Quick Hit – September 8, 2015

Quick Hit
What It Means
September 8, 2015

Congress returns today

Here’s the quick rundown:

– 10 legislative days until the start of FY16. A short-term continuing resolution (CR) will be required to buy some maneuvering space. While a minority of pundits foresee a year-long CR, it’s more likely that an FY16 budget can be agreed before the end of this calendar year. Expect an initial CR that takes us into at least late October / early November.

– The Iran deal will pass both chambers, but not without fanfare. President Obama successfully secured a veto-proof Senate majority over the August recess. Defense One published an interesting article and graphic depicting 2/3 of national security “insiders” disagree with the present deal and thought a better deal was possible. See the full article here.

– Limiting (or eliminating) government funding of Planned Parenthood will be raised in opposition to any proposed funding bill, including a CR. The lobbying and messaging over the summer has not been organized enough to support a threatened government shutdown over this issue.

– Secretary of Defense Ashton Carter continues to telegraph in his public comments that he expects part of the $38B FY16 Overseas Contingency Operations funding will not come to DoD when the budget dust settles. Recall the $38B proposal was the method Congress chose to get around the Budget Control Act caps known as Sequestration.

– If DoD had to “give back” as much as $19B of it’s now planned FY16 budget, how would your military customer decide which programs would be bill- payers?

– Many large programs and budget lines are effectively fenced (OHIO replacement program, for example). Where will your program shake out?

– If you aren’t communicating with your DoD Program Manager directly, know that your competitors are doing just that.

– The National Defense Authorization Act (NDAA) remains held up over contentious issues such as personnel benefits, the closing of Guantanamo Bay and transfer of remaining detainees to CONUS. Ft Leavenworth, KS and Charleston, SC remain leading sites under consideration to house detainees.

– The Export-Import (Ex-Im) Bank funding lapsed June 30th. In a late effort before the August recess, the Senate attached Ex-Im reauthorization language to a six-year highway bill. However, the House had passed its own three-month highway bill extension and did not take up the Senate bill. Both issues (highway bill and Ex-Im Bank) remain unresolved. The present highway bill extension expires 29 October. Congress and the White House continue to negotiate tax reforms to help fund an estimated $16B annual transportation shortfall. Look for a reauthorization of Ex-Im bank and yet another highway bill extension.

– Congressional pressure continues on the Dept of Veterans Affairs as Secretary McDonald, now in position over one year, struggles to convince Congress of his control of the second largest federal department. Construction cost overruns, inadequate security controls and and stagnant management culture continue to challenge the former CEO of Proctor & Gamble. A legislative patch allowing the internal movement of $3B allowed VA operations to continue without disruption through the August recess.

– A debt ceiling debate is looming in November as our national debt climbs above $19 Trillion.

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