Week ending July 14, 2017
HR 2810 National Defense Authorization Act for Fiscal Year 2018
(All data; CBO)
“H.R. 2810 would authorize appropriations totaling an estimated $689 billion for the military functions of the Department of Defense (DoD), for certain activities of the Department of Energy (DOE), and for other purposes. In addition, the bill would prescribe personnel strengths for each active-duty and selected-reserve component of the U.S. Armed Forces.” – cbo
$613.8 billion would count against the 2018 defense cap set in the Budget Control Act (2011); $0.6 billion would count against the nondefense cap for 2018; and $74.6 billion designated for overseas contingency operations would not be constrained by caps.
The Sequester imposed in 2013 as a result of the Budget Control Act limited the amount that can be spent on Defense. Congress, however, finding that low amount risky added a separate category of spending not subject to the defense cap and that is for Overseas Contingency Operations spending which is not capped. As such the bill assigns the $613.8 billion to defense matters as mentioned above. .6 Billion comes under the non-defense cap and $74.6 billion is for the Overseas Contingency Operations. (OCO). The OCO covers US military action principally in Afghanistan but also covers other military action in the Middle East.
Other bill spending details include; $278 million for the Maritime Administration (transportation); $127 million for the Small Business Administration (commerce and housing credit); $124 million for the Department of the Interior (general government); $116 million for a medical facility demonstration fund (veterans benefits and services); $64 million for the Armed Forces Retirement Home (income security); and $5 million for the Naval Petroleum Reserves (energy).
Non-defense spending is also capped but increases by $62 billion over last year. That spending includes Procurement ($23.2 billion), operation and maintenance ($15.2 billion), research and development ($13.1 billion), military personnel ($7.5 billion and military construction and family housing ($2.1 billion). Authorized funding for all other categories combined would increase by $1.2 billion or 5 percent).
End Strengths –
Under title IV, the authorized end strengths in 2018 for active-duty personnel and personnel in the selected reserves would total 1,324,000 and 829,900, respectively. Of those selected reservists, 78,626 would serve on active duty in support of the reserves. In total, active-duty end strength would increase by 18,100 and selected-reserve end strength would increase by 9,700 when compared with levels authorized under current law for 2018.
Increases in active-duty personnel for three of the four services:
10,000 more for the Army, 4,100 more for the Air Force, and 4,000 more for the Navy. The end strength authorized for the Marine Corps would remain unchanged at 185,000. CBO estimates that the net growth in active-duty personnel of 18,100 service members would cost $12.3 billion over the 2018 -2022 period, assuming appropriations are increased by that amount.
Under this bill, five of the six reserve components would experience increases in end strength: 4,000 more for the Army Guard, 3,000 more for the Army Reserve, 1,000 more for the Navy Reserve, 900 more for the Air Guard, and 800 more for the Air Force Reserve. End strength for the Marine Corps Reserve would stay the same. As part of those changes, the number of full-time reservists who serve on active duty in support of the reserves would grow by 2,275.
Compensation and Benefits.
H.R. 2810 contains several provisions that would affect compensation and benefits for uniformed personnel and civilian employees of DoD. The bill would specifically authorize regular appropriations of $141.9 billion for the costs of military pay and allowances in2018. For related costs resulting from overseas contingency operations (primarily in Afghanistan), the bill would authorize the appropriation of an additional $5.1 billion for 2018.
Expiring Bonuses and Allowances
. Sections 611 through 615 would extend for another year DoD’s authority to enter agreements to pay certain bonuses and allowances to military personnel. The authority to enter into such agreements is currently scheduled to expire on December 31, 2017. Some bonuses are paid in a lump sum, while others are paid in annual or monthly installments over a period of obligated service. Based on DoD’s budget submission for fiscal year 2018, CBO estimates that extending that authority for one year would cost $3.1 billion over the 2018-2022 period.
Higher Basic Allowance for Housing
. Section 602 would delay by one year a planned reduction in the housing allowance paid to service members residing in housing constructed under the Military Housing Privatization Initiative (MHPI).
Civilian Benefits in a Combat Zone
. Section 1108 would extend for one year the authority to grant certain benefits to federal civilian employees who perform official duty in a combat zone. Those benefits, which expire under current law on September 30, 2018, include death gratuities, paid leave and travel for one trip home, and up to three leave periods per year for rest and recuperation. CBO estimates that about 2,400 civilian employees of DoD and 500 employees of other federal agencies will work in a designated combat zone in 2019 and, under this provision, would receive an average benefit that would cost about $18,900 a year.
Military Health System and Overseas Hospitals
. Title VII would make several changes to health benefits for members of the armed forces. In total, those changes would increase costs for health care by about $170 million over the 2018-2022 period, CBO estimates.
. Section 712 would prevent all military hospitals that are overseas from reducing the types of inpatient services that they currently provide. The immediate effect of this provision would be to prevent the planned reorganization and downsizing of several military hospitals in Italy, which is scheduled to be completed as early as 2019.
Multiyear Procurement Contracts.
The bill would authorize the Navy to enter multiyear procurement contracts for four major programs. Multiyear procurement is a special contracting method authorized in current law that permits the government to enter into contracts covering acquisitions for more than one year but not more than five years, even though the total funds required for all years are not appropriated at the time the contracts are awarded. Section 124 would authorize the Navy to enter a multiyear contract to purchase up to 13 Virginia-class submarines beginning in 2019 and to make advance purchases of equipment for those vessels beginning in 2018.
Nuclear Refueling and Overhaul of the U.S.S. Nimitz Class Carriers.
Section 121 would authorize the Navy to conduct nuclear refueling and overhauls of the remaining Nimitz class carriers. The bill also would allow the Navy to fund the refueling and overhauls over several years (incremental funding). The Navy deploys 10 Nimitz class carriers. The lead ship of the class was commissioned in 1975and the last ship was commissioned in 2009. The carriers have a service life of about 50 years and are capable of operating for nearly25 years without refueling the nuclear reactor cores.
General provisions –
Section 523 would create a new specified offense under the military justice system that would provide a more effective and efficient means for DoD to prosecute individuals who wrongfully broadcast or distribute intimate visual images; any penalties collected under this provision would be classified as revenues.
Section 721 would extend the authority for DoD to carry out a pilot program whereby retail pharmacies could buy prescription drugs at DoD’s lowest cost for those drugs through 2019. DoD has not used the current authority to implement such a pilot program and, based on information from DoD, CBO expects that there is a very low probability that DoD would use the extended authority.
Section 722 would require DoD to carry out a pilot program to provide counseling and assistance to TRICARE beneficiaries with complex medical conditions. The pilot program could affect the cost of health benefits for retirees of the Coast Guard, Public Health Service, and the National Oceanic and Atmospheric Administration, and their dependents; those benefits are paid from mandatory appropriations.
Section 1062 would delay by nine months (from January2020 to October 2020) the time when H-2B nonimmigrant (or temporary) workers hired in Guam or the Northern Marianas begin to count against the nationwide cap on H-2B workers.
Thus, the provision would result in more aliens receiving H-2B status and working in one of the 50 states or Washington, D.C., where they can receive emergency Medicaid benefits and health-insurance subsidies under the Affordable Care Act, if they otherwise qualify.
Section 1222 would extend DoD’s authority to accept and spend contributions from foreign governments to assist the military and security forces of, or associated with, the government of Iraq to counter threats posed by the Islamic State of Iraq and the Levant.
Section 1276 would extend DoD’s authority to accept and spend contributions from Australia, Canada, New Zealand, and the United Kingdom to operate a joint security cooperation program with those countries.
Section 2824 would authorize the Army to sell certain real property near U.S. Army Natick Soldier Systems Center and use the proceeds to build new housing at that installation.
Section 2862 would authorize the Chief Operating Officer of the Armed Forces Retirement Home to lease out underused property at the home. Such property can currently be leased out by the Secretary of Defense. Those leases would increase offsetting receipts to the Armed Forces Retirement Home Trust Fund, which are recorded as reductions in direct spending.
Additionally, some leases include in-kind consideration such as the construction of new facilities that could result in mandatory obligations to make payments in subsequent years. Those obligations are treated as an increase in direct spending.
CBO expects enacting section 2862 would accelerate the process for new leases but would not increase the total number of leases that would be approved over the 2018-2027 period.
CBO has determined that section 573 of H.R.2810 is excluded from review for mandates under UMRA. That section would allow service members to vote in federal, state, and local elections in the state where they are stationed for military orders instead of in their state of permanent residence.
Sponsor: Rep. Mac Thornberry (R-TX)
Status: Passed House / Amended by Senate / to Senate-House conference /
VOTES and FLOOR ACTION
On Passage: On passage Passed by recorded vote: (Roll no. 378)
Motion to recommit: On motion to recommit with instructions Failed by recorded vote: (Roll no. 377)
Text of the motion:
he House proceeded with 10 minutes of debate on the Lujan Grisham (NM) motion to recommit with instructions. The instructions contained in the motion seek to require the bill to be reported back to the House forthwith with an amendment to add a new section to prohibit any funds authorized to be appropriated in the underlying bill from being used to plan, develop, or construct any barriers, including walls or fences, along the international border of the United States
COST AND IMPACT
Cost to the taxpayers: $689 billion. CBO estimates that appropriation of the authorized amounts would result in outlays of $669 billion over the 2018-2022 period.
Pay-as-you-go requirements: Because enacting the bill would affect direct spending and revenues, pay-as-you-go procedures apply.
Regulatory and Other Impact: H.R. 2810 contains intergovernmental and private-sector mandates as defined in UMRA. CBO estimates that the aggregate cost of the mandates on public and private entities would fall below the annual thresholds established in UMRA for intergovernmental and private-sector mandates ($78 million and $156 million respectively in 2017, adjusted annually for inflation).
Increasing the End Strength of Active-Duty Forces Section 401 would increase the costs of complying with existing intergovernmental and private-sector mandates by increasing the number of service members on active-duty by about 20,000 relative to currently authorized levels.
Those additional service members would be eligible for existing protections under the Servicemembers Civil Relief Act (SCRA). Protections under SCRA require public and private entities to grant active-duty personnel various allowances for business and tax transactions and court procedures.
For example, SCRA allows service members to maintain a single state of residence for paying state and local personal income taxes and to request deferrals for certain state and local fees. CBO estimates that the additional cost of those mandates on state and local governments would be small.
SCRA also requires creditors to charge no more than 6 percent interest rate on service members’ loan obligations when the acquisition of such obligations predates active-duty service, and it allows courts to temporarily staycertain civil proceedings, such as evictions, foreclosures, and repossessions. The act alsoprecludes the use of a service member’s personal assets to satisfy the member’s trade or business liability while he or she is in military service.
Under the bill, the number of active-duty service members covered by SCRA would increase by less than 2 percent, CBO estimates. Service members’ utilization of the various provisions of the SCRA depends on a number of uncertain factors, including how often and how long they are deployed. However, the increase in the number of active-duty service members covered by SCRA would be small, so CBO estimates that the incremental cost of compliance for private sector.
Dynamic Scoring: CBO estimates that enacting H.R. 2810 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2028.
Tax Complexity: Not applicable to this bill.
Earmark Certification: Data not available
Duplication of programs: Data not available
Direct Rule-Making: Data not available
Advisory Committee Statement: Data not available
Budget Authority: Data not available
Constitutional Authority: Assumed.
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