It can be hard to keep up with all the moving legislative parts that affect Pentagon spending levels for the fiscal year starting October 1 (that is, FY2018). Here is a brief primer.
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Congress did not reach agreement on FY 2018 funding levels before the fiscal year started. Instead, Congress and the president only agreed to temporarily fund the government’s operations through December 8, at the rate set by the previous year’s levels. Congress has until December 8 to agree on the full year’s level—or to buy more time to reach a deal.
Between now and December 8, you should tell your senators and representative that Congress needs to reject proposals that increase Pentagon spending or that force cuts in Medicaid and SNAP funding.
Here’s what you need to know about the key mechanisms that will determine Pentagon spending for FY2018: appropriations acts, the Budget Control Act of 2011, the congressional budget resolution, and the defense authorization act.
Appropriations
Every year Congress must pass appropriations legislation for the Department of Defense, the Department of Energy’s nuclear weapons work, and other national defense activities. Federal agencies cannot do work or buy goods and services until the relevant appropriations act is law. To get there, the House and the Senate have to reach agreement on every word, every dollar, and every decimal point. Majorities in each house have to pass the same bills, and the president has to sign them, or else Congress has to override the president’s veto.
Status Update
On July 28, the House of Representatives voted 235-192 on a version of appropriations legislation that would provide around $697 billion in total defense spending—over $60 billion more than FY 2017 levels. That bill included funding for the Department of Energy’s nuclear weapons activities as well.
The Senate Appropriations Committee has not voted on Department of Defense appropriations legislation for FY 2018.
On July 20, the Senate Appropriations Committee reported a proposed bill making appropriations for the Department of Energy’s nuclear weapons activities, among other things, to the Senate. The full Senate has not yet considered the measure.
The House and the Senate have not reached agreement on final appropriations levels for FY 2018.
Budget Control Act Caps/“Sequestration”
Legislation passed several years ago is complicating the regular appropriations process. The Budget Control Act of 2011 imposes a cap on all “defense” and “non-defense” discretionary spending. Under this law as it stands today, if Congress appropriates any “base” Pentagon spending above $539 billion, then on December 31, 2018 every defense account and program would have to return a “sequestered” across-the-board percentage to the Treasury in order to bring the total back down to the $549 billion level.
However, the law exempts any spending that Congress and the president agree is going towards “Overseas Contingency Operations,” which are ongoing military operations, from those caps. Lawmakers and analysts often refer to this fund of extra, uncapped billions as “OCO” (when spoken it rhymes with “cocoa”). Regular, non-OCO spending is referred to as “base” spending.
Many in Congress want to raise this year’s cap of $549 billion for non-OCO “national defense” spending, but Congress has not reached a deal that would raise or eliminate the caps yet. Congress and the president must enact legislation to lift or eliminate the cap, or designate more defense spending as OCO.
Status Update
- An amendment filed by Senator Cotton (R-AK) that would have eliminated the Budget Control Act’s sequestration requirement (and thereby effectively eliminated any consequence for failing to stay within the budget caps) was not adopted during September Senate debate on the National Defense Authorization Act for FY 2018.
Congressional Budget Resolution
Under Congress’s own rules, the House of Representatives and the Senate are supposed to concur with each other on a single overarching budget for each fiscal year. The president does not sign Congress’s budget resolution. The resolution simply guides House and Senate procedures on other bills that actually fund the government. Even though appropriations bills would still need to be passed to settle actual Pentagon spending levels, budget resolutions do signal what the House and Senate majority party think those levels should be.
Instead of being organized by government agency, the congressional budget resolution is organized around broad functional divisions—such as national defense, international affairs, natural resources and the environment, and health. In theory, the congressional budget resolution is supposed to precede and set binding top lines for the annual agency-based appropriations bills. If Congress agrees to a budget resolution, the Appropriations Committees work to write legislation that appropriates funds to each government agency based on the budget’s instructions. After that translation is complete, appropriations bills are subject to procedural objections if they exceed the budget caps set by the resolution.
However, reality does not always follow this plan, and Congress does not always agree to budget resolutions before the fiscal year starts, or, in some cases, at all. That has been the case so far for FY 2018: the House and the Senate have not yet reached agreement on a single budget resolution. Congress can still enact individual appropriations bills without a budget resolution.
Status Update
On July 19, 2017, the House Budget Committee voted on party lines (22-14) to recommend to the full House a budget resolution that would provide $697 billion in Pentagon spending. The full House has not yet acted on the budget resolution.
On October 5, 2017, the House passed the House Budget Committee’s version of the budget resolution on a vote of 219-206, providing $697 billion in Pentagon spending.
The Senate narrowly passed its version of the budget resolution on October 19, 2017 with a vote of 51-49. Its version of the budget resolution sets Pentagon spending at the level of the Budget Control Act cap for 2018 ($549 billion). Some news sources have mistakenly interpreted exemplary language in the budget resolution as setting a target for Pentagon spending at $640 billion, but this is inaccurate.
In a bid to speed consideration of a tax cut package, we expect the House to pass the Senate’s version of the Budget Resolution without changes during the week of October 23.
Defense Authorization
Under its own guidelines, Congress is supposed to authorize program funding levels before it appropriates funds to agencies to execute those authorized programs. Every year the National Defense Authorization Act debates funding levels both broad and narrow, and sets policy guidance on a wide range of military as well as foreign policy matters. The House of Representatives and the Senate each pass their own version. Then they come together to negotiate a single package. The final appropriation levels do not have to match the amounts authorized by the NDAA, but the separate committees responsible for the appropriations and authorization bills work together to align the levels in the separate bills as much as possible.
Status Update
The House of Representatives voted on July 14, 2017, to authorize almost $700 billion in Pentagon spending for FY 2018, a level over $60 billion higher than the previous year.
The Senate voted on September 18, 2017, to authorize around $700 billion in Pentagon spending for FY 2018.
Leaders of the House and Senate’s Armed Services Committees will now negotiate a single version of the NDAA for passage by their respective houses and signature into law by the president.
