Washington Weekly – March 28, 2014

March 28, 2014 

The House and Senate passed different Ukraine aid and Russia sanctions bills, which leaders will have to reconcile before sending them to the President. Both authorize aid to Ukraine and sanction Russia for its takeover of the Crimean peninsula, but the Senate bill contains $100 million for security assistance to central and eastern Europe while the House bill authorizes U.S. international broadcasting to Ukraine and the surrounding region. The House also passed a one-year extension of the “doc fix” and a bill creating new hurdles to presidential designations of national monuments. The Obama administration announced this week that it will extend the March 31 deadline for signing up for health care for people who have begun the process before the deadline but who encounter problems or who have complicated family situations. 

FY2015 Budget

House Budget Committee Chairman Paul Ryan (R-WI) will hold a mark up next week in his committee on an FY15 budget resolution. Ryan’s budget will likely adhere to the $1.014 trillion level agreed to in the Bipartisan Budget Act (BBA) signed into law last December, and may also seek to eliminate the projected deficit by the end of the decade. Republicans have ruled out new tax revenue, so those savings would have to come from spending cuts – either reducing discretionary spending after FY15 or making deeper or faster reductions in entitlement and assistance programs such as Medicare and food stamps. House Majority Leader Eric Cantor (R-VA) said that the budget resolution would be considered on the House floor the week of April 7. Passage of the budget resolution in the House may be difficult, as Republicans will need 217 votes. Out of the 233 Republicans in the House, 62 voted against the BBA in December. Ryan’s FY14 budget resolution also passed by a slim margin last year. Senate Budget Committee Chair Patty Murray (D-WA) has said that her committee will not write a budget since the BBA already set the FY15 discretionary spending limit.

FY2015 Appropriations

House Appropriations Committee Chairman Hal Rogers (R-KY) said that his committee would wrap up their hearings on the FY15 budget and begin mark ups in late April. The Senate is expected to follow a few weeks later with their first committee markup by May 22. The MilCon VA bill could be the first bill the Senate considers in full committee. Senate Majority Leader Harry Reid (D-NV) has set aside four weeks (two in June, two in July) of floor time this summer for the spending bills. While there has been a push to get the 12 spending bills done before the end of the fiscal year (Sept. 30), Republicans who are thinking they may make gains in the Senate in the November elections and Democrats who are up for re-election and want to avoid tough votes may want to put off consideration of the bills until after the election. This is especially true for bills that are typically targets of contentious policy riders or are subjects of disagreement between the parties over the funding levels, such as the Financial Services, Interior-Environment, and Labor-HHS-Education spending bills.

As a reminder, the deadlines for members of Congress to submit their programmatic and language requests for the FY15 appropriations process are as follows:

Appropriations Subcommittee House Deadline Senate Deadline
Agriculture, Rural Development, FDA and Related Agencies Mar. 31 Apr. 4
Commerce, Justice, Science, and Related Agencies Mar. 31 Apr. 11
Defense Apr. 2 May 2
Energy and Water Development, and Related Agencies Apr. 2 Apr. 4
Financial Services and General Government Apr. 2 Apr. 11
Homeland Security Mar. 31 Apr. 4
Interior Apr. 4 Apr. 9
Labor, HHS, Education, and Related Agencies Apr. 4 Apr. 4
Legislative Branch Mar. 17 Apr. 3
Military Construction, Veterans Affairs, and Related Agencies Mar. 17 Apr. 10
State, Foreign Operations, and Related Programs Apr. 4 Apr. 9
Transportation, HUD, and Related Agencies Apr. 2 Apr. 4

Cybersecurity

The Senate Homeland Security and Government Affairs Committee held a hearing this week on Strengthening Public-Private Partnerships to Reduce Cyber Risks to Our Nation’s Critical Infrastructure. At the hearing, committee Chairman Tom Carper (D-DE) said that the Administration’s recently released NIST cybersecurity framework is a blueprint or “living document” that will be continually updated; and commended the efforts of those trying to use the framework. However, he said that much more needs to be done and that he continues to believe that bipartisan legislation is the best long-term solution. Carper has been in discussions with Ranking Member Tom Coburn (R-OK) and DHS in an attempt to produce legislation that would do the following:

  1. Modernize the way we protect our federal networks from cyber threats. (Federal Information System Management Act (FISMA))
  2. Clarify and strengthen the public private partnerships for the homeland security industry to have regarding cybersecurity.
  3. Make information sharing easier so that companies can share best practices and threat information with each other and with the federal government.
  4. Continue to develop the next generation of cyber professionals.

The primary reason Congress has yet to enact comprehensive cybersecurity legislation is differences over how much liability protection to grant businesses to get them to share cyber threat information with the government. Democrats prefer more targeted liability protection as they contend it would provide sufficient protection to enable businesses to share cyber threat information, and that businesses could potentially exploit broad liability protection for other matters. Proponents of broad liability protection, mainly Republicans, argue that businesses would not feel adequately protected under limited liability, and that their legal counsel would caution them that they could still be subject to legal action.

At the hearing, Sen. McCain (R-AZ) expressed his concerns that when the Senate is considering cybersecurity legislation they will bump up against the same issues they have been addressing in the past. McCain has been advocating for the creation of a select committee to overcome the jurisdictional issues in the Senate.

The SEC hosted a cybersecurity roundtable this week and discussed the cybersecurity landscape and cybersecurity issues faced by exchanges and other key market systems, broker-dealers, investment advisers, transfer agents, and public companies. They also discussed industry and public-private sector coordination efforts relating to assessing and responding to cybersecurity issues. At the roundtable, Commissioner Luis Aguilar recommended that the SEC create a new cybersecurity task force. Larry Zelvin, the head of DHS’ National Cybersecurity and Communications Integration Center, said companies are mostly fearful of disclosing cyber incidents and generally only push information to the government after a problem has persisted for days. The roundtable kicked off a five-week public comment period on the issues discussed at the event.

Homeland Security

The House Homeland Security Subcommittee on Oversight and Management Efficiency marked up H.R. 4228, the DHS Acquisition Accountability and Efficiency Act this week. The bipartisan bill was introduced in the House on March 13 and has been endorsed by the Project Management Institute, the Security Industry Association, the Professional Services Council, and the Business Executives for National Security. The bill gives the agency’s undersecretary for management the power to approve, stop, change, or cancel any major acquisition program, and to review how such purchasing decisions are made. The bill creates an acquisition review board and requires quarterly reviews, multiyear acquisition strategies and congressional notification if the acquisition schedule is changed. Chairman Jeff Duncan (R-SC) said at the hearing, “Although DHS has taken steps to implement an acquisition policy with elements of commercial best practices and has put mechanisms in place to review programs, it has routinely failed to hold programs accountable. This must change.” The full committee is expected to consider and mark up the bill next month.

The panel adopted a few amendments including one that would require every major acquisition program to have a department-approved program baseline before continuing through the acquisitions process, allowing the CIO to provide recommendations to the acquisition review board. They also adopted two amendments offered by Rep. Beto O’Rourke (D-TX). One would require that each program analyze its expected security benefit and how the program or system would be measured. O’Rourke’s second amendment would require program managers to have a life cycle cost estimate and a master schedule for the program’s implementation.

Political Updates

Rep. Mike Rogers (R-MI) announced this morning that he is not seeking re-election to Congress, ending a 14-year career in Washington. Rogers is the chairman of the House Intelligence Committee. Post retirement, Rogers will join Cumulus, a talk radio company. While Rep. Mac Thornberry (R-TX) is next in line on the committee in seniority, he is considered the frontrunner to take over as chairman of the House Armed Services Committee (HASC) next year. If Thornberry becomes HASC chairman, Rep. Jeff Miller (R-FL) would be the frontrunner to take the Intelligence gavel. Miller is currently chairman of the House Veterans Affairs Committee. Rep. Devin Nunes (R-CA) and Rep. Peter King (R-NY) have both expressed interest in the position. Rep. Dutch Ruppersberger (D-MD), the ranking Democrat on the committee may also be leaving the committee at the end of the year because his term on the panel ends. Mr. Ruppersberger said whether he can stay past this term is up to House Minority Leader Nancy Pelosi (D-CA).

Secretary of Defense Chuck Hagel announced several Department of Defense Senior Executive Service appointments and reassignments this week:

  • Navy Rear Admiral Margaret “Peg” Klein, Senior Advisor for Military Professionalism, reporting directly to Sec. Hagel on issues related to military ethics, character, and leadership
    James P. Woolsey president, Defense Acquisition University, Office of the Under Secretary of Defense (Acquisition, Technology and Logistics)
  • Thomas M. Brady, director, Department of Defense Education Activity, Office of the Under Secretary of Defense (Personnel and Readiness
  • Guy C. Beougher, executive director, operations and sustainment, Defense Logistics Agency
  • Iram A. Ali, special assistant to the secretary of defense for White House Liaison

Next Week

In addition to a few bills on the suspension calendar and completing action on the Ukraine aid measure, the House will consider HR 2575, the Save the American Workers Act of 2014, a bill amending the Internal Revenue Code to redefine “full-time employee” from 30 hours to 40 hours a week, for purposes of the mandate requiring employers to provide health care coverage for their employees. The House will also consider HR 1874, the Pro-Growth Budgeting Act of 2013, a bill requiring the Congressional Budget Office to prepare a macroeconomic impact analysis for each major bill or resolution reported by any congressional committee (except appropriations). The Senate will complete work on the “doc fix” bill and continue debate on an extension to unemployment benefits.

Washington Weekly – March 14, 2014

March 14, 2014

The House passed a bill requiring the Attorney General to report to Congress when federal officers refrain from enforcing laws as well as a bill authorizing Congress to pursue civil action against the Executive Branch for not executing laws. The House also passed the Water Rights Protection Act, a resolution expressing support for the people of Ukraine, and a bill providing a long-term fix for Medicare’s physicians’ pay problem offset by a five-year delay of the Affordable Care Act’s individual mandate. While the current “doc fix” expires on March 31, the Senate is unlikely to agree to the House bill because of the offset. A short-term extension might be needed. The Senate passed Sen. McCaskill’s (D-MO) sexual assault prevention in the military bill and a bill reauthorizing the Child Care and Development Block Grant Act. The Senate also passed the Homeowner Flood Insurance Affordability Act (HR 3370), which now goes to the President for his signature.

FY2015 Budget

The White House released part two of its $1.014 trillion FY15 budget request on Monday, which included the budget’s historical tables and analytical perspectives. Administration officials were on the Hill this week testifying and defending the President’s FY15 budget request.

OMB released two sequestration reports this week. While the Balanced Budget Act (PL 113-67) Congress passed in December averted sequestration in FY15 for discretionary funding, the sequester will still cut almost $18B from mandatory spending programs. These reports outline what those mandatory cuts will look like for each non-exempt budget account with direct spending. The Budget Control Act (PL 112-25) calls for sequestration of almost $18B in defense and non-defense direct spending in FY15. The reports can be found at:

http://www.vantagepointstrat.com/wp-content/uploads/2014/03/sequestration_order_report_march2014.pdf

http://www.vantagepointstrat.com/wp-content/uploads/2014/03/sequestration_preview_report_march2014.pdf

FY15 Appropriations

House and Senate Appropriations Chairs, Rep. Hal Rogers (R-KY) and Sen. Barbara Mikulski (D-MD) have set aggressive timetables for marking up their FY15 appropriations bills this year. They would like to have them enacted into law by Oct. 1. Both will begin marking up their bills in subcommittee in May, with floor action for some bills starting in June. The order of consideration has not been decided.

Mikulski said this week that the Transportation HUD bill will likely be among the first ones her panel marks up. Defense may be considered later or last in the Senate as appropriators have not received the Administration’s FY15 Overseas Contingency Operations (OCO) budget request. The budget included a $79.4 billion placeholder for OCO until DOD can better determine the scope of the enduring US presence in Afghanistan. During several hearings this week, Pentagon officials were asked when they could expect the FY15 OCO budget. DOD Comptroller Robert Hale responded that they wouldn’t be able to finalize the budget details until the bilateral security agreement is complete. This is not likely until after the elections on April 5. The Administration is expecting the next president of Afghanistan to sign the agreement. If there is no winner in April, a runoff would be held in August.

In the House, the Legislative Branch and MilCon/VA may be considered first, and Labor HHS Education likely would go last. While it has been reported that Rogers and Mikulski may pre-negotiate the subcommittee FY15 allocations, otherwise known as 302(b)s, that decision has not yet been made.

As a reminder, the deadlines for members of Congress to submit their programmatic and language requests for the FY15 appropriations process are as follows:

House Appropriations Subcommittee Deadline
Agriculture, Rural Development, FDA and Related Agencies Mar. 31
Commerce, Justice, Science, and Related Agencies Mar. 31
Defense Apr. 2
Energy and Water Development, and Related Agencies Apr. 2
Financial Services and General Government Apr. 2
Homeland Security Mar. 31
Interior Apr. 4
Labor, HHS, Education, and Related Agencies Apr. 4
Legislative Branch Mar. 17
Military Construction, Veterans Affairs, and Related Agencies Mar. 17
State, Foreign Operations, and Related Programs Apr. 4
Transportation, HUD, and Related Agencies Apr. 2

 

Cybersecurity

DHS named a new leadership team in the National Protection and Programs Directorate’s Office of Cybersecurity and Communications:

  • Andy Ozment

Assistant Secretary for Cybersecurity and Communications

In addition to his recent role as Senior Director for Cybersecurity at the White House, Ozment has previously served in operational and policy roles at both DHS and the DoD.

  • Air Force Brigadier General Gregory J. Touhill

Deputy Assistant Secretary for Cybersecurity Operations and Programs

Touhill will focus on the development and implementation of operational programs designed to protect government networks and the critical systems that run power plants and utilities.

  • Bobbie Stempfley

Deputy Assistant Secretary for Cybersecurity Strategy and Emergency Communications

Stempfly will oversee emergency communications, developing and implementing strategy and policy efforts, as well as focusing on building on our partnerships with the public and private sectors, and the general public.

Homeland Security

The House Homeland Security Subcommittee on Oversight and Management Efficiency Chair Rep. Jeff Duncan (R-SC) introduced legislation this week to reform DHS’ acquisition management. Reps. Ron Barber (D-AZ) and Steve Daines (R-MT) were cosponsors of the bill, H.R. 4228, the DHS Acquisition, Accountability and Efficiency Act. The bill requires greater oversight of DHS’ purchasing process and reforms DHS’ acquisition process by:

  • Authorizing the Department’s Chief Acquisition Officer, the Undersecretary for Management, to approve, halt, modify or cancel major acquisition programs as needed;
  • Requiring that every major acquisition program have an approved Acquisition Program Baseline (APB) document;
  • Codifying the Acquisition Review Board and requiring the board to validate the documents – including the APB – and review the cost, schedule and performance objectives of major acquisitions;
  • Requiring a Multiyear Acquisition Strategy be included in each Future Years Homeland Security Program;
  • Authorizing the Chief Procurement Officer to serve as the main liaison to industry and to oversee a certification and training program for DHS’s acquisition workforce;
  • Compelling DHS to submit to Congress major acquisition programs that fail to meet cost, schedule or performance metrics through quarterly status and accountability reports;
  • Directing the Department to find ways to streamline the acquisition process and strategically address issues regarding bid protest without creating any new offices or programs; and
  • Instructing DHS to eliminate unnecessary duplication.

A copy of the bill can be found at:

http://www.vantagepointstrat.com/wp-content/uploads/2014/03/031314-HR4228.pdf

Political Updates

Republican David Jolly defeated Democrat Alex Sink in the special election for Florida’s 13th District. Jolly was sworn in on Thursday and succeeds Rep. Bill Young (R-FL), who passed away in October. The district is a true swing district that was won by President Obama in 2012. Jolly won the race 48.5% to 46.6% running as an opponent to Obamacare while Sink promised to work across the aisle bringing Democrats and Republicans together. This was an opportunity for both parties to test out their attack lines for the November election. Jolly will have to run for re-election in November.

Next Week

The House and Senate are in recess next week. The Senate will resume consideration of a bill to provide aide to Ukraine when they return the week of March 24. They will also take up an emergency unemployment compensation extension bill, “doc fix” legislation, and nominations.

Washington Weekly – March 7, 2014

March 7, 2014

The House passed legislation making Ukraine eligible for US loan guarantees, delaying the implementation of penalty fees for Obamacare, limiting environmental reviews for construction projects, prohibiting the FEMA Director from raising flood insurance rates, and limiting the EPA Administrator from establishing performance standards for greenhouse gas emissions from fossil fuel-fired electric utilities. The Senate completed work on several nominations, but rejected President Obama’s nominee to be assistant attorney general for the Justice Department’s Civil Rights Division. The Senate also began consideration of two bills on sexual assault in the military and a bill to impose new educational, health and safety standards on child care facilities that receive federal funding.

FY2015 Budget

The White House released its  $1.014 trillion FY15 budget request (compared to $1.012T in FY14) on Tuesday and defended the request in several hearings on Capitol Hill this week. The information released this week by the Administration included proposals, summary tables, agency-level information and the detailed appendix. The budget’s historical tables and analytical perspectives will be released next week.

The budget adheres to the discretionary spending levels included in the Balanced Budget Act (BBA) (PL 113-67) Congress passed in December, but the administration also proposes an additional $56 billion in discretionary spending split evenly between defense and non-defense programs. This Opportunity, Growth, and Security Initiative would fund investments aimed at biomedical research, clean energy programs, preschool programs, infrastructure, national parks, veterans’ hospitals, modernization of defense weapons systems, restoration of cuts to readiness accounts, improvement of military facilities, etc. House and Senate Appropriations Chairs, Rep. Hal Rogers (R-KY) and Sen. Barbara Mikulski (D-MD) said that their committees would adhere to the top line funding level set in the BBA effectively nullifying any FY15 supplemental funding for the President’s initiative.

The President’s budget also included a four-year transportation bill, immigration overhaul, and a continued press for a corporate tax overhaul netting $650 billion in new revenues. And the FY15 plan recommends cuts to entitlement programs such as Medicare and Medicaid by $402 billion over the next 10 years.

Defense

The FY15 defense budget request includes a request of $495.6 billion for base defense programs, which is 0.1% or $400 million less than the enacted FY14 appropriation and is consistent with the current budget caps. The Opportunity, Growth, and Security Initiative requests an additional $26 billion in FY15 defense spending to address significant readiness and modernization challenges. The budget also requests an additional $115 billion in FY16 to F19 to meet defense requirements. However, there is some confusion over what the additional $115 billion would go towards. DOD officials contradicted their statements that the additional funding would go towards bolstering manpower and meeting a statutory requirement for 11 aircraft carrier battle groups. Even with the additional $115 billion, DOD would not be able to meet this requirement.

The FY15 Defense budget includes $167.2B for military pay and benefits (including health care and retirement benefits); $77B for civilian pay and benefits; $154.3B for procurement, RDT&E, and new facilities construction; and $97.1B for other operating costs. The biggest savings in this year’s budget come from personnel, particularly the Army, which will be pared back to its smallest size in 74 years. The budget includes $199B for Operations and Maintenance ($4B over FY14), $91B for Procurement (down $94B from FY14); and a 1% increase in basic pay, a 1.5% increase in housing allowances, and a 3.4% increase in subsistence allowances.

As for the Overseas Contingency Operations (OCO) budget, the department included a $79.4B placeholder as the administration is still determining its post-2014 presence in Afghanistan and doesn’t know whether any troops will remain there after this year. This is equal to last year’s request. DOD Comptroller Robert Hale said that the final OCO request will be smaller than the placeholder and will be used to pay for US troops in Afghanistan plus funding to reset equipment and support the Afghan National Security Forces.

DOD also released the Quadrennial Defense Review (QDR), which lays out the military’s long-term strategy and anticipated threats on Tuesday. The QDR outlines DOD’s top strategic priorities: defending the homeland against all threats; building security globally by projecting U.S. influence and deterring aggression; and, remaining prepared to win decisively against any adversary should deterrence fail. House Armed Services Committee Chairman Buck McKeon (R-CA) immediately rejected the QDR saying that he will introduce legislation requiring the Pentagon to rewrite and resubmit the document.

Homeland Security

The President requested $38.2B in non-disaster discretionary funds for the Department of Homeland Security in FY15. This is 2.8% less than last year. With regards to cybersecurity the FY15 DHS budget includes a total of $1.25 billion, with $549M to support continued implementation of the Einstein managed security service; $66M for the National Protection and Programs Directorate (a $10M increase over FY14); and $680M for the National Institute of Standards and Technology (an increase of $29M over FY14). Cybersecurity funding requested is for resources to detect malicious traffic that targets civilian government networks; to support cyber and cyber-enabled investigations carried out by ICE and the Secret Service in areas such as cyber economic crime, identity theft, theft of export controlled data, and child exploitation; and to manage computer forensics programs. The DHS FY15 budget also includes funding for 4,000 additional Customs and Border Protection officers, $1 billion in assistance to state and local governments for firefighters and emergency-management personnel and $10 million to help immigrants on the path to citizenship.

FY15 Appropriations

As a reminder, the deadlines for members of Congress to submit their programmatic and language requests for the FY15 appropriations process are as follows:

House Appropriations Subcommittee Deadline
Agriculture, Rural Development, FDA and Related Agencies Mar. 31
Commerce, Justice, Science, and Related Agencies Mar. 31
Defense Apr. 2
Energy and Water Development, and Related Agencies Apr. 2
Financial Services and General Government Apr. 2
Homeland Security Mar. 31
Interior Apr. 4
Labor, HHS, Education, and Related Agencies Apr. 4
Legislative Branch Mar. 17
Military Construction, Veterans Affairs, and Related Agencies Mar. 17
State, Foreign Operations, and Related Programs Apr. 4
Transportation, HUD, and Related Agencies Apr. 2

Political Updates

DHS Sec. Jeh Johnson announced President Obama’s intent to nominate Vice Admiral Paul F. Zukunft as the 25th Commandant of the US Coast Guard. Zukunft is a 37-year veteran of the Coast Guard whose experience includes coordinating federal response to the Deepwater Horizon spill. He currently commands the US Coast Guard Pacific Area.

Primaries were held in Texas this week and Sen. John Cornyn won easily defeating conservative Rep. Steve Stockman. Cornyn faces no serious Democratic challenger in his bid for a third term. Rep. Ralph Hall (R-TX), who at 90 years old is the oldest sitting member of the House of Representatives in history, was forced into a run-off contest in the primary. Hall will face off with former U.S. Attorney John Ratcliffe, who is 48, in the fight to represent the northeast Texas 4th District. The primary run-off contest is set for May 27.

Next Week

In addition to considering a resolution expressing support for the people of Ukraine, the House will consider legislation requiring the Attorney General to report to Congress when federal officers refrain from enforcing laws, authorizing Congress to pursue civil action against the Executive Branch for not executing laws, placing prohibitions on the Secretaries of the Interior and Agriculture with respect to privately held water rights, and repealing the Medicare sustainable growth rate, otherwise known as the “Doc Fix” bill. The Senate will vote on Sen. McCaskill’s sexual assault in the military bill and resume consideration of the child care block grants legislation.

Washington Weekly – February 28, 2014

February 28, 2014

The House passed several bills under suspension this week including the Federal Information Technology Acquisition Reform Act (FITARA); a bill to legalize cell phone unlocking; a private property rights act; a bill barring the IRS from asking questions regarding religious, political or social beliefs; a bill making changes to the federal rule-making process; a bill authorizing the Chairperson of the Financial Stability Oversight Council to set aside regulations issued by the Consumer Financial Protection Bureau; and the Unfunded Mandates Information and Transparency Act. The Senate set aside a proposal to increase to the federal minimum wage, and failed on a procedural motion on a bill to extend and expand health care, education, and job-assistance programs and benefits for veterans.

FY2015 Budget

The Chairman of the Senate Budget Committee, Sen. Patty Murray (D-WA) is expected to decide next week whether her committee will mark up a FY15 budget resolution. Murray believes that another resolution is unnecessary as the Balanced Budget Act  (PL 113-67) passed by Congress in December already sets the spending caps for FY15. She is also concerned that pursuing another budget resolution could cause confusion for appropriators and may renew partisan battles. Rep. Paul Ryan (R-WI), Chair of the House Budget Committee still intends to write a FY15 budget resolution

Two of the biggest budget questions for FY15 have already been settled – top-line discretionary spending is locked in at $1.014 trillion and defense funding is capped at $521.4 billion. The only question that remains is how members will divide the $492.5 billion domestic discretionary budget.

The President will unveil his FY15 budget request next Tuesday, which is expected to stick to the $1.014 trillion cap. Historical tables and analytical perspectives will be released the following week. The President will also propose a $56 billion “Opportunity, Growth and Security Initiative” aimed at funding research, manufacturing, defense, education, and other priorities. The administration will also offer a plan to pay for this initiative by closing tax loopholes and changing spending programs.

FY15 Defense Budget Briefing

Defense Secretary Chuck Hagel previewed the FY15 $496 billion Defense Department budget request on Monday and briefed the House and Senate “Big Eight” (Armed Services committees and Defense Appropriations subcommittees Chairs and Ranking Members) before the press conference. While the Pentagon request adheres to the cap for FY15, the department’s five-year budget plan exceeds spending limits in place for FY16-19 by a total of $115 billion. The FY15 request also includes an additional request of $26 billion for the Opportunity, Growth and Security Initiative. The budget calls for further reductions in troop strength and force structure in all services, active and reserve; terminates or delays some modernization programs; protects higher priorities in procurement, research and development; and slows the growth of military compensation costs.

Some specific FY15 budget recommendations are as follows:

  • BRAC in 2017
    • European Infrastructure Consolidation Review this spring to recommend further cuts
  • Force Structure and Modernization Decisions
    • Preserves all three legs of nuclear triad
    • Special Ops forces grow from 66k today to 69.7k
  • Air Force
    • Protects funding for the new bomber, the Joint Strike Fighter, and the new refueling tanker.
    • $1 billion for next-generation jet engine technology
    • Reduce the number of tactical air squadrons including the entire A-10 fleet replacing them with the F-35 in the early 2020s.
    • Retire the U-2 in favor of the unmanned Global Hawk system.
    • Reduce around-the-clock combat air patrols of Predator and Reaper aircraft from 65 to 55.
  • Navy/Marine Corps
    • Maintain 11 carrier strike groups
    • Continue buying two destroyers and two attack submarines per year, as well as one additional Afloat Staging Base.
    • For the LCS, no new contract negotiations beyond 32 ships will go forward.
    • Navy will submit alternative proposals to procure a capable and lethal small surface combatant, generally consistent with the capabilities of a frigate. Navy will consider a new design, existing ship designs, and a modified LCS.
    • Marines number around 190,000 today, and they will draw down to 182,000.
  • Army
    • Today 520,000 active-duty soldiers, planned originally to reduce to 490,000, but will further reduce to 440k-450k.
    • Army National Guard and Reserves draw down from 355,000 and 205,000 to 335,000 (Guard) and 195,000 (Reserves).
    • Terminate the Ground Combat Vehicle program. Redirect funds to next-generation platform.
    • Transfer Apache attack helicopters from Guard to active duty, and transfer Blackhawk helicopters to the Guard. Active duty to retire Kiowas and “JetRanger” training helicopters.
  • Military Compensation
    • 1% raise in basic pay for military personnel – except general and flag officers whose pay is frozen for one year.
    • Tax free housing allowances reduced from 100% to 95% with 5% out of pocket contribution.
    • No reimbursement for renters insurance.
    • Reduce direct subsidies to military commissaries by $1B but not shutting them down. Overseas commissaries will continue to receive subsidies.
    • TRICARE health insurance programs – consolidate plans, and adjust deductibles and co-pays. Retirees and some active duty to pay more for deductibles and co-pays.
    • Awaiting results of the Military Compensation and Retirement Modernization Commission’s report before pursuing other reforms in this area.

FY15 Appropriations

All of the House Appropriations subcommittees have set their deadlines and issued their instructions to members of Congress for submitting programmatic and language submissions for the FY15 appropriations process. The deadlines for each subcommittee are as follows:

House Appropriations Subcommittee Deadline
Agriculture, Rural Development, FDA and Related Agencies Mar. 31
Commerce, Justice, Science, and Related Agencies Mar. 31
Defense Apr. 2
Energy and Water Development, and Related Agencies Apr. 2
Financial Services and General Government Apr. 2
Homeland Security Mar. 31
Interior Apr. 4
Labor, HHS, Education, and Related Agencies Apr. 4
Legislative Branch Mar. 17
Military Construction, Veterans Affairs, and Related Agencies Mar. 17
State, Foreign Operations, and Related Programs Apr. 4
Transportation, HUD, and Related Agencies Apr. 2

House Defense Authorization Timeframe

The House Armed Services Committee (HASC) is working towards passing the FY15 National Defense Authorization Act (NDAA) by early June this year. Members who wish to submit programmatic or language requests must do so by COB March 10th. Despite the President’s budget request being a month behind schedule, the committee hopes to have subcommittee markups the last week of April, full committee markup the following week, and floor action the week of May 19th. HASC Chairman Buck McKeon’s (R-CA) goal is to have the bill conferenced and done before the House and Senate adjourn in October for the mid-term elections.

Tax Reform

House Ways and Means Committee Chairman Dave Camp (R-MI) released a discussion draft of his tax reform framework this week. Camp is term-limited as chairman and may be looking to put his stamp on a tax overhaul effort that is likely to not progress until the next Congress. Camp’s plan would reshape policy from poverty aid to accounting mechanisms for multinational corporations, and cut tax rates for individuals and corporations while scaling back tax breaks like the mortgage interest deduction. The Joint Committee on Taxation scored the plan and said it would bring in an additional $700 billion in revenue over 10 years. House Speaker John Boehner (R-OH) made no promises when asked about taking action on Camp’s tax-reform plan as Republican leaders have little interest in debating tax reform before the fall elections. Details on Camp’s plan can be found at: http://tax.house.gov.

Cybersecurity

NIST’s National Cybersecurity Center of Excellence (NCCoE) proposed two new building blocks this week and is inviting the public to comment on the draft documents. Building blocks are cybersecurity solutions that the NCCoE develops in collaboration with small groups of vendors and are meant to be applicable across multiple industry sectors. The comment period on these two new building blocks is open until March 28, 2014.

The first new building block is the Attribute Based Access Control (ABAC) Building Block, which proposes an identity management system that allows multiple enterprises to exchange and validate employee attributes such as title, division, certifications, and training. This allows an organization to grant a non-employee access to a range of corporate resources using risk-based policy enforcement. (http://csrc.nist.gov/nccoe/Building-Blocks/abac.html)

The second is the Mobile Device Security for Enterprises Building Block, which proposes a system of commercially available technologies that provide enterprise-class protection for mobile platforms that access corporate resources. This building block will examine an array of security technologies that can enable enterprise risk management for users to work inside and outside the corporate network with a securely configured mobile device. (http://csrc.nist.gov/nccoe/Building-Blocks/mds.html)

Two other building blocks announced previously by NIST include the Trusted Geolocation in the Cloud (http://csrc.nist.gov/nccoe/Building-Blocks/Trusted-Geolocation-in-the-Cloud.html) and the Continuous Monitoring: Software Asset Management (http://csrc.nist.gov/nccoe/Building-Blocks/conmon.html).

Political Updates

Rep. John Dingell (D-MI), the longest serving member of Congress in history, announced that he would not seek reelection this year. Dingell, 88, has served in the House of Representatives since 1955 and is on the Energy and Commerce Committee. Dingell’s wife, Democratic National Committee member and former General Motors executive Debbie Dingell, announced today that she would run for his seat. The seat is safely Democratic.

Rep. Ed Pastor (D-ZA) also announced he will retire at the end of his term after 23 years in Congress. Pastor is on the Appropriations (Ranking Democrat, Transportation HUD subcommittee) and Intelligence Committees.

Next Week

The House will take up a flood insurance bill, legislation that would eliminate the individual mandate penalty under ObamaCare for the rest of 2014, a bill aimed at streamlining National Environmental Policy Act compliance, and a bill that would apply to all states a Bush Administration rule regarding coal mining and buffer zones around streams. They may also take up a bill blocking EPA’s greenhouse gas regulations for future power plants. The Senate will take up a number of nominations and begin consideration of the Child Care and Development Block Grant Act.