July 30, 2018

H.R. 5515 – FY19 National Defense Authorization Act

NOTEWORTHY

Background: The Senate version of the fiscal year 2019 John S. McCain National Defense Authorization Act, S. 2987, passed on June 18, 2018, by a vote of 85-10. The House approved its version of the NDAA, H.R. 5515, on May 24, 2018, by a vote of 351-66. On July 10, the Senate agreed to go to conference by a vote of 91–8. The House approved the NDAA conference report on July 25, 2018 by a vote of 359-54.

Floor Situation: The Majority Leader filed cloture on the NDAA conference report and the Senate is expected to vote on the NDAA conference report the week of July 30.

Executive Summary: The FY2019 NDAA authorizes $616.9 billion for the Department of Defense base budget, $21.8 billion for the Department of Energy base budget, $69 billion for overseas contingency operations, and $8.3 billion for defense programs outside the Departments of Defense and Energy. 

OVERVIEW OF THE ISSUE

The conference report for the fiscal year 2019 NDAA authorizes $716 billion for national defense including the defense base budget, Department of Energy defense programs, overseas contingency operations, and other programs. This is within the budget caps for defense spending.

The NDAA conference report authorizes a 2.6 percent across-the-board pay raise requested by the administration. The House and Senate both supported the 2.6 percent raise in their bills.

The NDAA conference report also authorizes higher troop levels from the House bill and the president’s request. In general, the Senate allocated more funding for investment in research and development of emerging technologies and a lower overall troop level than the House and the president’s request.  

NOTABLE BILL PROVISIONS

Section 401 – Military End Strength for Active Duty

Conference Result: Increase of 15,600 active duty troops; matches the president’s request

The Air Force will increase by 4,000 active-duty personnel to 329,100 airmen; the Army will add 4,000 active-duty personnel for a total of 487,500 soldiers; the Navy would gain 7,500 sailors to increase to 335,400 overall; the Marine Corps will add 100 marines to grow to 186,100 active duty personnel.

Section 889 – ZTE Prohibition and Sanctions

Conference Result: No repeal of ZTE sanctions relief and government-wide prohibition on contracting with ZTE

The NDAA conference report does not include any language that would reverse the administration’s settlement with Chinese telecommunications company ZTE or re-impose any sanctions on ZTE. Earlier this year the Commerce Department reached a settlement that included a $1 billion fine for, among other offenses, ZTE’s sales to North Korea and Iran in violation of law. The settlement requires ZTE to have new management and compliance officers selected by the U.S. and set aside $400 million for possible future fines and penalties.

House and Senate versions of the NDAA both prohibited the Defense Department from doing business with ZTE or contracting with companies that do significant business with ZTE. The provision in the House bill prohibits all federal agencies from contracting with ZTE or with any contractors that significantly use ZTE products or services.

The Senate bill went further than the House by retroactively repealing any sanctions relief to ZTE granted by the administration through a settlement. The administration strongly opposed the Senate provision on repealing sanctions relief.  

The conference report contains a provision that would ban ZTE, Huawei, and other companies tied into the Chinese government from doing business with the United States government or any entity that does business with the United States government. The provision also requires heads of agencies administrating loan, grant, or subsidy programs to prioritize available funding and technical support to assist affected businesses, primarily rural communications service providers, anchor institutions, and public safety organizations, in the transition.

Section 1601 – Space Force

Conference Result: Pentagon required to submit plans on warfighting in space and acquisitions for space systems.

The House bill required the secretary of Air Force to establish a new organization within the Air Force dedicated to military operations in space. Earlier this year President Trump called for the creation of a Space Force. The conference report does not include the new Air Force organization from the House bill, nor does it include authorization for the creation of a Space Force.

The conference report does include provisions for the deputy secretary of defense to develop a plan for an alternative acquisition system for space acquisitions, and also requires the creation of a new subordinate unified command within Strategic Command dedicated to space operations.

Sections 1632 and 1636 – Cybersecurity

Conference Result: Enhances DOD cyber authorities, including offensive cyber capabilities

The conference report largely adopted the Senate’s authorization of a new cyber warfare policy to enable the Defense Department to deter and respond to cyberattacks by conducting cyber operations as traditional military operations. The Senate bill authorizes a greater role for Cyber Command in pushing back against Russia, North Korea, and Iran in cyberspace.

Section 1701 – Committee on Foreign Investment in the United States Reform

Conference Result: CFIUS Reform included in NDAA

The Senate version of the NDAA included the Foreign Investment Risk Review Modernization Act as adopted by the Senate Banking Committee to give CFIUS the authority it needs to address national security concerns. The House version of the NDAA did not include a version of FIRRMA, as the House passed a separate bill to reform CFIUS on June 26, 2018, by a vote of 400-2. The conference report contains a compromise based on the Senate’s FIRRMA bill.

Section 4101 – Funding Table for Procurement – Joint Strike Fighter

Conference Result: Authorizes 77 Joint Strike Fighters; matches the president’s request

The conference authorizes $4.2 billion for 48 F-35A fighters for the Air Force; $2.3 billion for 20 F-35B fighters for the Marine Corps; and $1.1 billion for 9 F-35C fighters for the Navy.

The House bill authorized 77 Joint Strike Fighters compared to 75 for the Senate bill. The president’s budget request was for 77 Joint Strike Fighters.

The Joint Strike Fighter is prohibited from being transferred to Turkey under both bills. Turkeyhas been criticized harshly by the administration and members of Congress for purchasing the S-400 surface-to-air missile defense systems from Russia.

Section 4101 – Funding Table for Procurement – Shipbuilding 

Conference Result: Authorizes $24.1 billion for 13 new ships; $2.2 billion higher than the president’s request

The conference report authorizes 3 Arleigh Burke-class destroyers, 2 Virginia-class submarines, and 3 Littoral Combat Ships.

Section 3111 – Low Yield Nuclear Weapons 

Conference Result: Removal of unique limitation on low-yield nuclear weapons engineering and development

The conference report adopts most of the House position and repeals the following limitation on low-yield nuclear weapons from the fiscal year 2004 NDAA (Public Law 108-136):

“The Secretary of Energy may not commence the engineering development phase, or any subsequent phase, of a low-yield nuclear weapon unless specifically authorized by Congress.”

Section 3111 of the conference report aligns requirements for low-yield nuclear weapons to the same requirements for nuclear weapons other than low-yield. Under Section 3111, Congress retains its ability to prevent the engineering and manufacturing of a low-yield nuclear weapon through the annual authorization and appropriations bills.

Environmental Provisions (Legislative provision not Adopted; page 46 of Joint Explanatory Statement)

Conference Result: Sage grouse and lesser prairie chicken prohibitions on endangered species listing not included

The House receded on its prohibition on listing the sage grouse or lesser prairie chicken as endangered species for 10 years.

ADMINISTRATION POSITION

A statement of administration policy is not available at this time.

COST

A Congressional Budget Office estimate of the bill is not available at this time.

A Congressional Budget Office estimate of the bill is not available at this time.