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HFES Bulletin

January 2014
Volume 57, Number 1

Public Policy Matters

Bipartisan Budget Agreement Cleared by Congress, Paving the Way for an Omnibus Appropriations Bill

By Lewis-Burke Associates LLC

On December 26, 2013, President Obama signed a into law a bipartisan budget agreement that will restore funding to the appropriations process for both fiscal years (FY) 2014 and 2015 and avoid further threat of a government shutdown. The House and Senate Appropriations Committees must now negotiate a final FY 2014 Continuing Resolution (CR)/omnibus appropriations bill before the current CR expires on January 15. The House and Senate Appropriations Committees have done the preparatory work to outline differences in pending bills. The full Appropriations Committee will provide each subcommittee with its spending allocation within the overall total of $1.012 trillion agreed to in the final budget agreement. Each subcommittee will begin negotiations over the holidays to write its chapter of an omnibus bill to complete the FY 2014 appropriations process.

On December 18, the U.S. Senate gave final approval to the modest budget agreement. Twelve Senate Republicans joined all Senate Democrats and two Independents in providing the supermajority vote to end debate on the Continuing Resolution (H.J. Res. 59) that carried the final budget agreement. The budget agreement was then adopted by the Senate on a 64 to 36 vote. Prior to the Senate vote, and in a dramatic reversal from the 16-day government shutdown in October, on December 12, the House of Representatives overwhelmingly passed the budget agreement on a 332 to 94 vote.

The key elements of the bipartisan budget agreement would do the following:

  • Provide $63 billion over two years above the potential sequester to the House and Senate Appropriations Committees for purposes of writing the FY 2014 and FY 2015 spending bills. These funds would be split evenly between defense and nondefense spending. The new spending level provides flexibility to the Appropriations Committees to sustain funding for federal science agencies, and education programs, including student aid.
  • Provide an overall spending level of $1.012 trillion for FY 2014. This level is about halfway between the House budget resolution and potential sequester level of $967.5 billion, and the Senate budget resolution spending cap of $1.058 trillion. Within this total, $491.8 billion would be provided for nondefense discretionary spending for FY 2014, an increase of $22.4 billion above the current law (sequester) level. The agreement sets FY 2015 spending for nondefense programs at $492.5 billion, an increase of $9.3 billion above the current law (sequester) level.
  • Save an additional $28 billion by extending certain mandatory savings, most of which is the 2% reduction to Medicare providers, for an additional two years (through FY 2023) beyond the Budget Control Act of 2011.
  • Include a package of legislative savings from mandatory programs, user fees, and miscellaneous program reforms and changes totaling $85 billion over 10 years to offset the additional funding provided to the Appropriations Committees to help alleviate the sequester. The net deficit reduction would be approximately $23 billion under this agreement.

The big winner in the budget agreement is the Department of Defense and related programs, which faced the full brunt of the anticipated $20 billion sequester in January. The budget agreement would provide a total of $520.5 billion for defense discretionary programs in FY 2014 and $521.4 billion in FY 2015, increases of $22.4 billion and $9.3 billion, respectively.

Additional information is available in the following documents: the Bipartisan Budget Act of 2013; the legislative language of the agreement; a complete list of the savings provisions included in the budget agreement; and the cost estimate of the bill by the Congressional Budget Office (CBO).

Although the budget agreement passed with bipartisan support, this action does not address the debt limit, which will again need to be raised sometime in the spring of 2014. Although neither party wants another government shutdown, there is no current consensus on how Congress will proceed on the debt ceiling, particularly as Members increasingly turn their focus to the 2014 midterm elections.

Congress Approves FY 2014 National Defense Authorization Act (NDAA)
On December 12, the House of Representatives passed a compromise version of the fiscal year 2014 National Defense Authorization Act (NDAA) as Congress scrambled to finish the legislation before leaving town for the holidays. House passage was the first step to "ping-pong" the bill between the House and Senate to secure final passage. The bill then passed the Senate late on December 19 and was sent to President Obama who signed the bill into law on December 26. Leaders of the House and Senate Armed Services Committees (HASC/SASC) negotiated the compromise NDAA in an attempt to fast-track final passage of a bill that had been delayed throughout the year due to partisan debates.

This is the 52nd consecutive year in which Congress has passed the NDAA, which sets the limits at which Department of Defense (DOD) programs can be funded and establishes defense policy guidelines for the fiscal year. However, even the historically bipartisan NDAA has become a heavy lift in an increasingly polarized Congress.

The compromise NDAA negotiated by HASC Chairman Buck McKeon (R–CA) and SASC Chairman Carl Levin (D–MI), along with Ranking Members Adam Smith (D–WA) and Jim Inhofe (R–OK), authorizes a total of $625.1 billion for FY 2014. This amount includes $526.8 billion in base funding for DOD, $80.7 billion in Overseas Contingency Operations (OCO) funding for the war in Afghanistan, and $17.6 billion for nuclear weapons programs at the Department of Energy. These amounts are similar to those in President Obama's FY 2014 budget request as well as in the House and Senate budget resolutions.

The amounts violate the cap on defense spending set by the Budget Control Act of 2011 but are closer to the levels included for defense programs in the FY 2014 budget agreement struck by House Budget Committee Chairman Paul Ryan (R–WI) and Senate Budget Committee Chairwoman Patty Murray (D–WA). Authorization levels are often higher than the amounts at which programs are funded through the annual appropriations process.

The authorized levels for defense research, development, test, and evaluation (RDTE) programs reflect bipartisan, bicameral support for DOD's continued technological advancement. A total of $67.74 billion is in the compromise NDAA for RDTE programs, including just under $12 billion for defense science and technology (6.1–6.3; basic research, applied research, and advanced technology development) programs. Although the levels contained in the FY 2014 compromise NDAA are positive for universities and other nonprofit research institutions, these programs could see significant reductions in FY 2015. DOD officials suggest that research and other "investment" accounts could be cut by up to 20% in the President's FY 2015 budget request as Pentagon leadership prioritizes operations and readiness.

The compromise NDAA also contains policy provisions of interest to the research community, including the following:

HASC and SASC leadership accept a Senate provision changing requirements for the Defense Advanced Research Projects Agency (DARPA) strategic plan. The compromise NDAA would shift responsibility for producing the plan from the Secretary of Defense to the DARPA director, who would also be required to place a greater emphasis on how the agency's high-risk work supports future defense operations. This provision reflects a growing desire among policymakers for DOD-funded research, including basic research, to align with defense priorities. Members of Congress and DOD officials have suggested that DOD should fund less research that may be supported by other agencies (e.g., some types of biomedical research) as planned spending levels decline.

HASC and SASC members remain concerned about the state of DOD's national laboratories. The compromise NDAA includes an extension of authority for DOD national labs to make infrastructure improvements and other "revitalizations" through a previously authorized program. As Lewis-Burke has reported, HASC and SASC staff and Administration officials worry about an erosion of DOD's internal science, technology, engineering, and mathematics (STEM) capacity.

The compromise NDAA adopts a provision included in the House bill to authorize a five-year proof-of-concept pilot program to be administered by the Office of the Secretary of Defense. The program, which would be open to research universities, would provide grants of up to $500,000 to accelerate the transition of basic research to defense-ready technologies. The pilot program would be authorized through FY 2018.

The compromise bill rejects a provision in the House NDAA that would have required DOD to assess whether existing programs–including the Science, Mathematics, and Research for Transformation (SMART) program–could meet the undergraduate STEM workforce needs of the intelligence community. Although the provision is omitted from the final bill, the explanatory report notes the challenges faced by DOD and the IC in attracting the next-generation STEM workforce. The bill does not authorize an expansion of the SMART program to meet the needs of the intelligence community. Expect HASC and SASC members to remain focused on DOD's STEM workforce challenges in the coming year.

Mental health among service members and veterans remains a top concern for HASC and SASC leaders. The bill authorizes numerous provisions aimed at improving mental health treatment for service members returning from Iraq and Afghanistan, including those suffering from traumatic brain injury or post-traumatic stress disorder. The bill also seeks to enhance mental health care for National Guard members.

Research and development provisions were among the least controversial issues considered during development of the NDAA. Divisive issues such as how to prosecute sexual assaults in the military, the fate of detainees at Guantanamo Bay, whether to proceed with a missile defense shield on the East Coast, and the future of several large weapons programs were among the debates that delayed progress on the NDAA.

Lewis-Burke Associates LLC, a leading Washington, D.C.–based government relations and consulting firm, represents the public policy interests of scientific societies and institutions of higher education. Lewis-Burke's staff of about 20 government relations professionals work to promote the federal research and policy goals of HFES and the HF/E community.

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