Conferees from the House and Senate recently agreed to a $250.5 billion fiscal year (FY) 1999 defense appropriations bill. When combined with defense-related funding in the military construction ($8.5 billion), energy and water ($12 billion), and several smaller appropriations bills,¹ total FY 1999 funding for defense is expected to be roughly consistent with the $270.5 billion level agreed to by the president and congressional leaders as part of the 1997 balanced budget agreement. Amounting to a 1 percent real (inflation-adjusted) decline from the FY 1998 budget, this overall funding level also is consistent with the conference agreement on the FY 1999 defense authorization bill.²

Because Congress and the administration had agreed upon the FY 1999 topline for defense as part of last year’s budget agreement, Congress was unable to add funding to the overall defense budget request. However, by shifting funding between different programs and accounts, it was able to make some modest changes, including additions to some programs (see Table).

Highlights: Defense Appropriations

• Rather than providing the $1.9 billion in emergency funding requested to cover the projected FY 1999 costs of keeping U.S. troops in Bosnia in the defense appropriations bill, the House and Senate conferees decided to include Bosnia funding as part of a separate emergency funding bill. This emergency supplemental is also expected to include extra funding for improving defense readiness, repairing storm damage at defense facilities, remedying year 2000 computer problems, improving security at U.S. embassies, and disaster relief for farmers.

• Under the conference bill, procurement would receive $48.5 billion, essentially the level of the administration’s request and about $1 billion less than authorized. Research and development (R&D) programs would be funded at $36.7 billion, or slightly above the $36.1 billion level requested and authorized.

• Like the authorizers, the appropriations conferees would provide a 3.6 percent pay raise. Included in the appropriations bill is an unrequested $200 million to cover this 0.5 percent increase over the administration’s request for a 3.1 percent, by law pay raise.³ The appropriations conferees also approved the requested active-duty end strength level of 1.396 million personnel and 877,000 guard and reserve personnel.

• The bill would provide $50 million in unrequested procurement funding for post-production support for the B-2 bomber fleet, $36 million below the level included in the authorization bill.

• The bill would fund tactical aircraft programs at or near the levels requested by the administration. It would provide $2.897 billion to procure 30 F/A-18E/Fs and $771 million to procure the first two F-22 fighters.

• As requested, the appropriations conference bill would provide $611 million for seven V-22 Ospreys. By contrast, the defense authorization conference bill recommended adding $78 million more for a total of eight V-22s.

• The appropriations conference bill would fully fund the $463 million request to procure two E-8C JSTARS in FY 1999. The Air Force had intended that these would be the last two JSTARS aircraft procured (bringing the total to 13). But the conference bill would also provide $36 million in unrequested advance procurement funding for the purchase of one more JSTARS aircraft in FY 2000. By comparison, the authorization conference bill recommended providing advance procurement funding for two more aircraft.

• The defense appropriations conference bill includes about $3.5 billion for ballistic missile defense, roughly $250 million less than the administration requested and slightly less than the level authorized. Most significantly, the conference bill would provide only $446 million of the $822 million requested for the Theater High Altitude Area Defense (THAAD) program, and $80 million less than the level authorized. The program’s troubled history, including five failures in five tests, led conferees to cut funding by $376 million and defer the program’s transition to engineering and manufacturing development. Other changes include increasing the Navy’s Theater-Wide missile defense program by $120 million and cutting $25 million from the Air Force’s Airborne Laser program.

• As requested, the conference bill would provide $638 million for one LPD-17, $2.680 billion for three DDG-51 destroyers and $2.003 billion for one new attack submarine (NSSN). However, the conferees would cut $85 million from the R&D request for CVX, the next generation aircraft carrier.

• The conference bill would provide $45 million as a down payment for an eighth Wasp-class amphibious assault ship (LHD-8). Rather than purchasing additional ships of this class, current Navy plans call for extending the service lives of its five existing Tarawa-class LHAs.

The Center for Strategic and Budgetary Assessments (CSBA) is an independent policy research institute established to promote innovative thinking about defense planning and investment strategies for the 21st century. CSBA research makes clear the inextricable link between defense strategies and budgets in fostering a more effective and efficient defense, and the need to transform the U.S. military in light of the emerging military revolution. The center is directed by Dr. Andrew F. Krepinevich.

© 1998 CSBA. All rights reserved.

1. While the defense authorization bill authorizes the appropriation of money, the defense, energy and water, military construction, and several other appropriations bills provide the actual funding. The largest of these is the defense appropriations bill, which provides about 90 percent of all defense-related appropriations. At press time, the military construction appropriations bill had been signed into law, and the House had passed the conference agreements on the defense appropriations (369-43) and energy and water (389-29) appropriations bills. The Senate is likewise expected to pass these two bills shortly. House and Senate conferees were still working to resolve differences between their respective versions of several other bills containing small amounts of defense funding.

2. The full House has passed (373-50) and the full Senate is expected to vote soon on the FY 1999 defense authorization conference agreement.

3. Reflecting growing concerns about recruitment and retention, the administration has indicated that it plans to seek an even larger, 4.4 percent pay raise in its FY 2000 budget request.