Robert E. Foelber Foreign Affairs and National Defense Division

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1 DEFENSE BUDGET FY85: CONGRESSIONAL ACTION TO DATE ISSUE BRIEF NUMBER IB84002 UPDATED 02/03/84 AUTHOR: Robert E. Foelber Foreign Affairs and National Defense Division THE LIBRARY. OF CONGRESS CONGRESSIONAL RESEARCH SERVICE MAJOR ISSUES SYSTEM DATE ORIGINATED 12/16/83 FOR ADDITIONAL INFORMATION CALL

2 CRS- 1 IB84002 UPDATE-02/08/84 ISSUE DEFINITION This issue brief tracks congressional action on the FY85 defense budget in the context of the "milestones" that shape the budget process. Since the adoption of the Congressional Budget and Impoundment Control Act of 1974 (P.L ), the issue of defense spending has been debated by the Armed Services, Appropriations, and Budget Committees in both Houses of Congress. While reviewing congressional decisions on major defense issues at each stage of the process, this issue brief does not evaluate defense requirements and the specific missions of the various U.S. military services. Such an evaluation is, of course, a vital component of the defense budget debate in Congress. This issue brief addresses the following questions: 1. What budget process "milestones" has Congress completed to date? 2. How does the budget process work with respect to the National Defense Function of the budget? 3. What specific action'has Congress taken to date on the FY85 defense budget? Related CRS prodycts on the"defense budget include Defense Budget Summary Documents: FY85, Report No F, Feb. 2, 1984 and a series of issue briefs (22 in all) on budgetary aspects of specific weapon systems. BACKGROUND AND POLICY ANALYSIS Introduction The size and shape of the annual defense budget is influenced by Congress largely through the actions of the Armed Services, Appropriations, and Budget Committees in the House and Senate, as well as through floor action. The following table lists the major budget-related milestones which affect defense spending with an indication of congressional action to date. Appendix A, attached to the printed version of this issue brief, provides a detailed historical review of the budget process and available legislative documentation. Table I THE FY85 DEFENSE BUDGET PROCESS AND CONGRESSIONAL ACTION First Concurrent Resolution on the Budget Senate Budget Committee... no action

3 CRS- 2 IB84002 UPDATE-02/08/84 House Budget Committee... no action Second Budget Resolution on the Budget Senate Budget Committee... no action House Budget Committee... no action POD Authorization Bill Senate Armed Services Committee... no action House Armed Service Committee... no action Military Construction Authorization Senate Armed Services Committee... no action House Armed Services Committee... no action DOE Defense Programs Authorization Senate Armed Services Committee... no action Senate.Floor... no action House Armed Services Committee... no action. House Floor... no action POD Appropriation Bill Senate Appropriations Committee... no action House Appropriations Committee... no action Conference... no action Military Construction Appropriations Senate Appropriations Committee... no action House Appropriations Committee... no action Formal congressional consideration of the Federal budget begins every year with the President's budget submission. By law, the President, is required to submit his budget recommendation to Congress within 15 days of the date each session of Congress convenes, except when Congress, by joint agreement, establishes a different date (as it did for FT80 and again for FY84). Congress is scheduled to reconvene on Jan. 23, Once the budget.has been submitted, the committees will begin to hold hearings. The Budget Act of 1974 establishes a timetable for the various phases of the congressional budget process. Historically, the timetable has not been strictly observed. However, the legally prescribed schedule built into the budget process is used generally as a guideline and does exert pressure on

4 CRS- 3 IB84002 UPDATE-02/08/84 the committees to act. While the sequence of events is often not timed as prescribed by the Budget Act, the elements of the process generally follow in order. National Defense Function The Federal budget is divided into separate spending categories. The National Defense Function is one of 19 categories used by the Office of Management and Budget,in preparing the President's budget. Within the National Defense Function, there are three major subfunctions. They are the budget of the Department of Defense, the a'tomic energy defense activities currently funded by the Department of Energy, and other defense-related activities; including civil defense (administered by the Federal Emergency Management Agency), the Selective Service System, and the operating expenses of the National Defense Stockpile of strategic materials (funded by the General Services Administration). The Department of Defense (DOD) budget in its entirety represents about 98% of the total National Defense Function of the budget. The remaining 2% is administered by other Federal agencies. The total defense function as presented by the President is the basis of the budget committees' deliberations and all discussion pertaining to the first and second concurrent budget resolutions. The keystone of the 1974 budget reforms, the first concurrent budget resolution provides Congress the opportunity to consider th.e Federal budget in its entirety and to go on record in favor of a 3-year spending plan. The National Defense Function is broken into its component parts by Congress for consideration' in the authorization and appropriation process. Authorizations vs. Appropriations Process The budget process established by the Budget Act taken alone does not provide for the authorization of programs or the appropriation of funds. The authorization, appropriations/ and revenue-raising procedures used by Congress pre-date the enactment of the Budget Act of 1974 and remain relatively unchanged. Authorizing legislation establishes or maintains a Government program or agency by defining its scope for a fixed or indefinite period of time. It may set a specific limit on how much Congress can appropriate for that program. An authorization is normally a prerequisite for appropriations; however, taken alone, an authorization does not make money available. The Armed Services Committees are responsible for reporting authorizing legislation pertaining to the National Defense Function's major elements. The three major defense-related authorization bills are (1) the DOD authorization bill, (2) the military construction authorization bill, and (3) the Department of Energy (DOE) defense programs authorization bill. In addition, the Armed Services Committees are responsible for reporting the annual bill authorizing supplemental appropriations for defense programs. * The DOD Authorization Bill is sometimes referred to as the Procurement Bill. The label, however, is misleading because various research, development, test, and evaluation programs, manpower strengths, and civil

5 CRS- 4 IB84002 UPDATE-02/08/84 defense programs have been authorized in the annual DOD Authorization Bill for many years; and operation and maintenance (O&N) programs have been included in the bill since FY82/ Appropriation legislation provides one form of budget authority for the actual funding of an agency, department, or program for a given amount of time (usually a fiscal year). An appropriation represents the authority to obligate the Federal Government to future spending. The funds appropriated are not necessarily obligated or spent in the year in which they are provided. The National Defense Function of the budget is made up entirely of programs requiring annual appropriations. Even the funds for military retired pay, which is considered an entitlement, are appropriated annually. Of the six appropriations bills which routinely contain defense funds, the three largest are the DOD Appropriation Bill, the Military Construction Appropriation Bill, and the Energy and Water Development Appropriation Bill (which provides funds for the DOE defense programs). In addition, the HUD-Independent Agencies Appropriation Bill provides funds for civil defense under the Federal Emergency Management Agency and for the Selective Service System. The Treasury, Postal Service, and General Government Appropriation Bill provides funds for the operating expenses of the strategic stockpile. The annual Government-wide supplemental appropriation routinely contains funds for defense programs and DOD personnel. Historically, the DOD Appropriation Bill has always been considerably larger than the DOD Authorization Bill, because many defense programs do not require annual authorization. In FY81, for example, $52.8 billion was authorized for the Department of Defense (excluding military construction and atomic energy defense-related activities which are routinely authorized separately), while the FY81 appropriation (excluding the same programs) totaled $160 billion. In FY83, for the first time, the three major accounts of the DOD budget in their entirety (procurement, research and development, and operation and maintenance), which constitute about 70% of the total defense request, were authorized by Congress in the DOD Authorization Bill, along with funding for civil defense. While personnel strengths are authorized annually, the funds required for compensation of active, reserve, and retired military personnel are not included in the annual authorization process. Both the Armed Services and Appropriations Committees in the House and Senate hold extensive hearings on the President's defense budget. Often the same witnesses are called upon to testify. In appearance, there may be little to distinguish the deliberations or particular interests of the Armed Services and defense-related Appropriations Subcommittees. In fact, however, the Committees have separate responsibilities. The two-stage authorization/appropriation procedure is designed to separate the legislative and financial decision-making processes in Congress. Authorizing legislation is normally required before funds can be appropriated for a program or agency, according to the rules of both Houses of Congress. However, the rules of both the House and Senate are often applied flexibly. Sec. 138 of the FY74 DOD Authorization Act (P.L ) states clearly that "no funds may.be appropriated for any fiscal year to or for the use of any armed force or obligated or expended... unless funds therefore have- been specifically authorized by law."

6 CRS- 5 IB84002 UPDATE-02/08/84 Appropriation legislation, according to the rules of the House and Senate generally, is* supposed to be restricted to financial matters. It should not include substantive legislative business (with the notable exception of provisions that limit the use of funds). However, as with all congressional rules, unless a Member of Congress raises an objection, the applicable rule does not come into play. President Reagan submitted his FY85 budget to Congress on Feb. 1, For the National Defense Function of the budget, the President requested $313.4 billion in budget authority with outlays estimated at $272.0 billion.' For the Department of Defense, the President's request totals $305.0 billion in budget authority for an estimated real increase (adjusted for inflation) of 13% over FY84. The Administration estimates outlays in FY85 will reach $264.4 billion a real increase of 9.3% over FY84. During the period FY81-FY84, real growth for defense averaged 7.7% a year in budget authority and 7.9% in outlays. According to the Administration (see Department of Defense Mews Release Mo , dated Feb. 1, 1984), the FY84 request "recovers some of the ground lost to congressional action in FY84," which reduced the Administration's FY84 Department of Defense budget request by $12.5 billion. The Administration estimates that the DOD budget as a percentage of U.S. Gross National Product (GNP) will increase from 6.5% in FY84 to 6.8% in FY85. This figures compares to an average level of 8.9% in the 1950s, 8.2% in the 1960s, and 5.9% in the 1970s. The percentage of total Federal spending devoted to defense will rise from 27.1% in FY84 to 28.6% in FY85, compared to 45% in FY60 and 23% in FY78. The President's FY85 defense budget request exhibits the same budget priorities as the Administration's previous budgets. Defense manpower costs (military and civilian pay, military retirement pay, and personnel support) as a percentage of the total defense budget continue to shrink totaling about'45% in FY84 and 42.3% in -FY85. On the other hand, the percentage of the total defense budget devoted to so-called "investment" (research, development, test, and evaluation (RDT&E), procurement and military construction) increases from 45.4%.in FY84 to 48.9% in FY85. In the President's FY85 budget procurement grows in real terms by %, RDT&E by 20.1% and military construction by 53.2%. Of the total increase of $46.8 billion in the FY85 budget/ $21.6 billion is for procurement, $7.1 billion for RDT&E, and $2.6 billion for military construction 66.9% of the total. The operation and maintenance (O&M) category of the budget as proposed by the President (including funds for civilian pay, personnel support, fuel, training, base operations and weapons maintenance) grows 10.8%.but shrinks as a percentage of the overall defense budget request from 27.5% in FY84 to 26.7% in FY85. Part of the proposed $4.4 billion increase in military pay provides for an increse in active duty.personnel of 29,900, an increase of 52,200 in Selected Reserve end strengths, and a 5.5% military pay raise, effective Jan. 1, The proposed increases in O&M provide for, in part, more depot maintenance (a $1.5 billion increase), more real property maintenance" (a $600 n-illion increase), and a 3.5% pay raise for civilian Defense Department personnel.

7 CRS- 6 IB84002 UPDATE-02/08/84 Major strategic investment programs in the FY85 defense budget i-nclude: $2, million for procurement of one Trident ballistic missile submarine, additional research and development, and related military construction; $2,322.8 million for research and development of the Trident II submarine launched ballistic missile; $8,220.6 million for 34 B-1B strategic bombers, additional R&D, and related construction; $986.3 million to re-engine part of the KC-135 tanker fleet; $242.8 million for the Air Force's anti-satellite (ASAT) weapon program; $1,800 million for research and.development of anti-ballistic missile technology in support of the President's strategic defense initiative: and $5,002 million for procurement of 40 MX, or Peacekeeper, missiles, further R&D, and related military construction. The Navy is requesting a total of $10.3 billion for construction or conversion of 28 ships, in addition to the Trident submarine, in pursuit of its goal of a 600-ship fleet, including: 4 attack submarines Reactivation of a third Iowa-class battleship 3 AEGIS air defense cruisers Ship life extension (SLEP) of the carrier Independence 1 DDG-51 guided missile destroyer 2 LSD-41 landing ship dock 4 mine counterraeasures ships 12 other support and amphibious ships Modernization of tactical air forces will continue with procurement of: 48 F-15 A/B/C/D fighter aircraft ($2,213.4 million) 150 F-16 fighter aircraft ($4,145.4 million) 32 AV-8B attack aircraft ($939.8 million) 84 F/A-18 fighter-attack aircraft ($2, million) 24 F-14 fighter aircraft ($985.8 million). 6 EA-6B electronic warfare aircraft ($395.8 million) 6 A-6E attack aircraft ($257.9 million) 1,674 HARM missiles ($647.5 million) 4,500 infrared guided Maverick missiles -($578.4 million) 400 Phoenix missiles ($481.8 million) 174 advanced medium range air-to-air missiles (AMRAAM) plus associated RfcD ($648.7 million) Of the three-services, the proposed Army budget grows the slowest in FY85. only 10% in real terms vs. 15% for the Air Force and 13% for the Navy. Army modernization continues in FY85 with funding requested for a number of new systems that recently entered production, including: 720 M-l tanks ($1,786.0 million) 710 M-2 Bradley Fighting Vehicles ($1,120.8 million)

8 CRS- 7 IB84002 UPDATE-02/08/ Sergeant York air defense guns ($621.5 million) 585 Patriot surface-to-air missiles ($1, million) 6,026 Hellfire missiles ($237.5 million) 144 AH-64 attack helicopters ($1,476.2 million) 50,472 multiple launch rockets ($561.9 million) The President's new 5-year plan for FY89-FY89 totals $1,712.3 million (FY85 dollars) in budget authority and $1,507.5 million in outlays. In the proposed 5-year plan, the Administration's Defense Department budget is projected to grow in both budget authority and.outlays at relatively higher levels in the near term and lower levels in the out years. A summary of the Administration's 5-year plan appears in Appendix B of the printed version of this issue brief. 02/01/84 President Reagan submitted his FY85 budget to Congress. As requested, the budget of the Department of Defense totals $305.0 billion in budget authority. U.S. Office-of Management and Budget. Budget of the United States Government, FY85. Washington, U.S. Govt. Print. Off., U.S. Department of Defense. News Release No The FY85 Department of Defense Budget. Washington, Feb. 1, U.S. Department of Defense. Annual Report to the Congress. Washington, Feb. 1, 1983.

9 IB 84Q02 APPENDIX A LEGISLATIVE HISTORY OF THE FY85 DEFENSE BUDGET House Action Senate Action Reported by Committee, number /date Date House Passed Reported by Committee, number /date Date Senate Passed Conference Action First Concurrent Resolution on the Budget Second Concurrent Resolution on the Budget * DOD Authorization Military Construction Authorization - " DOE Defense Program Authorization DOD Appropriations. ' Military Construction Appropriations

10 BUDGET % % S O O ro w B A ($ BILLIONS) MILITARY RETIRED PAY * OTHER MILITARY FUNCTIONS TOTAL,CURRENT PRICES o 2J S 01 TOTAL.CONSTANT (1985) Prices PERCENT CHANGE OUTLAYS (S BILLIONS) % % % % % MILITARY RETIRED PAY* OTHER MILITARY FUNCTIONS TOT AL,CURRENT PRICES i TOTAL,CONST/VNT (1985) Prices PERCENT CHANGE % % % % COMPOSITE PAY/PRICE ASSUMPTIONS FOR OUTLAYS (FY 1985«100%) % Retired Pay is on a cash basis in FY 1984 and on an accrual basis thereafter.

CRS Report for Congress Received through the CRS Web

Order Code RL30002 CRS Report for Congress Received through the CRS Web A Defense Budget Primer December 9, 1998 Mary T. Tyszkiewicz Analyst in National Defense Foreign Affairs and National Defense Division