The eagerly anticipated CROmnibus, that will provide funding for the federal government for fiscal year 2015, has finally been released.
It’s worth noting how we got here. The $1.014 trillion funding level was established in December of 2013 by the Bipartisan Budget Act. So, despite a head start, by the end of the fiscal year 2014 (September 30, 2014) the House had passed just seven of the dozen annual spending bills. The Senate had passed zero. Neither chamber even wrote a Labor/HHS spending bill. So a continuing resolution was adopted to fund the government until December 11, 2014. The plan was to enact an omnibus in the interim that contained all one dozen bills. After the Executive Order on immigration, the decision was made to include eleven bills and provide shorter term funding for the Department of Homeland Security (through Feburary 27th).
Now, very shortly before the current continuing resolution expires, the FY15 CROmnibus was posted on the House Rules Committee web site. Taxpayers for Common Sense will be scouring the bill and posting our findings here. Come back often to get updates and stay informed.
One Of These Days These Boots Are Gonna Walk All Over You! (December 15, 12:45pm)
The Small Business Administration (SBA) sets the number of employees a company may have in various lines of work and still be considered a “small business.” This should be a fairly non-controversial function but often is not due to the brisk competition for government contacts under small business set aside programs.
In 2012, new standards were put in place by SBA that doubled the size of a “small business” in footwear manufacturing from 500 to 1000 employees. And this got the Bates division of Wolverine Worldwide, based in Michigan, ready to march on Washington. This summer the Michigan Congressional delegation took the issue to the SBA but were, it seems, not satisfied by its response.
How do we know? Because in the Department of Defense section of the CROmnibus, we found this gem:
“The agreement notes that the Small Business Size Standards adopted by the Small Business Administration on October 1, 2012 could have a detrimental impact on the domestic supply base for military footwear. The Defense Logistics Agency (DLA), which is responsible for managing the acquisition of military footwear, aims to maintain the health of this supply base and preserve surge capacity for times of extreme demand. It is acknowledged that both of these goals may be affected by the new size standards. The agreement directs the Director of the Defense Logistics Agency to submit a report to the congressional defense committees not later than 60 days after the enactment of this Act that provides an estimate of the impact of the new size standards upon the supply base for military footwear, the potential impact to maintaining adequate surge capacity within the supply base, and the steps that DLA will take to ensure that both this surge capacity and the overall health of the supply base will be maintained under the new size standards for the footwear industry.”
And, like the report on lightweight carbon fiber composite ladders we found earlier this year in the House version of the Defense policy bill, Congress is asking for a report and, in the same breath, telling the agency what its answer should be.
Stocking Stuffers in Pentagon Spending
(December 12, 1:30pm)
The Pentagon portion of the CROmnibus is liberally sprinkled with funding for programs the Pentagon either wants to end or never asked for in the first place. These are just the programs where the Pentagon requested NO funding, and the Congress funded anyway.
Grand total: $3.38 billion. That’s a lot of candy canes.
We’ll keep updating this table as we find them, but here are just a few stocking stuffers for good little defense contractors.
Memo to Secretary of Defense: We’ve got some good news and we’ve got some bad news…(December 11, 4:25pm)
Yesterday we wrote about the provisions in the Pentagon portion of the CROmnibus that cut funding for civilian employees. Plans to hire people were labeled “unjustified” and scuttled.
This piqued our interest and we took a look at the section of the bill that funds the Office of the Secretary of Defense – versus those sections of the bill funding the military services, the Joint Chiefs of Staff, etc. Of the sixteen individual line items called out for changes from the budget request, eleven were cut by the Congress.
Among the increases – $8 million to get the Pentagon ready for an audit.
Among the cuts – all funds that could possibly be used to support a future round of base closure. Sigh.
A classic good news/bad news story.
National Sea-Based Deterrence Fund (December 11, 3:00pm)
As we have been talking and writing about, the Pentagon policy bill included a new funding line for the next generation of ballistic missile submarines. This bizarre idea would mean the new submarine would not be funded by the Navy but, instead, in the so-called “Defense wide” budget. The “reasoning” behind this is that, supposedly, submarines are a national asset.
Where does faulty logic like this end? Aren’t silo-based ballistic missiles also national assets? How about long range bombers? Tanks?
Our thoughts on this are pretty simple – the Navy budget is where Navy weapon systems belong.
For this reason we’re very pleased to see the Appropriations Committees – the only committees that can actually cause checks to be written – did not also create such a fund in the Defense-wide portion of the CROmnibus.
We’ll take our wins where we can get them in this massive legislation.
Aircraft Procurement: More, More, More (December 11, 10:00am)
As we wrote earlier, the F-35 makes out like a bandit in the Pentagon portion of the CROmnibus. Already the most expensive procurement program in the bill (when you aggregate the 34 planes for the Air Force, Navy and Marine Corps) the money for another 4 planes totals very close to an additional half a billion dollars.
In many of our writings about the F-35, we point out that current aircraft in the United States arsenal are among the most capable in the world. This includes the F-15E, F/A-18, EA-18G, F-16, F-18, and A-10. And our analysis shows that upgrading and maintaining all of these aircraft would cost considerably less than the massive price tag for the F-35.
So, while we were glad to see additional funding for F-15 radar modernization ($115 million), keeping A-10s in the active Air Force ($320 million), and buying more EA-18Gs ($1.5 billion), we were disappointed to see a long series of cuts to Navy F-18 modernization programs – although Marine F-18s will be modernized. Confusing, we know.
But we would like to point out some simple math: The Pentagon can only save money by modernizing existing aircraft if they don’t also buy the F-35.
Modernizing existing aircraft and buying the F-35 is the exact opposite of fiscal discipline. And it certainly doesn’t show any inclination in the Congress to actually make a decision.
Civilian Compensation Increases Called “Unjustified”
Because of all the hue and cry about potential changes to military compensation, at TCS we did a “compensation” word search of the Defense portion of the CROmnibus. And what we found wasn’t what we expected.
In almost every instance where “compensation” occurs in the language, the words “unjustified” or “justification lacking” appears nearby. In other cases, “hiring lag.” But in all cases, these discouraging words are directed at civilian employees of the Pentagon.
So, under the overall Operations and Maintenance title we find, “The agreement supports a strong civilian workforce for the Department of Defense. However, the fiscal year 2015 budget request substantially overestimates the number of civilians that will be employed during fiscal year 2015.” And this verbiage precedes a cut of $192.3 million from the civilian personnel accounts.
At TCS we’re glad to see some fiscal discipline at the Department of Defense. But in this case the money is just being shifted to some other program, allowing Congress to plus up the programs it likes while still staying within the budget caps. And we do note, with interest, that this language differs sharply from how senior Members of Congress recently referred to the modest changes in military compensation proposed by the Administration.
But we’re sure all those civilian employees are heartened to know the Congress supports a strong civilian workforce.
Overseas Contingency Operations (OCO) accounts
Overall, the bill appropriates $63.9 billion for OCO. And, as we’ve written before, this level of funding far exceeds most federal departments. Only the full Department of Defense, the Department of Health and Human Services, the Department of Education, and the Department of Veterans Affairs exceed the amount Congress has agreed to spend on OCO.
This section of the bill will bear deeper analysis, but the following things jump out at us:
- The new Counterterrorism Partnerships Fund received $1.3 billion. This doesn’t sound like good news until you consider that this is a $2.7 billion reduction from the original request.
- Similarly, Congress gave the European Reassurance Initiative a mere $175 million. This appears to be a reduction of $750 million from the request. Not so fast. In fact, this is only a reduction to the OCO account. $635 million simply migrates to the Operations and Maintenance account of the base budget for an aggregate reduction of $115 million from the request. We’d like to see this turn into a trend, as long as the base budget stays within the caps.
- Other procurement, Navy was reduced by more than half to $123 million.
- Classified programs for the Air Force receive a staggering $3.6 billion – about $175 million more than the $3.4 billion request. That means roughly 5% of the overall OCO request is going to classified programs for a single service.
- The National Guard and Reserve Equipment Account – a slush fund within a slush fund – is funded at $1.2 billion. None of this money is requested in the budget and the Congress is at great pains to direct the Chiefs of the National Guard and Reserve components to give priority to a laundry list of specific programs – as close to “earmarking” as the laws allow.
- “Remanufacturing” of Apache helicopters – nowhere to be found in the Administration’s request – receives $144 million
- MQ-8 Fire Scouts are increased by $29 million to purchase three more.
On top of the Administration’s staggering request of $6.3 billion for the procurement of 34 new F-35 airframes, Congress added about a half billion dollars. The Air Force would get two more airframes than its original request of 26. The Navy would also get two additional F-35s – doubling its original request.
Subtotal: $479 million more for the most expensive procurement program in the fiscal year 2015 Pentagon request.
Grand total in just procurement funding for the F-35: $6.779 billion.
For more TCS analysis of the F-35, go to our resources page.