Not too much has been certain with respect to future federal spending lately, so agency managers are operating roughly on a 90 percent basis. That is, since there is a continuing resolution, they are operating as if fiscal 2012 is repeating itself, only at a slightly reduced level just in case a final budget comes in with lower spending for a particular program.
Just before Christmas, the Office of Management and Budget was starting to talk to agencies about how to proceed during the still-possible sequestration. It said not to expect immediate furloughs or any sort of operational curtailment.
But Democrats and Republicans did manage to come to a mind-meld on a 2013 Defense authorization bill. Again, there’s no appropriation bill to go with it, but it does improve the government’s and industry’s ability to see what’s ahead. This House-side fact sheet gives the highlight. And here’s a link to the full 1,613 pages of this bill.
The authorized base budget at $527.5 billion shows Congress is basically flatlining the Defense budget. There’s another $88 billion for the war in Afghanistan, plus slightly more than $17 billion for the Defense activities that take place in the Energy Department, such as the National Nuclear Security Administration.
In many ways this bill is a high form of compromise. In several instances you see Congress not willing to drastically cut programs, but also not willing to engage in any major defense buildup. The bill sets an aggressive stance on special forces, including adding in $159 million for the IT-intensive ISR (intelligence, surveillance and renaissance).
And, contrary to what the administration wanted, Congress votes to continue programs including the expensive-to-operate, older batch of Global Hawk drones and upgrades to the Abrams tank. These programs, too, are likely to pull along new electronics and software programming services.
The Air Force was a big battleground, with the Defense Department wanting to retire hundreds of aircraft and thousands of people to support and fly them. In the end, Congress forces the Air Force to cut the retirements and force reductions by 50 percent.
Congress ordered several improvement projects in order to build a second Ford-class aircraft carrier. It also extended the Navy’s authority to buy Virginia class submarines, and to replace the Ohio class submarines with a dozen new ones (there are 18 Ohio class subs now). It also authorized guided missile destroyers. Each of these provisions follows years of program cost problems, but once established they have multi-decade lifecycles drawing on thousands of suppliers. The administration wanted full funding now, instead of multi-year, or “incremental” funding for these programs.
And so it goes, platform by platform. The base budget is not lavish but, in the absence of a sequester, it is not a terrible setback for DOD nor its suppliers. It adds to, or extends, programs the administration wanted to curtail or cut, such as more F-18 fighters. Something the administration wanted, called the Medium Extended Air Defense System to be extended in Europe, was deleted by Congress. It all prompted a tough speech from Defense Secretary Leon Panetta about Congress forcing programs onto DOD.
Non-platform provisions include a 1.7 percent raise for uniformed personnel and measures to increase DOD’s use of small business.
Significantly, the bill calls for a reduction in the size of the civilian DOD workforce equal to the size of planned uniformed reductions. This too is strongly opposed by the administration.
Despite all of the objections, President Obama is likely to sign the bill. It passed with solid bipartisan support – 315-107 in the House, 81-14 in the Senate.