S. 2943 - FY17 Defense Authorization Bill
Background: The Senate Armed Services Committee reported out its version of the fiscal year 2017 defense authorization bill, S. 2943, on May 12, 2015, by a vote of 23-3 (Cruz, Fischer, Lee opposing). The House approved its version of the bill, H.R. 4909, on May 18, 2016, by a vote of 277-147. According to the House Armed Services Committee, that bill provided an overall level of $602.2 billion in budget authority, which is the amount of the president’s request within the jurisdiction of the committee. This is composed of $543.4 billion for the base budget for the Department of Defense and Department of Energy national security programs, and $58.8 billion for ongoing operations in the war against terrorists, which the administration labels “overseas contingency operations.” Of this OCO amount, the committee said $23.3 billion “is authorized in support of base budget requirements,” meaning the remaining OCO amount “will cover contingency operations until April 2017.” The HASC chairman expressed his expectation that a new president would submit an additional supplemental budget request.
Floor Situation: On Monday, May 23, cloture was filed on the motion to proceed to the bill. By operation of rule, cloture will ripen one hour after the Senate convenes on Wednesday.
Executive Summary: The administration’s overall fiscal year 2017 defense budget request within the jurisdiction of the Senate Armed Services Committee was for $602 billion in discretionary spending, composed of $524 billion for the Department of Defense base budget, $19.2 billion for Department of Energy national security programs, and $58.8 billion for OCO.
The bill provides $602 billion in budget authority allocated slightly differently from the administration’s request. The bill provides $523.9 billion for the base budget, $19.2 billion for DOE national security programs, and $58.9 billion for OCO. $5 billion in OCO money is directed toward “functions traditionally supported through the base budget.”
Overview of the Issue
The bill authorizes the following amounts in the base budget:
- $102.4 billion in procurement funding, which is $463 million more than the president’s request;
- $71.2 billion in funding for research, development, testing, and evaluation, which is $165 million less than the president’s request;
- $171.4 billion for operation and maintenance, which is $71 million more than the request;
- $134 billion for military personnel, which is $1.3 billion less than the requested level;
- $19.2 billion for atomic energy defense, which is $73 million less than the request; and
- $7.4 billion for military construction, which is essentially equal to the request.
It authorizes $58.9 billion for OCO, which is $92.5 million more than the president’s request.
Also of note:
- Section 1021 extends the ban on transferring Guantanamo detainees to the United States, which President Obama has signed into law every year.
- Title VII makes substantial reforms to the military health care system, with its guiding principle that “beneficiaries should only be asked to pay more into a military system that delivers greater value.”
- Noting in report language that the “U.S. military [is] falling behind technologically and that the current acquisition structure and process [are] significant factors in the inability to access new sources of innovation,” Titles VIII and IX are directed at improving that structure and process.
- Division E provides the Military Justice Act of 2016, a comprehensive reform of the military justice system.
- Section 601 authorizes an across-the-board pay raise of 1.6 percent.
- Noting in report language that “the ban of females serving in ground combat units has been lifted by the Department,” section 591 requires females to register for the draft to the same extent males are required to register, if they turn 18 years old on or after January 1, 2018.
A driving goal of the Goldwater-Nichols Act, passed 30 years ago, was to create structure and incentives within the Department to prioritize and achieve strategic integration, namely joint operational capabilities and effectiveness between the services. Throughout this bill are numerous provisions making a substantial effort at updating the roles, missions, and organization of the Department and its component parts to the current strategic landscape.
Notable Bill Provisions
Division A – Department of Defense Authorizations
Title I – Procurement
The committee approved $102.4 billion, which is $463 million more than the president’s budget request.
Section 101 – Authorization of appropriation
Makes authorizations for fiscal year 2017 in accordance with the table outlined in section 4101.
Section 141 – Prohibit retirement of A-10
Extends from the fiscal year 2016 act the prohibition on retiring or preparing to retire the A-10 aircraft until the Air Force submits a report describing the results of the initial operational test and evaluation of the F-35A (which is designed to replace the A-10).
Section 151 – Study future mix of air platforms
Requires an independent study on the future mix of shorter-range and long-range strike aircraft, and manned and unmanned aerial platforms.
Section 152 – Cluster munitions
Limits the destruction of cluster munitions until a report is submitted describing the department’s policy on the use of such munitions and projections for future inventory requirements.
Title II – Research, Development, Test and Evaluation
For RDT&E, the committee approved $71.2 billion, which is $165 million less than the president’s request.
Section 201 – Authorization of appropriation
Makes authorizations for fiscal year 2017 in accordance with the table outlined in section 4201.
Third offset initiative
In report language, the committee expressed support for the need for an effort to maintain the military technological superiority of the United States, but expressed great disappointment at how the department is carrying out the initiative thus far. The committee expressed particular concern that the department appears to be using the funding allocated for this purpose to instead “pay its bills, rather than focus on technologies that are vital to the military technological superiority of the United States.” It then directed the secretary to submit a report on a variety of aspects of the “third offset strategy.”
Title III – Operation and Maintenance
The committee approved $171.4 billion for operation and maintenance, which is $71 million more than the request.
Section 301 – Authorization of appropriation
Makes authorizations for fiscal year 2017 in accordance with the table outlined in section 4301.
Section 303 – Report on high energy costs
Requires a report on efforts to achieve cost savings at military installations with high energy costs.
Title IV – Military Personnel
The committee approved $134 billion for military personnel, which is $1.3 billion less than the requested level. In report language, the committee noted that the bulk of this reduction, $880 million, was meant to reflect GAO’s recent assessment of the average annual under-execution in this account overall. Another $400 million came from the committee’s rejection of the department’s proposal to change the vesting date for Thrift Savings Plan contributions.
Section 421 – Authorization of appropriation
Makes authorizations for fiscal year 2017 in accordance with the table outlined in section 4401.
Title V – Military Personnel Policy
Section 501 – Distribution and allocation of general and flag officers
Makes reductions to the number of four-star general billets, along with accompanying reductions in lower-ranking general and flag officers, the effect of which would be, as the committee explains, to reduce the number of general and flag officers by 25 percent by the end of 2017.
Section 502 – Amending statutory specification of officer grade for certain positions
Removes many statutory requirements providing the specific rank or grade an officer must hold to serve in specific named positions. For example, it would repeal the requirement that the chief of legislative affairs in the Department of the Navy be a rear admiral.
Section 535 – Military commission orders based on gender
Provides that no military commission order may be construed to restrict a member of the armed forces from carrying out duties otherwise lawfully assigned to them to the extent the basis of that prohibition is the gender of the member. Goes on to provide that any such order in effect at the time of enactment shall be deemed vacated and null and void to the extent it is based on gender of the service member. Terrorists being prosecuted at the Guantanamo Bay military commissions have sought and received court orders barring female guards from escorting the terrorists from their jail cell to the courthouse.
Section 591 – Require females to register for draft
Requires females to register for the draft to the same extent males are required to register, if they turn 18 years old on or after January 1, 2018. In report language the committee noted that “the ban of females serving in ground combat units has been lifted by the Department ... and as such, there is no further justification to apply the selective service act to males only.” During committee mark-up, a motion to strike this provision failed by a vote of 7-19.
Title VI – Compensation and Benefits
This title authorizes various bonuses and special pay authorities aimed at encouraging enlistment, reenlistment, and continued service by active duty and reserve military personnel.
Section 601 – Across-the-board pay raise
Authorizes an across-the-board pay raise of 1.6 percent.
Section 604 – Reform basic allowance for housing benefit
Reforms the basic allowance for housing benefit to a system that utilizes actual costs up to a maximum amount allowable, to take effect January 1, 2018. In report language, the committee described the evolution of this benefit, noting that service members once paid a percentage of their own housing costs out of pocket based on actual costs, but by 2006 “out-of-pocket expenses were eliminated entirely,” and the benefit in some cases “exceeds the actual cost of housing,” by significant amounts in certain circumstances.
Section 646 – Independent assessment of Survivor Benefit Plan
Requires an independent assessment of the Survivor Benefit Plan, to include its purposes, how it interacts with other similar federal benefits plans, and a comparison of it to other similarly situated plans for other government and private sector employees.
Section 662 – Commissary privatization pilot program
Directs the secretary to conduct a pilot program of at least two years in length at no more than five commissaries to assess the feasibility and advisability of privatizing the Defense Commissary System. He is then to report to Congress on the program. During committee mark-up, a motion to strike this provision failed by a vote of 13-13.
Section 671 – Berry Amendment/Buy American for furnished footwear
Requires the department to furnish footwear directly to service members “instead of providing a cash allowance to the members for the purchase of such footwear,” and then requires the procurement of such footwear to comply with requirements of the Berry Amendment. This provision was added to the underlying bill during committee mark-up by a vote of 15-11.
Title VII – Health Care
Taking knowledge gained from the report of the Military Compensation and Retirement Modernization Commission, along with its own independent oversight work and investigation, the committee makes substantial reforms to the military health system in this title. In its summary of the bill, the committee said its guiding principle was that “beneficiaries should only be asked to pay more into a military system that delivers greater value.” In report language, the committee lamented that “data show that military healthcare providers have much lower productivity than their comparable civilian counterparts.” Some of the goals of this legislation are to improve and sustain the operational readiness of the department’s medical force; improve access to care; and lower per capita costs for the department and beneficiaries.
The changes made do not disturb current system operation where there are no fees for any health care services received in military hospitals and clinics. Moreover, active duty service members still would have no costs for health care services received anywhere.
Section 701 – Tricare plans
Reforms the Tricare system to establish three plans: 1) Tricare Prime (a managed care option); 2) Tricare Choice (a self-managed option); and 3) Tricare Supplemental (an option for retired service members and their families with other health insurance). It leaves other established Tricare programs in place, such as Tricare Pharmacy Benefits Program. The section provides a cost structure for the plans it creates, establishing enrollment fees, deductibles, caps, and certain co-payments. It also establishes the rates of annual increase for some of these costs. Active duty families would not have enrollment fees, and they would have no co-pays for health services received under Tricare Prime.
Section 702 – Tricare pharmacy co-pays
Provides for co-pay increases in certain Tricare pharmacy benefits. CBO has estimated this provision would save $53 million in direct spending and $32 million in discretionary spending in fiscal year 2017. It further estimates $2.4 billion in savings in direct spending and $4.9 billion in discretionary savings in the 10-year budget window. In report language, the committee pointed out that “beneficiaries would continue to receive pharmaceuticals at no cost in military medical treatment facilities.” Members would retain the option to get prescription drugs at retail pharmacies, although at slightly higher cost.
In order to encourage the use of pharmaceutical agents that provide the greatest value to the department and beneficiaries, this section authorizes the secretary to exclude from the pharmacy benefits program any pharmaceutical agent that provides “little or no value to covered beneficiaries and the Department.” In report language, the committee expressed its position that “the Department should use savings generated from pharmaceutical cost-share increases to improve health outcomes and the experience of care for beneficiaries of the military health system.”
Section 703 – Tricare beneficiaries eligible for FEDVIP
Directs the department to make certain Tricare beneficiaries eligible to purchase dental and vision insurance currently available to federal employees.
Section 721 – Consolidate medical departments
Directs the secretary of defense to disestablish the medical departments of the individual services and consolidate their activities into the Defense Health Agency, but not until 60 days have passed from the submission of a consolidation plan.
Section 732 – Standardize medical appointment scheduling
Directs the secretary to establish by January 1, 2018, a standardized system across the military medical treatment facilities for scheduling appointments.
Title VIII – Acquisition Policy and Management
This title is directed at improving the department’s acquisition process, in part by providing greater incentives for the acquisition and use of commercially available technology. This may provide the department better access to the technological advancements of firms that are not traditional providers to the department (in part due to the cumbersome acquisition process).
Section 826 – Penalty for cost-type contracts
Creates a framework for a penalty to be imposed for the use of cost-type contracts, such as cost no fee or cost plus award fee.
Section 827 – Preference for fixed-price contracts
Requires the Defense Federal Acquisition Regulation Supplement to be revised to establish a preference for fixed-price contracts.
Section 828 – Firm fixed-price contracts for foreign military sales
Requires the use of firm fixed-price contracts for foreign military sales.
Title IX – Department Organization and Management
Section 901 – USD(R&E)
Eliminates the position of undersecretary of defense for acquisition, technology, and logistics, and in its place re-establishes the position of undersecretary of defense for research and engineering. This position will serve as the chief acquisition officer of the department. The section then consolidates the functions of certain other assistant secretary positions, without eliminating them, into a newly created assistant secretary of defense for acquisition policy and oversight. In accompanying report language, the committee said it had “heard from a wide range of experts that the U.S. military was falling behind technologically and that the current acquisition structure and process were significant factors in the inability to access new sources of innovation.” It further expressed its position that the new undersecretary would “primarily focus on the innovation mission.”
Section 941 – Department organizational strategy
Directs the secretary to formulate an organizational strategy for the department that improves management relationships and processes involving his office, the Joint Chiefs of Staff, the combatant commands, the military departments, and the defense agencies; and improves support to the president and National Security Council in interagency processes. The section further outlines the objectives of the strategy, impediments to be addressed, and their causes to be eliminated and solutions to be achieved. It then directs GAO to conduct a comprehensive assessment of this matter. In accompanying report language the committee expressed its determination that the department must transform itself to carry out its missions more effectively and efficiently. This strategy is to serve as a roadmap for that transformation by describing “the desired future state of the Department's organizational capacities and agility, actions needed to achieve this future state, the priority and sequencing of each action, and the pace at which the Department can implement them.”
Title X – General provisions
Section 1001 – Transfer authority
Structures the general transfer authority provided to the department, limiting that authority to $4 billion, requiring that transfers may only be made to items with a higher priority than the items from which money is transferred, and specifying that transfer authority cannot be used to support an item denied authorization by Congress. This section then provides that transfers between military personnel authorizations do not count toward the $4 billion limit.
Section 1003 – Sense of Senate on sequestration
Expresses the sense of the Senate that sequestration relief must be accomplished for fiscal years 2018-2021, the remaining years of the Budget Control Act discretionary spending caps. Relief should include both defense and nondefense relief, and sequestration relief should be offset through targeted changes in mandatory and discretionary spending and revenues.
Section 1021 – 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 1022 – Facilities in the United States 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 1026 – Prohibiting transfer of Guantanamo detainees to certain countries
Extends for one year the prohibition in last year’s authorization bill on the use of funds to transfer any Guantanamo detainee to Libya, Somalia, Syria, or Yemen.
Section 1028 – Further limitations on transfer of Guantanamo detainees
Adds to current limitations on the transfer of Guantanamo detainees out of U.S. custody a requirement that no such transfer may take place until the secretary provides a report on the person describing his previous terrorist activities, affiliations or associations, and support for attacks against the United States or our allies.
Section 1029 – Prohibit Guantanamo detainee transfers to countries with travel warnings
Prohibits the use of funds to transfer a Guantanamo detainee to any country subject to a Department of State travel warning at the time of transfer. This restriction shall not apply to Saudi Arabia or countries with travel warnings based solely on health-related concerns, a natural disaster, or criminal activity. This provision was added to the bill during committee mark-up by a vote of 16-10.
Section 1036 – Restrict Russian rocket engines in national security satellite launches
Prohibits launching a national security satellite on a space launch vehicle using a Russian rocket engine, or certifying any entity to bid for a contract to provide space launch activities for the evolved expendable launch vehicle program if the entity would use a Russian rocket engine in carrying out the activities. This provision leaves in place the exemption in last year’s authorization bill for the use of up to nine Russian rocket engines for these activities.
Section 1037 – Assured access to space
10 U.S.C. § 2273 makes it U.S. policy to have the capabilities necessary to insert national security payloads into space whenever needed, mainly by sustaining at least two space launch vehicles capable of doing this (in case one were to fail or be otherwise unavailable). Section 1037 of the bill provides that Russian rocket engines may not be counted towards this capability, while also allowing the department to make use of the exemption in last year’s authorization bill for the use of up to nine Russian rocket engines to be counted towards this capability.
Section 1038 – Repeal appropriations language on space launch vehicles
Section 8048 of the fiscal year 2016 defense appropriations act (part of the omnibus) provided that “notwithstanding any other provision of law,” award of EELV service contracts “may be made to a launch service provider competing with any certified launch vehicle in its inventory regardless of the country of origin of the rocket engine that will be used on its launch vehicle.” Section 1038 of this bill repeals that provision.
Section 1076 – Submit unfunded priorities list
Directs the secretary, chairman of the Joint Chiefs, and the military departments to submit their “unfunded priorities” no later than 25 days after the submission of the president’s budget request.
Section 1078 – Independent assessment on force structure to meet future threats
Requires an independent assessment regarding the adequacy and sufficiency of the force structure to meet future threats.
Section 1089 – Limit National Security Council staff
Provides that there shall be no more than 150 professional staff on the NSC, not counting support or administrative positions.
Article III trials for Guantanamo detainees
Noting in report language that charges of conspiracy and material support to terrorism may not be available as charges in the military commissions – due to adverse D.C. Circuit Court rulings – directs the secretary in consultation with others to study options and feasibility for bringing such charges in Article III courts, including the practical and legal considerations of trying such people remotely or locating an Article III court near Guantanamo.
Title XII – Matters Relating to Other Nations
Section 1201 – CERP and ex gratia payments
Extends through fiscal year 2019 the authorization for the Commanders’ Emergency Response Program in Afghanistan. Under CERP, U.S. commanders are authorized and provided funds to respond to local urgent humanitarian relief and reconstruction requirements within their areas of responsibility in Afghanistan. This section also expands the authorization to use funds for ex gratia payments for damage, injury, or death incident to combat operations in Iraq to Afghanistan and Syria.
Section 1204 – Prohibit joint exercises with Cuba
Prohibits participation in joint or multilateral exercises with Cuba until the secretary makes certain assurances with respect to Cuba, such as that the Cuban military has ceased committing human rights abuses, or those indicted for the murder of U.S. citizens in the shoot-down of Brothers to the Rescue planes in 1996 are brought to justice. Exceptions are made for exercises related to humanitarian assistance or disaster response.
Section 1214 – Support Pakistan security
Authorizes use of up to $800 million to reimburse Pakistan for certain activities to enhance the security situation in northwest Pakistan and along the border with Afghanistan. It provides that $300 million of this cannot be used until the secretary certifies Pakistan is taking demonstrable steps to confront the Haqqani Network. The effect of this provision, as noted in committee report language, is to commit the United States to a bilateral relationship focused on stability and security in Pakistan, rather than reimbursements to Pakistan through “coalition support funds” for its support to coalition operations in Afghanistan.
Section 1221 – Extend authorization to support Syrian opposition
Extends to the end of 2019 the authority to assist vetted elements of the Syrian opposition.
Section 1222 – Extend counter-ISIL assistance authorization
Extends until the end of 2019 the authorization 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 the ISIL threat.
Section 1231 – Ukraine security assistance initiative
Extends the authorization to provide security and intelligence assistance to Ukraine and authorizes the use of $500 million in OCO funds for this purpose in fiscal year 2017. Of this amount, $150 million shall be for lethal assistance.
Sections 1243 and 1244 –Taiwan
Section 1243 directs the secretary to carry out a program of exchanges of senior military officers and officials between the United States and Taiwan. The next section expresses the sense of the Senate that the United States should strengthen and enhance its long-standing partnership and strategic cooperation with Taiwan.
Title XV – Authorization for Supplemental Appropriation for OCO
This title authorizes $58.9 billion to be appropriated in fiscal year 2017 for overseas contingency operations, which is $92.5 million more than the president’s request.
Title XVI – Strategic Programs, Cyber, and Intelligence Matters
Section 1602 – Use of allied launch vehicles for assured access to space
Directs Air Force Space Command to develop a plan to use allied launch vehicles to meet the assured access to space policy (see section 1037) in the event such requirements cannot be met using only U.S. launch vehicles.
Section 1640 – Deterrence of adversaries in cyberspace
Requires a report from the chairman of the Joint Chiefs of Staff on the military and nonmilitary options to deter Russia, China, Iran, North Korea, and terrorist organizations in cyberspace.
Section 1661 – GMD testing
Directs the Missile Defense Agency to conduct a flight test of the ground-based midcourse missile defense system at least one a year, with certain exceptions to this requirement.
Section 1665 – Modify missile defense policy
Section two of the National Missile Defense Act of 1999 provides that it is U.S. policy to deploy as soon as technologically possible a missile defense system capable of defending U.S. territory against limited ballistic missile attack. This section of the bill strikes the word “limited.” This provision was added to the bill during committee mark-up by a vote of 16-10.
Division B – Military Construction Authorizations
The committee approved $7.4 billion for military construction, housing programs, and BRAC-related activities, which is essentially the amount of the president’s budget request. This division of the bill authorizes the base closure accounts that fund military construction, environmental cleanup, and other activities required to implement the decisions in previous base closure rounds.
Section 2702 – Deny BRAC authority
President Obama requested authorization to conduct another BRAC round, which this section specifically declines to provide.
Division C – Department of Energy National Security and Other Authorizations
Title XXXI – Department of Energy National Security Programs
This title authorizes appropriations for atomic energy defense activities of the Department of Energy for fiscal year 2017 in accordance with the table outlined in Section 4701 in the amount of $19.2 billion, which is $73 million less than the president’s budget request. Of this amount:
- $12.9 billion is authorized for the NNSA, of which:
- $9.2 billion is for weapons activities, which is essentially equal to the request;
- $1.9 billion is for defense nuclear nonproliferation activities, which is $70 million less than the request;
- $1.4 billion is for naval reactors, which is equal to the budget request; and
- $412.8 million is for the office of the administrator, which is equal to the budget request.
- $5.2 billion is authorized for defense environmental cleanup activities, which is $135 million less than the budget request.
- $791 million is authorized for other defense activities, which is equal to the budget request.
Title XXXIII – Pilot’s Bill of Rights 2
The Pilot’s Bill of Rights 2 was introduced in the Senate at the beginning of last year; reported out of the Committee on Commerce, Science, and Transportation in December; and then passed the Senate by unanimous consent later that month.
Title XXXV – Maritime Administration
This title reauthorizes elements of the Department of Transportation Maritime Administration.
Division E – Military Justice Act of 2016
This title is a comprehensive reform of the military justice system. As the Department explains, last year the Secretary of Defense required a comprehensive review of that system, mainly the Uniform Code of Military Justice and the Manual for Courts-Martial. A military justice review group was convened and made recommendations in the form of a legislative proposal, with accompanying analysis. The committee reviewed those findings and, together with its own work, recommends the Military Justice Act of 2016 here. Section 5442 provides that the president shall designate when these changes are to become effective, which shall be no later than the first day of the first month that begins two years after the date of enactment.
A Statement of Administration Policy has not been issued yet.
A Congressional Budget Office cost estimate has not been issued yet.
The approach to amendments during consideration of this bill is unknown at this time.
Next Article Previous Article