Highlights of the Four Bills

• Military Pay: The House defense authorization and SASC bills include the 3.7 percent pay raise proposed by the administration. Consistent with the FY 2000 defense authorization act, the raise would provide an increase 0.5 percent above the employment cost index (ECI). The pay raise is fully funded in the two appropriations bills.

  Health Care: The House defense authorization and SASC bills both include a number of provisions aimed at improving military health care. The most costly provision in the House bill would provide a mail order pharmacy benefit for military retirees 65 and over at a cost of $94 million in FY 2001 and more than $2 billion through FY 2005. The SASC bill contains a similar set of provisions. In addition, during floor consideration of the defense authorization bill, the Senate approved an amendment that would allow older military retirees to participate in DoD’s TRICARE system, at a cost that reportedly could exceed $40 billion over the next 10 years.²

• Procurement: The House defense authorization bill would add $2.0 billion, the SASC bill, $3.0 billion, and the House defense appropriations bill, $1.7 billion to the administration’s $60.3 billion request for procurement. The SAC bill technically would cut the administration’s request for procurement by $1.8 billion. However, this “cut” primarily results from the SAC decision to transfer $2.9 billion in funding for the C-17 program from procurement to a new “National Defense Airlift Fund.” Absent this transfer the SAC bill would also provide an increase over the president’s request.

  Research & Development: The budget request included $37.9 billion for research and development (R&D) funding. The House defense authorization and SASC bills would add $1.4 billion and $1.5 billion, respectively, to the administration’s $37.9 billion request for research and development (R&D) funding. The House appropriations and SAC bills would provide, respectively, $2.1 billion and $1.6 billion increases.

• National Missile Defense (NMD): To the administration’s $1.8 billion request for NMD, the House defense authorization bill would add $326 million ($85 million in new funding plus $241 million in transferred funds), the SASC, $129 million, and the SAC, $139 million. The House appropriations bill would fund the program at the requested level.

• FY 2000 Supplemental Appropriations: In February, the administration requested $2.3 billion in FY 2000 supplemental appropriations for DoD, primarily to cover the cost of operations in Kosovo. At the end of March, the full House passed a supplemental appropriation that would have provided about $9 billion for DoD. However, the Senate refused to consider such a large supplemental. Instead, Senate Majority Leader Trent Lott directed that the spending be attached to various regular FY 2001 appropriations bills. Reflecting this approach, the SAC attached a $4.7 billion supplemental to cover the costs of Kosovo and other DoD priorities to the FY 2001 military construction bill recently passed by the full Senate. Eventually, House and Senate conferees will have to meet to resolve differences between these two approaches.

Ballistic Missile Defense
The administration requested $4.73 billion for ballistic missile defenses programs in its FY 2001 budget submission, including $103.5 million for military construction. Most of the request, about $4.39 billion, is allocated to the Ballistic Missile Defense Organization (BMDO). The House defense authorization bill would add $366 million to the request for ballistic missile defense programs,³ while the SASC bill would add $365 million. The House appropriations bill would provide a $140 million increase for ballistic missile defense programs, ⁴ while the SAC bill would add $405 billion to the effort.

National Missile Defense
The lion’s share of BMD funding, $1.8 billion in the request, is for the acquisition of a national missile defense (NMD) system. The system contemplated by the administration is intended to protect the entire United States from a limited strategic ballistic missile attack. By this fall the president is scheduled to decide whether to deploy this system, consisting of 100 interceptors in Alaska, using the following four criteria: threat, cost, technical feasibility and overall security implications, including for arms control. In preparation for a decision to deploy, the administration added $10.4 billion for NMD efforts over the FY 2001-05 period, roughly $2.3 billion more than allotted in last year’s plan. The additional funding, according to the administration, should suffice to achieve an initial capability in 2005, assuming the president decides in favor of deployment this fall.

The House defense authorization bill would provide $2.14 billion for the NMD program. However, only $85 million of this $326 million plus-up represents a real increase (for risk reduction); the other $241 million results from a decision to transfer funding for development of the SBIRS-Low system from the Air Force’s budget to BMDO’s NMD account. The SASC bill would add $129 million for R&D for risk reduction and the SAC bill would increase NMD funding by $139 million. By contrast, the House appropriations bill would provide the level of funding requested by the administration. All four bills would provide the $74.5 million requested for NMD procurement.

Theater Missile Defenses
The administration requested $2.498 billion for theater missile defense (TMD) programs and supporting technologies, including $382.7 million for the Navy Theater-wide (NTW) program, $549.9 million for the Theater High Altitude Area Defense (THAAD) system, and $270.7 million for BMD technical operations.

Upper Tier
The THAAD and NTW systems are intended to provide broad area, “upper tier” missile defenses for forward deployed forces. DoD’s latest plan calls for providing $3.6 billion for the land-based THAAD system and $1.3 billion for the sea-based NTW system over the next five years. According to DoD, this funding would be enough for THAAD, but not NTW, to achieve an initial operating capability in FY 2007. The NTW program would require additional funding after FY 2002 in order to meet that timeline. All four bills would fund THAAD at the requested level. The House defense authorization bill would add $25 million, and the House appropriations bill, $130 million, to the NTW program, while both the SASC and SAC bills would add $60 million.

Lower Tier
Complementing the upper tier TMD programs are two “lower-tier” programs, the land-based Patriot Advanced Capability 3 (PAC-3) system and the shipborne Navy Area program. The budget request includes $447 million for developing and procuring the PAC-3 and $274 million for the Navy Area program. The House defense authorization bill would add $65.2 million to the PAC-3 program, including $35 million for additional interceptor missiles, and fully fund the Navy Area program. The SASC bill and both appropriations bills would fund both programs at the requested levels.

Other Programs
The administration’s request also includes nearly $900 million for support technology, BMD technical operations and other related efforts. The House defense authorization bill would add $108 million, including $83.5 million for sensors and technologies particularly important to the THAAD, NTW and Patriot systems, while the SASC bill would fund the programs at the requested level. The House appropriations bill would add a net $38.3 million, while the SAC bill would provide an additional $101 million for support technologies.

The Air Force also requested $149 million for development of the airborne laser (ABL), which is intended to intercept theater-range missiles in their boost phase (i.e., immediately after launch), and $63 million for development of a space-based laser (SBL).⁵ In addition, the Army requested $25 million for its Aerostat program. The House defense authorization bill would increase ABL funding by $82.4 million and SBL funding by $63 million, while funding the Aerostat program at the requested level. The SASC bill would provide increases for these three programs of $92 million, $30 million and $2 million, respectively. The House appropriations bill would fund the ABL request, cut $45 million from SBL and fund Aerostat at the requested level. Similar to the SASC bill, the SAC bill would provide increases of $92 million for the ABL, $10 million for the SBL and $2 million for the Aerostat programs.

Beyond these BMDO and Service programs specifically focused on the acquisition of ballistic missile defense systems, the administration’s FY 2001 budget request also includes funding for a number of programs that could be used to support such systems. Most importantly, the administration’s request includes $241 million for development of the Space-Based Infrared System-Low (SBIRS-L) system, which is intended to provide mid-course tracking of both theater and strategic ballistic missiles, as well as supplement other intelligence and space surveillance capabilities. As noted earlier, the House defense authorization bill would transfer the entire SBIRS-L request to NMD R&D. By contrast, the SASC, HAC and SAC bills would fully fund the administration’s request.

Tactical Aircraft
The Department of Defense’s current plans call for procuring as many as 339 F-22s, at least 548 F/A-18E/Fs and 2,852 Joint Strike Fighters to replace current Air Force, Navy and Marine Corps fleets for a total cost of as much as $340 billion. Concerns about the cost of tactical aircraft generally have grown in recent years.

F-22
The F-22 is eventually intended to replace the Air Force’s existing fleet of F-15 air superiority fighters. The Air Force now estimates that the F-22 program will cost some $63 billion, about $22.5 billion of which has already been appropriated. Both the House authorization and SASC bills would fully fund the administration’s request for the F-22, including $2.150 billion to begin low-rate initial production of 10 F-22s, $396 million for advanced procurement of 16 F-22s in FY 2002, and $1.412 billion for continued development. In addition, the SASC bill would increase the F-22 engineering and manufacturing development cost cap by 1 percent in order to allow the F-22 to meet its testing requirements.

Both the HAC and SAC would fund the F-22 at the requested level. The SAC would also replace the separate caps on development and production with a single cap for the overall program and would prohibit the awarding of a low-rate production contract until the F-22 program meets certain testing requirements.

F/A-18E/F
The F/A-18E/F is a substantially changed derivative of the current C/D version of the F-18, featuring, among other things, a longer fuselage and larger wing. It is intended to replace earlier models of the F/A-18, as well as A-6E and F-14 aircraft, aboard US aircraft carriers. The administration requested $2.939 billion for the F/A-18E/F program in FY 2001, including $2.819 billion to procure 42 aircraft, $101 million in advance procurement funding for another 42 F/A-18E/Fs in FY 2002 and $19.2 million for continued development. The SASC bill would fully fund the request. By contrast, the House authorization bill would reduce the FY 2001 procurement request by three aircraft and $205.8 million, while fully funding the requests for advance procurement and R&D.

Conversely, the House appropriations bill would fully fund the request, and the SAC bill would approve the procurement of 42 aircraft, as requested, but cut total procurement funding for the program by $42.6 million.

Joint Strike Fighter (JSF)
The Navy requested $427.5 million and the Air Force, $429.1 million to continue development of the JSF. The JSF program is intended to yield a family of affordable aircraft to replace Air Force F-16s, Marine Corps AV-8Bs, and Navy F-14s and F/A-18C/Ds. Current plans as established by the 1997 Quadrennial Defense Review call for procuring 2,852 aircraft; CBO estimates that total acquisition costs for the program will amount to some $223 billion (FY 2000 dollars).

The request includes $261 million to complete the demonstration phase of the aircraft and a “flyoff” between the Lockheed Martin and Boeing versions of the aircraft. Under the current plan, a single winner is to be chosen in March 2001 and $595.5 million provided to start the engineering and manufacturing development (EMD) phase. Because the JSF program is the only new tactical aircraft program envisioned for the next few decades, the winner-take-all strategy has raised industrial base concerns. As a result, although the Services are still working under the assumption that a winner-take-all contract will be awarded, DoD has initiated a study of various options that might be available to maintain competition in the program. In the same vein, both the House authorization and SASC bills recommend that DoD revisit this strategy.

The JSF program has also raised concerns because it involves the integration of complicated technologies as well as the development of two different propulsion systems. Reflecting these concerns, the House authorization bill recommends postponing EMD until the secretary of defense certifies the technology is mature enough to move forward. The bill would, however, provide the $856.6 million requested, including $595.5 million for EMD, and add $15 million to accelerate development of an alternate engine. The SASC bill similarly recommends more extensive testing of the competing aircraft, particularly the vertical takeoff and landing (VTOL) demonstrators, before moving forward with EMD. But the Senate bill would provide only $685.3 million for program, and provide no funding for EMD.

The House appropriations bill would provide a total of $706.6 million for the program: $411 million for demonstration and validation and $295.5 million for EMD, reflecting projected changes in the acquisition strategy and delays in the actual commencement of EMD. The SAC bill would provide even less, $653.3 million, and like the SASC bill limit funding to the demonstration and validation phase. Unlike both authorization bills, the SAC also directs DoD to use the appropriated funding only for selecting a single design under the original acquisition plan.

F-15E
The administration requested no funding for the procurement of new F-15Es in FY 2001. But it did request $61.3 million for continued development of F-15E upgrades. The House and SASC defense authorization bills and the HAC appropriations bill would add $8 million to the F-15E R&D request. The SAC bill would add $5 million to the R&D request. In addition, the House bill would provide an unrequested $149.8 million to procure two new aircraft and the House appropriations bill would provide $400 million to acquire five aircraft.

F-16
The FY 2001 budget request includes $125 million for F-16 R&D, but no funding for the procurement of new F-16s. Last year the Air Force requested funding for 10 F-16s in FY 2000 and planned to buy 10 more in FY 2002 and FY 2003 (for a total of 30). It now plans to buy the last 20 aircraft over three years, with six in FY 2003 and seven each in FY 2004 and FY 2005. Both the House defense authorization bill and the SASC bill would fully fund the R&D request. In addition, the House bill would provide $51.7 million in procurement funding for three unrequested aircraft. The House bill also assumes that the Air Force would apply $24 million in FY 2000 advance procurement funding to the purchase of these three aircraft. The HAC and SAC bills would add $9 million and $1 million, respectively, to the R&D request. In addition, the SAC bill would provide $183 million for six unrequested aircraft.

Other Aircraft
C-17
The administration requested $2.891 billion for the C-17 program in FY 2001, including $2.213 billion to procure 12 C-17s and $266.8 million in advance procurement funding for 15 aircraft in FY 2002. The administration also requested $176.4 million for continued R&D. The Air Force has already procured 85 C-17s and plans to acquire another 37 over the FY 2002-05 period. The House authorization bill would increase procurement funding to $2.917 billion, reflecting a $14.9 million addition for another weapons trainer, while the SASC bill would provide the requested level of funding for procurement. Both bills would fully fund the R&D request.

The House appropriations bill would provide $2.831 billion, including $2.186 billion for 12 C-17s, a $26.1 million cut, $207.8 million for advance procurement, a $59 million reduction, and $176.4 million, the requested level for R&D. The SAC bill would fully fund the administration’s request for the C-17, but transfer the funding into a new account, the National Defense Airlift Fund.

V-22
The proposed FY 2001 budget request would provide $1.129 billion to procure 16 MV-22s, $79.9 million in advance procurement funding and $148 million for continued R&D. In addition, the Air Force requested $363 million to procure four CV-22 variants. A tilt-rotor, vertical take-off and landing aircraft, the MV-22 is intended to replace the Marine Corps' CH-46 and CH-53 helicopters. The QDR calls for acquisition of 360 MV-22s, as well as 50 Air Force CV-22s for special operations and 48 HV-22s, a Navy variant for search and rescue missions. The Marine Corps plans to acquire 119 MV-22s over the next five years, while the Air Force plans to buy 37 CV-22s. The House and SASC authorization bills and the HAC appropriations bill would fully fund the administration’s request for the MV-22 and the CV-22. The SAC would fully fund the request for the MV-22, but cut $5 million from the CV-22 procurement program.

Joint Surveillance Target Attack Radar Systems (JSTARS)
The E-8C JSTARS is an airborne system designed to locate enemy forces operating behind the forward edge of the battle area. The 1997 QDR recommended reducing the total program from 19 to 13 aircraft under the assumption that NATO would also purchase 12-16 JSTARS. Subsequently, NATO decided against buying any JSTARS. In response, the Air Force added a 14th aircraft to its plan, intending to procure this last JSTARS in FY 2000. Congress, however, provided FY 2000 funding not just for the 14th aircraft but also advance procurement funding for a 15th JSTARS in FY 2001.

The FY 2001 budget request includes $261 million to procure this 15th aircraft and $144 million for continued R&D. The House defense authorization bill would add $40 million in advance procurement for a 16th aircraft in FY 2002, while the Senate version would add $46 million either for advance procurement funding of a 16th aircraft or for shutting down the production line. Both bills would fully fund the procurement of the 15th aircraft as requested. The House defense authorization bill would increase R&D to $146.6 million, while the SASC bill would provide $151.3 million.

Like the House authorization bill, the House appropriations bill would add $40 million in advance procurement funds for a 16th aircraft; however, the House appropriations bill would provide only $251 million for procurement of the 15th aircraft, a $10 million cut. The SAC bill would follow in the SASC’s lead, providing a total of $307 million for procurement and $151 million for R&D.

C-130J
The Air Force requested $208.1 million to procure two C-130J transport aircraft plus $60.5 million for continued R&D. The House defense authorization bill and House appropriations bill would fund this program at the requested level. By contrast, the SASC bill would add $90 million to acquire one unrequested EC-130J, on grounds that this aircraft is a vital “high demand, low density” asset. Like its authorization counterpart, the SAC bill would add $90 million to acquire one EC-130J. But the bill would not fund the request to procure two C-130Js. Instead, the SAC bill would appropriate $84 million to convert two C-130Js to EC and KC models.

The Marine Corps requested $154.8 million to buy two KC-130J tankers. Both House bills would provide $231 million for three aircraft, while both Senate bills would provide $229.4 million for three aircraft.

UH-60
The Army requested $116.7 million for the UH-60 program, including $64.7 million to procure six Blackhawk utility helicopters and $29.9 million for continued R&D. By comparison, last year’s Army plan projected the procurement of nine Blackhawk helicopters in FY 2001. The House defense authorization bill would provide $187.7 million for the Blackhawk program, including $135.8 million for the procurement of 12 UH-60s, while the SASC bill would provide $261.0 million for procurement of 26 helicopters. The House appropriations bill would add $118.7 million for an 11 unrequested helicopters for the Army Guard and Reserve, while the SAC bill would add $55.8 million for six more aircraft for the guard. All four bills would fully fund the R&D request.

Apache Longbow
Under the Longbow Apache program, a portion of the Apache attack helicopter fleet will be equipped with a mast-mounted fire control radar, and all existing Apaches will be upgraded to carry the radar-frequency fire-and-forget version of the Hellfire missile. The Army requested, and the House authorization bill would provide, $745 million in procurement funding for the upgrade program. The SASC bill would include $903 million for the program, with the $158 million increase to be used for procurement of critical component upgrades for fielded aircraft. The House authorization bill would provide a $18.4 million increase to the Army’s $17.4 million request for R&D to modernize components identified as reducing performance and increasing maintenance costs, while the SASC bill would provide the requested level of R&D funding.

The House appropriations bill would provide the requested level of funding for the program, while the SAC version would fund the procurement request, and would increase R&D funding by $12 million.

Comanche
The Army plans to procure 1,213 Comanche RAH-66 armed reconnaissance helicopters beginning in the middle of the next decade to replace its existing fleet of OH-58 and AH-1 scout and attack helicopters. The program is currently limited to a long-term prototype development effort. The Army requested $614 million for continued development in FY 2001. All four bills would fully fund this request.

Shipbuilding
SSN-774 (New Attack Submarine)
The Navy requested $1.711 billion in procurement funding for the third Virginia-class attack submarine plus $320 million for R&D. In 1997 Congress and the administration agreed, after much debate through the mid-1990s, that the first four boats will be jointly built by Electric Boat and Newport News under a multiyear procurement contract. As under last year’s plan, the Navy intends to buy one SSN-774 per year through FY 2005 with the ultimate goal of reaching a production rate of at least two boats per year.

Both the House defense authorization bill and SASC bill would fully fund the procurement request. The two bills also would authorize the Navy to enter into a multiyear contract for the procurement of as many as five boats between FY 2003 and FY 2006, and would authorize continuation of the shared shipbuilding arrangement. The House would add $12.2 million and the SASC bill, $9.5 million to R&D. The House appropriations bill would reduce the procurement request by $5 million, while the SAC would provide the requested level of funding for procurement. The House appropriations bill would increase R&D by $21.5 million and the SAC version, by $17.5 million.

DDG-51
The Navy requested $2.714 billion to procure three Arleigh Burke-class guided missile destroyers, $356 million in advance procurement and $180 million for continued R&D. The Navy had planned to procure three destroyers each in FY 2002 and FY 2003, but when the Service pushed back procurement of the new destroyer, DD-21, from FY 2004 to FY 2005, it revised its DDG-51 plans. The new plan calls for buying two destroyers per year over the FY 2002-04 period and one last DDG-51 in FY 2005.

The House defense authorization bill would fully fund the request. The SASC bill, however, raised concerns about potential industrial base problems resulting from the revised DDG-51 procurement plan. It, therefore, would recommend $143.2 million in added advance procurement funding for an additional ship in FY 2002, for a total of $500 million. Both bills would fully fund the R&D request.

The HAC would provide $2.704 billion for the program, a $10 million cut, to procure three ships, $356 million in advance procurement funding and $180 million for R&D. The SAC would provide $2.714 billion to procure three ships, $500 million in advance procurement, a $143 million add-on, and $209.7 million for R&D, including $25 million for an upgrade of the Aegis combat system engineering.

DD-21
The FY 2001 request contains $555 million to continue development of the DD-21, a new class of surface combatant intended to replace existing DD-963 destroyers and FFG-7 guided missile frigates. The DD-21 is to be designed with a special focus on land attack capabilities, complementing the DDG-51’s primary mission of air defense. The latest Navy plans slips construction of the first ship of this class from FY 2004 to FY 2005, in part as a result of the decision to incorporate electric drive propulsion into this new class. To cover the cost of developing this electric drive and other advanced technologies, the Navy added $1.7 billion in R&D funding over the next five years to the DD-21 program. The House defense authorization bill would fully fund the FY 2001 request, while the SASC bill would add $13 million, including $8 million for the development of new radar systems.

The SAC bill would increase R&D funding by $8 million, while the House appropriations bill would cut R&D by $48 million. In its report, the HAC states that it supports the DD-21 program, but has substantial reservations about the acquisition strategy.

LPD-17
The Navy requested $1.510 billion in procurement funding for the fifth and sixth LPD-17 amphibious transports plus $2.6 million for R&D. Navy plans call for acquiring a total of 12 ships of this class, including two per year through FY 2004. Both the House defense authorization bill and the SASC bill would fund the program at the requested level, while the House appropriations bill would reduce the procurement request by $10 million.

Because the LPD program has experienced significant cost growth and delays, the SAC bill recommends a pause in procurement. The SAC bill would provide $285 million to cover cost growth in construction of first four ships, plus an additional $179 million in advance procurement for two ships in FY 2002. It would not, however, provide any funding to begin construction of ships five and six in FY 2001.

LHD-8
Last year Congress provided $356 million in advance procurement as a down payment on an eighth Wasp-class amphibious assault ship. Instead of requesting the roughly $1 billion needed to fully fund this ship in FY 2001, however, the latest Navy plan, like the previous year’s, calls for providing full funding in FY 2005 for the LHD-8. The House authorization bill includes an increase of $10 million and the SASC bill, $460 million for further incremental funding of the LHD-8. The SAC bill would provide the same level of funding as the SASC. The House appropriations bill contains no funding for the LHD-8.

Military Construction
Both the House defense authorization bill and the SASC bill would add over $300 million to the administration’s $8.033 billion request for military construction ($4.5 billion) and family housing ($3.48 billion). The House and Senate military construction appropriations bills would both add roughly $600 million to the request, providing a total of some $8.63 billion.

Department of Energy
The administration requested $13.084 billion for Atomic Energy Defense Activities in FY 2001, including $4.6 billion for weapons activities and $4.6 billion for environmental restoration and waste management. The $3.9 billion balance would fund a variety of activities, including $683 million for non-proliferation and national security programs and $678 million to support naval nuclear reactor programs. The House defense authorization bill would cut funding for Atomic Energy Defense Activities by $279 million, while the SASC bill includes a $324 million cut. At the time of publication, neither the House and Senate appropriations committees had completed work on their respective energy and water appropriations bills.

1. While the defense authorization bill authorizes the appropriation of defense funding, the DoD, energy and water, military construction, and several other appropriations bills provide the actual funding. By far the largest of these appropriations bills is the DoD appropriations bill, which typically contains over 90 percent of all defense-related appropriations.

2. At press time, although the full Senate had approved this amendment, it had not yet approved the defense authorization bill. Tom Philpott, “Senate Votes 96-1 to End ‘Age Discrimination’ In Military Health Care,” June 8, 2000.

3. The House defense authorization bill would also shift $241 million requested for the Space-Based Infrared Sensor—High (SBIRS-H) into the BMDO account.

4. The House military construction appropriations bill would cut $20 million from the request for ballistic missile defense-related construction, which would be offset through the use of unobligated balances from previous years.

5. This is in addition to the $74.5 billion for the SBL included in BMDO’s request.