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Disruption of Regular Appropriations Threatens DOD Projects

The Navy has grand plans for its next-generation ballistic missile submarine, pushing it deeper into the research-and-development phase in fiscal 2014 — and one step closer to production — with a healthy $1.1 billion investment that amounts to roughly double what the service spent on the program last year.

The new submarine is expensive by any measure, with the total price tag for developing and purchasing the 12 ships estimated at a staggering $93 billion. Lawmakers and Navy officials, however, believe that the cost of modernizing a critical leg of the three-pronged nuclear deterrent is well worth its price.

But the Navy’s plans to replace its venerable Ohio-class submarines may be slowed at a critical time for the program, thanks to a stopgap continuing resolution (PL 113-46) that forces the Defense Department and other federal agencies to spend at fiscal 2013 levels.

The current continuing resolution expires Jan. 15, but there is growing concern both within the Pentagon and on Capitol Hill that the political stalemate over spending may ultimately force another extension of that stopgap spending bill, perhaps for the rest of fiscal 2014.

The Defense Department, unlike most other federal agencies, has never operated under a yearlong continuing resolution in the modern budgeting era, which began in the mid-1970s. But Democrats on Capitol Hill are already signaling that the military’s spending bill will not receive the preferential treatment it has in years past.

Appropriations Chairwoman Barbara A. Mikulski, D-Md., and Senate Majority Leader Harry Reid of Nevada insist the defense bill is just one among the 12 appropriations measures, a senior congressional Democratic aide said last week.

Meanwhile, Mikulski and House Appropriations Chairman Harold Rogers, R-Ky., have both made clear they want to see all 12 of those measures ultimately enacted, a steep climb in a Congress that has become increasingly reliant on CRs for most agencies.

Defense Department officials seem to be getting the message.

Less than a month into the fiscal year, they are already warning about the long-term consequences of operating under a lengthy continuing resolution, arguing that it creates a mismatch between funding and priorities while also forcing the Pentagon to abandon new programs.

Funding Defense

Despite the partisan gridlock, many observers believe Congress will ultimately agree to a bill to fund the Pentagon, which consumes about half of all federal discretionary spending. The stakes of abdicating that responsibility are simply too high.

“Congress goes out of its way to make sure it marks up $500 billion,” said Russell Rumbaugh, an analyst at the nonpartisan Stimson Center. “National defense is important and Congress takes time to do it.”

But when the Pentagon ultimately gets a bill — and the amount of funding it will contain — remains an open question. Congress’ recent track record on defense spending does not leave a lot of hope that the Pentagon’s fiscal 2014 funding will be settled anytime soon.

The House-passed defense spending bill for fiscal 2014 (HR 2397), as well as the Senate Appropriations Committee’s version of the measure (S 1429), blows past mandatory budget caps by close to $50 billion.

The longest the Pentagon has operated under a continuing resolution was for just over half of fiscal 2011, according to Todd Harrison at the Center for Strategic and Budgetary Assessments. The second longest was two years later, when the Defense Department received its fiscal 2013 appropriations (PL 113-6) in late March.

Pentagon officials have made clear they do not want to operate under a stopgap resolution any longer than necessary.

“All they do is allow the government to keep on functioning, or perhaps dysfunctioning, as it were,” Army Secretary John M. McHugh said last month at the annual Army conference in Washington.

Acquisition Obstacles

Under a CR, the military must fund programs at the previous year’s levels, meaning that dollars are not aligned with spending plans for the current fiscal year.

The Ohio-class replacement is just one of many programs that would be affected, but it is among the most dramatic and could ultimately push back the plans to begin production in 2021. The program has already been delayed by two years thanks to earlier budget cuts.

Another casualty of a yearlong CR would be new-start programs for which the department would be prohibited from awarding a contract under the stopgap bill. Most major defense programs are already under contract, but one major new start that cannot begin under a CR is a large support ship the Navy hoped to buy for $524 million this year.

Dozens of smaller new-start contracts will similarly be affected. Army acquisition chief Heidi Shyu told the House Armed Services Subcommittee on Tactical Air and Land Forces on Oct. 23 that the CR delays 59 new programs within the Army’s budget alone.

Limits on new starts include military construction and other infrastructure improvements the services had planned for the new fiscal year. It would also delay the overhaul and refueling of a nuclear-powered aircraft carrier scheduled to begin this year.

The threat of across-the-board sequester cuts beginning in January — which would bring defense spending down to $498 billion, which is $20 billion less than provided in the CR — only complicates the outlook for defense spending.

“It would have a hugely negative effect on our security,” Senate Armed Services Chairman Carl Levin, D-Mich., said.

But Levin, like Mikulski and Reid, also signaled that defense cannot be considered separately from other government agencies.

The double whammy of a CR and sequester would also have a “hugely negative effect on education, a number of health care clinics and a lot of other things,” Levin added.

Frank Oliveri contributed to this report.

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