlong continuing resolution. However, as the bill moves to the Senate its future is uncertain. The $584B bill breaks budget caps that amount to a spending increase. Senate Democrats have long insisted that no defense increase could occur without similar increases to non-defense spending. Even Senate Republican appropriators seemed cool to the idea of rushing the one bill through. In other words, we’re a long way from a bill that can pass in the Senate.

Senator Thad Cochran (R-Mississippi), Chairman of the Senate Appropriations Committee and Chairman of the Defense Subcommittee in Appropriations

FY17 Supplemental

The $30B supplemental appropriation adds almost $25B to Pentagon base spending, and$5B to OCO funds. Within the base funds, the proposal would add $976 million for military personnel and $13.5B in procurement of aircraft like F-35 Joint Strike Fighters, F/A-18 Super Hornets, P-8s, Black Hawk and Apache helicopters. Additionally the bill increases funds for operations, maintenance, cyber and intelligence. Within the war budget, the focus is geared towards the campaign against ISIS, as well as efforts in Iraq, Syria and Afghanistan.

FY18 Budget

Before reading further, recall that budgets are fundamentally policy statements, do not carry the weight of law, and do not actually spend money. They are an opening position in an elaborate process of funding the government.

OMB Director Mick Mulvaney addresses the White House press corp on the FY18 budget roll-out.

President Trump’s skinny budget (the broad outline of a budget) for FY18 was delivered to Congress last week. It would remove $15B from non-defense programs while adding $54B to DOD, DHS and some security portions of DOE. The “pay-fors” of the $54B equate to serious cuts in several remaining agencies. OMB Director Mulvaney made his position clear that this budget requires difficult discretionary spending cuts to help shift funds towards the new White House vision; a vision much more aligned to “hard power.”

The FY18 defense budget blueprint looks to bring $639B to defense with a $574B base budget, and an additional $65B in OCO funding. Specific details for the defense blueprint will likely not be available until May when they are delivered to Congress.