by Shaun McDougall, Military Markets Analyst, Forecast International.
The United States has what is probably the most transparent defense budget process in the world. The Pentagon releases an annual budget request that provides detailed information on virtually every line item in the budget. House and Senate defense committees then release markups of the budget, comprising hundreds of pages of mandates, recommendations, and opinions and providing insight into the often fickle minds of lawmakers. Congressional budget markups also contain the all-important funding tables that dictate the various winners and losers throughout the budget process.
Navigating this legislation is often easier said than done. Congressional accounting methods can make budget questions more difficult to answer than one might think. It is at these times that I use Forecast International’s U.S. Defense Budget Forecast tool to see through the smoke and mirrors.
How much procurement funding, for example, does the House Armed Services Committee include in its markup of the FY17 defense authorization bill, and what is the net change in funding compared to the president’s request?
In light of mandatory spending caps, the committee’s markup uses the Pentagon’s war budget – known as the Overseas Contingency Operations, or OCO, budget – to increase funding for procurement programs in the base budget. As a result of this maneuvering, the legislation actually contains three separate procurement funding tables: one for the base budget and two for the OCO account (the second OCO funding table is intended for base budget priorities). Pictured below are the procurement totals from those three tables as presented in the committee markup.
As illustrated above, Congress employs ambiguous accounting practices. Source: FY17 Defense Authorization Act (House Markup)
Determining the impact the legislation will have on procurement would require a careful examination of all three funding tables and the hundreds of lines contained within. And don’t forget that Congress often shifts funding for certain programs outside of the procurement budget, meaning the markup’s funding tables can be deceiving at first glance. Merely adding the subtotals from the three procurement tables would not take into account any changes to the military’s Joint Improvised Explosive Device Defeat Fund or Chemical Agents and Munitions Destruction accounts, for example, which lawmakers shift outside of the procurement budget. Nor would it account for the committee’s recommendation to transfer some $773.1 million for a new ballistic submarine to a supplemental account that falls outside of the Navy’s shipbuilding account.
FI’s U.S. Defense Budget Forecast provides a clearer view of the procurement budget. Source: Forecast International
Forecast International accounts for all of these issues by loading the Pentagon’s acquisition budget into an in-house database, which then tracks every single line item through the entire budget process. The user is presented with a single summary page for both the procurement and RDT&E accounts, with the ability to drill down to individual appropriations accounts, as well as to individual programs. A quick view of our online tool shows that the House markup provides a net increase of $10.1 billion for all programs contained in the DoD’s Procurement Programs (P1) request. Combined base and OCO funding is presented by default, but a cost type filter allows the user to sort by base, OCO, or other supplemental funding as well.
Now let’s see how our online tool simplifies things at the program level, taking the UH-60M Black Hawk as an example. The HASC recommends an increase of $440.2 million for 36 additional helicopters, but those aircraft are not included in the base budget or the standard OCO funding table. Rather, they are included in the legislation’s secondary OCO funding table. Once again, our online tool puts all of the data in one easy-to-find place.
With FI’s online budget tool, program-level data is at your fingertips. Source: Forecast International
Our online database provides a simultaneous view of the House, Senate, and conference authorization markups, as well as the House, Senate, and conference appropriations markups, as they are released by defense committees, along with links to legislation and other summary documents. Furthermore, we provide a 10-year forecast for every line item in the procurement and RDT&E accounts, as well as filters to sort budget lines by market segment.
Visit Forecast International to learn more about our extensive U.S. Defense Budget Forecast tool.
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