Congress Takes Up Defense Authorization Bill

After an extended conference process that at times threatened to derail over issues like the conservation status of the greater sage grouse, Senate and House negotiators finally reached agreement on the FY17 National Defense Authorization Act (NDAA). The House is expected to consider the conference report on Friday, with the Senate to follow in the next week.

Taxpayers had good reason to be concerned about what a final conference product might look like. The earlier House version had included wasteful spending such as eleven F-35s and a Littoral Combat Ship (LCS) over and above the original requests of the Pentagon, despite the many problems both systems continue to encounter. When the House took up their version of the NDAA, H.R. 4909, NTU issued a key vote alert opposing the bill, primarily because the legislation relied on budget gimmicks to avoid the spending restraint imposed by the 2011 Budget Control Act and threatened to create funding crisis for overseas service members.

A center-right coalition of 18 organizations issued a letter in July urging conferees to reject the arbitrary April 30 deadline for use of Overseas Contingency Operations (OCO) funds in H.R. 4909:

OCO is already a budget gimmick that has created a slush fund for increased spending. This deadline provision raises the budgetary stakes and could lead to increased across-the-board spending. This is not smart fiscal policy, and we urge all conferees to reject this arbitrary deadline.

It would appear that on these matters, taxpayers prevailed. The conference report laudably rejects the F-35 and LCS plus-ups, as well as the April 30 OCO deadline.

Taxpayers also gained ground on key government accountability issues. The conference report rejected an attempt to restrict the Pentagon’s  Freedom of Information Act (FOIA) disclosures and expanded the rights of military whistleblowers.

However, two key elements still make the overall package unpalatable to taxpayers. Going into the conference, a major sticking point between the chambers had been an attempt by the House to add $18 billion over the Pentagon’s FY17 request. This complicated maneuver sought to shift uncapped OCO funding into the base budget, which is subject to a budget cap. Fortunately, the conference report abandoned this gimmicky strategy and reduced the OCO plus-up to $9 billion. This remains too much, but is further blunted by President Obama’s July announcement that more troops than originally planned would be staying on the ground in Middle East and his corresponding request for $5.8 billion in supplemental funding. This puts the conference report’s funding level at $3.2 billion above the Pentagon’s total FY17 request.

Authorizing OCO at numbers above and beyond those stipulated by the Pentagon only exacerbates its slush-fund status– making it less and less likely that the Pentagon will make the tough decisions all federal agencies need to make to reduce our out-of-control spending.

In addition, the final version of the FY17 NDAA contains a permanent expansion of the Berry Amendment that will require the Secretary of Defense to provide only footwear wholly manufactured within the U.S. to members of the Armed Forces. Coincidentally, only the New Balance company fits this rubric. This protectionist measure is a shameful misuse of our national defense policies, benefiting crony capitalists at the expense of service members and taxpayers.

Just because the final product wasn’t as bad as feared, taxpayers can’t breathe a sigh of relief just yet. While the annual NDAA sets out the policies, or authorizations, for the Department of Defense, it’s really in appropriations bills that legislators are playing with real money. How differences between the House and Senate versions of the Pentagon spending bills (including Department of Defense, Military Construction, and Energy and Water bills), and how Congress will address OCO in next week’s continuing resolution remains to be seen. House Armed Services Committee Chairman Mac Thornberry (R-TX) has also made it clear that he hopes the new Administration will ask for supplemental funding (often not paid for) for the Pentagon, with an eye toward further spending increases down the road should Congress reverse course on the Budget Control Act.