October 05, 2015

H.R. 1735 – Fiscal Year 2016 Defense Authorization Act

Noteworthy

Background: The Senate approved its version of the fiscal year 2016 defense authorization bill by a vote of 71-25. The House approved its version of the bill by a vote of 269-141. A conference committee was convened, and the House approved this conference report by a vote of 270-156.

Floor Situation: Leader McConnell has filed cloture on this conference report. A vote in relation to that is expected some time Tuesday.

Executive Summary: The bill authorizes defense spending at the amount of the president’s request, although allocated differently from the administration’s request, in order to be consistent with the Budget Resolution as informed by the Budget Control Act.

The administration’s overall fiscal year 2016 defense budget request was for $612 billion in discretionary spending for national defense, of which $604.2 billion falls under the jurisdiction of the Senate Armed Services Committee. The $604.2 billion is composed of $534.2 billion for the Department of Defense base budget, $19 billion for Department of Energy national security programs, and $50.9 billion for ongoing operations in the war against terrorists, which the administration labels “overseas contingency operations.”

The bill provides $604.2 billion in budget authority. It provides $496.4 billion for the base budget and $18.6 billion for DOE national security programs. It goes on to provide $50.9 billion for OCO, and $38.3 billion in additional authorized spending in the operation and maintenance accounts, none of which is to be counted against the BCA caps.

Section 1004 expresses the sense of Congress that the BCA budget caps increase risk to U.S. national security and they must be modified or eliminated by a bipartisan legislative agreement.

The bill prohibits the transfer of Guantanamo detainees to the United States and requires certain certifications prior to transferring Guantanamo detainees out of U.S. custody. The president has consistently signed both types of provisions into law in the past.

The administration has threatened to veto the bill over this funding allocation structure and these Guantanamo provisions, among other reasons. 

Overview of the Issue

The bill authorizes defense spending at the amount of the president’s request within the committee’s jurisdiction in the amount of $604.2 billion, although it is allocated differently from the administration’s request, in order to be consistent with the Budget Resolution as informed by the Budget Control Act. Whereas the administration requested $50.9 billion in OCO funds and a higher amount in the base, to be paid for by tax increases, the bill authorizes $50.9 billion in OCO funds and an additional $38.3 billion in spending in the operation and maintenance accounts beyond the base budget.

The significance of the $38.3 billion difference between the president’s OCO request and the total amount provided in the bill beyond the base amount is as follows: The Budget Control Act cap on national security spending (budget function 050) is $523 billion for fiscal year 2016. CBO points out base Department of Defense spending usually comprises 95.5 percent of all budget authority in this category. The president proposed to fund function 050 at $561 billion, an increase of $38.3 billion over the current law spending caps. OCO funding and these additional amounts provided in this bill are exempt from the Budget Control Act discretionary spending caps.

In report language in its version of the bill, the Senate Armed Services Committee noted that the transfer of funds from the base budget took place in the operations and maintenance account in order to “avoid triggering automatic cuts, known as sequestration.” Section 1501 of this bill provides that if this is addressed by subsequent legislation revising the Budget Control Act discretionary spending limits for fiscal year 2016, these additional operation and maintenance account funds equal to the amount of the increase in the revised limits shall be deemed to have been authorized in the base budget.

Considerations on the Bill

For the base budget, the bill authorizes the following amounts:

  • $110.8 billion in procurement funding, which is $3.9 billion more than the president’s request;
  • $70.3 billion in funding for research, development, test, and evaluation, which is $559 million more than the requested level;
  • $135.7 billion for military personnel, which is $1 billion less than the request;
  • $8.1 billion for military construction, which is $228 million less than the request; and
  • $18.5 billion for atomic energy defense activities, which is $473 million less than the request.

It authorizes a 1.3 percent across-the-board pay raise for members of the uniformed services in grades O-6 and below.

The bill contains no authorization for the use of force in counter-ISIL operations.

Notable Bill Provisions

Section 631 – Repeal of past COLA adjustments for retirees

This section repeals recent legislative action concerning COLA adjustments for military retirees. Section 403 of the Bipartisan Budget Act of 2013 reduced annual COLA increases by one percent less than the U.S. Department of Labor Consumer Price Index for military retirees under the age of 62. Then, when these retirees reached age 62, their monthly retired pay would be readjusted as if this COLA reduction had not taken place, and they would receive the full COLA thereafter. Title X of Division C (Defense) of the fiscal year 2014 omnibus made this adjustment inapplicable to certain disabled military retirees and to those receiving annuity payments under the Survivor Benefits Program. Congress has since made these COLA adjustments inapplicable to any member who had joined the military prior to January 1, 2016. Section 631(d) of this bill makes all these past changes ineffective.

Section 632 – Military participation in TSP

Authorizes military participation in the Thrift Savings Plan, a recommendation of the Military Compensation and Retirement Modernization Commission. These changes will apply to members joining service on or after January 1, 2018, although current members may choose to be covered by the new plan.

Section 651 – Commissaries

Directs the secretary to submit a plan to achieve budget-neutrality in the delivery of commissary and exchange benefits by October 1, 2018. It then directs the comptroller general to assess that plan. Following GAO review, the department is authorized to conduct pilot programs to test the model articulated in the plan. The secretary would then submit a report after completion of the pilot program.

Section 702 – Tricare drug co-pays

Provides for both one-time and then continual, incremental co-pay increases in certain Tricare pharmacy benefits. CBO estimates this provision will save $66 million in fiscal year 2016. It further estimates $1.5 billion in savings in direct spending in the 10-year budget window. In the Joint Explanatory Statement the conferees noted the military health care system is in need of comprehensive reform and committed to working with the Department to begin that reform in fiscal year 2017.

Section 1004 – Sense of Congress on sequestration

Expresses sense of Congress that sequestration remains an unreasonable and inadequate budgeting tool to address deficits and debt, the BCA budget caps increase risk to U.S. national security, and they must be modified or eliminated by a bipartisan legislative agreement.

Section 1031 – Prohibiting Guantanamo detainee transfers to the United States

Extends for one year the prohibition on the use of funds to transfer to the United States Khalid Sheikh Mohammed or any other Guantanamo detainee. President Obama has signed into law such a prohibition every year of his presidency.

Section 1032 – Facilities in the U.S. for Guantanamo detainees

Extends for one year the prohibition on the use of funds to construct or modify facilities in the United States for the purpose of housing Guantanamo detainees. President Obama has signed into law such a prohibition every year of his presidency.

Section 1033 – Prohibiting transfer of Guantanamo detainee transfers to certain countries

Prohibits the use of funds to transfer any Guantanamo detainee to Libya, Somalia, Syria, or Yemen.

Section 1034 – Certifications on Guantanamo detainee transfers

Requires the secretary of defense to make a variety of certifications prior to transferring a Guantanamo detainee out of U.S. custody, such as that the receiving country has agreed to take steps to mitigate any risk the detainee could attempt to reengage in terrorism, especially where there has been a prior case of recidivism for detainees transferred to this receiving country. President Obama has signed into law such certification requirements many times in the past.

Section 1035 – Comprehensive detention strategy

Requires a report on a comprehensive strategy for the detention of current individuals and future individuals captured and detained pursuant to the 2001 Authorization for the Use of Military Force. It is to include a plan for the disposition of each Guantanamo detainee, the name of any facility intended to be used for detention, a plan for the disposition of a detainee if the authority to continue detaining him were to expire, a plan for disposition of future detainees held pursuant to the AUMF, and any additional authorities that may be needed to detain.

Section 1036 – Prohibit relinquishing control of Guantanamo

Prohibits the department from using any funds to close, abandon, or relinquish control of the Guantanamo facility, or implement a material modification to the 1934 Cuba-United States Treaty in such a way that constructively closes the naval facility.

Section 1037 – Report on high or medium risk Guantanamo detainees

Requires a report providing the names of Guantanamo detainees who Joint Task Force Guantanamo has assessed at any time before the date of the report to be a high-risk or medium-risk threat to the U.S.

Section 1040 – Report on Guantanamo detainee transfer agreements

Requires a report describing the terms of any written agreement with a foreign country regarding the transfer of a Guantanamo detainee to that country, or a statement that a transfer took place but not pursuant to a written agreement.

Section 1045 – Report on Guantanamo detainee transfer agreements

Provides that any person in U.S. custody or detained within a U.S. facility in any armed conflict shall not be subjected to any interrogation technique, approach, or treatment not listed in the publicly available Army Field Manual.

Section 1059 – Authorize department to provide assistance in securing the southern border

Authorizes the secretary to use up to $75 million to assist U.S. Customs and Border Protection in increasing efforts to secure the southern border, to include deployment of regular and reserve components of the armed forces, manned aircraft, and unmanned aerial surveillance systems.

Section 1223 – Modifying authorities to counter ISIL

Updates the authorization in last year’s bill to provide assistance to Iraqi security forces, including Kurdish and tribal security forces, for the purposes of securing the territory of Iraq and defending it from ISIL. Authorizes $715 million in OCO funds for this purpose. Further updates the program to authorize the provision of assistance directly to the Kurdish Peshmerga and Sunni/local security forces with a national security mission, in coordination with the government of Iraq to the extent practicable, if the president determines Iraq has failed to take substantial action to increase political inclusiveness, address minority grievances, and enhance minority integration into the political and military structures of Iraq. Also requires the secretary to certify Iraq has taken reasonable actions to safeguard against such assistance being acquired by violent extremist organizations.

Section 1225 – Syrian opposition matters

Requires a report outlining the military support necessary for the vetted elements of the Syrian opposition receiving U.S. assistance to carry out the intended purposes of such assistance. Further requires a report on a strategy for Syria.

Section 1243 – Russia INF violation

Directs the secretary to submit a plan regarding the capabilities for possible military responses to Russia’s continued violation of the INF Treaty.

Section 1250 – Ukraine security assistance initiative

Authorizes $300 million to provide security and intelligence assistance to Ukraine, $50 million of which shall be used for lethal assistance, unless the secretary certifies that providing lethal assistance in that amount is not in the U.S. national security interest.

Section 1263 – South China Sea Initiative

Authorizes $50 million for the South China Sea Initiative to provide assistance and training to named recipient countries for the purpose of increasing maritime security there.

Section 1275 – Arms Trade Treaty

Prohibits the use of funds to implement this treaty unless it has received the advice and consent of the Senate and been the subject of implementing legislation.

Section 1501 – Authorizing OCO and additional funds

Authorizes additional funds for the department beyond the base budget in two categories: 1) OCO and 2) additional monies for the operation and maintenance accounts. This section says these funds in the second category are being “appropriated in support of base budget requirements,” but they are essentially treated as OCO funds for budgetary purposes. It goes on to provide that if a bill is subsequently enacted revising the Budget Control Act discretionary spending limits for fiscal year 2016, the amounts in this second category equal to the amount of the increase in the revised limits shall be deemed to have been authorized in the base budget.

Section 2702 – BRAC

This section declines to provide the president’s request of authority to conduct another BRAC round, and further provides nothing in this bill should be construed to provide such authority.

Administration Position

The administration has indicated in multiple manners it intends to veto this bill.

Cost

CBO has estimated the bill’s effect on direct spending and revenues.

Amendments

Conference reports are generally not amendable.