Both houses of Congress deal blows to DoD's cost-cutting proposals

Friday - 5/23/2014, 3:32am EDT

Jared Serbu, DoD reporter, Federal News Radio

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In two votes yesterday on separate versions of the annual defense authorization bill, the House shot down nearly every one of the Defense Department's proposals to cut its costs, and the Senate allowed just a few.

With regard to the Pentagon's requests to trim weapons systems, personnel spending and other major expenses, the final bill the full House of Representatives overwhelmingly passed Thursday differed very little from the version the House Armed Services Committee approved two weeks ago. In it, lawmakers rejected everything from another round of base closures to DoD's requests to retire weapons systems, mostly ignoring a White House veto threat.

Later in the day, the Senate Armed Services Committee passed its version of the DoD authorization bill, and lawmakers acceded to some of the cost cutters in the department's 2015 budget plan — but not all.

Few details on Senate bill

As of Thursday night, senators had not released any written details of their bill, which they marked up behind closed doors. However, Sen. Carl. Levin (D-Mich.), the chairman of the Armed Services Committee, told reporters late Thursday afternoon that the panel accepted a few of DoD's proposals, including one that would raise copays for prescription drugs when TRICARE beneficiaries buy them at retail pharmacies instead of via mail order or at a military treatment facility.

However, the committee rejected the Pentagon's proposal to combine TRICARE's three separate health insurance plans into one.

Also, the Senate committee went along with DoD's proposal to gradually reduce service members' tax-free housing allowances so that they cover only 95 percent of rent expenses in a given geographic area. And it signed off on the Pentagon's request to provide a 1 percent pay increase next year instead of the 1.8 percent raise that the current formula requires — one of the few areas of spending reductions that the House also agreed to.

But the preliminary Senate bill, like the House's final one, rejected many of the Defense Department's requests, including cutbacks to military commissary subsidies and a reduction in the military's real estate footprint through additional base closures.

"There was disagreement within the committee about this," said Sen. James Inhofe," (R-Okla.), the Armed Services Committee's ranking member. "But it's been my experience, having been here through all five BRAC rounds that they always lose money for the first two or three years. If there's ever a time when we can't afford to lose money unnecessarily, it's now."

House, Senate take different tack on weapons systems

With regard to weapons systems, the Pentagon has proposed to retire the Air Force's entire fleet of A-10 and U-2 aircraft, reallocate the Army's helicopters between the active Army and its reserve components, remove 11 Navy cruisers from service and also begin the process of retiring the aircraft carrier U.S.S. George Washington unless sequestration is repealed.

The House rejected each of those ideas. The Senate allowed a few, Levin said.

"The bill allows the Navy to move forward with its plan to lay up cruisers for overhaul, we allow the Army to move forward with its proposed aviation restructuring including the retirement of a number of types of helicopters, but we also provide for the establishment of an independent commission to review those decisions," Levin said. "And the bill shifts money from the Global Hawk to the U- 2, but it does not require the Air Force to retire or keep either aircraft."

But the Senate bill, like the House version, requires the Air Force to keep the A- 10 in service, and also blocks the retirement of the George Washington.

"We concluded it would be unacceptably wasteful to retire a multibillion ship that still has 25 years of useful life ahead of it," Levin said. "We were not able to find enough money to pay for all of the refueling of that carrier, but we did authorize the Navy to take up to $650 million from other programs we believe are under-executing and use that money to keep the carrier alive. We believe the money will be there to do just that."

Disagreement over top-line

The two houses also differ in the amount of money they authorize for DoD. The House wound up with a total top line figure of $601 billion. The Senate version matches the Obama administration's own proposal: $514 billion. The largest reason for the difference is that the House is continuing to rely on the overseas contingency operations account that's currently funding the war in Afghanistan. Its version of the bill, for example, relies on those OCO funds — which are not subject to sequestration — to save the A-10. The White House budget proposal for DoD will likely grow by tens of billions of dollars in the next few months as well, once the administration submits its request for 2015 OCO funding.