Appropriations and Authorization for FY2002: Defense
CRS Report for Congress
Appropriations and Authorization for FY2002:
Updated February 2, 2002
Amy Belasco and Stephen Daggett
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bound by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current program
This report is a guide to one of the 13 regular appropriations bills that Congress considers
each year. It is designed to supplement the information provided by the House and Senate
Defense Appropriations Subcommittees. It summarizes the current legislative status of the
bill, its scope, major issues, funding levels, and related legislative activity. The report lists
the key CRS staff relevant to the issues covered and related CRS products.
This report is updated as soon as possible after major legislative developments, especially
following legislative action in the committees and on the floor of the House and Senate.
NOTE: A Web version of this document with active links is
available to congressional staff at:
Appropriations and Authorization for FY2002: Defense
On June 27, the Administration submitted an amended fiscal year 2002 defense
budget request to Congress. The request totaled $343.5 billion in funding for the
national defense budget function, $32.9 billion above the amount originally enacted
for FY2001, an 11% increase. The total included funding for the Department of
Defense and for defense-related activities of the Department of Energy and other
agencies. Both House and Senate versions of the DOD appropriations bill provided
the total for national defense that the Administration requested. To accommodate that
level, Congress adjusted limitations in the 1997 Balanced Budget Act and set aside
provisions in this year’s concurrent budget resolution that were designed to protect
the social security surplus.
With the onset of a recession last spring, along with higher defense spending and
additional federal spending in response to the terrorist attacks, and lower revenues
due to the tax cut, the government is expected to run a deficit as well as use all of the
surplus generated by social security revenues. With the destruction of the World
Trade Center and the extensive damage to the Pentagon by terrorists on September
11th, congressional concerns shifted from whether the overall federal budget could
accommodate higher defense expenditures without spending the budget surplus to
adding funding for defense programs that combat terrorism.
Funding to aid the victims and provide for recovery from the attacks, for the
ongoing conflict in Afghanistan, and for other programs to combat terrorism, was
approved in the $40 billion Emergency Terrorism Response supplemental
appropriations act (P.L. 107-38) that passed Congress September 14, 2001. Of that
total, DOD receives $17.5 billion of the total funding in the Emergency Terrorism
Response supplemental, about 44% of the total (see P.L. 107-117 and H. Report.
107-350) with about 56% going to other agencies. Allocation of half of the $40 billion
was included in P.L. 107-117/H.R. 3338, the FY2002 DOD appropriations act, which
was signed by the President on January 10, 2002.
Although there had been broad bipartisan support for adding funds for recovery
and response to the September 11 terrorism attacks, sharp differences emerged about
whether the total amount was sufficient and whether the allocations matched the most
critical priorities, particularly for New York and other homeland security needs. The
President, however, threatened to veto any spending measure this year that went
beyond the $40 billion. Faced with this threat, both the House and the Senate rejected
proposals to add more emergency funding to H.R. 3338 when they passed the bill.
Instead, within the $20 billion total that was acceptable to the President, the
conference bill shifts $3.4 billion of the $7.3 billion funds allocated to Defense by the
Administration to homeland security and recovery of New York.
The conference version of the National Defense Authorization Act for FY2002
was passed by the House and the Senate on December 13, 2001, and signed by the
President on December 28, 2001 (P.L. 107-107/S. 1438,H.Rept. 107-333). The Act
provides $343.3 billion as requested by the Administration and authorizes another
round of base closures but delays the date to 2005, settling the chief issue in
Area of ExpertiseNameCRS DivisionTelephone
Aviation ForcesChristopher BolkcomFDT7-2577
Arms ControlAmy WoolfFDT7-2379
Arms SalesRichard GrimmettFDT7-7675
Base ClosureDavid LockwoodFDT7-7621
Defense BudgetStephen DaggettFDT7-7642
Defense BudgetMary TyszkiewiczFDT7-3144
Defense BudgetAmy BelascoFDT7-7627
Defense IndustryGary PaglianoFDT7-1750
Defense R&DJohn MoteffRSI7-1435
Ground ForcesEdward BrunerFDT7-2775
Ground ForcesSteven BowmanFDT7-7613
Health Care; MilitaryRichard BestFDT7-7607
Military ConstructionDaniel ElseFDT7-4996
Military PersonnelDavid BurrelliFDT7-8033
Military PersonnelRobert GoldichFDT7-7633
Military Personnel;Lawrence KappFDT7-7609
Missile DefenseSteven HildrethFDT7-7635
Naval ForcesRonald O’RourkeFDT7-7610
Nuclear WeaponsJonathan MedaliaFDT7-7632
Peace OperationsNina SerafinoFDT7-7667
Radio Frequency, MilitaryLennard KrugerRSI7-7070
Space, MilitaryMarcia SmithRSI7-7076
War PowersDavid AckermanALD7-7965
War PowersLouis FisherG&F7-8676
War PowersRichard GrimmettFDT7-7675
FDT = Foreign Affairs, Defense, and Trade Division
G&F = Government and Finance Division
RSI = Resources, Science, and Industry Division
Most Recent Developments........................................1
Background .................................................... 2
Status ........................................................ 3
Debate on Funding to Combat Terrorism..........................4
Total Funding for National Defense in FY2002.....................4
Enacted Version of FY2002 DOD Appropriations Bill................7
Prior Congressional Action on FY2002 Appropriations and
Funding to Combat Terrorism: Congressional Action.....................9
Composition of Anti-Terrorism Supplemental.....................11
The President’s $20 Billion Allocation Request....................17
Administration’s Defense Funding Request to Combat Terrorism ......25
Previous National Security Funding to Combat Terrorism............30
Changes in the Budgetary Context since the Terrorist Attacks.............32
Likely Reductions in the Surplus...............................32
Other Potential Claims on the Surplus...........................35
Action on the FY2002 DOD Appropriations Bill.......................37
Enacted Version of DOD Appropriations Bill......................37
Previous Congressional Action on FY2002 DOD Appropriations......38
Military Construction Appropriations............................40
FY2001 Non-Emergency Supplemental Appropriations..............40
Action on FY2002 DOD Authorization Act...........................41
Conference Version of FY2002 DOD Authorization Act.............42
House Action on S. 1438, FY2002 DOD Authorization Bill...........43
Senate Action on S. 1438, FY2002 DOD Authorization Bill..........44
FY2002 Congressional Budget Resolution............................46
Section 302 (b) Allocations...................................46
Overview of the Bush Administration Request.........................47
Initial Budget Projections.....................................47
June 27 Budget Amendment..................................48
Future Defense Spending Plans................................50
Composition of Changes in the FY2002 Amended Budget............52
Major Issues in the FY2002 Amended Defense Budget..................57
Accommodating the FY2002 Increase Within Budget Constraints......57
Adequacy of Funding for Procurement...........................63
Implications of Recent Rise in Defense Health Costs................64
Spending for Operation and Maintenance.........................65
Major Weapons Issues.......................................69
Defense R&D Spending......................................75
Chemical Weapons Destruction, and Cooperative Threat Reduction.....77
Military Bases, Competitive procurement, and Defense Industry.......78
Space, Intelligence, and Communications Issues....................80
Legislation .................................................... 82
Emergency Supplemental Appropriations.........................83
Authorization for Use of Military Force..........................83
For Additional Reading..........................................84
Selected World Wide Web Sites ...............................87
List of Tables
Table 1a. Status of FY2002 Defense Appropriations.....................3
Table 1b. Status of FY2002 Defense Authorization......................4
Table 2. National Defense Function by Appropriations Bill,
FY2001 to FY2002 Enacted...................................6
Table 3. Department of Defense Appropriations Bill by Title,
FY2002 to FY2002 Enacted...................................8
Table 4. Allocations of Anti-Terrorism Supplemental by Agency...........14
Table 5. Congressional Action on DOD’s Share of $20 Billion Supplemental..20
Table 6. DOD Allocations under $40 billion Emergency Terrorism
Table 7. OMB Estimate of National Security Community Funding to
Combat Terrorism, FY2000 - FY2002...........................31
Table 8. Bipartisan Estimate of the Post September 11, 2001
Budgetary Outlook: FY2002-FY2011...........................34
Table 9. Other Potential Claims on the Surplus........................36
Table 10. Department of Defense Funding, FY2000 through the
Amended FY2002 Budget Request.............................49
Table 11. Changes in Administration’s Estimates for National Defense,
FY2000 - FY2006..........................................50
Table 12. Composition of Changes Between FY2002 Amended Request and
FY2001 Enacted Amounts....................................53
Table 13. Major Changes in FY2002 Amended Bush Budget.............54
Table 14. Congressional action on Ballistic Missile Defense Funding:
FY2001 to FY2002 Enacted..................................62
Table 15. Department of Defense RDT&E: Total Obligational Authority....76
Table A1. Defense Appropriations, FY1998 to FY2002.................89
Table A2. Congressional Action on Major Weapons Programs,
Table A3. Congressional Action on Major Weapons Programs,
List of Figures
Figure 1. Composition of $40 billion Supplemental Request..............12
Figure 2. Composition of $40 Billion Supplemental Enacted..............13
Figure 3. Allocation of $40 Billion by Major Purposes: Administration Plan..16
Figure 4. Allocation of $40 Billion by Major Purposes: Actual............16
Figure 5. Enacted Allocation of Second $20 Billion.....................17
Figure 6. Enacted Allocation of Second $20 Billion....................18
Appropriations and Authorization for
Most Recent Developments
On January 10, 2002, the President signed P.L. 107-117, the FY2002 DOD
Appropriations Act (H.R. 3338). On December 20, 2001, the House and the Senate
passed H.R. 3338 by 408 to 6 and 94 to 2, respectively. In addition to providing the
funding requested by the Administration for DOD, the act allocates $20 billion in
Emergency Terrorism Response supplemental (P.L. 107-38) funding among all
federal agencies to combat terrorism and provide aid and recovery to the victims of
The debate on the FY2002 DOD appropriations act centered on the allocation
of the $20 billion in funding to combat terrorism. The conferees resolved the
significant differences between the House and Senate versions by shifting $4.3 billion
in funding requested by the Administration for DOD to non-defense agencies to
combat terrorism and provide aid to New York city. Efforts in both houses to
increase funding for antiterrorism beyond the $20 billion already enacted in the
emergency supplemental failed after President Bush threatened to veto any bill that
exceeded that amount. The final version of the bill provides $317.2 billion to the
Department of Defense in regular appropriations.
The DOD Authorization Act (S. 1438) was passed on December 13 and also
provided the amount requested by the Administration. The authorizers resolved the
chief item of contention - base closures - by delaying the date to 2005.
There was little controversy about the total amount of regular appropriations
for DOD. Along with funds for military construction and other defense-related
programs, the $317.2 billion for DOD in the final version of H.R. 3338 provides
$343.3 billion, about the same amount in total as requested by the Administration.
Because of the recession that began last spring, along with accommodating the full
defense request, emergency spending to combat terrorism, and lower tax revenues
because of the tax act, funding government expenditures in FY2002 will require not
only using all of the social security surplus but also returning to deficit spending.
Congress provides funding for national defense programs in several annual
appropriations measures, the largest of which is the defense appropriations bill.
Congress also acts every year on a national defense authorization bill, which
authorizes programs funded in all of the regular appropriations measures. The
authorization bill addresses defense programs in almost precisely the same level of
detail as the defense-related appropriations, and congressional debate about major
defense policy and funding issues usually occurs mainly in action on the authorization.
Because the defense authorization and appropriations bills are so closely related,
this report tracks congressional action on both measures.
The annual defense appropriations bill provides funds for military activities of the
Department of Defense (DOD), including pay and benefits of military personnel,
operation and maintenance of weapons and facilities, weapons procurement, and
research and development, as well as for other purposes.
Most of the funding in the bill is for programs administered by the Department
of Defense, though the bill also provides (1) relatively small, unclassified amounts for
the Central Intelligence Agency retirement fund and intelligence community
management, (2) classified amounts for national foreign intelligence activities
administered by the CIA and by other agencies as well as by DOD, and (3) very small
amounts for some other agencies. Five other appropriations bills also provide funds
for national defense activities of DOD and other agencies including:
!the military construction appropriations bill, which finances
construction of military facilities and construction and operation of
military family housing, all administered by DOD; and
!the energy and water development appropriations bill, which
funds atomic energy defense activities administered by the
Department of Energy.
!the VA-HUD-independent agencies appropriations bill, which
finances civil defense activities administered by the Federal
Emergency Management Agency, activities of the Selective Service
System, and DOD support for National Science Foundation
!the Commerce-Justice-State appropriations bill, which funds
national security-related activities of the FBI, the Department of
Justice, and some other agencies; and
!the transportation appropriations bill, which funds some defense-
related activities of the Coast Guard.
On January 10, 2002, the President signed P.L. 107-117 (H.R. 3338), the
FY2002 DOD Appropriations Act, including both the regular funding for defense and
the allocation of $20 billion among all government agencies that was provided in the
Emergency Terrorism Response supplemental to combat terrorism (see H.Rept. 107-
3338/P.L. 107-117, the conference version of the FY2002 Department of Defense
(DOD) appropriations bill. Although Congress provided $343.3 billion for National
Defense, close to the total requested by the Administration, Congress re-allocated the
funding – providing $1.7 billion less than requested for the Department of Defense,
and $500 million more for military construction, and $750 million more for the2
Department of Energy’s defense programs. Of the $20 billion in emergency
supplemental funding that was allocated in H.R. 3338, DOD received $3.5 billion.
Although P.L. 107-117 (H.R. 3338) makes various changes to the
Administration’s FY2002 request for regular DOD appropriations, the
Administration’s basic priorities are preserved, including a substantial increase in
overall resources for defense, a large increase in military pay and full funding of
defense health benefits, and a major jump in spending for missile defense. Congress
does, however, reduce spending on operations and maintenance on the basis of
various pricing adjustments and efficiency measures in order to accommodate
increases to the procurement and RDT&E accounts (see below for a fuller
A week earlier, on December 13, 2001, both houses passed S. 1438, the
conference version of the FY2002 DOD authorization bill (see S.Rept. 107-333 and
Table 1b). The conferees resolved the chief issue in contention - authorizing another
round of base closures as requested by the Administration - by delaying the date to
2005. In addition, the authorizers set upward limits on the amounts that could be
provided in the emergency supplemental to combat terrorism.
Table 1a. Status of FY2002 Defense Appropriations
Report Passage Report Passage Report Law
House Senate House Senate
10/24/01 11/19/01 11/28/01 12/5/01 12/7/01 12/19/01 12/20/01 12/20/01 1/10/02
1 For an overview of the defense budget process in Congress, see CRS Report RL30002, A
Defense Budget Primer, by Mary Tyszkiewicz and Stephen Daggett.
2 The total amount provided for the national defense function by Congress was $343.3 billion
compared to the Administration’s request of $343.5 billion, but the $220 million difference
reflected different estimates of spending in mandatory programs.
Table 1b. Status of FY2002 Defense Authorization
Full CommitteeConference Report
Report Passage Report Passage Report
House Senate House Senate
9/4/01 9/25/01 9/12/01 10/2/01 12/12/01 12/13/01 12/13/01 12/28/01
107-194 107-62 107-333
Debate on Funding to Combat Terrorism
During floor consideration of the bill in both houses, the debate centered on the
adequacy and allocation of the $20 billion in emergency supplemental funding to
combat terrorism. In response to concerns raised by members that more funding was
needed for the recovery of New York and homeland defense, the conferees shifted
$4.3 billion from funding requested by the Administration for DOD to those purposes.
Several members suggested that the Administration could request additional funding
for defense in a FY2002 supplemental. Earlier attempts to provide funding above the
$20 billion already appropriated were stymied by the threat of a presidential veto.
Of the total $40 billion provided by the emergency supplemental, DOD received
$17.5 billion, including $14 billion that was allocated at the discretion of the President
and $3.5 billion that was allocated in the FY2002 DOD appropriations act (see
below).3 Non-defense agencies received a total of $22.5 billion, including $16.5 billion
that was allocated in the FY2002 DOD bill. Within that $16.5 billion for non-defense
agencies, the major programmatic emphasis is for:
!recovery for New York and other affected areas ($5.0 billion);
! bioterrorism $2.8 billion); and
! investigatory activities ($2.3 billion).
(See discussion below and CRS Report RL31187, Terrorism Funding: Congressional
Debate on Emergency Supplemental Allocations, by Amy Belasco and Larry
Total Funding for National Defense in FY2002
Total funding appropriated for the national defense function in FY2002,
including the $3.5 billion of funding from the Emergency Terrorism Response
supplemental that was allocated in the DOD bill, is $346.8 billion (see Table 2).
DOD also received $14.0 billion in funding from the Emergency Terrorism Response
3 Of the $40 billion appropriated In P.L. 107-38, the terrorism supplemental, the President
could allocated $20 billion at his discretion, and $20 billion became available only when
included in a subsequent appropriation bill.
supplemental that was distributed by the President (see below).4 Those funds are
included in DOD’s FY2001 appropriations. Including those funds along with $5.8
billion provided last summer in a non-emergency supplemental, funding for national
defense in FY2001 totaled $330.5 billion, or $16.3 billion below the total for FY2002.
Since the advent of the new Administration, resources available to DOD have
increased by a total of $56 billion, including:
!$5.8 billion appropriated in the non-emergency supplemental in late
!$32.6 billion increase for FY2002 provided by Congress in the
regular defense appropriations as requested by the Administration;
!$17.5 billion in emergency supplemental funding to combat
President Bush’s increase in resources for defense of $56 billion or 18% in real
growth for defense within a year is comparable to the $61.6 billion, or 19% real
growth in defense resources, added by President Reagan between 1981 and 1982 in5
his first year in office (all figures in FY2002 dollars). In comparison to growth in
defense spending between 1965 and 1966, the beginning of the buildup for the
Vietnam war, the additions by President Bush are somewhat larger - $56 billion
compared to $53.5 billion (in 2002 $) for Vietnam.6
Combined with the emergency funding allocated to non-defense agencies and the
impact of the recession that began in the spring of 2001, this additional funding for
Defense required that Congress set aside earlier budgetary guidelines designed to
protect the surplus generated by the Social Security and Medicare trust funds and
return to deficit spending (see below).
4 P.L. 107-38 permitted the President to allocate $20 billion of the $40 billion in emergency
supplemental funding at his discretion whereas the second $20 billion would not become
available until the allocation was included in a subsequent appropriation act. Because no
additional legislative action was necessary for agencies to receive allotments from the first $20
billion, CBO counts (or ‘scores’) allocations of the first $20 billion as FY2001
appropriations. Since allocations of the second $20 billion required additional legislation that
occurred in FY2002, those funds are counted (or ‘scored’) as FY2002 funds.
5 The comparison is between the total for national defense originally enacted for FY1981 -
$323.2 billion in FY2002 dollars - and the final level in FY1982 of $384.8 billion. When the
late-President Reagan came to office, he proposed supplemental appropriations for FY1981
and an amended FY1982 budget.
6 Between 1980 and 1982, funding for national defense grew from $310.3 billion to $384.8
billion (all in 2002 dollars), including supplemental funding provided by Congress in response
to President Reagan’s request in 1981 and the enacted version of Reagan’s amended FY1982
budget. See Table 10 in CRS Report RL30976, Defense Budget for FY2002: Data
Summary, Final Version, by Mary T. Tyszkiewicz.
Table 2. National Defense Function by Appropriations Bill,
FY2001 to FY2002 Enacted
(in millions of dollars a)
Appropriations Bill andFY2001FY2002 FY2002FY2002FY2002
Budget FunctionenactedAmendedEnactedAppropsEnacted vs.
Request vs. RequestFY2001
Military Construction &8,9599,97110,4875161,528
Offsetting Receipts and-1,272-1,134-1,10727165
Total, Department of295,060327,782326,575-1,20731,515
Atomic Energy (053)14,06514,25215,002750937
Total, National Defense310,643343,504343,280-22432,637
Total, National Defense316,463343,504343,280-22426,817
(050) with Non-
function with Non-
a. Includes discretionary and mandatory funding.
b. P.L. 107-20, Supplemental appropriations for FY2001.
c. P.L. 107-38, the Emergency Terrorism Response supplemental, appropriated $40 billion in
emergency supplemental funding to respond to the terrorist attacks of September 11,2 001. Of
that total, $20 billion was available to be distributed by the President without further
congressional action; for that reason, the Congressional Budget Office scored or considered
those funds as FY2001 appropriations. Because the second $20 billion became available only
when included in a later appropriation act, those funds are FY2002 appropriations.
House Appropriations Committee, appropriations tables for FY2002, Conference report on H.R. 338,
FY2002 DOD Appropriations, H.Rept. 107-350, Conference report on S. 1438, FY2002 DOD
Authorization, CBO cost estimates for S. 1438, Pay-as-you-Go, DOD (Comptroller), National
Defense estimates for FY2002, OMB, Budget of the United States (April 2001), and Mid-Session
Update, August 2001, and CRS calculations.
Enacted Version of FY2002 DOD Appropriations Bill
In the enacted version of H.R. 3338, P.L. 107-117, the FY2002 DOD
appropriations bill, Congress endorses most of the Administration request. Despite
some concerns raised by members, Congress funds most of the substantial increase
in funding requested for the Ballistic Missile Defense program. P.L. 107-117 also
provides the full increases in pay and benefits requested by the Administration, and
in all but a couple of cases, the funding requested for major weapons systems (e.g.
JSF, F-22 Captor, Comanche, Crusader, DDG-51 cruiser). Those major programs
in which Congress reduces funding – the V-22 tilt rotor aircraft and the Navy’s new
surface combatant – are troubled programs that the Department of Defense is in the
process of designing (for more detailed discussion, see below). The overall RDT&E
funding level is higher than requested (see Table 3 and Summary Tables A2 and
The greatest divergence in funding priorities is for Operation and Maintenance,
(O&M) where Congress reduces the Administration’s request for O&M at funding
by $3.1 billion in FY2002 to reflect anticipated savings from a variety of management
reforms, as well as cuts in administrative areas (like headquarters) and various pricing
adjustments (e.g. fuel and foreign currency). O&M funds not only training that
ensures readiness but also support of the military infrastructure (see below).
Congress also all but eliminates the Overseas Contingency Operations Transfer
Fund, a revolving and management account that funds ongoing continency operations
(like Bosnia), as well as unanticipated operations. Congress transfers the funds
designated for Bosnia to the services and cuts $650 million from the request,
suggesting that the accounting of funds needed to be improved.7 This issue is likely
to resurface in the FY2003 budget request. For additional information on
congressional changes, see individual sections on “Major Issues” and “Other
Important Issues” below.
7 See H.Rept. 107-350, p. 209. This fund was not used for operations in Afghanistan because
of the passage of the Emergency Terrorism Response supplemental on September 14, 2001.
Table 3. Department of Defense Appropriations Bill by Title,
FY2002 to FY2002 Enacted
(in millions of dollars)
without suppsaAmendedEnacted Enacted vs.Enacted vs.
Request FY2001 Request
Operation and Maintenance107,954125,730122,54114,587-3,189
Procurement c 62,11161,59561,333-778-262
Research, Development, Test40,82947,42948,7047,8751,275
Revolving & Management1,0442,2371,595551-642
Counter-terrorism & Defense00881881881
agst. Weapons of Mass
Legislative proposals for0-33000330
Total DOD appropriations287,373318,945317,19529,822-1,750
Reflects FY2001 enacted level prior to non-emergency and emergency supplementals, P.L. 107-
Reflects effect of rescissions include in the FY2002 DOD appropriations bill.
OMB, CBO, House Appropriations Committee, and conference reports on H.R. 3338 (H.Rept. 107-
Prior Congressional Action on FY2002 Appropriations and
Action on the defense appropriations bill was delayed by the debate about the
amount and the distribution of the emergency supplemental funds. On December 7,
2001, the Senate passed by voice vote H.R. 3338, the FY2002 DOD appropriations
bill after making major changes to the bill as reported by Committee (S.Rept. 107-
109). Both the Senate and House bills appropriated $317.6 billion for the Department
of Defense and allocated $20 billion in emergency supplemental funding to combat
terrorism that was previously appropriated on September 14 in response to the
terrorist attacks of September 11 (P.L. 107-28), but there were significant differences
between the bills.
As in the House, debate on the defense appropriations bill in the Senate focused
on the adequacy and allocation of the emergency funding (see below).8 During Senate
8 National Journal’s Congress Daily, “Appropriations: White House Urges Hard Line on
Defense,” December 5 2001, and National Journal’s Congress Daily, “Appropriations: Senate
Approps Panel Turns to Final FY02 Spending Bill,” December 5, 2001, and BNA, Daily
floor debate, the additional $15 billion in funding for homeland security that was
included by the Appropriations Committee was stripped from the bill through a series
of procedural motions.9 The President threatened to veto any funding beyond that
already appropriated in the emergency supplemental. Once the additional funding was
deleted, the allocation of the $20 billion was adjusted in response to the policy
priorities of Senator Byrd and other members pressing for additional funding. The
Senate bill as passed shifted $5.3 billion in funds requested for Department of Defense
to homeland security and aid to New York, a compromise that laid the groundwork
for the final version of the bill.
On November 28, 2001, the House passed the FY2002 DOD appropriations bill,
H.R. 3338, by 406 to 20 after turning aside attempts by Representatives Obey, Walsh,
Lowey, and Murtha to add funds for homeland security for both defense and non-
defense needs. In a compromise agreement worked out with the Administration
several days earlier, an additional $1.5 billion out of the $20 billion was allocated to
New York in the House version of H.R. 3338.
Action on the major defense funding bills was delayed by a series of events in
addition to the dispute between the Administration and congressional leaders about
funding to combat terrorism. Before that, the week-long evacuation of some
congressional offices for anthrax testing, a dispute between the Administration and
Congress about the total amount for discretionary spending, and congressional
passage of the $40 billion emergency supplemental for FY2001 in response to the
terrorist attacks on the World Trade Center and the Pentagon all moved consideration
of the Defense bill to late in the congressional session.
Funding to Combat Terrorism: Congressional
The President had requested that DOD receive a total of $21.1 billion in
emergency supplemental funds, including $14 billion that was distributed by the
President, and $7.3 billion, which would become available if included in an
appropriations act (see above).10 With enactment of the FY2002 DOD appropriations
bill, the total amount that DOD receives from the emergency supplemental is $17.5
Report For Executives, “Senate panel Backs Homeland Funds, as GOP Readies to Defeat
Defense Bill,” December 5, 2001.
9 The emergency designation of the funds was successfully challenged in a point of order.
Once the emergency designation was removed, a point of order was raised that the total
funding in the bill exceeded the funding allowed in the 302 (a) allocation for defense.
10 Of the emergency funding, $8.2 billion became available 15 days after the allocations were
sent to Congress; the latest allocation, on November 9 became available November 25.
billion, or $3.8 billion less than requested by the Administration (see Table 2). All but
$57 million of the $40 billion in emergency funds has now been allocated.11
Passed on September 14, 2001, P.L. 107-38/H.R. 2888, the FY2001 Emergency
Appropriations Act for Recovery from and Response to Terrorist Attack on the
United States provided $40 billion in emergency spending to be allocated by the
Administration in consultation with Congress. The funds are to be spent for the
!federal, state, and local preparedness for relief from and for
responding to the attack;
!support to counter, investigate and prosecute domestic and
!increased security for transportation;
!repairing damage to public facilities and transportation systems; and
!supporting national security.
Funds designated as emergency spending are not subject to the limitations set in
concurrent budget resolutions.
The President was required to consult with the chairmen and ranking minority
members of the appropriations committees prior to the transfer of the funds to
individual agencies. After consultation with the appropriations committees about the
allocation of the funds, the initial $10 billion becomes available immediately. (DOD
refers to these funds as ‘cash’.) The second $10 billion became available 15 days after
the Office of Management and Budget submitted a proposed allocation and plan for
use of the funds to the appropriations committees. (DOD refers to these funds as ‘15
day notification’ funds). An additional $20 billion became available if included in a
later appropriation bill. These funds are included in P.L. 107-117, the enacted
version of H.R. 3338 (see above).
According to the Emergency Terrorism Response supplemental, P.L. 107-38,
not less than $20 billion of the $40 billion “shall be allocated for disaster recovery
activities and assistance related to the terrorist acts in New York, Pennsylvania, and12
Virginia on September 11, 2001.” The law also provides that the President may
submit detailed requests to Congress if further funding is required. Although the
emergency supplemental required that the Director of OMB was to provide quarterly
reports to the appropriations committees on the use of funds, beginning on January
2, 2002, that reporting requirement was superceded by the one included in the DOD
appropriations act, calling for quarterly reports 30 days after enactment (by February
11 The total of $17.5 billion includes $300 million that Congress of unobligated funds that
Congress allocated in the FY2002 DOD bill (see Section 305 of H.R. 3338); with that
transfer, all but $57 million of the total $40 billion in the emergency supplemental has been
12 P.L. 107-38, “Making emergency supplemental appropriations for fiscal year 2001 for
additional disaster assistance, for anti-terrorism initiatives, and for assistance in the recovery
from the tragedy that occurred on September 11, 2001, and for other purposes.”
On September 14, Congress also passed S.J.Res. 23 authorizing the President
to use military force against those responsible for the terrorist attack. Three weeks
later, on October 7, the U.S. initiated the bombing of Afghanistan to destroy the
terrorist training camps of Osama bin Laden and dislodge the Taliban government.
Funding for the war is included in the emergency supplemental (see section on defense
Since September 21, OMB has sent Congress eight notifications of intended and
requested allocations of the $40 billion emergency supplemental, including a notice
on October 16 that contained details of the $20 billion proposal that needed to be
approved by Congress in an FY2002 appropriation bill.13 Both the House and Senate
Appropriations Committee included their allocations of the Administration’s request
for that $20 billion in a separate section of the FY2002 DOD Appropriations bill
(H.R. 3338, H.Rept. 107-298, S.Rept. 107-109). As costs of recovery and response
efforts have risen, however, policy differences emerged over the amount, timing, and
priorities of the supplemental spending.
The White House, concerned over potential rising budget deficits for FY2002,
argued that the $40 billion emergency total was sufficient for the moment, but that the
President would entertain more spending next year if needs exist. Many lawmakers,
including senior Appropriations Committee members, however, called for the infusion
of immediate resources well above the $40 billion figure, with an emphasis on funds
for New York City in order to meet the $20 billion allocation directive in P.L. 107-38.
President Bush said that he would veto legislation that would spend more than the
$40 billion already enacted. These issues were considered during floor debate on the
DOD appropriations bill in both the House and the Senate floor debate.14
Composition of Anti-Terrorism Supplemental
Of the total $40 billion supplemental, the White House had proposed that the
majority of funds be allocated to the Defense Department, with a lesser share for non-
defense agencies, specifically:
!$21.1 billion for DOD (53%);
!$18.6 billion for non-defense agencies (47%); and
!$.3 billion (less than 1%) not yet allocated (see Figure 1 below).15
13 See Letters from President George Bush to Speaker of the House, J. Dennis Hastert,
authorizing transfers from the Emergency Response Fund under provisions of P.L. 107-38,
with attachment from the Office of Management and Budget, dated Sept. 21, 28, Oct. 5, 16,
14 See CRS Report RL31187, Terrorism Funding: Congressional Debate on Emergency
Supplemental Allocations, by Amy Belasco and Larry Nowels for further discussion of these
issues and more detailed information on the allocation of non-defense funds. See also, CRS
Report RL31173, Terrorism Funding: Emergency Supplemental Appropriations -
Distribution of Funds to Departments and Agencies, October 25, 2001, and CRS Report
RL31168, Terrorism Funding: FY2002 Appropriation Bills, and individual CRS
appropriation reports on [http://www.crs.gov/products/appropriations/apppage.shtml].
15 For the Administration’s allocations of the emergency supplemental, see
As illustrated in Figures 1 and 2, Congress, through enactment of H.R. 3338, altered
the President’s plan by providing that $22.5 billion or 56% of the total is provided to
non-defense activities, and $17.5 billion, or 44%, supports defense programs. A small
amount remains unallocated.
Allocation by Federal Agency. Other than the Department of Defense, the
other major recipients of funds based on notified and proposed allocations thus far are
the Federal Emergency Management Agency ($6.6 billion), which provides disaster
assistance relief, Health and Human Services ($2.9 billion), Housing and Urban
Affairs ($2.7 billion), Justice, ($2.2 billion), and Transportation ($2 billion) (see
Figure 1. Composition of $40 billion Supplemental Request
($s - billions & % of total)
Policy Priorities of Emergency Supplemental Allocations. There has
been broad bipartisan support for the enactment of significant additional resources for
recovery and response to the September 11 terrorism attacks. Nevertheless, sharp
differences emerged as to whether the original $40 billion package is sufficient,
whether the allocations matched the most critical priorities, especially regarding
homeland security needs, and whether New York and other jurisdictions directly
affected by the attacks are received adequate funds. Many assumed that New York
would receive about half, or $20 billion of the total emergency supplemental. (For
additional information about current and proposed spending for non-defense agencies.
see Appendix A1, and CRS Report RL31187, Terrorism Funding: Congressional
Debate on Emergency Supplemental Allocations by Amy Belasco and Larry Nowels,
CRS Report RL31168, Terrorism Funding: FY2002 Appropriation Bills, by Larry
Nowels, CRS Report RL31173, Terrorism Funding: Emergency Supplemental
Appropriations - Distribution of Funds to Departments and Agencies, by James R.
Riel, and individual CRS appropriations reports available at
Table 4 and Figures 3 and 4 provide estimates of how Congress changed the
Administration’s planned and proposed allocations of the $40 billion by ten major16
policy priorities. The two chief areas reduced by Congress are defense activities -
decreased to $17.5 billion or 44% of the total - and recovery resources, which were
cut slightly. The areas receiving more emphasis are bioterrorism, aviation and
infrastructure protection, and investigation and law enforcement activities.
Figure 2. Composition of $40 Billion Supplemental
($s - billions & % of total)
16 These figures area based on CRS analysis and should be regarded as illustrative rather than
a precise calculation of allocations.
Table 4. Allocations of Anti-Terrorism Supplemental by Agency
(in billions of dollars and percentage of total)
Department/ExecutedFifteen-dayAdmin.TotalAs % of
Agency TotalsTransfersWaitRequestEnactedSupplement$40 Bil.
Not yet allocated0.030.00.00.00.030.1%
FEMA 2.0 0.0 5.5 4.6 6.6 16.5%
HHS 0.1 0.0 1.6 2.8 2.9 7.3%
HUD 0.0 0.7 0.0 2.0 2.7 6.8%
Justice 0.0 0.0 1.1 2.1 2.1 5.3%
Transportation 0.2 0.5 0.7 1.3 2.0 5.0%
USAID 0.6 0.1 0.0 0.1 0.8 2.0%
Treasury 0.1 0.0 0.3 0.6 0.7 1.8%
U.S. Postal Service0.00.20.00.50.71.8%
State 0.3 0.3 0.0 0.0 0.6 1.5%
Labor 0.0 0.0 2.0 0.2 0.2 0.5%
Note: Totals may not add due to rounding.
Sources: OMB, House and Senate Appropriations Committees, CRS calculations.
Changes to Defense Request. Despite Congress’ cut of $3.5 billion in the
$7.3 billion DOD request for the emergency supplemental, the President’s general
priorities for defense spending to combat terrorism remained largely intact. In both
the President’s request and in the enacted bill, about 30% of the $17.5 billion
allocated for Defense in the Emergency Terrorism Response supplemental is for
funding of the Afghan war and related operations, and another 30% is for intelligence
and surveillance activities. The remaining funds are distributed among self-defense
weapons for ships and upgraded security at bases (8.6%), improved command and
control (8%), precision-guided munitions (10%), repair and upgrade of the Pentagon,
and initial crisis response (8% and 4% respectively ). For more detail, see Table A1
in the Appendix.
Congress was able to accommodate the $3.5 billion cut to defense by providing
funding within the regular defense bill, by deferring less urgent requests, and by
inserting a provision that permits DOD to transfer up to $1.65 billion, or 1.5% of the
FY2002 appropriations, for RDT&E and procurement to fund the Afghan war or
DOD’s homeland defense activities, should that prove necessary.17 Congress also
restored the funding requested to repair and upgrade the Pentagon by transferring
$300 million of the funds remaining in the emergency supplemental that were to be18
distributed by the President. Finally, in floor debate, several members of Congress
noted that the President was expected to submit another supplemental with additional
funding for defense when Congress reconvenes in January 2002.
17 In the regular DOD appropriations bill, Congress provided $478 million to improve
protection of DOD’s weapons and facilities, thus restoring roughly half of the President’s
request (see Title IX of H.R. 3338). In the allocation of the emergency supplemental in H.R.
3338, Congress inserted a provision that permits DOD to transfer up to 1.5% of RDT&E and
procurement funds to Operation Enduring Freedom (Afghan war), and Operation Noble Anvil
(combat air patrol activities on both coasts for homeland defense), thus providing another
mechanism to ensure that adequate funding would be available.
18 Congress transferred $300 million of the funds that were to be allocated by the president
from the first $20 billion to upgrade the Pentagon, thus matching the total requested by DOD
(see H.Rept. 107-350, p. 424, and Section 305(b) of H.R. 3338).
Figure 3. Allocation of $40 Billion by Major Purposes:
Figure 4. Allocation of $40 Billion by Major Purposes:
The President’s $20 Billion Allocation Request
The allocation process established in P.L. 107-38 for the Emergency
Supplemental spending measure guaranteed Congress a central role in deciding how
half of $40 billion anti-terrorism money would be spent. On October 16, OMB
submitted its plan for the second $20 billion portion of the supplemental that must be
subsequently approved by Congress.
Under the President’s plan for use of that $20 billion (see Figure 5 below), the
two largest shares of the supplemental request were to go to DOD (over one-third)
and to recovery activities (over one-quarter), for a total of $12.5 billion. Assistance
to victims of the terrorist attacks represented about 11%, or $2.3 billion.
Infrastructure and aviation security would have received 9%, or about $1.8 billion,
while funding to combat bioterrorism and investigative activities represented slightly
smaller shares of 7% or $1.4 billion, and 6% or $1.2 billion, respectively. There was
no humanitarian and other foreign assistance proposed in the second $20 billion
Congressional Priorities in Funding to Combat Terrorism
On December 20, 2001, Congress cleared for the White House H.R. 3338,
including $20 billion in emergency supplemental spending for homeland security,
increased defense needs, and other efforts to combat terrorism. The package sent to
the President, however, differs significantly from what had been proposed in mid-
October for allocating the second $20 billion. The legislation roughly doubles the
request for bioterrorism, law enforcement, and infrastructure security activities, while
reducing by more than half the $7.3 billion proposed for defense. The final
Figure 5. Enacted Allocation of Second $20 Billion
compromise – to increase homeland security and New York aid and decrease defense
resources – partially accommodates the position of those who sought more spending
for domestic programs, but without exceeding $20 billion. (See Figure 6.)
Figure 6. Enacted Allocation of Second $20 Billion
Conference Agreement for Defense Funds. To accommodate higher
funding for non-defense needs, H.R. 3338, as enacted, cuts the amount requested by
the President for Defense from $7.3 billion to $3.5 billion. Although particular
categories of defense spending to combat terrorism are reduced, the Administration’s
overall programmatic priorities for DOD remain intact. Congress was also able to
provide funding from other sources to offset the cuts (see discussion above and Table
5). The Administration has also signaled that it plans to request additional emergency
funding for Defense later this winter.19 The major changes to the request are:
!halving the funding for “increased situational awareness” (intelligence
and surveillance activities) from $1.74 billion to $850 million;
!eliminating $881 million in funding for “enhanced force protection”
(self-protection systems for weapons and protection to DOD
facilities), offset in part by an increase of $478 million provided in the
regular FY2002 DOD appropriations for similar activities;
19 James Dao, “Pentagon Seeking a large increase in its next budget, “ New York Times,
January 7, 2002.
!eliminating $219 million in funding for improved command and
!halving the funding for “increased worldwide posture” (funding for
the Afghan war and DOD’s homeland defense activities) from $2.9
billion to $1.45 billion, although up to $1.64 billion can be
transferred to those activities from regular FY2002 appropriations
for RDT&E and procurement should it prove necessary (see Section
!decreasing funding for “offensive counter-terrorism” (munitions)
from $545 million to $372 million;
!decreasing funding for “initial crisis response” from $106 million to
!reducing funding for repair and upgrade of the Pentagon from $925
million to $640 million, offset by a transfer of $300 million remaining
in the emergency supplemental but not yet allocated by the President;
!an increase of $104 million for military construction projects.
To track the expenditure of these funds, Congress requires DOD to provide
quarterly reports to the defense committees showing the appropriation accounts
where funds have been transferred, obligations of those funds, and a forecast of
expenditures. Because DOD’s funding is being provided in these unique and fairly
general categories, the reports are to be more detailed, showing spending by project,
and by categories for military personnel and operation and maintenance spending that
have been used to report previous contingency operations. The reports are also to
identify offsetting savings due to cancellation of peacetime training or other activities.
The first report is due 45 days after enactment (February 26, 2002), and quarterly
20 See H.Rept. 107-350, p. 425; the conference report references the House bill for reporting
requirements, see H.Rept. 107-298, p. 295, and Section 3012 of the House version of H.R.
Table 5. Congressional Action on DOD’s Share of $20 Billion
(As of December 20, 2001)
In millions of dollarsAs percent of total
Enhanced Force Protection 881743NSc012.0%0.0%
Improved Command and219162NSc03.0%0.0%
Increased Worldwide Posture2,9382,801NSc1,49540.0%42.7%
Initial Crisis Response106108NSc391.4%1.1%
Pentagon Repair andb92592547564012.6%18.3%
Other d 0 0 NS c 0 0.0% 0.0%
Other military constructione010501040.0%3.0%
Transfers f 0  0  NA NA
NS = Not specified.
a. P.L. 107-38, theFY2001Emergency Terrorism Response supplemental provides that a total of $10 billion
is available immediately (‘cash’), another $10 billion is available 15 days after the request is submitted
to Congress, and $20 billion is available to agencies after being enacted in a subsequent appropriations
b. H.R. 3338 transfers $300 million in ‘cash’ resources remaining in the emergency supplemental (P.L.
107-38) for reconstruction, and hardening of command centers in the Pentagon; these funds were to be
distributed by the President.
c. Except for the Pentagon, the Senate-passed version of H.R. 3338 does not specify how individual categories
would be affected.
d. The category ‘other’ includes potential increases in fuel costs.
e. Funding added by Congress for military construction.
f. The House and conference version of H.R. 3338 transfers $30 million of DOD funds to the Former Soviet
Union Threat Reduction appropriation in the Department of State, and the conference version also
provides up to $100 million for military and logistical support to Pakistan and Jordan for their support
in the Afghan war.
g. Section 306 of the conference version provides that up to 1.5% of the total in FY2002 funding for RDT&E
and procurement can be transferred to support the Afghan war (Operation Enduring Freedom) or DOD’s
homeland defense activities (Operation Noble Anvil).
P.L. 107-38, 2001 Emergency Response Terrorism supplemental; OMB submissions on allocations for
supplemental, dated September 21, 28, October 5, 16, 22, November 5, 9, 30, see
[http://w3.access.gpo.gov/usbudget/FY2002/amndsup.html]; see also materials provided to Appropriations
committees; House of Representatives, H.Rept. 107-299, Report of Committee on Appropriations to accompany
H.R. 3338, DOD Appropriations Bill, 2001, and supplemental appropriations; U.S. Senate, S.Rept. 107-109,
Report of Committee on Appropriations to accompany H.R. 3338, and Department of Defense Appropriation
Bill, 2002, and supplemental appropriations, and H.Rept. 107-350, Conference report to accompany H.R. 3338,
Department of Defense Appropriations Bill, and supplemental appropriations.
Conference Agreement for Non-Defense Funds. H.R. 3338, as enacted,
follows much of the framework proposed by the Senate: transfer of defense resources
to fund homeland security and recovery needs. Major non-defense elements of the
conference agreement include:
!Bioterrorism – $2.84 billion, nearly double the Administration’s
$1.59 billion request.
!Recovery for New York and other affected areas – $8.2 billion,
slightly higher than the amount proposed by the President, but
programmed in a way that more directly targets New York. The
House Appropriations Committee estimates that amounts provided
in H.R. 3338 for recovery efforts in New York and other
jurisdictions, when combined with previously allocated funds, will
bring the total to $11.2 billion out of the entire $40 billion
!Border security – $759 million, mostly for the Coast Guard and the
Immigration and Naturalization Service to upgrade border and port
security, compared to $600 million requested by the President.
!Aviation security – $540 million, one-third higher than the $405
!Counterterrorism aid – $2.1 billion, 75% more than the $1.2 billion
request. The agreement includes $745 million for the FBI, more than
requested and passed by either the House or Senate, and $400
million for counterterrorism aid to state and local governments, as
proposed in both bills but not in the request.
!Postal Service assistance – $500 million to repair Postal Service
facilities destroyed in the attacks, protect workers handling the mail,
and establish a system to sanitize and screen the mail, an addition to
the $175 million allocated from the first $20 billion portion of the
!Securing nuclear materials – $226 million, including $135 million
to secure nuclear materials at sites in Russia and other former Soviet
states, and for nonproliferation programs aimed at retaining Russian
Senate Passage of Funding to Combat Terrorism. During Senate
debate of H.R. 3338 on December 6 and 7, 2001, a number of Senators objected to
the extra $15 billion funding for homeland security and New York added to the bill
by the Senate Appropriations Committee. In a procedural motion, the Senate voted
to remove the emergency designation for those funds. By doing so, the homeland
security and New York funds were added to the other non-emergency funding in the
bill, which pushed the total amount appropriated over the allowable allocation under
Section 302 (a) of the concurrent budget resolution. That made the entire bill subject
to a point of order.
On December 7, the Senate adopted a compromise amendment offered by
Senators Byrd, Stevens, and Inouye that reduced the emergency anti-terrorism
spending to $20 billion but retained many of the program spending priorities adopted
by the Committee, although at lower levels. Relative to the House bill and the
Administration request, the Senate version of the bill reduced the amount for the
Department of Defense (see below), and added funds for bioterrorism, New York
recovery, and security of infrastructure, nuclear facilities airports, and borders (For
additional information, see CRS Report RL31187, Terrorism Funding:
Congressional Debate on Emergency Supplemental Allocations by Amy Belasco and
Larry Nowels). With some adjustments in specific funding levels, this formula of
reducing funding for defense in order to add monies to non-defense needs proved to
be the basic compromise that was reached in the conference version.
Senate Consideration of Defense Request. Under the Byrd, Stevens,
Inouye amendment that was adopted on the Senate floor, the Department of Defense
would have received $2.0 billion of the $20 billion included in the Senate bill, a
reduction of $5.3 billion from the funding included in the House bill and from the
Administration’s request. Of that $2 billion, $475 million was designated as military
construction funding to be used for reconstruction and renovation of the Pentagon.
The bill did not specify where the remaining $1.53 billion would be spent among the
categories developed by the Administration to describe DOD spending; those
categories range from funding for the Afghan conflict to increased funding of
intelligence and surveillance activities (see Figure 6 and Table 5).
Under the President’s proposed allocations, the Defense Department would have
received a total of $21.1 billion, the largest share of both the total funding available
under the supplemental (53%) and of the $20 billion supplemental request currently
under consideration in Congress (37%). Under the Senate bill, however, DOD’s
share of the $40 billion would have totaled $15.7 billion or 39% of total supplemental
funding, smaller than proposed by the House or the Administration. Of that $15.7
billion, $13.7 billion was already available to Defense from the first $20 billion
allocated by the President; the remaining $2 billion was in the Senate bill.21
Secretary of Defense Rumsfeld called on Congress to give DOD the entire $7.3
billion requested by the President in order to “maintain the president’s priorities for
fighting this war [in Afghanistan],” and to ensure that DOD would not need to curtail
training and operations.22 In floor debate, Senator Stevens suggested that the
Department of Defense had already received a large increase of over $42 billion
compared to the previous year, and under the emergency supplemental, the President
could submit requests for additional supplementals for any further requirements to
combat terrorism. Senator Stevens also mentioned that the Department of Defense
has authority under the Food and Forage Act (Section 3732 or Title 41 U.S.C.
Section 11) to obligate monies in advance of appropriations for emergency
21 Of that $13.7 billion, $5.6 billion was available immediately and $8.1 billion became
available on November 25, 2001 at the latest, 15 days after the President submitted the
proposed allocation to Congress.
22 National Journal’s Congress Daily, “House Democrats Demand More Funding for
Homeland,” December 11, 2001.
expenses.23 DOD also had already been allotted $3.6 billion for expenses associated
with the conflict in Afghanistan from the first $20 billion distributed by the President
Table 6 describes the purposes for the Administration’s defense requests,
ranging from support for the conflict in Afghanistan to repair and renovation of the
Pentagon, and compares the amounts provided by the House and Senate with the
Administration’s request. Unlike submissions by other agencies and normal budget
proposals, the funding for DOD is appropriated to a central fund, the Defense
Emergency Response Fund, rather than to individual appropriation accounts in order
to give DOD additional flexibility and to ensure separate tracking of these emergency24
funds. If necessary, DOD could, for example, transfer additional funds from one
category to “Worldwide Military Posture, “ the category that provides monies for the
conflict in Afghanistan or for additional training (see Table 6).25
Senate Markup of DOD Appropriations Bill. H.R. 3338, as reported by
the Senate Appropriations Committee on December 4, 2001, not only allocated the
$20 billion in funding provided by P.L. 107-38 in the amounts that were requested by
the President but also included an additional $15 billion in funding as proposed by
Senator Byrd. The additional $15 billion was to be split evenly between homeland
security and recovery activities and aid to New York, Virginia, and Pennsylvania.
(See section on action on FY2002 DOD Appropriations bill for change to regular
For aid to New York, the Senate bill provided an additional $7.5 billion to
FEMA for recovery activities. For other non-defense homeland security, the Senate
bill emphasized the following areas:
!bioterrorism prevention and response and food safety;
!federal anti-terrorism law enforcement;
!security for borders; and
!security for nuclear power plants and federal facilities.
For more details about increases provided for non-defense activities, see CRS Report
RL31187, Terrorism Funding: Congressional Debate on Emergency Supplemental
Allocations, by Amy Belasco and Larry Nowels.
House Passage of Funding to Combat Terrorism. Attempts to add
funding for homeland security in both defense and non-defense programs were
rejected during floor debate on the House side. After negotiations between
23 For Senator Steven’s statement, see Congressional Record, December 6, 2001, p. S12515.
The Department of Defense invoked its authority to use the Food and Forage Act on
September 16, 2001 but no obligations have been incurred by the services. DOD can also
transfer funds using reprogramming authority.
24 Under the Senate bill, the Defense Emergency Response Fund can reimburse the services
for expenses incurred by other appropriations between September 11, 2001 and December 31,
25 DOD would need to get approval from OMB for such transfers.
Committee leaders and the White House, Representative Walsh reached an agreement
with the Administration to provide an additional $2.1 billion for New York that would
be drawn from other programs to provide a total of $11.5 billion.
The House endorsed many of the funding priorities recommended by the
President, including the amounts proposed for defense and those for investigation and
law enforcement programs in the Department of Justice (see discussion below). The
House bill, however, also made various changes to the allocations in both defense and
non-defense programs (see CRS Report RL31187, Terrorism Funding:
Congressional Debate on Emergency Supplemental Allocations, by Amy Belasco and
During House consideration, several amendments that would have added funding
to the Administration’s request were rejected by the Rules Committee or on the floor:
!Representative Obey’s amendment to add $6.5 billion in funding
primarily for non-defense agencies (rejected 31 to 34 and ruled out
of order on the floor);
!Representative Walsh’s amendment to add $9.7 billion to meet the
needs of those people most directly affected by the attacks in New
York, Pennsylvania, and Virginia (rejected 31 to 33);
!Representative Lowey’s amendment to add $10.4 billion in additional
aid for New York, Virginia, and Pennsylvania by setting up a
contingent emergency fund (ruled out of order); and
!Representative Murtha’s amendment to add $6.5 billion to the
Department of Defense primarily for intelligence and precision-
guided munitions and other equipment (rejected by voice vote).
Prior to markup, some Members questioned whether $20 billion was sufficient
to meet all of the pressing needs related to the terrorist attacks. Some argued that the
President’s proposal lacked enough funding for such things as law enforcement,
bioterrorism preparedness, border protection, and other homeland security priorities.
Others, especially Members from New York, contended that the President’s plan fell
far short of the $20 billion that they anticipated would be allocated out of the $40
billion total to meet the specific needs of New York City, Virginia, and rural
Pennsylvania where the attacks had the most direct impact. They estimated that only
about $9.7 billion was slated for New York. Still others believed that additional
defense resources were required beyond the $7.3 billion recommended by the
Administration in the $20 billion plan. This issue became more controversial when
President Bush, on November 6, said he would veto the appropriation measure if it
exceeded the $20 billion he had proposed.
House Consideration of the Defense Request. Although the House
provided the same amount as requested by the Administration for the Department of
Defense – $7.3 billion – H.R. 3338 shifted more than $600 million in funding from the
allocation proposed by the Administration to reflect House priorities. Indicating its
policy priorities, the House Appropriations Committee added funds in for precision
guided munitions ($79 million), for equipment for special operations forces ($145
million), for chemical-biological protection projects ($105 million) and other areas.
House Consideration of the Non-Defense Request. The most
significant change during floor debate was the reallocation of an additional $1.5 billion
to New York in the Rules Committee amendment that reflected an agreement reached
between Representative Walsh and the White House.26 With this change, some
estimated that the total for New York out of the entire $40 billion supplemental
would have been about $11.5 billion. The Committee also recommended significant
increases bioterrorism ($600 million) and included funds for counterterrorism aid to
state and local governments that was not requested ($400 million), and passenger and
baggage screening activities ($1.25 billion) that was to be offset by fees collected
from passengers and airlines.The House also proposed reductions to the President’s
non-defense request, including transferring funds for dislocated workers assistance
($2 billion) and FEMA grants ($500 million) to New York.
Similarities in House and Administration’s Priorities for Non-
Defense Programs. H.R. 3338 as passed by the House supports many of the
funding priorities recommended by the President including $4.9 billion for FEMA to
remove debris in New York City ($2.15 billion), reconstruct buildings ($1 billion), and
repair highways and subways in New York ($1.75 billion). Other major policy
priorities endorsed by the both the committee and the President include:
!Dislocated worker grants to States – $2 billion
!Medicines and other supplies for the National Pharmaceutical
Stockpile and smallpox vaccines – $1.15 billion
!Operation expenses of the FBI, INS, and U.S. Marshals – $1.05
See CRS Report RL31187, Terrorism Funding: Congressional Debate on
Emergency Supplemental Allocations for more details on the actions taken by
Congress in H.R. 3338 to change non-defense funding.
Administration’s Defense Funding Request to Combat
Under the President’s proposed allocations of the Emergency Terrorism
Response supplemental, the Defense Department was to receive a total of $20.7
billion constituting both the largest share of total funding available under the
supplemental (52%) and the largest portion of the $20 billion supplemental request
currently under consideration in Congress (37%). DOD received a total of $17.5
billion in funding under the Emergency Terrorism Response supplemental, including
$14.0 billion in funding that was immediately available or subject to the 15-day wait
26 Although the total amount of funds shifted was $2.1 billion, the net increase was $1.5
billion because some of the funds had already been slated for New York. The major change
was to add $1.825 billion to HUD Community Development Block Grants to aid New York
businesses to recover from the terrorist attacks by shifting funds from DOL programs
designed to extend unemployment benefits and health insurance to displaced workers; those
funds would have been widely distributed across the country. See CRS Report RL31187,
Terrorism Funding: Congressional Debate on Emergency Supplemental Allocations by Amy
Velasco and Larry Nowels for additional detail on non-defense programs.
period, and $3.5 billion that was provided in DOD’s FY2002 appropriations act.27
(See discussion above for congressional action on the Administration’s request.)
Table 6 shows the Administration’s request and congressional action on DOD’s
share of the $40 billion, using the categories developed by the Administration
specifically for the emergency supplemental.28 Those purposes range from support
for the conflict in Afghanistan to repair and renovation of the Pentagon. Unlike
submissions by the domestic agencies and normal budget proposals, the funding for
DOD is being appropriated to a central fund, the Defense Emergency Response Fund,
rather than being appropriated to specific accounts. (Funds will be transferred from
the central fund to particular accounts in the services.) This approach was adopted to
give DOD additional flexibility and to ensure separate tracking of these emergency
funds. The discussion below describes the rationale for the Administration’s
allocation of funds; for congressional action on those allocations, see discussion
Estimating the Cost of the Afghan Conflict. The largest single category
in the Administration’s request was $6.5 billion to support the higher operating tempo
associated with ongoing operations in Afghanistan or elsewhere - categorized by
DOD as “Increased worldwide posture.” (Since the funding is not specifically tagged
for Afghanistan but rather for higher operating costs, the Administration can use the
funding for operations elsewhere.) That funding covers the cost of higher operating
tempo for forces that are deployed, the cost of airlifting supplies and setting up
operations, and additional pay for activating reservists and for active-duty forces (e.g.,
hazardous duty pay).
According to DOD, that $6.5 billion request represented a rough estimate of the
additional funding that may be necessary to conduct operations in Afghanistan for six
months, or until mid-March, 2002. The estimate reflected a 15% increase above
normal operating tempo costs (i.e. for unit training and related areas) of all of DOD’s
forces, rather than the number and makeup of forces likely to be deployed, and is
intended to ensure funding for the Afghan conflict through mid-March after the
convening of the next Congress.29
With rapid and unpredictable changes in the situation in Afghanistan, any
estimate of costs is uncertain, and initial estimates are likely to be revised in the
coming months. The Department of Defense has not released any estimates of costs
incurred in the conflict thus far. This funding is to be administered centrally by the
27 Of that $13.4 billion, $5.3 billion was available immediately and $8.1 billion became
available15 days after the allocation was sent to Congress, by November 25, 2001 at the
28 The Office of Management and Budget will apportion (or release) funds in these categories,
and any DOD proposals to shift funds among categories will require OMB approval.
29 DOD provided the Appropriations Committees with additional descriptive materials
concerning their $7.3 billion request. According to policy guidance, funding for Afghanistan
is to represent incremental operating costs, i.e. taking into account offsets for peacetime
exercises funded in the normal budget that would not occur because units are deployed to the
Department of Defense with the services submitting requests as expenses for
deployments and other areas are incurred.
Improving Intelligence and Surveillance. The second largest category of
funding – $5.8 billion, referred to by DOD as “Increased situational awareness”–
covers classified programs, including upgrades to reconnaissance platforms (aircraft,
unmanned vehicles, communications stations), and improvements to intelligence
collection and processing. Early reports suggested that the funding would include the
purchase of additional unmanned vehicles such as RC-135 and EP-3 reconnaissance
aircraft, assets in heavy use in Afghanistan.
Enhancing Physical Security. An additional $2.4 billion has been requested
by DOD for “Enhanced Force Protection,” to purchase a variety of self-defense
weapons and sensors for ships, aircraft and other forces, upgrades to and more
physical security systems at bases, and increases in the number of active-duty military
personnel doing security duty at bases. Some of the purchases were based on the
recommendations of the Cole Commission, which reported on ways to improve
security after the terrorist attack on the USS. Cole.
Purchasing More Precision Guided Munitions. DOD requested another
$2 billion for “Offensive Counter-terrorism” to purchase additional precision-guided
missiles and other munitions (Tomahawks, JDAMS, ALCMs, laser-guided bombs)
that are being heavily used in the bombing attacks in Afghanistan. These expensive
missiles are the ‘weapon of choice’ in conflicts where the military is particularly
concerned about accurate targeting. The funding level in the supplemental was set
to buy the maximum number of missiles that could be produced by defense
contractors in FY2002 rather than a specific estimate of the number that would be
used in the conflict.
Improving Command and Communication Systems. DOD requested
another $1.5 billion to improve connections both within the military and to local,
state, and federal governments.
Repairing the Pentagon. Repair, renovation, and removal of debris at the
Pentagon, as well as leasing of temporary space was anticipated to cost another $1.5
Aiding New York, Patrolling the Coasts, and Protecting Airports .
The initial response to the bombing of the World Trade Center, as well as the new
mission of conducting combat air patrols off the east and west coasts, and stationing
National Guard personnel at airports – was estimated to cost almost $1 billion.
The additional funding provided to DOD in the supplemental appeared to include
a mixture of one-time or temporary expenses (such as the cost of the conflict in
Afghanistan and repair of the Pentagon), accelerations in current programs now given
higher priority, and recurring costs reflecting longer-term changes in mission. In the
months and years ahead, Congress may assess whether these programmatic changes
are permanent, requiring continuing investments in people, equipment or facilities, or
whether DOD will need to reorient its missions, and force structure to reflect the new
emphasis on combating terrorism.
Table 6. DOD Allocations under $40 billion Emergency Terrorism Response Supplemental
In millions of dollarsAs percent of total
Cashaday wait$20B aAdmin. total Enactedtotal AdminTotalEnactedDescription of category
1,9252,3471,7356,0075,12228.1%29.2%Upgrades to reconnaissance aircraft, unmanned aerial
vehicles, sensors, and classified programs.
physical security system upgrades, personnel alerting
systems, and more security personnel.
6667372191,6221,4037.6%8.0%For connecting to local, state, and federal governments, and
for military communication systems.
iki/CRS-RL310058902,7132,9386,5415,09830.6%29.1%Funds increased operating tempo and higher personnel costs
g/wassociated with Afghan war or related conflicts.
leak2521,2075452,0041,8319.4%10.4%Additional buys of precision-guided missiles and other
://wiki561761067436763.5%3.9%Costs of deploying ships and combat air patrols off coasts,
httpDOD support to FEMA, and to NYC.
739919251,7551,4708.2%8.4%Debris removal, engineering studies, repairs, and
3019802282281.1%1.3%Funds National Guard providing airport security
c100001001000.5%0.6%Potential cost of higher fuel prices.
d 0000NANASee note below.
e 0000[1,648]NANADOD can transfer up to 1.5% of total funding for RDT&E
and procurement for Afghan war and homeland defense.
immediately, another $10 billion is available 15 days after the request is submitted to Congress, and $20 billion is available to agencies after being enacted in a subsequent
$30 million of DOD funds to the Former Soviet Union Threat Reduction appropriation in the Department of State, and provides
that up to $100 million can be provided to Pakistan and Jordan for their military and logistic support in the Afghan war.
(Operation Enduring Freedom) or DOD’s homeland defense activities (Operation Noble Anvil).
see also materials provided to Appropriations committees; House of Representatives, H.Rept. 107-299, Report of
on Appropriations to accompany H.R. 3338, DOD Appropriations Bill, 2001, and supplemental appropriations; U.S. Senate, S.Rept. 107-109, Report of Committee on
to accompany H.R. 3338, and Department of Defense Appropriation Bill, 2002, and supplemental appropriations, and H.Rept. 107-350, Conference report to
H.R. 3338, Department of Defense Appropriation Bill, and supplemental appropriations. See also, Tony Capaccio, “Emergency Defense Funds going to improve military
[http://www.bloomberg.com], September 27, 2001; Frank Wolfe, “Zakheim: supplemental includes RC-135 Upgrades, Global Hawk Acceleration, Defense Daily,
Previous National Security Funding to Combat Terrorism
There is no consensus about either the definition of activities that are designed
to combat terrorism or the categories to use to describe spending for those activities.
Some use the term ‘homeland defense’ for programs designed to combat terrorism.
In its 2002 report to Congress, OMB uses a set of categories for spending to combat
terrorism that differs from those used by the Department of Defense for its current
spending in response to the terrorist attacks, making a comparison between previous
and current spending impossible based on the reporting provided thus far (see below).
In an amended version of its August 2001 report to Congress, OMB estimated
that the national security community funding to combat terrorism in FY2001 totaled
$5.5 billion, or 57% of that total.30 That total includes funding for both the
Department of Defense and intelligence agencies; for security reasons, OMB did not
segregate the portion for the Department of Defense. The OMB report also estimates
that DOD was spending an additional $1.8 billion in FY2001 to protect critical
infrastructure, such as computer and communications networks.
For FY2002, the Administration’s estimated request for funding for the national
security community to combat terrorism was $6.4 billion, or $930 million more than
the previous year. This revised estimate reflected the amended budget request sent
to Congress by the President on June 27 rather than the initial “current services”
estimate included in OMB’s annual report to Congress that was issued in August
2001. (Table 7 shows the revised estimates from OMB.) Using a set of categories
that apply to all government agencies, the table below divides DOD’s spending into
!Law enforcement and investigative;
!Physical security of government;
!Physical security of national populace;
!Preparing for and responding to terrorist attacks; and
!Research and Development.
With the attack on the World Trade Center and the Pentagon, both these
estimates and the amount of funding, as well as the role of the various federal
agencies, are being reviewed both within the executive branch and by Congress on an
30 See amended September version, “Annex 1: Funding to combat terrorism (including Defense
against WMD) by Bureau and Category,” included in OMB, Annual Report to Congress on
Combating Terrorism, August 2001.
Table 7. OMB Estimate of National Security Community
Funding to Combat Terrorism, FY2000 - FY2002
(in millions of dollars and percent of total)
Category FY2000$ FY2001$ FY2002$ FY2000% FY2001% FY2000%
Law enforcement and$2,644$2,732$2,88849%50%45%
Physical security of$2,231$2,300$3,09842%42%48%
Physical security of$0$0$00%0%0%
Preparing for and$303$238$2496%4%4%
responding to . . .
Sources: OMB, “Annual Report to Congress on Combating Terrorism,” revised estimates as of
September 2001 [http://www.whitehouse.gov/omb/legislative/nsd_annual report2001] and CRS
a. Figures include funding for both the Department of Defense and intelligence agencies and an
estimated $609 million in FY2002 for defense against weapons of mass destruction.
Prior to the terrorist attacks, 93% of the national security funding for FY2002
was concentrated in two areas – $2.9 billion for law enforcement and investigative
activities and $3.1billion for physical security of government (see Table 6). Funding
for law enforcement, as described by OMB, includes all monies provided to DOD’s
investigative services and military police even though some of those assets may not
be specifically directed against terrorism. In a similar fashion, the funding for physical
security includes protection of federal facilities, including those located overseas
where DOD has a substantial presence along with the State Department.
The remaining funding included $249 million for preparing for and responding
to terrorist attacks and $199 million for R&D. The total for preparing for and
responding to terrorist attacks includes funding to protect DOD facilities against
attacks that rely on weapons of mass destruction (WMD), and DOD’s role as a
coordinator of the actions by federal, state and local agencies who are the first to
respond to terrorist incidents. R&D efforts include funding to develop responses to
biological warfare and DOD’s contribution to interagency efforts to develop new
technologies and equipment to counter terrorism.
Because DOD adopted a unique set of categories in its request under the
Emergency Terrorism Response supplemental, and because few details are available
about the composition of both sets of categories, it is difficult, if not impossible, to
compare funding to combat terrorism before and after the September 11th attacks.
Changes in the Budgetary Context since the
Since the terrorist attacks of September 11, the budgetary context for decisions
on spending levels for federal programs has changed dramatically. At the beginning
of September, leaders of both parties were debating whether higher spending for
discretionary programs – including an additional $18.4 billion above the
Administration’s initial request for the Department of Defense – could be
accommodated after the tax cut in the spring without tapping the surplus generated
by social security revenues. With the recession that began in the spring of 2001 and
the new spending to combat terrorism, the possibility of keeping the social security
surplus “off-limits” has disappeared, and both the Administration and the
Congressional Budget Office are predicting deficit spending in 2002 and 2003.31
In August 2001, CBO estimated that the total surplus in 2002 would be $176
billion (see Table 8), with all but $2 billion resulting from the surplus in social32
security revenues. The lower CBO estimate reflected primarily the effects of the
tax decreases enacted in the spring as well as the downturn in the economy.33 With
higher funding for DOD as well as other agencies under consideration, it was likely
that Congress would have to tap the surplus in the Medicare Hospital Insurance Fund
(HI) and social security revenues. After the attacks of September 11, however, with
the new concern about combating terrorism, and the ongoing conflict in Afghanistan,
the fiscal debate shifted from the potential problem of tapping the social security
surplus to adding funding for defense programs and homeland security. That
additional spending, coupled with the recession, made worse by the terrorist attacks,
made that prospect inevitable.
Likely Reductions in the Surplus
A bipartisan estimate, “Budget Committees Lay Out Revised Surplus Estimates,”
released on October 4, 2001, by the House and Senate Budget Committees suggested
that the effects of a recession, coupled with additional emergency spending to combat
terrorism, as well as additional discretionary spending for defense, education, and
disasters agreed to by the Administration and Congress, could reduce the total surplus
to $52 billion in FY2002 and $65 billion in FY2003.34 That would absorb much of
31 Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2003-
2012, (January 31, 2002), p. xiv; and New York Times, “Security Buildup and Tax cuts Win
Protection from the Deficit, January 30, 2002.
32 Congressional Budget Office, The Budget and Economic Outlook: An Update, (August
33 Ibid, pp. ix-xi and pp. 5ff.
34 Senate Budget Committee, Senators Kent Conrad, Chairman and Senator Pete V. Domenici,
Ranking Member, and House Budget Committee, Representative Jim Nussle, Chairman, and
Representative John M. Spratt, Jr., Ranking Member, House Budget Committee, tables
accompanying “Budget Committees Lay Out Revised Budget Outlook, Principles for
the social security surplus that the Administration and congressional leaders had
hoped to reserve for debt reduction (see Table 8). Endorsed by the Chair and
Ranking Minority of both budget committees, that estimate reflected the following
!the possible economic effects of a recession;
!the effect of holding spending to $686 billion for discretionary
programs, as agreed to by the Administration and Congress at the35
end of September;
!the effect of the $40 billion emergency anti-terrorist supplemental
spending passed by Congress in the wake of the September 11
!the effect of the Airline Assistance Act; and
!the higher interest costs associated with servicing a larger public debt
than previously assumed.
Economic Surplus,” October 4, 2001; see [http://www.house.gov/budget].
35 New York Times, “White House and Congress Reach Deal on Budget,” September 28,
Table 8. Bipartisan Estimate of the Post September 11, 2001 Budgetary
(Outlays in billions of dollars)
FY02FY03FY04FY05 FY06 FY07 FY08 FY09FY10FY11Total
Total Surplus (as of August 20011761722012442893403894505076283,397
Update by CBO) bc
On budget surplus 2-18-3214778106147184283847c
Of which: Medicare HI d
Off-budget surplus 1741902042242422622833033233452549e
Changes to Date
Possible economic effects of af805680000000144
recession and technical changes
Total for discretionary spending ofg10141617171818191920167
Airline Assistance Act646200000017j
Higher interest costs 4101519222529333741236k
Sum of Changes 1241066659616570758086793
Staff Estimate of the Effect onl52651351862282753183754275432,604
Sources: Adapted from Senate Budget Committee, Senators Kent Conrad, Chairman and Senator Pete V. Domenici,
Ranking Minority Member and House Budget Committee, Representative Jim Nussle, Chairman, and Representative
John M. Spratt, Jr., Ranking Minority Member, House Budget Committee, tables accompanying “Budget Committees
Lay Out Revised Budget Outlook, Principles for Economic Surplus,” October 4, 2001; see
[http://www.house.gov/budget]. For breakout of surplus, see Congressional Budget Office, The Budget and Economic
Outlook: An Update, (August 2001), Table 1-1, p. 1.
a. Totals may not add due to rounding.
b. Reflects estimate of the surplus included in CBO’s mid-session update of August 28, 2001, which assumes that
discretionary spending continues at the level enacted in 2001 with increases in later years for inflation, and that
current tax policies, including the tax cuts enacted this spring are in effect.
c. On-budget surplus includes the Medicare Hospital Insurance (HI) surplus.
d. Off-budget surplus is made up of surplus in the social security trust fund as well as net cash flow of the Postal
e. Reflects congressional actions as of October 4, 2001, including passage of the Airline Assistance Act, the $40 billion
Emergency Anti-Terrorism supplemental, and agreement between Congress and the Administration to hold total
discretionary spending to $686 billion in 2002.
f. Reflects estimate by budget committee of potential effect on the surplus of a recession; the estimate is higher than
the Congressional Budget Office’s estimates that are based on the 1990-91 recession - reducing the surplus by
$47 billion in the first year and $63 billion in the second year; see Congressional Budget Office, The Budget and
Economic Outlook, January 2001, p. 102.
g. Reflects agreement between the Administration and Congress reached at the end of September that total
discretionary spending would be held to $686 billion in FY2002, $24.2 billion more than was included in the
Concurrent Budget Resolution passed by Congress; that total includes $18.4 billion for defense, $2.2 billion for
emergencies, and $4 billion for education. Out year estimates assume a level of $686 billion adjusted for inflation
h. Reflects outlays from $40 billion emergency supplemental enacted on September 14, 2001 (P.L. 107-38). Assumes
$20 billion to combat terrorism, adjusted for inflation, in each subsequent year.
i. Preliminary staff estimates of costs of the Air Transportation Safety and System Stabilization Act (H.R. 2926).
j. Higher interest costs associated with a larger public debt.
k. Does not include “other possible claims on the surplus,” listed in the following table.
l. Difference between initial surplus and the effect of congressional actions as of October 4, 2001.
These estimates were uncertain. For example, estimating the effect of a
recession - shown below as $80 billion in the first year, $56 billion the second year,
and $8 billion the third year - will vary with the length, depth, and timing of a
downturn, none of which is easily predicted. Although the budget committee staff
estimates below were somewhat larger than CBO’s estimates of the effects of a
recession - $47 billion the first year, $63 billion, the second year, tapering off to $18
billion in the third year - that were included in CBO’s January 2001 report ( modeled
on the experience of the 1990-1991 recession), those estimates have turned out to be
too low.36 New predictions from CBO, in its latest update in January 2002, predict
that economic and technical changes will reduce the surplus by $242 billion rather
than $80 billion as predicted by the budget committees last October.37
On the other hand, the estimate of $686 billion for total discretionary spending,
$10 billion in outlays more than assumed in the concurrent budget resolution, turned
out to be correct as Congress did, in fact, conform to the agreement reached between
the President and Congress to allow $24.6 billion more in new discretionary budget
authority - $18.4 billion more for defense, $4 billion more for education, and $2.2
billion more for disasters that would together increase government outlays by about
$10 billion.38 Although Congress also conformed to the $40 billion emergency
supplemental as assumed in the October. estimates of anti-terrorism spending in future
years are uncertain. Estimates by the budget committee staff estimates below
generally assumed a continuation of the policies agreed to in 2002, for example, a
continuation of $686 billion (with increases for inflation) for discretionary spending
and an additional $20 billion for emergency anti-terrorism spending each year.
Other Potential Claims on the Surplus
The two budget committees also noted that Congress is considering a variety of
other changes to current entitlement programs and tax policies that could place
additional demands on the budget. Those policy changes - ranging from additions for
the farm bill to coverage of prescription drugs for seniors and changes to the
alternative minimum tax - could reduce the surplus further (see Table 9). In addition,
because of a lack of consensus, the budget committees did not include two other
changes that could place large additional demands on federal spending - an economic
stimulus package that could reduce revenues by $50 billion to $100 billion and
additional unspecified increases for the Department of Defense apart from the
emergency supplemental. In light of these various demands, along with the ongoing
recession, deficits are predicted to resurface in 2002 and 2003 if not beyond.
36 The staff estimates also include an unspecified amount for “technical changes, “ which are
not included in the CBO estimates. See Congressional Budget Office, The Budget and
Economic Outlook: Fiscal Years 2002-2011, (January 2001), p. Table 5-5, p. 102.
37 Congressional Budget Office, The Economic and Budget Outlook, FY2002-FY2012
(January 2002), p. xiv.
38 New York Times, “White House and Congress Reach Deal on Budget,” September 29,
Table 9. Other Potential Claims on the Surplus
(In billions of dollars)
Potential Claims on the SurplusFY02FY03FY04FY05 FY06 FY07 FY08 FY09FY10FY11Totala
Budget Resolution Policies
One-year extension of tax provisions12000000003
expiring in 2001
Other revenue policies322231111118
All other resolution policies35-0425555539
Budget Resolution Reserve Fund Policies b
Farm program 788877667774
Expanded health coverage81010000000028
Home health, student loans, Family012333444529
Department of DefenseNSNSNSNSNSNSNSNSNSNSNS
House- and Senate-Passed Bills
Faith-based Initiative (House)011111222213
Railroad Retirement (House)1600-0-0-0-0-0-0-015
Patients Bill of Rights (Senate)-01-0023333418
Elementary and Secondary Education061013151820212122145
Natural Disasters c245666667755
Permanent Extension of Expiringd1249131720222529142
Elimination of 2001 Tax Bille011112123100113
Alternative Minimum Tax0002122230394854208
Economic Stimulus PackageNSNSNSNSNSNSNSNSNSNSNS
Range of Cost of Specified Possible0 to0 to0 to0 to0 to0 to0 to0 to0 to0 to0 to 1241
Claimants 43 46 58 76 99 129 146 162 180 296
Adapted from Senate Budget Committee, Senators Kent Conrad, Chairman and Senator Pete V. Domenici, Ranking Minority
Member and House Budget Committee, Representative Jim Nussle, Chairman, and Representative John M. Spratt, Jr., Ranking
Minority Member, House Budget Committee, see tables accompanying “Revised Budgetary Outlook and Principles for Economic
Stimulus, October 4, 2001;” see [http://www.house.gov/budget].
NS = Not specified
a. Numbers may not add due to rounding.
b. Includes increases for particular programs that are specified in the “reserve” funds set up in the 2002 Concurrent Budget
Resolution. A “reserve” fund was set up for additional defense spending but no specific amount was specified.
c. Assumes annual outlays (adjusted for inflation) that would result from average historical spending of $5.6 billion for
d. Assumes extension of expiring provisions in H.R. 1836, the “Economic Growth and Tax Relief Reconciliation Act of 2001,”
as estimated by the Joint Committee on Taxation.
e. Includes Alternative Minimum Tax Relief provision in Joint Committee on Taxation document #01-1-144R, excluding the
treatment of non-refundable personal credits.
Action on the FY2002 DOD Appropriations Bill
On December 20, 2001, the House and the Senate passed the conference version
of H.R. 3338, the FY2002 DOD appropriations bill (H.Rept. 107-350) by 408-6 in
the House and 92-2 in the Senate. In addition to DOD’s regular appropriations, the
FY2002 Defense bill allocates the $20 billion in funding from the Emergency
Terrorism Response supplemental that had to be included in an appropriation act (see
Enacted Version of DOD Appropriations Bill
For regular defense appropriations, the enacted version of H.R. 3338 provides
DOD with $317.2 billion, $1.7 billion below the Administration’s request. Congress
reduced the amount for DOD in order to provide higher funding for defense-related
activities that are funded in the Department of Energy (+$750 million), Military
Construction (+$500 million), and defense-related activities that are funded in other
appropriations (+$200 million) (see Table 2). With these adjustments, the $343.3
billion appropriated by Congress for national defense, including all defense-related39
funding, is close to the total requested by the Administration.
Congress also significantly changed the allocation of the emergency response
terrorism supplemental funds in the enacted bill by reducing the Administration’s
request for emergency spending for DOD from $7.3 billion to $3.5 billion and shifted
those funds to homeland security and recovery activities.
On the non-defense side, the chief changes in funding for homeland defense
activities are a doubling of the Administration’s funding requests for bioterrorism, law
enforcement, and infrastructure security activities. On the defense side, the enacted
version halves the Administration’s request for funding for intelligence-related
activities, higher operating tempo related to the Afghan war and homeland defense,
and efforts to protect DOD facilities, personnel, and weapons (see discussion above).
Throughout the fall, much of the debate on the defense bill focused on the
emphasis to be given to various policy priorities (see CRS Report RL31187,
Terrorism Funding: Congressional Debate on Emergency Supplemental Allocations,
by Amy Belasco and Larry Nowels).
39 The $224 million decrease in total funding for National Defense primarily reflects
differences between the Administration and CBO in estimates of the cost of the Energy
Employee Compensation Fund, a mandatory program that provides benefits for Department
of Energy Employees who contract illness related to exposure to radiation.
Previous Congressional Action on
FY2002 DOD Appropriations
Senate Action on H.R. 3338. On December 7, the Senate passed H.R.
3338, which reflected the markup by the Senate Appropriations Committee on
December 5; (the committee substituted its version in H.R. 3338, see S.Rept. 107-
the same amount as in the House-passed bill. With the amounts already appropriated
for Military Construction and national security-related programs for DOE, the total
for the national defense function is the same as requested by the President. (The
Senate provided $1.9 billion less than requested for the Department of Defense, and
$500 million more for military construction and $1.2 billion more for DOE Nuclear
Military Pay and Benefits. Following the authorizers, the Senate
Appropriations Committee endorsed the Administration’s proposals for increases in
military pay and benefits, accelerating increases to housing allowances, and fully-
funding the Defense Health program, including the new benefit for seniors, TRICARE
for life. The committee also provided $60.9 billion for procurement, $440 million
more than requested by the President and made a variety of changes to particular
programs (see Summary Tables A2 and A3).
Missile Defense. The Senate appropriators provide $8.3 billion for missile
defense, but provided that the President could re-allocate $1.3 billion of that total to
combat terrorism, a provision that is not included in the House bill. The Senate bill
also does not transfer missile defense programs to a separate title as provided in the
House bill, a provision that is opposed by the Administration (see below).
Savings in Operation and Maintenance. Like the House, the Senate
appropriators include several general provisions that would reduce funding for
Operation and Maintenance (O&M) for pricing adjustments or savings as a result of
management reforms while preserving funding in readiness-related programs. In the
Senate version, these adjustments total $1.9 billion in O&M (for contract savings,
travel, and foreign currencies), less than half the amount that is included in the House
bill (see below).
Proposal on Tanker Aircraft. The Senate Appropriations Committee also
included a potentially controversial provision to lease commercial transport aircraft
for up to ten years and eventually convert them to military tanker aircraft. As written,
the language in the bill was categorized by CBO as an operating lease, which permits
Congress to fund the proposal on an annual basis rather than provide $20 billion in
funding upfront as would be required in a lease/purchase arrangement. An operating
lease, however, can only be used for commercial assets, but the aircraft would need
to be modified for use as military tankers, a modification permitted by the legislation
at a later date. The validity of this approach was debated on the Senate floor. The
House bill does not have a similar provision.
Major Procurement Programs. Both the Senate and the House version of
the bill fully-funded the Air Force’s F-22 Captor program and criticized the Navy for
poor management of its shipbuilding program (including large cost growth of $3
billion in the next five years for current ships) and poor definition of its new cruiser
program (DD-21/DD(X)). Both houses cut the troubled V-22 tilt-rotor Osprey
helicopter (see below) and added funds to accelerate conversion of retiring ballistic
missile submarines (SSGNs) to use conventional cruise missiles. The Senate, like the
House, also added $500 million for procurement of equipment for the Guard and
Reserve (see Table A3).
House Action on DOD Appropriations Bill
Overall Level. On November 28, 2001, the House passed its version of H.R.
3338. In its first markup of the regular DOD bill on October 24, 2001, the House
Appropriations Committee provided a total of $317.5 billion for the Department of
Defense, about $2 billion below the Administration’s request, and almost $24.3 billion
above the amount available to the Department of Defense in 2001.40 For national
defense as a whole, however, both houses provided the same amount in total. The
Committee reduced the Administration’s request in order to meet funding guidelines
set by the full committee that allocated additional amounts – beyond the
Administration’s request – to defense-related programs in other appropriations, i.e.
the Military Construction and the Department of Energy bills.
Military Pay and Benefits. In large part, the committee endorsed the
Administration’s request, including providing an across-the-board pay increase of
4.6% plus additional targeted pay raised, improved housing allowances, and full
funding of the 50% increase in the Defense Health Program to cover the new Tricare
for Life program for over-65 military retirees.
Ballistic Missile Defense. The House Appropriations Committee approved
$7.9 out of the $8.1 billion request, all but $300 million, of the funding for ballistic
missile defense programs but transferred the programs to a separate title covering all
New Appropriations Title for Counter-terrorism. The House bill created
a new appropriations title, “Counter-terrorism and weapons of mass destruction,”
with $11.8 billion including:
– the transfer of funding requested for ballistic missile defense, RDT&E for chemical
and biological weapons, Patriot PAC-3 procurement, and the Defense Threat
Reduction Agency; and
– an additional $1.7 billion in funding for enhancements to intelligence and military
capabilities to prosecute Operation Enduring Freedom, the conflict in
Afghanistan, and other actions to combat terrorism, to be split between the CIA
40 This comparison includes $5.5 billion provided in a non-emergency supplemental
appropriations for FY2001. These totals do not include additional funding for defense-related
programs that are provided in other appropriations such as for military construction bill and
the Department of Energy.
($451 million), DOD ($1,219 million), as well as transferring $180 million to
Savings in O&M and Military Personnel. The House appropriations bill
preserved funding in readiness-related accounts but decreased funding by $5.3 billion,
$4.4 billion in Operation and Maintenance (O&M) accounts, and the remaining $.8
billion in military personnel to reflect various pricing adjustments (e.g. more favorable
foreign currency rates), efficiencies (e.g. a saving of almost $1.2 billion from reducing
the number of contractor workyears and headquarters staff), and fact-of-life changes
(e.g lower utilities rates).42 This amount is considerably larger than similar savings
included in the Senate bill and is opposed by the Administration.
Major Procurement Programs. The House bill added funding for an
additional DDG-51 ship ($820 million) to offset a decrease of $493 million in the
RDT&E for the DD-21, the new surface combatant, eliminated one LHD-1
amphibious assault ship (-$267 million), and funded the conversion of four rather than
two Trident submarines from a strategic platform to a cruise missile carrier (+$463
million). Like the Senate, the House also added about $500 million for National
Guard and Reserve equipment (see Table A3 for changes to major weapon
Military Construction Appropriations
The conference version of the Military Construction appropriations bill was
passed by the House and Senate on October 17 and October 18, respectively, and
signed by the President on November 6, 2001 (P.L. 107-64 ). The Act provides $10.5
billion in funding, $500 million above the Administration’s request (see CRS Report
RL31010, Appropriations for FY2002: Military Construction, by Daniel Else).
Earlier, the House Appropriations Committee passed its FY2002 Military
Construction appropriations bill (H.R. 2904) on September 21 after completing its
markup the previous day. The Senate Appropriations Committee passed its version
on September 26 (S. 1460) after completing markup on September 25th.
FY2001 Non-Emergency Supplemental Appropriations43
On July 20, both houses approved a conference agreement on a bill (H.R. 2216)
providing supplemental appropriations for FY2001. The measure includes $5.5 billion
for the Department of Defense, and $5.8 billion for national defense as a whole.
41 See Title IX, Counter -Terrorism and Operational Response Transfer Fund in bill for
allocation of funds among various purposes and agencies.
42 Of the total $5.3 billion in reductions, $4.4 billion affects Operation and Maintenance
(O&M) accounts, $788 million is in military personnel accounts, $61 million in RDT&E, and
$14 million in working capital funds. Most of these reductions are implemented through
43 For detailed information on the FY2001 supplemental appropriations, see CRS Report
RL30995, Supplemental Appropriations for FY2001: Defense Readiness and Other
Programs, by Stephen Daggett.
Unlike other recent supplementals for defense, which typically provided funds mainly
for contingency operations, this bill – submitted by the new Administration on June
1 – provided additional funding for day-to-day operating expenses and unanticipated
cost growth in health and other areas. The bill was initially passed by the House on
June 20, (H.R. 2216) and by the Senate on July 10 (S. 1077), and signed into law on
July 24 (P.L. 107-20).
Action on FY2002 DOD Authorization Act
On December 13, the House and Senate passed the FY2002 DOD Authorization
Act by 382 to 40 in the House and 96 to 2 in the Senate (P.L. 107-107, H.Rept. 107-
333, see Table 1b). The Act provides the $343.3 billion as requested by the
Administration, an 11% increase over FY2001 without taking into account funding
from the emergency supplemental. Like the appropriators, the authorizers’ action
reduces the amount for the Department of Defense by $1.2 billion, and re-allocates
those funds to military construction (+$600 million) and defense-related activities of
the Department of Energy (+$600 million).
Passage of the FY2002 DOD Authorization Act was delayed by the difficulty in
resolving the issue of authorizing another round of base closures in 2003 as proposed
by the Administration. Initially, the House opposed an additional round and the Senate44
supported another round. In the final compromise included in the conference
version, Congress agreed to authorize a round of base closures but delayed the date
until 2005. As part of the compromise, the conference version also requires that a
‘super-majority’ of at least seven of the nine commissioners approve any decision to45
add bases to those suggested by the Secretary of Defense. During House floor
debate, several members raised concerns about the base closure provision. On the
Senate side, the chief concern raised during floor debate was the potentially de-
stabilizing effects of President Bush’s decision to withdraw from the ABM Treaty
announced on December 13, particularly at a time of rapid buildup in the U.S.’s
ballistic missile defense program, an increase that was largely endorsed by Congress
in the 2002 budget.
Completion and passage of the conference report was also delayed by the need
to resolve the issue of the Navy’s access to the training vase at Vieques (see below),
and by the debate about the allocation of emergency supplemental spending (see
above). Earlier, congressional action on FY2002 defense authorization and
appropriations bills had been delayed because the Administration did not submit its
amended request until June 27 because of the ongoing review of military strategy and
because of the evacuation of Congress due to the delivery of anthrax-laden letters.
44 See House did not include any provision for base closures in its version of the authorization
bill (see H.Rept. 107-194), and Senate authorized a round of base closurs in FY2003 (see p.
45 See Section 2914 of Title XXX, P.L. 107-107 or p. 331 of H.Rept. 107-333; for floor
debate, see Congressional Record, December 13, 2001, H. 10070-10080, and S. 13113 to S.
Major issues resolved in the conference report and changes made in each house are
Conference Version of FY2002 DOD Authorization Act
The conference version of S. 1438 resolve several contentious issues as follows:
!Approves the President’s request for another round of base closures,
but delayed the date to 2005, and changed the procedures proposed
!Authorizes the Secretary of the Navy to close the training facilities
at Vieques (and transfer the facility to the Department of the Interior)
after certifying that alternative training sites are available;
!Provides $7.0 billion for ballistic missile defense as requested by the
President but authorizes the President to transfer $1.3 billion of that
total to efforts to combat terrorism, permitting the President to fund
the request fully;
!Adopts provisions that reduced non-readiness related spending for
Operation and Maintenance by $2.1 billion and Working Capital
Funds by $400 million to reflect savings in management reforms, fuel
and utility prices, foreign currency decreases.46
The conference version of the bill also authorizes the increases in pay (5%
across-the-board and up to 10% for targeted skills) and housing allowances as
requested by the Administration, and fully funds the increase for the Defense Health
program, including the new benefit for seniors, TRICARE for life. The conference
bill also increases funding beyond that requested by the Administration for military
construction and family housing and equipment and training for the reserve
components. Congress also authorizes $21.2 billion in emergency funding to combat
terrorism (see above), providing an upward limit on spending.47 ( Combining the
funding allocated at the Administration’s discretion with the amounts provided by the
appropriators, DOD received a total of $17.5 billion as discussed above.)
Although the act endorses the proposal to authorize military retirees to receive
VA disability compensation without a reduction in retirement benefits (known as
“concurrent receipt”), the bill provides that the program will not go into effect until
the President submits legislation and Congress offsets the $55 billion in costs over the
next 10 years (see below). DOD objects to this additional benefit both because of its
high cost and because the two programs (retirement and disability payments) were
46 House Armed Services Committee, Chairman Bob Stump, “Conferees Reach Bipartisan
Accord on Fiscal Year 2002 Defense Authorization Bill,” and “Summary of Major
Provisions, December 12, 2001, and H.Rept. 107-333, pages 601ff.
47 National Journal’s Congress Daily AM, “Conferees Reach Base Closing Pact,” December
designed to reach two different groups of beneficiaries.48 For changes to specific
programs, see below.
House Action on S. 1438, FY2002 DOD Authorization Bill
The House matched the total amount requested by the Administration and made
relatively few changes to individual programs.
House Floor Action. After considering the DOD Authorization bill, H.R.
The act provided a total of $343.5 billion for the national defense function, matching
the Administration’s request. The Rules Committee limited the number of floor
amendments, and debate was less extensive because of the bipartisan support for49
defense spending in response to the terrorist attacks. The major amendments
passed were the following:
!an add of $250 million for testing of the F-22 aircraft;
!a $400 million increase for combating terrorism that was offset by
cuts to BMD programs and consulting services (see discussion
!an amendment offered by Representative Traficant permitting the
Secretary of Defense to assign active-duty military personnel to assist
with border patrol.
Other amendments that were passed would (1) permit military installations to be
used as polling places; (2) allow private donations to repair the Pentagon; and (3)
establish a new medal to be awarded to civilians who are killed or wounded as a result
of hostile action. (See Summary Tables A2 and A3 for changes to major weapon
Markup by House Armed Services Committee. The House Armed
Services Committee markup of H.R. 2586 provided $343.5 billion for the national
defense function, generally endorsing the Administration’s request. In military
personnel, the Committee not only supported the Administration’s requests for
substantial improvements in military pay but also provided for other improvements in
compensation and health care. In the case of funding for Operation and Maintenance
(O&M), the Committee supported the Administration’s request for additional funding
for readiness-related funding but cut non-readiness related O&M by about $1 billion
and redistributed some of those funds to enhancement of training of reserve forces.
See below for more detailed discussions of individual issues.
48 DOD estimated that concurrent receipt would require an additional $41 billion in
mandatory spending, which would have to be offset by cuts to other entitlement programs, and
$14 billion in additional costs to the Department of Defense; see Letter from Secretary of
Defense David Rumsfeld to the Honorable Carl Levin, Chair, Committee on Armed Services,
October 25, 2001.
49 See H.Rept. 107-218, Providing for further consideration of H.R. 2586, National Defense
Authorization Act for Fiscal Year 2002, September 24, 2001, for amendments ruled in order.
The Committee provided $47.4 billion for RDT&E, $300 million more than the
Administration’s request, and supported all but $135 million of the President’s request
for $8.2 billion for missile defense (see CRS Report RL31111, Missile Defense: The
Current Debate, coordinated by Steven A. Hildreth and Amy F. Woolf). The
Committee also added $525 million to the Administration’s request for procurement
funds, citing it as the “weakest link” in the Administration’s budget because decisions
about modernization are awaiting completion of the Quadrennial Defense Review.
Senate Action on S. 1438, FY2002 DOD Authorization Bill
Although the Senate bill, S. 1438, provided total funding of $344.8, $1.3 billion
above the Administration’s request, the Senate initially included more changes likely
to be controversial. In a bipartisan compromise, however, the most controversial
provisions requiring congressional approval of anti-ballistic missile testing were
removed prior to floor debate (see below).
Senate Floor Action. On October 2, as a bipartisan compromise in the wake
of the terrorist attacks, the Senate considered a new version of the DOD
Authorization Act on the floor that stripped the bill of controversial provisions. ( The
new version, S. 1438, replaced S. 1416, the bill that was reported out of committee.)
The new version passed unanimously. The compromise version no longer required
that the President to certify and Congress to approve the funding of any activity that
could violate the ABM Treaty.50 The President had threatened to veto the bill if these
provisions were included. Those provisions were included in a separate bill, S. 1439.
The Senate permitted the President to restore $1.3 billion in funding cut from ballistic
missile programs by authorizing the President to allocate those funds either to
combating terrorism or to the BMD program, a compromise that was adopted in the
final version of the bill. That change increased the total amount authorized to $344.8
billion, or $1.3 billion above the Administration’s request. The Senate passed S. 143851
by a vote of 97 - 0 on October 2.
In floor action, the Senate included the following significant amendments:
!adopted a provision restoring $1.3 billion that the Senate Armed
Services Committee cut from ballistic missile defense (BMD)
programs, and allowing the President to allocate those funds to either
RDT&E for BMD, or combating terrorism; and
!rejected an amendment that would have removed provisions adopted
by the Senate Armed Services Committee providing for a new round
of base closures in 2003; and
!adopted the Reid amendment permitting “concurrent receipt” of
benefits for military retirees with service-connected disabilities that
would increase entitlement spending by $2.9 billion in FY2002 by
50 See Subtitle C - Missile Defense, Sections 221 to 224; these provisions also included
reporting requirements for missile defense programs.
51 The Senate passed S. 1438 after debate over six days: September 21, 24, 25, and October
allowing eligible persons to receive both retirement and VA disability
payments without the reduction required in current law.
Long-Term Effect of Expanded Benefits to Veterans. Authorizing
“concurrent receipt” to improve the benefits received by military retirees with service-
connected disabilities would have a significant effect on future budgetary requirements
for the government as a whole. According to cost estimates from CBO, authorizing
“concurrent receipt”of both retirement benefits and VA disability payments without
requiring an offset to those eligible for benefits under both programs would increase
mandatory or entitlement spending by $2.9 billion in FY2002 and $40.6 billion over
the next ten years. In addition, the Defense Department would have to provide about
$1 billion annually to cover the estimated cost of providing this benefit in the future
for service members currently in the force.52 (The House version of the bill contained
the language that was originally included in the Senate bill, which stated that the
benefit would not be provided until the Administration provided an offset to cover the
mandatory or entitlement spending.) The Administration supports current law.
Markup by Senate Armed Services Committee. Like the House Armed
Services Committee, the Senate Armed Services Committee markup of S. 1416
provided $343.3 billion for the national defense function, the same amount as the
Administration’s request. The Senate Armed Services Committee, however, required
that authorization of $15.2 billion of the Administration’s $18.4 billion increase would
be contingent upon approval of additional funds for Defense by the Chair of the
Senate Budget Committee as provided in the FY2002 concurrent budget resolution
(see section below for a more detailed discussion of the budget resolution).53
The Senate Armed Services Committee also adjusted the Administration’s
request to reflect the Committee’s priorities (see Summary Tables A2 and A3 for
changes to major weapons programs.) The Committee’s markup included the major
changes outlined below. The committee added funds in the following areas:
!$450 million for family housing and military construction;
!$250 million for military compensation (primarily to reduce out-of-
pocket housing costs for military personnel);
!$400 million for procurement of additional helicopters and other
!$307 million to convert four Trident ballistic missile submarines
(SSBNs) to carry Tomahawk cruise missiles;
!$625 million more for theater missile defense systems like PAC-3 and
52 This accrual funding, where the agency is required to include the anticipated cost of
providing benefits to its current members, is also used to fund military retirement. The cost
of providing the benefit to current recipients is mandatory spending that is not part of the
53 The Senate Armed Services Committee exempted the funding requested for military pay and
Defense Health, which totals $3.6 billion out of the $18.4 billion increase requested on June
!over $800 million for “transformational” RDT&E programs,
including over $250 million for science and technology programs;
!over $600 million for new initiatives to deal with non-traditional
threats including over $200 million to combat terrorism (see section
!$270 million to Operation and Maintenance to improve readiness.
At the same time, the Senate Armed Services Committee reduced the
Administration’s request in the following areas:
!$590 million less for the V-22 tilt-rotor Osprey aircraft;
!$247 million less for the Joint Strike Fighter;
!$1.3 billion less for ballistic missile defense; and
!$1.6 billion reduction for savings from management efficiencies.
To improve the efficiency of defense operations and management, the Committee
also authorized another round of base closures in 2003 and directed the Defense
Department to save $1.6 billion by applying best commercial practices and improving
defense management. DOD was directed to achieve that $1.6 billion reduction in the
FY2002 Congressional Budget Resolution
Congress completed action on the FY2002 congressional budget resolution
(H.Con.Res. 83) in early May – the House approved a conference agreement on the
resolution on May 9, and the Senate on May 10 – before the Administration had
determined its defense spending plans. The conference agreement established a
provisional target of $324.8 billion in new budget authority for the national defense
budget function (which includes Department of Energy defense-related activities and
defense-related activities of other agencies as well as of the Department of Defense).
To allow for further increases in defense, the resolution used the mechanism of
reserve funds, separately administered in the House and the Senate, to accommodate
increased spending in FY2002 and over the whole FY2002-FY2011 period. With the
lower mid-session estimates of the surplus issued by both OMB and CBO in August
(reflecting the effect of the tax cut in the spring as well as other changes), the
downturn in the economy, and additional spending in response to the terrorist attacks,
it will be impossible to accommodate the defense increase without tapping social
security revenues. In fact, both CBO and the Administration now predict deficit
spending in FY2002 through FY2004, in addition to fully using the Medicare and
Social Security surplus (see above).
Section 302 (b) Allocations
Section 302 of the Congressional Budget Act established procedures through
which budget resolution ceilings on spending are implemented in the appropriations
process. Under Section 302 (a) procedures, the congressional budget resolution
allocates funds to the appropriations committees. Section 302 (b) then requires that
the appropriations committee in each house report how funds are subdivided among
the appropriations subcommittees. These “302 (b) allocations” ultimately determine
how much money will be available for each of the regular appropriations bills,
including defense. The 302 (b) allocations may be adjusted at any time, and often
change as action on appropriations bills proceeds.
In the conference version of the FY2002 DOD appropriations act, (P.L. 107-
117, H.R. 3338), Congress raised the initial ceilings set for Defense in the FY2002
concurrent budget resolution to amounts appropriated by Congress.54 Prior to
submission of the Administration’s revised request, on June 8, 2001, the House
Appropriations Committee released its initial 302(b) allocations for FY2002
appropriations bills. The Subcommittee on Defense received $300.3 billion in budget
authority, compared to $301 billion anticipated in the Bush Administration’s April 9
“placeholder” request. (Note that this is below the $310.5 billion in discretionary
funding requested for the Department of Defense because it does not include funds
provided to DOD in the military construction appropriations bill.) On June 21, 2001,
the Senate Appropriations Committee approved its initial allocations – the
Subcommittee on Defense received $298.6 billion in new budget authority. Following
receipt of a revised budget request, the budget resolution allowed the defense
allocation to increase, with the approval of the chairs of the House and Senate Budget
Overview of the Bush Administration Request55
Initial Budget Projections
The Bush Administration released an initial outline of its overall budget plans,
A Blueprint for New Beginnings, on February 28, and its official, more detailed
budget request was submitted on April 9. Both the “Budget Blueprint” and the56
April 9 budget included $310.5 in discretionary budget authority for the Department
of Defense, about the level the Clinton Administration had planned. Note that this
does not include defense-related activities of the Department of Energy and other
agencies – with all defense-related activities added, the April 9 budget projected
$325.1 billion in FY2002 for the national defense budget function.
The defense totals in the February 28 “Budget Blueprint” and in the April 9
budget request were, however, characterized simply as “placeholder” numbers. The
Administration’s plan was to submit a revised budget request by the summer,
following completion of a review of defense strategy and plans. Defense budget
54 See H.Rept. 107-333, p. 462.
55 For more background on the Administration request, see CRS Report RL30977, Defense
Budget for FY2002: An Overview of Bush Administration Plans and Key Issues for
Congress, by Stephen Daggett.
56 Discretionary funds are controlled through annual appropriations acts. For definitions of
this and other budget terms, including “budget authority,” see CRS Report RL30002, A
Defense Budget Primer, by Mary Tyszkiewicz and Stephen Daggett.
estimates beyond FY2002 simply reflected projected growth of the original FY2002
$310.5 billion for DOD at the rate of inflation rather than the results of any policy
assessment (see Table 10).
June 27 Budget Amendment
On June 27, the Administration submitted an amended FY2002 defense budget
request totaling $328.9 billion dollars in discretionary funding for the Department of
Defense – $18.4 billion more than the April 9 budget, and $32.6 billion above the
amount initially enacted for FY2001 (not including FY2001 supplemental
appropriations). For the national defense budget function, the revised total amounts
to $343.5 billion. The Administration revised its estimates of defense spending
beyond FY2002 in the mid-session update in August 2001 (see Table 10). Table 10
shows the actual FY2000 level, the original FY2001 enacted level, supplemental
appropriation for FY2001, the FY2002 amended request, and the enacted level in
In discussing the amended budget, Administration officials said that increased
spending – $32.6 billion above the FY2001 level appropriated by Congress last year
for DOD – was necessary to “address severe shortfalls in readiness, healthcare,
operations, maintenance, and infrastructure ... inherited” from the previous57
administration. The amended request was 11% higher than the FY2001 level passed
by Congress last year. Taking into account the effect of inflation, the request
reflected real growth of 7%, a reversal of the modest declines in spending that have
characterized the second half of the 1990s, with the exception of an increase in 199958
to fund the conflict in Kosovo. The Administration modified projections of funding
beyond 2002 in its Mid-Session Review issued on August 22, 2001 (see below). Final
projections of funding for later years, however, will not be provided until DOD
submits the FY2003 budget after completion of the national strategy review in
57 Letter from President Bush transmitting the amended FY2002 request to the Speaker of the
House of Representatives, June 27, 2001.
58 For the long term trend in defense spending up to FY2000, see CRS Report RL30447,
Defense Budget for FY2001: Data Summary, February 23, 2000, Table 10.
Table 10. Department of Defense Funding,
FY2000 through the Amended FY2002 Budget Request
(billions of dollars)
FY2001 FY2002 vs. vs.
Title FY2000 FY2001April FY2001Supple- withSupple- Amended FY2001(Apr. FY2001(Apr.
Actual Estimate a mental a mental a Request Est.) Est.)
Operation and Maintenance 108.1108.04.7112.7125.7+17.7+16%
Procurement 55.0 62.1 -0.2 61.9 61.6 -.5 -1%
RDT&E 38.7 40.8 0.5 41.3 47.4 +6.6 +16%
Rev., Mgt. & Other Funds3.11.0-0.11.02.3+1.2+118%
Total DOD Discretionaryb287.3296.35.5301.9328.9+32.6+11%
Total DOD Funding290.5295.05.5300.6327.8+32.8+11%
Sources: U.S. Office of Management and Budget, Budget of the United States Government, FY2002, April
pp. H4388-4389, and CRS calculations.
a. In April, 2001,the Bush administration submitted its FY2002 budget to Congress including “placeholder”
numbers for the Department of Defense. The President sent Congress a request for supplemental
appropriations for FY2001 on June 1, 2001 and an amended FY2002 budget request on June 27.
Congress passed the FY2001 supplemental on July 20, 2001, and the President signed the bill on July
b. Discretionary budget authority is appropriated to the Department of Defense annually.
c. Mandatory funding is governed by standing law – in DOD it reflects primarily offsetting receipts received
by certain DOD activities.
Future Defense Spending Plans
On August 22, 2001, OMB issued its Mid-Session Review of the FY2002
budget, including revised estimates of not only the surplus but also new estimates of
defense spending in later years (see Table 11). Those estimates added $98 billion to
projected spending between FY2001 and FY2006, compared to the Administration’s
initial April 2001estimates. The increase was designed to make later years consistent
with the amended budget request for FY2002, which added $18.4 billion to the
Table 11. Changes in Administration’s Estimates for National
Defense, FY2000 - FY2006
(Budget authority in billions of current and constant FY2002 dollars)
Initial April 2001 Requesta
National Defense Budget Functiona
Current Year Dollars304.1310.6325.1333.9342.8352.2361.92,026.5
Constant FY2002 Dollars322.0319.8325.1326.0326.1326.2326.51,949.6
Real Growth/ Decline1.5%-0.1%1.6%0.0%0.0%0.0%0.0%NA
Department of Defense Budgeta
Current Year Dollars290.5295.1309.4318.0326.9336.0345.51,930.8
Constant FY2002 Dollars307.5303.7309.4310.5310.9311.2311.61,857.3
Amended Request without Supplemental FY2001 Fundingb
National Defense Budget Functionb
Current Year Dollars304.1310.6343.5352.9362.4372.2382.52,124.2
Constant FY2002 Dollars322.0319.8343.5344.6344.7344.8345.02,042.4
Department of Defense Budgetb
Current Year Dollars290.5295.1328.0336.9346.3356.0366.02,028.3
Constant FY2002 Dollars307.5303.7328.0329.0329.4329.8330.21,950.1
Amended Request with Supplemental FY2001 Funding c
National Defense Budget Functionc
Current Year Dollars304.1316.7343.5352.8362.3372.1382.52,129.9
Constant FY2002 Dollars322.0326.0343.5344.5344.6344.7345.02,048.3
Department of Defense Budgetc
Current Year Dollars290.5300.6327.8336.9346.3356.0366.02,0336
Constant FY2002 Dollars307.5309.5327.8329.0329.4329.8330.11,955.
Sources: U.S. Office of Management and Budget, Budget of the United States Government, FY2002 Historical
Tables, April 2001; U.S. Office of Management and Budget, Mid-Session Review, FY2002 (August 22, 2001);
deflators from Department of Defense Comptroller; Conference Report to Accompany H.R. 2216, H.Rept. 107-148.
a. Reflects the Bush Administration’s initial April request for the Department of Defense for FY2002 - 2006.
b. Reflects amended budget for FY2002 submitted on June 27, 2001, excludes FY2001 supplemental enacted on July
c. Reflects amended budget request for FY2002 submitted on June 27, 2001, supplemental funding for FY2001
enacted on July 20, 2001, and new estimates for FY2003-2006 included in Mid-Session update of August 22,
Quadrennial Defense Review. Sent to Congress on September 30, the
much-anticipated Quadrennial Review (QDR) set out four key goals for U.S. military
!assuring U.S. allies;
!dissuading competitors from challenging the U.S. or our allies;
!deterring aggression; and
!defeating adversaries decisively should deterrence fail.59
Citing the unpredictability of threats in the post-Cold War world, the QDR called
for adopting a “capabilities-based” strategy rather than a regional approach oriented
to conflicts in two particular regions (i.e. the two “major regional conflicts” endorsed
in the previous QDR). Under a “capabilities” approach, the military would focus more
on “how an adversary might fight rather than specifically whom the adversary might
be or where a war might occur.”60 In light of the September terror attacks, the report
called for restoring “the emphasis once placed on defending the United States and its
land, sea, air, and space approaches.”61
At the same time, U.S. military forces are still to be prepared to defeat attacks
in “two theaters of operation in overlapping time frames,” with a decisive defeat in
one theater, and holding the enemy in the second, as well as being ready to conduct
smaller-scale contingencies (SSCs) of varying durations.62 In the new capabilities
approach, however, U.S. military forces are to emphasize information operations,
ensuring U.S. access to distant theaters, and defending the United States. Despite the
shift in approach, the QDR did not propose any changes in the current force structure
or military end strength.
Unlike most of the report, which is very general, the QDR specifically required
the services to make plans to redeploy forces to re-orient the global posture of the
U.S. to give additional emphasis to the Middle East and South Asia rather than the
current emphasis on western Europe and northeast Asia; for example, the Secretary
of the Air Force is tasked to develop plans to base more forces in the Arabian Gulf.63
Calling for a “transformation” of U.S. forces, operational capabilities, and
management practices, the new QDR emphasized:
59 Secretary of Defense Rumsfeld, Quadrennial Defense Review Report, September 30, 2001.
60 Ibid, p. IV in foreword.
61 Ibid, p. 14.
62 Ibid, p.21-22.
63 Ibid, p. 27.
!improving U.S. capabilities in information warfare, intelligence, and
!strengthening joint operations, command and control, and training;
!“selectively” replacing current equipment; and
!reforming DOD management and acquisition practices to achieve
efficiencies, including achieving $3.5 billion in savings through
Citing the new requirements arising from the September terrorist attacks, the
QDR abandoned previous plans for gradual increases in defense spending to be
achieved through savings from efficiencies and stated that DOD was developing new64
estimates of future funding needs.
Composition of Changes in the FY2002 Amended Budget
Of the $32.6 billion increase in requested FY2002 DOD discretionary funds
compared to FY2001, fully three-quarters was allocated to Operation and
Maintenance (54%) and Military Personnel (21%) accounts, which fund readiness-
related and other support activities and military compensation (see Table 12).
Another 20% of the increase was allocated to RDT&E, reflecting, in large part, the
growth in spending for ballistic missile defense – half of the $6 billion increase in
R&D was allocated to a 61% increase in funding for ballistic missile defense, with the
remainder spent on increases for “transformational R&D,” such as digitization of
weapon systems and unmanned combat vehicles, and other R&D programs.
The FY2002 request included only small changes in funding for weapons
procurement, reflecting the fact that the Administration had not yet completed its
strategic review. Completed by the end of September 2001, the conclusions in
Quadrennial Defense Review (QDR), are to be reflected in the FY2003 budget, rather
than in FY2002, where spending on Procurement is slated to decrease by $.5 billion.
64 Ibid, p. 48.
Table 12. Composition of Changes Between FY2002 Amended
Request and FY2001 Enacted Amounts
(billions of dollars)
FY2002 Amended vs.Shares of Change
TitleFY2001 OriginalEnacted LevelBetween FY2001and FY2002
(in billions of dollars)(in percent)
Operation and Maintenance (O&M)17.754%
Procurement -0.5 -2%
Revolving & Mgt. & Other Funds 1.24%
Total, DOD Discretionary BA32.6100%
Sources: FY2002 amended request from Office of Management and Budget, Transmission of the
FY2002 Amended DOD budget to the Speaker of the House of Representatives, June 27, 2001;
FY2001 original enacted levels from U.S. Office of Management and Budget, Budget of the United
States, FY2002, April 2001, Table 22-1; CRS calculations.
Table 13 and the discussion that follows provide a more detailed breakdown of
the Administration’s $32.6 billion increase in funding between FY2001 and FY2002.
Military Personnel. The amount for Military Personnel in the FY2002
amended budget reflected the Administration’s decision to exploit a variety of tools
to improve military compensation in order to meet recruitment and retention goals,
a major concern of the services and Congress in recent years. Those tools include:
!an increase in basic pay that averages 5% (including a 4.6% across-
the-board increase in basic pay and higher raises for certain grades);
!a 15% increase in the housing allowance provided to military
!$1 billion for improvements in pay targeted to particular grades and
skills where retention problems have persisted; and
!$2.9 billion of additional funding for bonuses and other incentive
Table 13. Major Changes in FY2002 Amended Bush Budget
(budget authority in billions of dollars)
CategoryEnacted LevelRequestFY2002 and FY2001
billions of dollarsbillions of dollarspercent
Military personnel total75.482.36.99%
Across-the board increase to basic b39.442.42.05%
Targeted pay raisebNANA1.00%
Reduction in housing costs6.47.41.015%
Bonuses and other increases NANA2.9NA
Operation and maintenance total108.0125.717.716%
New benefits for retirees(0.2)(3.9)(3.7)NA
Growth in TRICARE and(11.4)(14.0)(2.6)23%
Other 47.7 51.7 4.0 8%
Procurement 62.1 61.6 -0.5 -1%
RDT&E 41.0 47.4 6.4 16%
Ballistic Missile Defense5.38.33.057%
Revolving & Management andc1.02.01.0NA
TOTAL 296.3 328.9 32.6 NA
Sources: CRS calculations based on DOD, Under Secretary of Defense Comptroller, National
Defense Budget Estimates for FY2001, March 2000; Transmission of FY2002 DOD Amended
Budget to Congress, June 27, 2001; FY2002 DOD Briefing to the Press (with slides); Office of the
Under Secretary of Defense (Comptroller), Department of Defense Amended Budget, Fiscal Year
Note: Totals may not add due to rounding.
a. Reflects April 2001 estimate for FY2001; does not include 2001 supplemental appropriations
passed by both houses on July 20, 2001 and signed into law on July 24.
b. Includes both active-duty and reserve pay.
c. Includes appropriations to Revolving and Management funds and legislative contingencies.
Operation and Maintenance. Funding for O&M in the Administration’s
FY2002 request grew dramatically – from $108 billion in FY2001 to $126 billion, a
16% increase of almost $18 billion. This increase pushed O&M’s share of the DOD
budget to 38%. Although O&M spending is commonly associated with readiness, this
increase boosted spending in a variety of areas reflecting the fact that O&M funds
support activities that range from training operational units to cutting the grass on
Chief areas that grew in the amended request included –
!Defense Health:65 The amended budget included an additional $3.7
billion for the expanded health care coverage that Congress
authorized last year for military retirees over the age of 65 (see
below for more detail about the Tricare for Life program), and $2.6
billion more to cover expanded benefits and higher costs for
dependents of active-duty personnel. The Administration claimed
that this reflects more “realistic” estimates for pharmacy costs and
contracts for managed care.66
!Optempo-related activities and depot maintenance: For the day-to-
day training of military units, typically referred to as “optempo-
related activities,” the new budget provided an additional $2 billion.67
That 15% boost in funding over the FY2001 level did not necessarily
mean a higher pace of training of operational units (except for naval
aviation units) but rather more funding for the purchase of spare
parts, higher levels of depot repair, and improving firing ranges in
response to concerns raised by military leaders about shortfalls that
could affect readiness. 68 An additional $1.3 billion for depot
maintenance, a 20% increase, was also intended to improve
!Base support: Another $2.8 billion proposed addition in O&M was
for base support, 16% above last year’s level.69 The Administration
argued that such increases are necessary to improve the condition of
military installations, which the services suggest have been
shortchanged in recent years.
!Other areas: Other areas within O&M grew by about 10%.
Procurement Funding. The FY2002 amended budget included $61.6 billion
for procurement of new weapon systems, $0.5 billion below last year’s level.
Procurement spending largely followed plans laid in previous years because the
Administration had not yet decided on its investment strategy pending its review of
the national military strategy.
65 About two-thirds of the cost of the Defense Health Program is funded in O&M. The
remaining one-third is the cost of military medical personnel (physicians, nurses, hospital
corpsmen) that is funded in the Military Personnel title.
66 DOD News Briefing on Amended Budget for FY2002 by Secretary of Defense Rumsfeld,
Under Secretary of Defense (Comptroller) Dov Zakheim, and Deputy comptroller
(Programs/Budget), Bruce Dauer, June 27, 2001, slide number 9.
67 “Optempo” is an abbreviation for “operating tempo,” the term that refers to the amount or
pace of training of operational units.
68 Office of Management and Budget, Transmission of the FY2002 Amended DOD budget,
as included in the White House letter to the Speaker of the House of Representatives, June 27,
69 Ibid, and DOD News Briefing on Amended Budget for FY2002, June 27, 2001, cited above.
RDT&E. Of the $6.4 billion or 16% increase in the R&D budget proposed for
!$3 billion was for the Administration’s more ambitious pursuit of
missile defense, a decision that generated considerable controversy
(see below), and
!additional funding of more than $1 billion was for programs
characterized as “transformational,”(e.g. unmanned systems like
Funding for basic research (the Science and Technology share of R&D) was pegged
at $8.8 billion, some $200 million below the level provided in 2001.70
Military Construction and Family Housing.71 Military construction and
family housing – programs designed to maintain and modernize the defense
infrastructure – were slated for increases of 11% ($0.6 billion) and 14% ($0.5 billion)
respectively. The Administration justified the increase for military construction as part
of a long-term initiative to improve the condition of facilities. At the same time, the
Administration proposed an “Efficient Facilities Initiative” – including a round of base
closures in FY2003, coupled with expansion of a new way to share the use of land
and facilities on military facilities, based on a pilot project at Brooks Air Force Base.
After much debate, Congress approved a new round of base closures, and agreed to
an expanded pilot program of the Brooks Air Force base initiative.
70 Slides included with DOD News Briefing on Amended Budget for FY2002, June 27, 2001.
71 For more information on military family housing, see CRS Report RL31039, Military
Housing Privatization Initiative: Background Issues, by Daniel Else.
Major Issues in the
FY2002 Amended Defense Budget
Several issues emerged as key matters of debate on the FY2002 defense budget
though the salience of some of these issues changed in response to the September 11
terrorist attack and new issues emerged about the appropriate role for the Department
of Defense in combating terrorism, and the changes in funding should flow from that
role (see discussion above about funding to combat terrorism). Major issues raised
during this year’s debate on the defense budget included:
!Was the $343.5 billion requested by the new Administration the
appropriate amount relative to defense needs, and could that amount
be accommodated without dipping into the Medicare surplus in
!Was increased funding of over 60% and proposed restructuring of
the ballistic missile defense program appropriate, and how would the
Administration’s plans affect the Anti-Ballistic Missile Treaty
!Was funding for procurement – slightly below last year’s level –
!What, if any, implications arise from the rapid growth in defense
!Were the large proposed increases in operation and maintenance
funding necessary to support readiness, and will higher funding for
O&M squeeze out other defense needs in the future?
A variety of other important issues – ranging from the level of military
compensation to finding alternatives to Navy live fire training on Vieques – were also
be considered, and are discussed in later sections of this report.
Accommodating the FY2002 Increase Within Budget
The Administration characterized the defense budget increase in FY2002 as an
initial down payment designed to make up for several years of shortfalls in funding of
the day-to-day requirements of the services. Some argued that the increase was
insufficient. In response to a request from Representative Skelton, the ranking
minority member in the House Armed Services Committee, the military services,
submitted a list of “unfunded” requirements that totals another $32 billion in FY2002.
The total for this list was twice as large as that submitted by the services last year.
Supporters of higher funding argued that the Administration’s request did not correct
“shortfalls” in long-term funding for weapon systems designed to “recapitalize” and
“modernize” the force, an issue that has been the focus of debate in recent years.
Members of the defense committees expressed their dissatisfaction with the
procurement levels proposed in the amended request.
Others, however, argued that the Administration’s request could not be
accommodated without dipping into the surplus generated by the Medicare Hospital
Insurance Fund or shortchanging competing demands for higher funding for
education, new coverage for Medicare prescription drugs, and adequate support of
other domestic programs. Critics complained that the size of the Administration’s tax
cut left little or no room for defense increases.
Although this perennial “guns versus butter” debate grew more intense when
new, lower estimates of the FY2002 federal budget surplus – reflecting the effect of
the tax cut on revenues and recent downturns in the economy – were published in
August in OMB and CBO’s mid-session updates, these concerns dissipated
temporarily, at least, with the terrorist attacks. The defense appropriations bill was
delayed because of congressional response to the terrorist attack, and eight continuing
resolutions were passed that covered government spending through January 10, 2002
when the final appropriation bills were signed into law.
During this congressional session, attention focused on the Administration’s
proposals about allocation of the $40 billion provided in the emergency supplemental.
Congress was less concerned with reconciling increases for defense with other
competing spending demands, although concerns about the effect of higher defense
spending in the future could resurface with the re-emergence of deficit spending and
the reliance on the social security surplus to fund government programs, rather than
using those funds to pay down the debt and reduce the burden of payments for social
security and Medicare for the baby boomer generation.
Constraints in the Congressional Budget Resolution. The final
Congressional Budget Resolution approved in May established “reserve funds” for
defense and certain other high-priority areas. The Chair of the Budget committees in
each House could tap the “reserve funds” – in other words, approve higher levels of
spending than those included in the Congressional Budget Resolution – only if the
proposed increases would not reduce the surplus in the Medicare Hospital Insurance
(HI) Fund, and if certain other conditions are met.72 If the proposed increase, taken
together with all previously enacted legislation, tapped the Medicare HI Fund surplus,
any member could raise a point of order against the proposal.73 On the Senate side,
72 The FY2002 Congressional Budget Resolution establishes “reserve funds” in each house
to allow higher levels of defense spending and other programs, subject to the limitation that
the increase not reduce the size of the Medicare surplus–the excess of revenues over outlays.
This authority is likely to be exercised by revising the 302(a) allocations to the appropriations
committees, which are the mechanism by which the budget committees implements the targets
included in the resolution. On the Senate side, as long as the Medicare surplus would not be
reduced, the Chair of the Budget Committee can approve higher levels if the President
submits an amended request and the authorizing and appropriating committees report bills
with higher levels based on the recommendations of the President’s National Defense review.
(See Section 217 in H.Con.Res. 83, May 10, 2001. The same restriction on dipping into the
Medicare surplus applies on the House side, and the Chair of the Budget Committee can
consider the recommendations of the President’s National Defense Review and other
Administration policy or budget submissions.
73 See Section 217 of H.Con.Res. 83, H.Rept. 107-60, p 24-25 for the reserve fund for defense
in the Senate. The limitation–about dipping into the Medicare HI surplus– applies to all
reserve funds except for Medicare, where the surplus in the Hospital Insurance Fund can be
used to finance a new prescription drug benefit as long as funding does not exceed the caps
sixty votes were required to override a point of order. On the House side, the Rules
Committee would decide whether a point of order could be raised. (This limitation
applied to all the reserve funds except for Medicare itself, where the HI surplus could
be used to finance a new prescription drug benefit.) Unlike the other reserve funds,
the one set up for defense in the Senate did not include any specified limits on the
amount of additional funding that may be provided. The Chairman of the Budget
Committee could adjust committee allocations to reflect use of this reserve fund.74
See CRS Report RL30977, Defense Budget for FY2002: An Overview of Bush
Administration Plans and Key Issues For Congress, by Stephen Daggett for a more
extensive discussion of the budget resolution.
These guidelines - which were included in the concurrent budget resolution and
hence did not have statutory effect - were essentially set aside by Congress during the
debate on the DOD appropriations bill because no member raised a point of order.
Support for higher defense spending was high because of the September 11th attacks,
and overcame concerns about protecting the Social Security and Medicare surpluses.
(This section was prepared by Steve Hildreth and Amy Woolf)
Whether and when the United States should deploy defenses designed to protect
against attack from long-range ballistic missiles has been a divisive defense issue for
nearly 20 years. Although the Bush Administration has not outlined a specific
architecture for missile defense, it has indicated that the development and deployment
of missile defenses would be part of a broader shift in the framework for international
strategic stability, away from reliance on nuclear and conventional deterrence and
towards a growing reliance on a mix of offensive capabilities and missile defenses.
Where the Clinton Administration sought to develop and deploy a system that
consisted of land-based interceptor missiles and radars, with some reliance on space-
based sensors, the Bush Administration has suggested that the United States develop
and deploy land- and sea-based interceptors, along with more extensive space-based
capabilities for identifying and tracking attacking missiles. (For an overview of
national and theater missile defense, see CRS Report RL31111, Missile Defense: The
Current Debate, coordinated by Steven A. Hildreth and Amy F. Woolf.)
The amended FY2002 budget included a dramatic overall increase in missile
defense funding – a 60% increase compared to FY2001 funding. It does not appear,
however, that the new Administration significantly changed the relative priorities
given to the main categories of missile defense – terminal, midcourse, and boost-phase
defenses – that the Administration is using to present the program (see Table 14).
The Administration did not propose different rates of increase for individual
programs, however. In congressional testimony, the Administration emphasized these
new categories for classifying various programs, as well as certain organizational
in the resolution. For FY2002, the cap is zero (see Section 211 of H.Con.Res. 83, H.Rept.
74 See Section 218 of H.Con.Res. 183, in H.Rept. 107-60, p. 25.
changes – programs that were initially designed for an air defense role (to shoot down
missiles launched from aircraft) are being transferred from the purview of the Ballistic
Missile Defense Organization to the services.75
Debate about the Administration’s missile defense program focused on the
!the foreign policy and arms control implications of the
!the pace, long-range cost, design, and acquisition strategy of the
!the potential squeeze on other R&D efforts; and
!the blurring of the distinction between the threats posed by theater
and long-range missiles as well as the defense systems to be
developed to meet those threats.
In a test on July 14, 2001, which came on the heels of two previous failures, an
interceptor destroyed a dummy missile warhead in space about 140 miles above the
ocean. Supporters contended that these results justify accelerating the program. In
response, critics suggested that the test was not realistic because there was only one
rather than many decoys, and the target emitted a signal whereas the decoy did not.
Such differences in interpreting test results have been common in the past.
The large increase in funding – from $5.1 billion in FY2001 to $8.3 billion in
FY2002 – reflected the Administration’s decision to accelerate R&D efforts on
systems currently in development in order to deploy missile defenses as soon as
possible. On December 13, 2001, President Bush announced that the U.S. would
withdraw from the ABM Treaty, in order to pursue testing, development, and
deployment of missile defense system without constraint. Despite concerns that the
Russians would react negatively, the growing cooperative relationship between the
two nations in the wake of September 11th blunted the expected response. The
withdrawal was prompted partly by plans to construct a missile defense test site in Ft.
Greely near Fairbanks Alaska in spring of 2002 and to test the capabilities of the
Navy’s AEGIS radar system (a tactical system) during a missile defense test, and
partly by pressure by some within the Administration to get rid of a “relic of the Cold
War.” (See CRS Report RL30967, National Missile Defense: Russia’s Reaction, by
Amy F. Woolf. )
The Bush program included R&D on systems designed to intercept missiles at
each stage from the initial “boost” phase, to mid-course, to the “terminal” phase of
the flight. Secretary of Rumsfeld’s plan to pursue a wide range of programs, and
deploy a rudimentary system as soon as possible – before the technologies are fully
mature – is a new and more risky acquisition strategy that has raised concerns (See
CRS Issue Brief IB10034, National Missile Defense: Issues for Congress, by Steven
Hildreth and Amy F. Woolf, and CRS Issue Brief IB98028, Theater Missile Defense:
issues for Congress, by Robert D. Shuey.). Some have questioned whether such an
75 Testimony of Lieutenant General Ronald T. Kadish, USAF, Director, Ballistic Missile
Defense Organization, before the House Armed Services Committee, July 19, 2001.
approach is merited, particularly in light of the potential effects on arms control, and
the strain put on defense resources.
In congressional testimony, DOD emphasized the common elements in long-
range, national ballistic missile defense (NMD) and short-range, theater missile
defense (TMD) systems, a new approach that blurs the distinction between strategic
and tactical threats and the missile defense responses to those threats. That approach
concerns many, both inside and outside of Congress.
The Administration has not developed cost estimates for its new missile defense
plan, and some legislators have questioned whether sufficient funding will be available
in light of the overall budget squeeze, as well as other competing defense needs. For
example, funding for missile defense could limit funding for other defense R&D and
Congressional Action. The conference version of the authorization bill, S. 1438,
provided that $1.3 billion in funding could be used by the President either for RDT&E
for BMD programs or for activities to combat terrorism. If the President allocated
the funding to BMD, the Administration’s request would be funded fully. Thisth
provision mirrored a compromise adopted on the Senate floor after September 11
when Senator Levin agreed to remove controversial sections included in the markup
by the Senate Armed Services Committee that would have reduced funding for BMD
by $1.3 billion and required congressional approval of activities that would violate the
ABM Treaty; the President had threatened to veto the defense authorization bill if
those provisions were included. The authorizers also transferred three terminal
defense programs - PAC-3, MEADs, and Navy Area Defense - from the services to
BMDO because of concern that the services would not adequately fund those
In their conference report, the appropriators approved a total of $7.7 billion,
reducing the President’s request by over $500 million, and did not include the
provision permitting a transfer of funds that was recommended by the authorizers (see
Table 14 below). The size and rationale for the cuts made by Congress are:
!Sea-based Terminal or Navy Area Defense - a cut of $289 million
reflecting a Navy’s decision to cancel the program leaving only
funding for cancellation costs;
!Sea-based Midcourse/Navy Theater Wide - a cut of $120 million
because Congress considered the Navy’s request for missiles that
would be used for testing or contingencies to be premature;
!Space Sensors/Space-Based Infrared System (SBIRS) Low - a cut of
$135 million in response to the announcement of a 2-year delay in the
Notwithstanding the reduction, congressional action appears to preserve the
general priorities of the Administration as well as approve the substantial increase
requested by the Administration.
Table 14. Congressional action on Ballistic Missile Defense
Funding: FY2001 to FY2002 Enacteda
(In millions of dollars or percent of total)
ProgramEstimatedAmendedEnactedShare ofEnactedenacted vs.
StageFundingTotal % change
Ground-based 442.0 783.7 865.7 9% 11% 96%
Ground-based 52.6 73.6 71.6 1% 1% 36%
Ground-based 541.0 922.4 872.5 11% 11% 61%
Sea-based Terminal/ Navy269.6395.5100.05%1%-63%
Arrow/b/ 94.3 65.7 65.7 2% 1% -30%
BMD Midcourse subtotal2,411.33,940.53,820.547%49%58%
Ground-based 1,954.9 3,230.7 3,230.7 38% 42% 65%
Sea-based BMD/ Navy456.4596.0476.09%6%4%
Other 0.0 113.8 113.8 0% 1% NA
Boost defense segment subtotal 304.0685.4609.46%8%100%
Sea-based Boost and other0.085.485.40%1%NA
Infrared System (SBIRS)
RAMOS and other/b/35.4110.890.81%1%156%
BMD system and745.3912.5960.215%12%29%
Sources: CRS calculations based on H.Rept. 107-350 and Office of the Undersecretary of Defense (Comptroller),
“Department of Defense Amended Budget, Fiscal Year 2002,” (June 2001); Ballistic Missile Defense
Organization, “FY2002 Amended Budget Submission,” June 2001; Ballistic Missile Defense Program, Briefing
of 30 July 2001; Office of the Undersecretary of Defense (Comptroller), “Department of Defense Amended
Budget, Fiscal Year 2002, RDT&E Program (R-1),” June 2001; and Office of the Undersecretary of Defense
(Comptroller), “Department of Defense Amended Budget, Fiscal Year 2002, Procurement Programs (P- 1),” June
2001. Prepared with the help of Yeonmin Cho.
a . Comparisons reflect April estimate for FY2001 and FY2002 Amended budget request, and final FY2002
congressional action. Funding includes RDT&E, procurement, and military construction.
b. Arrow and RAMOS were both funded under International Cooperative Programs in FY2001.
Adequacy of Funding for Procurement
The new Administration decided to delay major changes in funding for new
weapon systems pending completion of its national defense review. Presumably for
that reason, the procurement budget in the amended FY2002 budget was $61.6
billion, $0.5 billion below last year’s level.76 Until the review was completed, the
Administration decided to emphasize “funding of systems that will continue to be
necessary even with significant shifts in defense strategy” – purchases of airlift aircraft
was given as one example.77 Based on that rationale, the Administration’s
procurement request included only modest changes in current plans.
Limited funding procurement fueled concerns among some defense supporters
in Congress, particularly in light of the debate in recent years about alleged
“shortfalls” in long-term defense funding, particular for weapons modernization. That
debate has centered on whether the spending on new weapon systems needs to be
increased – and at what rate – to “recapitalize” or replace those systems as they age.
Although estimates of the amount necessary to replace current systems have varied
widely, there is near consensus among Members of the defense committees in78
Congress that some increase in the procurement budget in the near term is needed.
In testimony, Secretary of Defense Rumsfeld acknowledged that the current
budget did not address the replacement issue. But he argued that decisions on that
issue could not be made until completion of the Quadrennial Defense Review, which
would incorporate the findings of the National Defense Review. Those decisions,
which are to be included in the FY2003 budget, are likely to be contentious within
the Defense Department as well as in Congress, in part because changes in strategy
and the “transformation” of today’s forces to meet new military goals could require
a different mix of forces.79 (See Summary Tables A2 and A3 for the number and
procurement and RDT&E funding for major weapon systems requested by the
Administration as well as congressional action.)
Congressional Action. Reflecting these concerns, the authorizers added about
$500 million to the President’s request, making a variety of changes to selected
76 The new budget does leave room for some additions to procurement because the
FY2001budget included a one-time expense – $4 billion for full funding of a carrier – which
is not repeated in FY2002.
77 Letter from OMB Director Mitch Daniels to the President included with the transmission
of the amended FY2002 budget to Congress, June 27, 2001.
78 See CRS Report RL30977, Defense Budget for FY2002: An Overview of Bush
Administration Plans and Key Issues for Congress, May 22, 2001 for a description of this
debate. Estimates of the appropriate level of future procurement budgets have ranged from
a high of $111 billion to $164 billion annually proposed by a study conducted by the Center
for Strategic and International Studies in 1999 to a mid-range “steady-state” budget of $90
billion included in a study by the Congressional Budget Office in 2000 to $75 billion by
FY2005 suggested by Secretary Cohen and senior DOD officials during the Clinton
79 Tom Ricks, “For Military, ‘Change Is Hard’,” Washington Post, July 19, 2001.
programs (e.g. UH-60 Black Hawk helicopters). The appropriators, however,
generally funded weapon systems at the request. See discussion of individual weapon
systems below.). This issue is likely to resurface in the FY2003 budget debate.
Implications of Recent Rise in Defense Health Costs
(This section was prepared by Richard Best)
The Defense Health Program (DHP) has been a matter of considerable
congressional interest in recent years because of initiatives to expand medical
coverage to military retirees and their dependents and, also, because of concern about
continuing cost growth, particularly for managed care contracts. The substantial
increase for the Defense Health Program in the new budget reflected both additional
benefits for military retirees, a 15% increase in the cost of drugs, and a 12% increase
in the managed care contracts that provide care to the dependents of military80
personnel. DOD spokesman said that these higher funding levels were designed to
eliminate the practice in recent years of turning to supplementals to cover earlier,
unrealistic estimates. (Some $1.4 billion of the $5.5 billion supplemental recently
passed by Congress, was for higher-than-anticipated costs in the Defense Health
The FY2001 Defense Authorization act provided new benefits – dubbed
“TRICARE for Life” – for Medicare-eligible military retirees. The measure required
that the Defense Department pay the full cost of the program for current beneficiaries
out of appropriated funds in FY2002, but established a trust fund to pay future costs,
which will be counted as mandatory spending financed outside of the defense budget
in later years.81
In future years, the Defense Department’s cost will reflect an actuarial estimate
of the cost of future benefits for current personnel, the same approach now used for
retirement benefits. There is great uncertainty about the size of those estimated,82
future costs. If the estimated costs are smaller than the $3.9 billion included for
these benefits for Medicare-eligible military retirees in the FY2002 budget, the
pressure on DOD’s budget created by the Defense Health Program may subside in
later years. Otherwise, DOD could continue to face significant, or even additional
pressure on its total resources because of the obligation to provide this new benefit.
Meanwhile, the costs of other medical care in DOD continued to increase, and
just as importantly, the Defense Department has seldom been able to project its
required expenditures accurately. According to one congressional committee, the
Defense Department has requested either substantial reprogramming of funds or
80 DOD Press Briefing of June 27, 2001, p. 14.
81 Although the Treasury will finance the costs of current beneficiaries, the Defense
Department will have to pay into the trust fund annually to cover the cost in the future of this
benefit for current personnel.
82 The DOD actuary will estimate those costs, which will have to be included in DOD’s
budget beginning in FY2003.
supplemental appropriations to meet unbudgeted health care costs for 12 of the past
Faced with both the obligation to provide more extensive benefits and rapidly
rising costs, senior DOD officials suggested that Congress may want to consider
transferring other defense health costs to the mandatory side of the overall federal
budget to relieve this pressure. Although such a transfer would free up resources in
the defense budget, the government would, of course, still pay those costs.
Along with the economy-wide pressure on medical costs from rising drug costs
and technological advances, DOD’s health care system lacks mechanisms such as84
copayments that restrain the usage of medical services. With removal of most
copayments for active-duty beneficiaries, and only modest copayments for retirees,
DOD cannot rely on the tools that are typically used in the civilian sector to restrain
health care usage and, thus, contain costs.
Congressional Action. The authorizing and the appropriating committees both
endorsed the Administration’s request. The appropriators also added $235 million for
research into breast and prostate cancer.85
Spending for Operation and Maintenance
The amended FY2002 defense budget request included an increase of $17.7
billion in spending on operation and maintenance. Of that total, about $2 billion was
additional funding for flying hours, steaming hours, and training, the funding that is
most clearly related to military readiness. (Day-to-day training of operational units,
or operational tempo, is typically referred to as “optempo,” a shortened version of the
term.) Other funding increased with a direct effect on readiness included depot
maintenance – ensuring that weapon systems are available for training.86
A large share of the increase in the Operation and Maintenance budget this year,
however, was for objectives that may not contribute so directly to military readiness.
Some $6.3 billion is for the Defense Health Program (see discussion above). Although
better benefits for retirees may contribute, in some fashion, to the morale of some
military personnel, showing a direct effect on readiness would be difficult. The other
major increase in the O&M budget was to upgrade the facilities on military
installations. DOD justified those increases as a readiness-related expense – a way to
improve the morale of military personnel by improving the quality of their workplace
83 House Appropriations Committee, Report to Accompany H.R. 2216, Making Supplemental
Appropriations for FY2001, H.Rept. 107-102, p. 10.
84 CBO, “Budget Options for National Defense,”Option 4-08 and Option 4-09, pp. 73-74.
Although those options refer to beneficiaries who use military health care facilities, the
argument could also be applied to Medicare-eligible retirees who receive the new benefits
under the “TRICARE for life” program.
85 See H.Rept. 107-350, p. 392 and 393.
86 See slide entitled “Operation and Maintenance” that is included in DOD Press Briefing on
the FY2002 Budget, June 27, 2001.
– but it may be difficult to show how such spending directly affects the readiness of
units to go to war.
Congressional Action. Although Congress has generally supported increases in
the O&M budget in order to preserve and protect readiness, this year, both the
authorizers and the appropriators cut O&M funding by about $3 billion, partly on the
basis that DOD could achieve savings from a variety of management reform initiatives
as well as specific pricing adjustments for fuel, utility costs, and foreign currency and
cuts to administrative areas like headquarters. Citing testimony by Secretary of
Defense Rumsfeld that DOD should be able to save 5% overall, the authorizers
included a variety of reform initiatives, particularly for procurement of services, on87
which DOD spends over $50 billion, and cut funding by $1.3 billion. The
Administration argued that such savings could not be achieved so quickly, and that
funding might therefore be drawn from readiness-related accounts.88 The
appropriators also reduced funding for the Overseas Contingency Operations Transfer
fund, set up to give the Secretary resources for unexpected costs, by $650 million in
response to GAO work that found poor oversight of that spending, as well as cuts in
management headquarters and administrative areas.89
87 See H.Rept. 107-350, p. 685.
88 See Letter from Secretary David Rumsfeld to the Honorable Senator Carl Levin, Chairman,
Committee on Armed Services, U.S. Senate, October 26, 2001, and Letter to the Honorable
Daniel K. Inouye, Chairman, Subcommittee on Defense, Committee on Appropriations, U.S.
Senate, December 10, 2001.
89 See S.Rept. 107-109, Department of Defense Appropriations bill, 2002, and supplemental
appropriations, 2002, Senate Appropriations Report on H.R. 3338, p. 53.
Other Important Issues
Military Recruiting, Retention and Compensation. (This section was
prepared by Robert Goldich.) As did the Clinton Administration in its last years, the
Bush Administration entered office emphasizing the need to increase pay and benefits
for military personnel to deal with serious recruiting and career retention problems,
or continue a recovery process which had already begun. In February, President Bush
announced that he would request a 4.6% pay raise for military personnel, with
additional increases targeted to particular skills and grades. The Administration later
raised its minimum to 5%, and Congress ended up approving that 5% request plus
some targeted raises for members in particular pay grades and years of service up to
There were proposals for higher minimum raises–some close to 8%–but they
were defeated. For the third year in a row, Congress refused to repeal a statute which
requires that any Department of Veterans’ Affairs (VA) disability compensation
received by a military retiree must be offset by an equivalent reduction in DOD retired
pay (i.e. prohibiting ‘concurrent receipt’ of benefits). In separate legislation, Congress
also approved a substantial increase in GI Bill educational benefits and allowed limited
transferability of such benefits to dependents.
These increases in military pay and benefits in recent years were a response, in
part, to problems in recruiting and retaining sufficient numbers of qualified military
personnel that began in the late 1990s. Frequently cited reasons include (1)
competition for qualified workers from a growing economy; (2) a rise in consumer
living standards against which military families measure their own quality of life; (3)
increased military operations and training away from home and family; (4) a decreased
propensity for military service among young people; and (5) the availability of federal
educational assistance that does not require military service. Although recruiting
improved in 2000 and 2001, with the services meeting or exceeding their goals, few
if any observers felt that long-term solutions have been found.
It is not yet clear what effects the ongoing war against terrorism which began on
September 11, 2001 will have on military personnel issues. A sense of near-total
national support, military successes with minimal combat casualties, and
compensation increases, could well contribute to easier recruiting and retention. A
recovering economy, the possible need to increase the strength of the active duty
forces to replace reservists who will have to be released, and the stark realization that
military service could indeed lead to combat could possibly hamper it, or at least
increase military compensation costs. In the short term, war-related personnel
deployments and military administrative action–known as “stop-loss”–to prevent
skilled personnel in particular occupational specialties from leaving active duty at least
mask the underlying significance of retention statistics.
Congressional Action. There was little if any fundamental disagreement between
the two Armed Services Committees in their yearly reworking of the Administration’s
proposed military personnel programs; both houses of Congress endorsed the
Administration’s proposal to expands compensation increases of recent years,
including the following actions:
!Accepting the Administration proposal for a January 1, 2002 basic
pay raise of a minimum 5% and a maximum 10% for military
personnel, depending on pay grade and years of service. This was
the largest annual raise since that of October 1, 1981 (FY1982), as
well as being higher than the 4.6% that the permanent statutory
formula would have provided.
!Increasing the proportion of housing costs that are reimbursed as
part of an effort to completely eliminate “out-of-pocket” housing
costs not covered by military housing allowances by FY2005.
!Increasing reimbursements for a wide range of moving costs.
!Authorizing officer accession bonuses for some officer candidates up
!Increasing the maximum age to commission college ROTC
scholarship recipients to from 27 to 31.
!Creating a new re-enlistment bonus of up to $30,000 in U.S. savings
bonds for those with critical skills who agree to serve at least six
additional years of active duty.
!Allowing military personnel with critical skills to transfer up to 18
months of Montgomery GI Bill benefits to family members in return
for serving at least another four years.
In a matter with major implications for both government-wide and DOD funding
that is of great interest to military retirees, the FY2002 defense authorization act, for
the third year in a row, did not repeal a statute that requires that those military retirees
who receive VA disability compensation must take an offset to their military
retirement that is equal to their VA disability payment (the prohibition against
‘concurrent receipt’ of benefits). DOD opposes any change in this prohibition, arguing
that the two programs - military retirement and VA disability payments - were
intended for different groups, veterans who are eligible for retirement and veterans
who are eligible for disability payments but not for retirement. To ensure that military
retirees with service-connected disabilities do not receive less than disabled veterans
who are not eligible for retirement, the current law permits disabled veterans to
choose the larger of the two payments, as long as the veteran waives the equivalent
amount of retirement compensation.
Although both the House and the Senate version of the authorization act
eliminated this offset and permitted veterans to receive full benefits under both
programs, the houses differed in their approach to funding the program. The Senate
adopted an amendment, which would have provided that concurrent receipt would be
considered an entitlement program that would go into effect on October 1, 2002.
That change would have triggered an additional $3 billion in mandatory spending in
2002 and $40 billion in spending over the next ten years as well as requiring that
DOD provide an additional $1 billion annually. Under the House version, this
authorization of “concurrent receipt” of the two benefits would have become effective
only if the President submitted a budget proposal to offset the mandatory spending
costs of the change in law, and if Congress approved legislation to provide such an
offset.90 By accepting the House version, Congress guaranteed that concurrent receipt
would not take place unless the Administration reversed its consistent opposition.
Possibly as partial recompense, Congress expanded the eligibility for some severely
disabled military retirees.
Social Issues. (This section was prepared by David Burrelli.) Social issues
are frequently matters of debate in the defense authorization process. This year it was
speculated that there could be efforts to revisit a number of issue including the current
policy under which, in all services except the Marine Corps, males and females receive
basic training together. Likewise, Congress required last year that DOD notify
congress in advance of any plans to change the current policy of assigning only males
to duty on submarines. In addition, according to press accounts, a panel reviewing
the Uniform Code of Military Justice had concluded that sodomy between consenting
adults should not be prohibited under the code. Despite that speculation, these issues
were not considered during this legislative session. However, efforts to expand the
availability of abortion services to members of the armed forces and their dependents
appear to be a subject of annual debate.
Congressional Action. On September 25, by a vote of 217-199, the House
rejected an amendment offered by Representative Sanchez that would have allowed
DOD facilities overseas to perform privately-funded abortions for military personnel
and their dependents.
Major Weapons Issues
The Administration’s FY2002 budget does not reflect decisions on major
weapons programs, but is largely a continuation of previous plans. This leaves
unresolved two key budget issues: (1) how much is needed for weapons procurement
over the next several years, and (2) whether some programs should be terminated to
free up money for leap-ahead technologies that would support a transformation in
Aviation Forces. (This section was prepared by Christopher Bolkcom.)
Air Force Transformation. Many airpower advocates argue that the Air
Force’s emphasis on long range precision strike and stealth technology best reflects
the goals of defense transformation. The debate about the Air Force’s transformation
approach has centered on 1) whether emerging capabilities will enable air forces to
“halt” enemy ground forces single-handedly, without relying on U.S. ground forces
for followup; and 2) what is the most effective balance between shorter-range combat
aircraft (e.g. F-22, Joint Strike Fighter) and longer-range combat aircraft (B-52s, and
B-2s) in light of the threats posed by surface-to-air missiles, ballistic missiles, and
weapons of mass destruction.
Combat Aircraft. Currently three theater-range combat aircraft modernization
programs are in procurement or development – the Air Force F-22, the Navy F/A-
90 If this provision were enacted and funded, the accrual funding for military retirement would
18E/F, and the multi-service Joint Strike Fighter (JSF). (See CRS Issue Brief
IB92115.) The central issue for policy makers is whether DOD can afford to pursue
all three programs simultaneously, an issue raised by President Bush himself in an
impromptu discussion with reporters, and whether threats today or in the future
would justify the need for these three programs.
Some advocates of defense transformation argue that DOD is placing too much
emphasis on short range combat aircraft, like the JSF, at the expense of long range
combat aircraft like the B-2 bomber. Most recently, however, one of the panels
contributing to the Administration’s defense policy review strongly recommended
going ahead with the JSF as well as with other planned theater aircraft programs.
Congressional Action. Authorization and appropriation conferees both matched
the administration’s request for JSF funds despite an initial $250 million cut proposed
by the Senate Armed Services Committee in expectation of a likely delay in the
selection of the final contractor. Funding at the level of the request keeps the R&D
program on track but both committees expressed concern about industrial base issues.
Both conference committees also matched the F-22 funding requests, and the
authorizes removed the $20 million legislative cost cap on F-22 Engineering
Manufacturing development designed to control costs.
Long-Range Bombers. The proposal in the Administration’s FY2002 budget
amendment to reduce the number of B-1s in service from 93 to 60 and to consolidate
operations at two, rather than the current five bases, which would have eliminated the
B-1 mission of the National Guard. This proposal was ultimately overturned by
legislators in states where B-1 operations would have been reduced. (See CRS
Report RS20859.) Restarting B-2 production, retiring the B-1 entirely, and
embarking on a new bomber program was also discussed.
Congressional Action. Both the House and the Senate Armed Services
Committees expressed concern about the Administration’s proposal to consolidate
basing of B-1s, and restored funds to the Air National Guard to maintain its B-1
capabilities. To restore their B-1 role, appropriations conferees provided the Air
National Guard with an additional $100 million in O&M funding .
Unmanned Aviation Systems. Unmanned aerial vehicles (UAVs) and
unmanned combat aerial vehicles (UCAVs) are seen as useful in performing missions
too dangerous or too onerous for manned aircraft, potentially at less cost. The high
altitude, long endurance Global Hawk surveillance UAV will augment and may
replace the U-2, and UCAVs in research and development (R&D) may eventually
augment or replace numerous combat aircraft. The precise capabilities of these
unmanned systems are still unclear as is the pace at which they will be developed.
Many observers predict that the Predator UAV’s successful performance and the
deployment of the prototype Global Hawk in the war in Afghanistan will lead to the
acceleration of many UAV programs. (See CRS Report RL30727 and CRS Report
Air Mobility. A 2001 Air Force study found a significant shortfall in the long-
range airlift fleet’s ability to meet the current national military strategy. Ongoing
operations in Afghanistan - with its long-range deployments - raise this issue anew.
The best way to resolve a shortfall – either through procurement of additional C-17s,
refurbishing some C-5s, or increased use of commercial variants – continues to be
debated. Increased use of commercial variants is also being explored (See CRS
Report RS20915.) Replacing aging KC-10 and KC-135s that provide aerial refueling,
a key capability for expeditionary operations, was also addressed this session.
Recapitalizing this fleet is potentially a $50 billion dollar endeavor. (See CRS Report
Congressional Action. Both committees endorsed the Administration’s request
for an additional 15 C-17 aircraft in FY2002, and also added a provision authorizing
the Secretary of the Air Force to enter into another multi-year contract. Section 8159
of the P.L. 107-117 gives DOD the authority to lease 100 commercial Boeing 767
aircraft and convert them into replacements for the oldest KC-135 tanker aircraft,
using an operating lease and O&M rather than procurement funds to obtain the
aircraft. Providing this authority generated controversy in Congress and the
administration partly because some (including the Administration) argue that the
operating lease would be far more expensive than buying the aircraft, and partly
because some suggest that alternatives have not been adequately explored.
V-22 Tilt-Rotor Aircraft. Another controversial aviation program is the V-22
tilt-rotor aircraft (that takes off and lands like a helicopter but flies like an airplane).
The centerpiece of Marine Corps plans to transport forces within theaters, this
program is also designed to satisfy Air Force special operations forces needs. The
program has been blemished by four crashes, (three of which resulted in crew
fatalities), as well as recent findings by DOD’s Inspector General that V-22
maintenance records were falsified. Critics have suggested cancelling or drastically
curtailing the V-22 program. In December 2001, Undersecretary of Defense Aldridge
approved the resumption of V-22 testing at the same time expressing his concerns
regarding the program.
Congressional Action. Reflecting congressional concerns about the technical
maturity of the program, authorization conferees cut one aircraft from the Navy’s 12
aircraft procurement request and deleted Air Force procurement funds.
Appropriation conferees reduced Navy procurement by three aircraft rather than the
one cut by the authorizes. The appropriators also eliminated Air Force procurement
funds, but increased Air Force RDT&E funding by $226 million to purchase two
development aircraft. Both committees cut $100 million from Navy.
Naval Forces. (This section was prepared by Ronald O’Rourke.)
Naval Transformation. Navy transformation plans center on the concept of
network-centric warfare (NCW), which entails using computers, data links, and
networking software to tie naval personnel, ships, aircraft, and installations into highly
integrated networks. The defense committees have closely followed certain Navy
programs for implementing NCW, particularly the Cooperative Engagement
Capability (CEC) program for ship air defense and the Navy-Marine Corps Intranet
(NMCI) program for tying together Navy and Marine Corps shore installations.
Some Members of the defense oversight committees have also expressed some
interest in other proposals for naval transformation, such as the “Streetfighter”
concept for building smaller ships to fight in heavily-defended littoral waters. Some
analysts have suggested that turning to these types of smaller (and less expensive)
ships could help relieve the pressure to maintain the current size of the fleet. (See
CRS Report RS20851 and CRS Report RS20557.)
Congressional Action. The conference report of the defense authorization bill
permits the Navy to proceed with the NMCI project after meeting certain testing
requirements. The provision also requires the Navy to submit to Congress a report
on the scope and status of NMCI testing, and requires GAO to study the impact of
NMCI implementation on the rate structure of naval shipyards and other repair
depots. The conferees expressed concern about delays in implementing the program
and the resulting shortage of data about the viability and performance of NMCI.
Size of the Navy. The Bush Administration’s 2001 Quadrennial Defense
Review (QDR), submitted to Congress on September 30, 2001, did not make any
substantial changes to the Clinton Administration’s plan for maintaining a Navy of
about 310 ships, including 12 aircraft carriers, 116 major surface combatants, 55
attack submarines, 12 amphibious ready groups. The 2001 QDR report did note,
however, that as DOD’s transformation effort matures, “DOD will explore additional
opportunities to restructure and reorganize the Armed Forces.”
Some analysts, noting the pace of Navy operations in recent years, have
questioned whether a 310-ship fleet is adequate. They and some Navy officials have
called for increasing the planned size of the Navy to about 360 ships, including 15
aircraft carriers, about 135 major surface combatants, 60 to 70 attack submarines, and
14 amphibious ready groups. Other analysts have questioned the need for maintaining
forward deployments of carriers and other naval forces, particularly in the
Mediterranean Sea. They have advocated reducing naval-forward presence
requirements in this region, which could lead to a reduction in the planned size of the
Navy below 310 ships.
The Bush Administration echoed concerns raised by the defense committees in
recent years about the rate of Navy ship procurement, which has been about 6 ships
per year since the early 1990s, less than the average of about 9 ships per year
(assuming an average 35-year service life) that would be needed over the long run to
maintain a 310-ship fleet (the so-called steady-state replacement rate). An even
higher procurement rate of 10 to 12 ships per year (a “catch-up rate”) may be
required to eliminate the backlog of deferred ship procurement that has accumulated
relative to the steady-state rate since the early 1990s. A similar situation exists
regarding the rate of naval aircraft procurement. (See CRS Report RS20535.)
Ship Financing Alternatives. In the last two years, some Members of the
defense oversight committees have begun to explore alternative ways to finance ship
procurement. Under longstanding policy, known as the “full funding” policy, the full
cost of a ship is appropriated at one time, even though funds may be obligated and
expended over several years. Alternatives to full funding include incremental funding,
which has been approved for the LHD-8 amphibious ship, and advance appropriations
(which can be thought of as a legislatively locked-in form of incremental funding),
which some Navy officials proposed last year.
Cost Overruns and Schedule Delays. Various ships procured in previous
fiscal years have experienced cost overruns totaling at least $2.4 billion. The Navy
requested $800 million in FY2002 to cover the portion of these overruns that the
Navy says must be covered that year if work on these ships is to continue.
Congressional Action. The defense authorizers and appropriators both approved
about $725 million in FY2002 for prior year cost overruns, reducing the request by
$75-million reduction overruns on previously appropriated LPD-17 class amphibious
New DD(X) Future Surface Combatant Program. On November 1,
2001, in the midst of congressional deliberations on the defense budget, the Navy
announced that it was replacing the DD-21 destroyer program with a restructured
program, called DD(X), for developing a family of surface combatants (rather than
a single destroyer in coming years. Under the Navy’s plan, the two industry teams
that were competing for the DD-21 program would now compete for the DD(X)
program, with a winning team to be selected on April 30, 2002. The DD(X) program
raises potential issues for Congress regarding the rationale for ending the DD-21
program, the potential impact of the DD(X) program on the shipbuilding industrial
base, the Navy’s proposed acquisition strategy for the DD(X) program, and future
The replacement of the DD-21 program with the DD(X) program also created
an immediate issue regarding the treatment of the $643-million request for FY2002
funding for research and development work on the DD-21 program. The Navy, in
briefings to Congress, explained that the initial DD(X) ship would use many of the
same technologies as the DD-21 and that all of the $643 million requested for the
DD-21 program in FY2002 would be needed for the new DD(X) program.
Congressional Action. Because the authorization conferees did not have
specifics about the DD(X) program, the conferees recommended a $50-million
reduction in the $643-million funding request “resulting from the delay in the down-
select to a future destroyer detail design;” the conferees plan to review the Navy’s
decision to restructure the DD-21 program when more information is available.91 To
protect the destroyer industrial base, the authorization conferees call on the Secretary
of the Navy to ”include procurement of three Arleigh Burke [DDG-51]-class
destroyers in the fiscal year 2003 budget request to attain an economic rate of
production and consider options for maintaining and transitioning the industrial base,
including second tier suppliers, to future destroyer production.”92 Echoing the
authorizers concerns, the appropriation conferees reduced the $643-million DD-
21/DD(X) research and development funding request by $125 million. (See CRS
Submarines. The Bush Administration’s amended FY2002 budget requested
$116 million in R&D and procurement funding to begin converting two Trident
ballistic missile submarines (SSBNs) into cruise-missile submarines (SSGNs), and
91 H.Rept. 107-33, p. 557.
92 Ibid, p. 510.
additional funds to retire and dismantle two other Trident SSBNs. Congressional
supporters of the SSGN conversion program were interested in increasing the
conversion funding so as to support a 4-boat SSGN conversion program.
Congressional Action. The authorization conferees’ increase of $66 million is
intended to support a 4-boat conversion program but falls short of the $163-million
increase that the Navy considers the minimum for such a program. The appropriation
conferees provided a $324 million increase, more than needed for a faster conversion
of four boats. (See CRS Report RS21007).
Ground Forces. (This section was prepared by Edward Bruner.)
Army Transformation. The Army’s current transformation plans were
reflected in the amended FY2002 budget. The goal is to build a new “Objective
Force” centered on a Future Combat System to be developed over the next ten years,
that would be fully fielded by 2020. More controversial may be the size of the Army’s
“Legacy Force”, the current mix of light and heavy forces. The Army plans some
modernization and recapitalization of this “Legacy Force” to maintain combat
readiness. In the meantime, to meet the need for forces that would be both mobile
and yet lethal enough to survive in a high-intensity, fast-breaking conflict that could
arise in many regions – a gap in the current mix of forces – the Army is creating an
“Interim Force” of 6 to 8 Interim Brigade Combat Teams (IBCT) that would be
deployable in C130 aircraft. (See CRS Report RS20787.)
Congressional Concerns. Some have questioned whether a major effort
to transform ground forces should be a priority today, given the current superiority
of U.S. military forces and a perceived low-level of conventional ground combat
threats. In particular, there is great concern that transformation be properly balanced
with current readiness and recapitalization. Even if future dangers justify a
transformation, has the Army picked the right path? Perhaps it need not cover the
entire spectrum of combat capabilities, leaving more tasks to other services. Perhaps
the Objective Force should create less stress on airlift assets by relying more on
sealift. Some have suggested that a radical reorganization of current units could yield
a more agile ground component for joint strike forces now, long before any Future
Combat System is fielded. In general, capabilities envisioned for the Objective Force
will have more utility in situations like Afghanistan than the current legacy force.
Affordability is a second major question. Critics have suggested that the
transformation plan pays for three separate armies at once: the Legacy, Interim, and
Objective Forces. The Army’s counter argument is that the overall size of the Army’s
force structure remains constant throughout the transformation. Yet, the Army Chief
of Staff testified that Army plans require a sustained increment of $10 billion annually
beyond its average post-Cold War expenditures for R&D and procurement. In
FY2002, Congress supported the Army’s transformation efforts.
Weapon Systems Issues. A key aviation component of the future Objective
Force, the Army’s Comanche (RAH-66), an armed reconnaissance helicopter, is being
designed with stealth and other advanced features, and will replace aging helicopters.
(See CRS Report RS20522.) The Army received full funding for two systems
scheduled for fielding in FY08 - the Comanche helicopter, and the more controversial
(because of its weight) 40-ton Crusader, which is designed to improve fire support in
the Legacy Force.
The Army also received its request for its largest effort to recapitalize the Legacy
Force, the $1 billion to rebuild and upgrade the current fleets of M1Abrams tanks and
M2 Bradley fighting vehicles. Some of that money is dedicated to “digitizing” the
battlefield in order to enable systems to operate in computer nets, an improvement
that the Army eventually wants to include in all its systems in the Objective, Interim,
and Legacy forces. A $4 billion program over six years, the Army’s new Light
Armored Vehicle III – a 20 ton wheeled platform – is intended to be the linchpin for
equipping the new IBCTs of the Interim Force.
Defense R&D Spending
(This section was prepared by Jack Moteff.)
In its June 27 budget amendment, the Bush Administration requested $47.4
billion in research and development for the Department of Defense (DOD) in FY2002,
almost $7 billion more than the 2001 level. About half of that increase was slated for
missile defense, however. Although the Bush Administration proposed increasing
DOD’s research and development by $20 billion over the next 5 years, the $8.8 billion
requested for DOD’s science and technology (S&T) part of the request (i.e. basic and
applied research and advanced technology development), traditionally a congressional
concern, was slightly below the $9 billion provided in FY2001. The Administration
stated that it wants to redirect investments away from legacy systems and toward
more forward-looking systems such as lasers, nonotechnology, space-based systems,
miniaturization, and unmanned combat platforms (See CRS Issue Brief IB10063,
Defense Research: DOD’s Research, Development, Test and Evaluation Program,
by John Moteff.)
Table 15 shows the total obligational authority for RDT&E over the last three
years, the amended FY2002 request, and the enacted version of the defense
authorization and appropriations bills.
Congressional Action. Congress authorized $46.5 billion for research and
development, with just under $9.0 billion of that going toward S&T. This included
the Senate’s proposal to reduce BMDO’s RDT&E funding by $1.3 billion to set up
a fund from which the President may support either ballistic missile defense RDT&E
or other activities to combat terrorism. Congress appropriated $49.0 billion for
RDT&E, with almost $10 billion going toward S&T. The final appropriation act
includes $113 million for RDT&E within a new Counter-terrorism Transfer Fund,
which supports antibiotics and vaccines development, research on unconventional
nuclear threats, post-biological-exposure therapeutics, and information assurance
Table 15. Department of Defense RDT&E: Total Obligational
(in millions of dollars)
FY1999 FY2000 FY2001 FY2002Amended Author- Appropri-
Army 5,031 5,314 6,280 6,6946,6757,106
Navy 8,942 9,065 9,458 11,12310,78411,499
Air Force 13,732 14,527 13,993 14,34414,40714,670
Defense Agencies 10,093 9,551 11,053 15,05114,42615,415
(1,850) (2,010) (2,281)(2,285)(2,304)
(BMDO)a (3,910) d
(3,457) (4,204) (7,036)(6,359)(7,069)
Dir. Test & Eval 258 265– – ––
Dir. Op.Test/Eval 47 31 225 217221232
Total Obligational$38,103$38,753$41,009$47,429$46,513 $48,922f
Basic Research 1,063 1,139 1,317 1,3041,3081,389
Applied Res. 3,057 3,409 3,676 3,6593,7634,135
Advanced Dev. 3,453 3,789 4,000 3,8153,9154,455
Demonstr./Valid. 7,364 6,514 7,830 11,38111,92510,487
Engrg/Mftg. Dev. 7,646 8,879 8,735 10,2499,87811,108
Mgmt. Supportb 2,553 3,076 2,634 3,0032,8292,862
Op. Systems Dev. 11,967 11,947 12,816 14,23514,35614,533
Authority $38,103 $38,753 $41,008 $47,429 $47,974 $48,969
Source: FY2000 to FY2002 figures based on Department of Defense Amended Budget, Fiscal Year 2002
RDT&E Programs (R-1), June 2001. FY1999 figures from Department of Defense, Budget for Fiscal Year
2000, RDT&E Programs (R-1), February 2000. Totals may not add due to rounding.
a. Includes only RDT&E funding for the Ballistic Missile Defense Organization (BMDO). Does not include
procurement and military construction.
b. Includes funds for Developmental and Operational Test and Evaluation.
c. Does not include the additional funds and rescissions associated with the FY2001 Supplemental P.L. 107-
20. The bill added $5 million to the Army, $128 million to the Navy, $275.5 million to the Air Force,
and $84.1 million to Defense Agencies RDT&E accounts. The bill also rescinded $7 million from the
Defense Agencies account.
d. Includes the $1.3 billion reduction, some of which the President may decide to put back into BMDO’s
e. Does not include $150 million in general reductions associated with management reform initiatives allocated
to Title II RDT&E authorizations. Although these reductions were allocated for each Service and across
agencies, and are to be allocated without prejudice, their impact at the budget activity level is not yet
known. Nor does this figure include the $1.3 billion reduction in BMDO funding, since it is not yet
known how that reduction will affect budget activity. Note: this figure also does not include the $53
million reduction in BMDO funding the authorization report suggested be taken as a result of Congress
targeting that amount for the Arrow program. The BMDO line item that includes this program accounted
for those targeted funds.
f. Does not include the $113 million in additional RDT&E funding appropriated to the Counter-terrorism
Transfer Fund, since it is not specified to which Service or agency all of those funds should be
transferred. The conference report does specify $30 million of this, however, goes to DARPA. The
DARPA figure in this column does include this addition.
g. Does not include a net $46.5 million in general reductions associated with management reform initiatives
and other adjustments made in the appropriations conference report. Although the general reductions
were allocated by Service and across agencies, and are to allocated without prejudice, their impact at the
budget activity level is not yet known.
Chemical Weapons Destruction, and Cooperative Threat
Cooperative Threat Reduction. (This section was prepared by Amy
Woolf.) Established by Congress in 1991 after the collapse of the Soviet Union, the
Nunn-Lugar Cooperative Threat Reduction Program (CTR) is dedicated to help
Russia and the former Soviet republics safeguard, store, or destroy their nuclear
weapons. After a comprehensive review, the Bush Administration requested $403
million, slightly below the 2001 level.
Congressional Action. Both the final defense authorization and appropriations
acts approve the Administration’s request for DOD’s CTR programs, including
funding for construction of a chemical weapons destruction facility in Russia that had
been withheld for the past two years. The emergency supplemental appropriations bill
transferred $30 million from existing CTR accounts to the State Department, to help
fund programs designed to reduce the threat of biological weapons proliferation from
The authorization conferees provide $776.9 million for Department of Energy’s
defense nuclear non-proliferation programs, many of which are geared to improving
the security and control over nuclear materials in Russia and other former Soviet
Republics, restoring the program to its 2001 level, and providing$100 million more
than requested by the Administration. A January 2001 report to DOE, authored by
former Senator Howard Baker and Lloyd Cutler, recommended sharp increases in
funding for these programs, calling the proliferation risks created by nuclear materials
in the former Soviet Union the “greatest unmet national security need” for the United
States. Congress also increased funding for two DOE programs designed to provide
alternative employment for nuclear weapons scientists in the former Soviet Union, as
did the emergency supplemental appropriations bill reflecting growing concerns about
proliferation from Russia and the threat of terrorist use of WMD.
Chemical Weapons Destruction Program. (This section was prepared
by Steve Bowman.) This program is designed to carry out the congressional mandate,
stated in 1985, to destroy obsolete U.S. chemical weapons (CW) stockpile. The chief
issues in this program are escalating costs, public concerns about methods of
destruction, and whether the program will meet its 2007 deadline. The Chemical
Weapons Convention, ratified by United States in 1997, mandated that destruction
be completed by 2007, with a possible extension of five years if approved by the
Organization for the Prohibition of Chemical Weapons. Incineration or neutralization
facilities are being constructed at each depot where the weapons are currently stored.
(See CRS Issue Brief IB94029, The Chemical Weapons Convention: Issues for
Congressional Action. Congress appropriated the $1.1 billion requested by the
Administration for the Chemical Weapons Destruction program, which is the same
level as in the previous year.
Military Bases, Competitive procurement, and Defense
Base Closure and Realignment. (This section was prepared by David
Lockwood.) An important issue for Members in the 107 Congress was whether or93
not to authorize new rounds of military base closures. For the past four years, DOD
has sought congressional approval for one or two more rounds of base closures, but
to no avail. Although most Members of Congress acknowledge the need for
additional base closures, Members have been reluctant to authorize additional rounds
because of continued resentment over President Bill Clinton’s controversial 1995
intervention in the closing of McClellan Air Force Base in California and inherent
concern for the economic and social dislocations that local communities would face.
By FY2002, DOD completed implementation of the 1988, 1991, 1993, and 1995
rounds as scheduled. About 451 installations and facilities have been closed or
affected in some fashion during the past 12 years.
On August 3, 2001, the Administration submitted a proposal to Congress for
another round of base closures in FY2003, as well as a new “Efficient Facilities
Initiative” (EFI) designed to share facilities and land on some military bases. The
Administration’s proposal would have enhanced the role of the Secretary of Defense
compared to the procedures used in previous base closures. The EFI was a wide-
ranging proposal that would permit base commanders to waive current regulations
and statutes and contract with public or private entities for use of military facilities
and services in return for payments that would be deposited in an Installation
Efficiency Project Fund that would be available to the Secretary of Defense to use at
Congressional Action. The House opposed any new round of closures and the
Senate supported another round. The impasse was finally resolved when the
authorization conferees reached a compromise that authorized a new round but
delayed the date to 2005. The authorizers also basically extended the procedures used
in previous rounds but as part of the compromise, made it more difficult for the Base
Closure Commissioners to add bases to those recommended by the Administration;
any additions would require approval by a ‘super-majority’ of at least seven of the
nine commissioners. The authorizes also permitted DOD to extend the pilot program
for alternative uses of military bases but with more restrictions than proposed by the
93 “Closure” is often used as a generalized term including realignment.
Competitive Sourcing. (This section was prepared by Valerie Grasso.)
The Bush Administration promised to mount ambitious efforts to improve efficiency
by relying on the method that DOD also pursued under the Clinton Administration –
competitive sourcing – where private companies can compete with government
organizations to perform work. Conducted under the rules established by OMB
Circular A-76, the program remains controversial because estimates of savings are
considered problematic, and the economic, social and political ramifications from cuts
in government jobs are painful.(See CRS Report RL30392, Defense Outsourcing:
The OMB Circular A-76 Policy.)
Congressional Action. The FY2002 Department of Defense Appropriations Act
(H.R. 3338) prohibits the conversion of certain DOD activities or functions to
contractor performance, if the activities are performed by ten or more civilian DOD
employees, until a “most efficient and cost-effective analysis” is completed and
certified to the congressional appropriations committees (see Section 8014). The
DOD appropriation conferees also reduced O&M funds by $25 million to reflect their
belief that the schedule for studies assumed by the Administration was overly
Shipbuilding Industrial Base. (This section was prepared by Ronald
O’Rourke.) Until recently, the six private-sector shipyards that build the Navy’s
major ships were owned by three organizations – General Dynamics Corporation
(GD), which owned three of the yards, Northrop Grumman Corporation (NOC),
which owned two of them, and Newport News Shipbuilding (NNS), which was an
independent, publicly traded shipbuilding company. In the Spring of 2001, both GD
and NOC made offers to buy NNS. Implementing either merger proposal would
consolidate ownership of the six yards under two organizations and very likely end
a process of consolidation in the ownership of these yards that began in 1995. The
Department of Defense and the Department of Justice reviewed both merger
proposals for several months. On October 23, 2001, the two departments announced
that they would oppose GD’s offer on the grounds that it would reduce competition
and innovation in naval shipbuilding, but would not oppose NOC’s Northrop’s offer.
NOC completed its acquisition of NNS on November 30, 2001. The two competing
merger proposals raised issues for Congress regarding the potential savings they
would generate and their potential impact on competition in Navy ship acquisition, on
the shipyards’ employment levels, and on the shipyards’ strength in the political
process. (See CRS Report RL30969.)
Navy Live-Fire Testing at Vieques. (This section was prepared by Ronald
O’Rourke.) On June 14, 2001, the Bush Administration announced that it had decided
to end military training operations at the U.S. naval training range on the small Puerto
Rican island of Vieques by May 2003. The Bush Administration's new plan
superceded a January 2000 agreement between President Clinton and the previous
Governor of Puerto Rico, Pedro Rossello, that called for holding a referendum on
Vieques (first scheduled for November 2001, then rescheduled for January 2002) in
which voters could choose to either end the military's use of the range by May 2003
or allow it to continue indefinitely beyond that point. To implement the
94 See H.Rept. 107-298, p. 46-47.
Clinton-Rossello plan, Congress in 2000 approved $40 million in assistance funding
for Vieques and other legislation as part of P.L. 106-246 (H.R. 4425) and P.L.
106-398 (H.R. 4205). The Bush Administration had previously supported the
Clinton-Rossello plan as implemented by Congress, but the new Governor of Puerto
Rico, Sila Maria Calderon, who took office in January 2001, did not and has instead
worked toward an immediate end to the military training operations on the island.
Congressional Action. The conference report on the defense authorization bill
contains a provision (Section 1049) that (1) cancels the requirement for holding the
January 2002 referendum; (2) authorizes the Secretary of the Navy to close the
Vieques range if the Secretary certifies that equivalent or superior training facilities
exist and are immediately available; (3) requires the Secretary, in making this
determination, to take into account the views of Navy and Marine Corps leaders; and
(4) transfers the lands to the Department of the Interior if the range is closed. (See
CRS Report RS20458, Vieques, Puerto Rico Naval Training Range: Background
and Issues for Congress.)
Space, Intelligence, and Communications Issues
National Security Space Programs. (This section was prepared by Marcia
Smith.) Today, approximately $14.5 billion per year is spent on national security
space activities (for an overview, see CRS Issue Brief IB92011, U.S. Space
Programs: Civil, Military, and Commercial, by Marcia Smith). Concern about how
DOD and the intelligence community manage and execute space programs led to
creation by Congress of a commission, chaired by now Secretary of Defense Donald
Rumsfeld, to assess national security space program management. In May 2001,
Secretary Rumsfeld announced a number of management changes in the Air Force and
DOD to implement many of the Commission’s recommendations. Recommendations
made by two other congressionally created commissions—one on the National
Imagery and Mapping Agency (NIMA); the other on the National Reconnaissance
Office (NRO)—may also impact the national security space program.
Among the national security space programs that received attention during the
FY2002 budget cycle were space control (the means to deter and defend against
hostile acts directed at U.S. space assets, and against the uses of space hostile to U.S.
interests); space-based weapons (lasers or kinetic energy weapons) for missile
defense; and a new early warning satellite system consisting of two sets of satellites,
SBIRS-High and SBIRS-Low. Both SBIRS programs have been the subject of
management and technological readiness concerns. SBIRS-Low was transferred from
the Air Force to BMDO, while SBIRS-High remains an Air Force program.
Congressional Action. Although the House and Senate sought to codify some
of the recommendations of the Space Commission, the final version of the FY2002
DOD authorization bill requires only reports to Congress on DOD’s actions to
implement the Commission’s recommendations. Congress approved the full request
of $33 million for space control in the final versions of the appropriations and
authorization bills. For space-based weapons, the authorizers fully funded the $165
million requested for space-based laser (SBL) development and the $20 million
requested for kinetic energy weapons, but the appropriators cut the SBL request by
$120 million, and cut kinetic energy weapons by $10 million. Although SBIRS-High
and SBIRS-Low were both almost fully funded in the authorization bill, the
appropriations bill cut all $94 million requested for procurement for SBIRS-High but
increased the $405 million in RDT&E funding for that program by $40 million. For
SBIRS-Low, the appropriations bill cut the entire $385 million requested but created
a new line item funded at $250 million which the Secretary of Defense may choose
to spend on SBIRS-Low or development of other sensor technologies.
Intelligence. (This section was prepared by Richard Best.) Most of the
funding for the nation’s intelligence effort is provided in national defense
authorization and appropriations bills. The budget of the Central Intelligence Agency,
which is separate from the Defense Department, is, from a practical standpoint,
overseen by the two intelligence committees, but is included in various parts of the
defense budget to preclude public disclosure.
The work of intelligence agencies that are part of the Defense Department,
including the Defense Intelligence Agency, the National Security Agency, the National
Reconnaissance Office, and the National Imagery and Mapping Agency, is overseen
by armed services and defense appropriations committees as well as by the two select
intelligence committees. Budgetary allocations for specific intelligence programs are
usually classified and discussed only in separate annexes to committee reports that are
not available to the public, though issues sometimes may become matters of open
debate in Congress. (See CRS Issue Brief IB10012, Intelligence Issues for Congress,
by Richard A. Best, Jr.).
Congressional Action. Changes to specific programs made by the authorizing
committees are covered in a separate, classified annex to their reports.
Radiofrequency Spectrum for DOD. (This section was prepared by
Lennard Kruger and Linda K. Moore.) The Department of Defense uses various
portions of the radiofrequency spectrum to support its operations and activities. Many
in the wireless communications industry would like to use part of this spectrum for
deployment of a next generation wireless service known as “3G”. That portion of the
spectrum – the 1755-1850 MHz - is currently used by DOD for such applications as
satellite systems, precision guided munitions, tactical radio relay communication
systems, air combat training systems, targeting, intelligence, and other
Citing a shortage of available spectrum for 3G, the Clinton Administration
directed the two agencies charged with management of the spectrum – the Federal
Communications Commission for commercial users and the National
Telecommunications and Information Administration for federal government users –
to identify suitable 3G spectrum for commercial services by July 2001, and to auction
licenses to competing applicants by September 30, 2002. On June 26, 2001, however,
FCC Chairman Michael Powell recommended to Secretary of Commerce Donald
Evans the extension of this deadline so that other ways to make additional spectrum
available for advanced wireless services could be considered.
One option is to relocate DOD to other frequency bands and auction the 1755 -
1850 MHz band for commercial use. To meet requirements in the FY1999 and
FY2000 DOD’s authorization acts, DOD must be reimbursed for relocation costs and
provided with spectrum that has comparable technical capabilities so there is no loss
of mission capability in case of any transfer to the civilian sector. (See CRS Report
RL30829, Radiofrequency Spectrum Management: Background, Status, and Current
Issues, and CRS Report RS20993, Wireless Technology and Spectrum Demand:
Third Generation (3G) and Beyond).
DOD now contends that full migration to another frequency band could take
many years because satellites currently in orbit cannot be reprogrammed to operate
on another frequency. For that reason, they argue that relocation could not occur
until 2010 for non-space systems, and 2017 for satellite control systems, assuming
that DOD also received alternative, comparable spectrum width and compensation.
Thus far, no comparable bandwidth for DOD has been proposed. In a new report,
GAO concluded that more analysis is needed before making decisions about the 1755-
Congressional Action. Neither the House nor the Senate Armed Services
Committees included any language about the issue of relocating DOD to another
H.Con.Res. 83 (Nussle)
A concurrent resolution establishing the congressional budget for the United
States government for FY2002, revising the congressional budget for the United
States government for FY2001, and setting forth appropriate budgetary levels for
each of fiscal years 2003 through 2011. Reported by the House Budget Committee
(H.Rept. 107-26), March 23, 2001. Passed the House (222-205), March 28, 2000.
Passed the Senate (65-35), April 6, 2001. Conference report filed (H.Rept. 107-55),
May 8, 2001. Conference report passed the House (221-207), May 9, 2001, and the
Senate (50-48), May 10, 2001.
P.L. 107-20, H.R. 2216/S. 1077
An original bill making emergency supplemental appropriations for the fiscal year
ending September 30, 2001, and for other purposes. H.R. 2216 reported by the House
Committee on Appropriations (H.Rept. 107-102), June 19, 2001; passed the House
(223-205), June 20, 2001. S. 1077 reported by the Senate Committee on
Appropriations (S.Rept. 107-33), June 21, 2001; passed Senate July 10. Conference
report (H.Rept. 107-148) passed the House and the Senate on July 20, 2001. Signed
into law July 24, 2001.
Emergency Supplemental Appropriations
P.L. 107-38, H.R. 2888
Making emergency supplemental appropriations for fiscal year 2001 for
additional disaster assistance, for anti-terrorism initiatives, and for assistance in the
recovery from the tragedy that occurred on September 11, 2001, and for other
purposes. Passed by the House and Senate on September 14, 2001.
Authorization for Use of Military Force
P.L. 107-40, S.J.Res. 23
Authorizing the use of United States armed forces against those responsible for
the recent attacks launched against the United States. Passed House and Senate on
September 14, 2001.
H.J.Res. 79/P.L. 107-97
Making continuing appropriations for the fiscal year 2002 through December 15,
H.R. 2586 (Stump)
A bill to authorize appropriations for FY2002 for military activities of the
Department of Defense, to prescribe military personnel strengths for FY2002, and for
other purposes. Ordered to be reported by the House Committee on Armed Services,
August 1, 2001; reported (H.Rept. 107-194) on September 4. Considered by the full
house on September 20, 24, and 25, 2001. Passed the House on September 25, 2001
S. 1438 and S. 1416 (Levin)
A bill to authorize appropriations for FY2002 for military activities of the
Department of Defense, for military construction, and for defense activities of the
Department of Energy, to prescribe personnel strengths for such fiscal year for the
Armed Forces, and for other purposes. S. 1416 ordered to be reported by the Senate
Committee on Armed Services on September 7, 2001; reported (S.Rept. 107-162) on
September 12, 2001. Senate took up S. 1438 (an amended version of S. 1416) on
September 21, 24, 25, 26, and October 2. S. 1438 passed by the Senate with
amendments on October 2, 2001. House took up S. 1438, substituted the text of H.R.
2586, and considered and passed the bill on October 17, 2001. Conference agreement
reported on December 12 (H.Rept. 107-333), and passed by the House on December
on December 28, 2001.
H.R. 3338 (Young)
A bill making appropriations for the Department of defense for the fiscal year
ending September 30, 2002, and for other purposes. Ordered to be reported by the
House Committee on Appropriations on November 19, 2001 (H.Rept. 107-298).
Passed House on November 28, 2001 (406-20). Senate took up H.R. 3338, and
adopted an amendment in the nature of a substitute and reported out the bill on
December 5 (S. Rept 107-109); it passed the Senate on December 7, 2001 by voice
vote. Conference report was filed on December 19, 2001 (H.Rept. 107-350).
Approved by the House (408-6) and the Senate (94-2) on December 20, 2001.
For Additional Reading
CRS Report 95-387. Abortion Services and Military Medical Facilities, by David
CRS Report RS20859. Air Force Transformation: Background and Issues for
Congress, by Christopher Bolkcom.
CRS Report RL31010. Appropriations for FY2002: Military Construction, by
Daniel H. Else.
CRS Report RS20787. Army Transformation and Modernization: Overview and
Issues for Congress, by Edward F. Bruner.
CRS Issue Brief IB96022. Defense Acquisition Reform: Status and Current Issues,
by Valerie Bailey Grasso.
CRS Report 98-756. Defense Authorization and Appropriations Bills: A
Chronology, FY1970-2001, by Gary K. Reynolds.
CRS Report RL30976. Defense Budget for FY2002: Data Summary, Final Version,
by Mary Tyszkiewicz.
CRS Report RL30002. A Defense Budget Primer, by Mary Tyszkiewicz and Stephen
CRS Report RL30392. Defense Outsourcing: The OMB Circular A-76 Program,
by Valerie Grasso.
CRS Report RL30639. Electronic Warfare: EA-6B Aircraft Modernization and
Related Issues for Congress, by Christopher Bolkcom.
CRS Issue Brief IB87111. F-22 Raptor Aircraft Program, by Christopher Bolkcom.
CRS Report RL30113. Homosexuals and U.S. Military Policy: Current Issues, by
David F. Burrelli.
CRS Issue Brief IB10012. Intelligence Issues for Congress, by Richard A. Best.
CRS Report RL30563. Joint Strike Fighter (JSF) Program: Background, Status,
and Issues, by Christopher Bolkcom.
CRS Report RL30624. Military Aircraft, the F/A-18E/F Super Hornet Program:
Background and Issues for Congress, by Christopher Bolkcom.
CRS Report RL30051. Military Base Closures: Time for Another Round?, by David
CRS Report RL30440. Military Base Closures: Where Do We Stand?, by David E.
CRS Issue Brief IB93103. Military Medical Care Services: Questions and Answers,
by Richard A. Best.
CRS Issue Brief IB85159. Military Retirement: Major Legislative Issues, by Robert
CRS Report RL31111, Missile Defense: The Current Debate, coordinated by Steven
A. Hildreth and Amy F. Woolf.
CRS Report RL30427. Missile Survey: Ballistic and Cruise Missiles of Foreign
Countries, by Robert D. Shuey.
CRS Report RS20151. National Guard & Reserve Funding, FY1990-2001, by Mary
CRS Report RS20062. National Missile Defense and the ABM Treaty: Overview of
Recent Events, by Amy F. Woolf.
CRS Report RL30654. National Missile Defense and Early Warning Radars:
Background and Issues, by Larry Chasteen.
CRS Issue Brief IB10034. National Missile Defense: Issues for Congress, by Steven
A. Hildreth and Amy Woolf.
CRS Report RS20967. National Missile Defense: Russia’s Reaction, by Amy F.
CRS Report RS20851. Naval Transformation: Background and Issues for Congress,
by Ronald O’Rourke.
CRS Report RS20862. Navy Amphibious Shipbuilding Programs: Background and
Issues for Congress, by Ronald O’Rourke.
CRS Report RS21007. Navy Trident Submarine Conversion (SSGN)Programs:
Background and Issues for Congress, by Ronald O’Rourke.
CRS Report RS20643. Navy CVN-77 and CVX Aircraft Carrier Programs:
Background and Issues for Congress, by Ronald O’Rourke.
CRS Report RS20557. Navy Network-centric Warfare Concept: Key Programs and
Issues for Congress, by Ronald O’Rourke.
CRS Report RS20535. Navy Ship Procurement Rate and the Planned Size of the
Navy: Background and Issues for Congress, by Ronald O’Rourke.
CRS Report RL30969. Navy Shipbuilding: Proposed Mergers involving Newport
News Shipbuilding: Issues for Congress, by Ronald O’Rourke.
CRS Report RS20698. Navy Zumwalt (DD-21) Class Destroyer Program:
Background and Issues for Congress, by Ronald O’Rourke.
CRS Report RL30699. Nuclear, Biological, and Chemical Weapons and Missiles:
the Current Situation and Trends, by Robert S. Shuey.
CRS Report 97-1027. Nunn-Lugar Cooperative Threat Reduction Programs: Issues
for Congress, by Amy F. Woolf.
CRS Issue Brief IB94040. Peacekeeping: Issues of U.S. Military Involvement, by
CRS Report RL30828. Radiofrequency Spectrum Management: Background, Status,
and Current Issues, by Lennard Kruger.
CRS Issue Brief IB93062. Space Launch Vehicles: Government Activities,
Commercial Competition, and Satellite Exports, by Marcia Smith.
CRS Report RS20915, Strategic Airlift Modernization: Background, Issues, and
Options by Christopher Bolkcom.
CRS Report RL30457. Supplemental Appropriations for FY2001: Defense
Readiness and Other Programs, by Stephen Daggett.
CRS Issue Brief IB92115. Tactical Aircraft Modernization: Issues for Congress, by
CRS Issue Brief IB98028. Theater Missile Defense: Issues for Congress, by Robert
CRS Report RL30345. U.S. Nuclear Weapons: Policy, Force Structure, and Arms
Control Issues, by Amy F. Woolf.
CRS Issue Brief IB92011. U.S. Space Programs: Civilian, Military, and
Commercial, by Marcia Smith.
CRS Issue Brief IB86103. V-22 Osprey Tilt-Rotor Aircraft, by Christopher
CRS Report RS20458. Vieques, Puerto Rico Naval Training Range: Background
Issues for Congress, by Ronald O’Rourke.
CRS Report RS20993, Wireless Technology and Spectrum Demand: Third
Generation (3G) and Beyond, by Linda K. Moore
Selected World Wide Web Sites
Information regarding the defense budget, defense programs, and congressional action
on defense policy is available at the following web sites.
House Committee on Appropriations
Senate Committee on Appropriations
House Armed Services Committee
Senate Armed Services Committee
CRS Appropriations Products
Congressional Budget Office
General Accounting Office
Office of Management and Budget
FY2002Federal Budget Publications
Defense Department and Related Sites
Defense Issues (Indexed major speeches)
Under Secretary of Defense (Comptroller) FY2001 Budget Materials
Assistant Secretary of the Army (Financial Management & Comptroller) Budget
Army Link — the U.S. Army Home Page
Navy On-Line Home Page
Navy Budget Resources
Navy Public Affairs Library
United States Marine Corps Home Page
Air Force Financial Management Home Page
Air Force Budget Resources
Table A1. Defense Appropriations, FY1998 to FY2002
(budget authority in billions of current year dollars)
FY1998 FY1999 FY2000 FY2001 FY2002
Sources: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2002, Apr. 2001, for FY1998 through FY2000; FY2001 includes estimate from OMB, Budget of the
United States Government, April 2001 plus additional appropriations for Department of Defense
included in P.L. 107-20, Supplemental Appropriations Act, 2001; FY2002 request from the White
House, Transmission to Congress of the FY2002 amended budget request, June 27, 2001.
Notes: These figures represent current year dollars; exclude permanent budget authorities and
contract authority; and reflect subsequent supplemental appropriations, rescissions, and transfers.
a. Includes regular FY2001 DOD appropriation of $287.4 billion, non-emergency supplemental of
$5.5 billion, and $14.0 billion from Emergency Terrorism Response supplemental allocated
to FY2001 by CBO.
b. Includes regular FY2002 DOD appropriation of $317.2 billion and $3.5 billion from Emergency
Terrorism Supplemental allocated to FY2002 by CBO.
Table A2. Congressional Action on Major Weapons Programs, FY2002: Appropriations
(amounts in millions of dollars)
FY2001 EstimateFY2002 RequestHouse AppropriationSenate AppropriationAppropriation Conference
# Proc. R&D # Proc. R&D # Proc. R&D # Proc. R&D # Proc. R&D
Apache Longbow Upgrade— 720.3— — 888.6— — 898.6— 885.6— — 890.9—
Comanche Helicopter— — 608.4— — 787.9— — 816.4— — 787.9— — 787.9
Blackhawk Helicopter18 187.9— 12 174.5— 12 174.5— 12 174.5— — 179.5 —
M1A2 Abrams Tank Upgrade— 290.9— — 395.8— — 395.8— — 395.8— — 395.8 —
Bradley FVS Base Sustainment— 427.7— — 400.8— — 400.8— — 373.2— — 387.0 —
Artillery Systems (Crusader)— — 371.9— — 510.4— — 510.4— — 475.4— 510.4 —
Tactical Unmanned Aerial Vehicles4 37.434.112 84.338.2963.338.212 48.538.2— 38.2 —
AV-8B Harrier12 259.8 28.6 — — 32.9 — — 32.9 — — 32.9— — 32.9
F/A-18 Hornet39 2,750.5234.548 3,067.5253.3483,067.5233.348 3,032.260.348 3,037.5259.3
V-22A/MV-22 Osprey Aircraft11 1,009.6146.612 1,009.9546.79825.9446.79 783.2546.79 783.2446.7
iki/CRS-RL31005DD-21/DD(X)/SC-21— — 545.7— — 643.5— — 160.5— — 577.5— — 535.1 DDG-51/Surface Combat Systems3 2,678.6200.33 2,966.0262.043,786.0286.93 2,966.176.03 2,966.0329.5
s.orCarrier Replacement1 4,016.4— — — — — — — — — — — — —
leakVirginia-class/New Design SSN1 1,193.7212.11 1,608.9201.611,578.9208.61 1,608.201.61 1,578.9206.5
://wikiLPD-17 Amphibious Transport— — 0.2— — 1.0— — 1.0— — 1.0— — 1.0
httpTrident SSGN Conversion— — 37.4 — — 30.0 — — 30.0— — 0.0— — 75.0
ADC(X) Auxiliary Cargo Ship1 335.8— 1 370.8— 130.8— 0 0.0— — 370.8—
Tactical Unmanned Aerial Vehicles— 121.8— — 66.3— — 76.3— — — 66.3— — 73.3
B-2 Bomber Support/Modification— 85.2129.1— 63.1155.0— 76.6222.0— 63.1218.0— 74.1219.0
C-17 Airlift Aircraft12 2,729.2174.815 3,456.3110.6153,389.6110.615 3,420.110.615 3,402.3110.6
F-15 Aircraft Support/Modification5722.768.2— 219.6101.4— 244.6101.4— 242.6113.4— 242.6108.4
C-5 Aircraft Modification— 94.591.7— 103.2166.5— 12.7152.5— 103.2166.5— 32.7156.5
F-22 Aircraft10 2,130.41,398.813 2,658.2881.6132,655.6881.613 2,658.881.613 2,769.6881.6
CV-22 Osprey Aircraft— 8.3— — 95.110.02180.010.0— — — — — 190.0
HAEUAV (Global Hawk) — 39.3— 2 85.4— 285.4— 2 85.4— 2 85.4—
Predator UAV (piston)7 31.8— 6 19.6— 639.6— 6 19.6— — 15.5—
Predator UAV (turboprop/jet)— — — — — — — — — — — — 3 36.6—
Airborne Laser (AF)— — 231.4— — — — — — — — 355.0— — —
Joint Strike Fighter (AF, Navy)— — 682.3— — 1,536.8— — 1,536.8— — 1,294.7— — 1,539.3
E-8C Joint Stars Aircraft (AF, A)1 347.2195.21 387.5187.31358.8290.91 376.0207.91 364.3201.8
FY2001 EstimateFY2002 RequestHouse AppropriationSenate AppropriationAppropriation Conference
Ballistic Missile Defense (BMDO)— 439.94,204.4— — 7,036.5— — 7,053.7— — 5,681.0— — 6,930.4
Space-Bsd Infrard Syst-Hi (AF)— — 563.9— — 405.2— — 435.2— — 455.2— — 445.2
Space-Bsd Infrard Sys-Lo (BMDO)— — 238.8— — [496.6]*— — [395.6]*— — [264.8]*— — [340.6]*
Guard & Reserve Equipment— 99.1— — — — — 501.5— — 560.5— — 699.1—
*Notes: All amounts exclude initial spares, advance procurement, and military construction. V-22 Osprey, C-17, and Global Hawk data for FY2001 Estimate include
adjustments made in the DOD Non-Emergency Supplemental Appropriation for FY2001. SBIRS Low funds are to be drawn from a central Satellite Sensor Technology Program
within BMDO and are included within the BMDO total. Conferees specified that the National Guard and Reserve components should control equipment modernization funds.
Guard and Reserve funding includes $436 million for the acquisition and modernization of 10 UH-60 Blackhawk helicopters and four C-130J transport aircraft.
Sources: Office of the Secretary of Defense (Comptroller), Department of Defense Amended Budget, Fiscal Year 2002 (June 2001), Procurement Programs (P-1), Reserve
Components (P-1R), RDT&E Programs j(R-1), H.Rept. 107-350, Conference report on Department of Defense Appropriations, 2002, and H.Rept. 107- 298, S.Rept. 107-109,
and CRS calculations by Daniel Else.
Table A3. Congressional Action on Major Weapons Programs, FY2002: Authorization
(amounts in millions of dollars)
Program FY2001 EstimateFY2002 RequestHouse AuthorizationSenate AuthorizationAuthorization Conference
# Proc. R&D # Proc. R&D # Proc. R&D # Proc. R&D # Proc. R&D
Apache Longbow Upgrade— 720.3— — 888.6— — 898.5— — 935.6— — 898.6—
Comanche Helicopter— — 608.4— — 787.9— — 816.4— — 816.2— — 866.2
Blackhawk Helicopter18 187.9— 12 174.5— 12 174.5— 22277.0— 22 277.0—
M1A2 Abrams Tank Upgrade— 290.9— — 395.8— — 385.8— — 395.8— — 395.8—
Bradley FVS Base Sustainment— 427.7— — 400.8— — 460.8— — 400.8— — 460.8—
Artillery Systems (Crusader)— — 371.9— — 510.4— — 510.4— — 510.4— — 510.4
Tactical Unmanned Aerial Vehicles4 37.434.112 84.338.212 91.618.212100.544.212 91.638.2
AV-8B Harrier Aircraft12 259.828.7— — 32.9— — 32.9— — 32.9— — 32.9
F/A-18 Hornet39 2,750.5234.548 3,067.5253.348 3,067.5214.348 3,082.5280.348 3080.5253.3
V-22A/MV-22 Osprey Aircraft11 1,009.6146.612 1,009.9546.712 1,009.9446.79 783.2451.711 959.9446.7
DD-21/DD(X)— — 545.7— — 643.5— — 622.5— — 647.5— — 596.5
iki/CRS-RL31005DDG-51/Surface Combat Systems3 2,678.6200.33 2,966.0262.03 2,966.0276.93 2,966.0268.03 2966.0276.9
g/wCarrier Replacement1 4,016.4— — — — — — — — — — — — — Virginia-class/New Design SSN1 1,193.7212.11 1,608.9201.61 1,608.9201.61 1,608.9201.61 1608.9201.6
s.orLPD-17 Amphibious Transport— — 0.2— — 1.0— — 1.0— — 1.0— — 1.0
leakTrident SSGN Conversion— — 37.4 — — 30.0 — — 30.0— — 64.0— — 45.0
://wikiADC(X) Auxiliary Cargo Ship1 335.8— 1 370.8— 1 370.8— 1 370.8— 1 370.8— Tactical Unmanned Aerial Vehicles— — 121.8— — 66.3— — 66.3— — 77.3— — 66.3
B-2 Bomber Support/Modification— 85.2129.1— 63.1155.0— 96.0245.0— 61.3229.0— 76.6204.9
C-17 Airlift Aircraft12 2,729.2174.815 3,456.3110.615 3,420.3110.615 3477.4110.615 3466.1110.6
F-15 Aircraft Support/Modification5722.768.2— 219.6101.4— 272.175.9— 244.6109.9— 252.6101.9
C-5 Aircraft Modification— 94.591.7— 103.2166.5— 103.2136.5— 103.2166.5— 103.2166.5
F-22 Aircraft10 2,130.41,398.813 2,658.2881.613 2,658.2866.513 2,658.2881.613 2658.2881.6
CV-22 Osprey Aircraft— 8.3— — 95.110.0— — 10.0— — 10.0— — 10.0
HAEUAV (Global Hawk) — 39.3— 2 85.4— 2 85.4— 2 85.4— 2 85.4—
Predator UAV (piston)7 31.8— 6 19.6— 6 19.6— 8 25.6— 6 36.0—
Predator UAV (turboprop)— — — — — — — 20.0— — — — — 20.0—
Airborne Laser (AF)— — 231.4— — — — — 0.0— — — — — —
Joint Strike Fighter (AF, Navy)— — 682.3— — 1,536.8— — 1,546.8— — 1,289.6— — 1536.8
E-8C Joint Stars Aircraft (AF, A)1 347.2195.21 387.5187.31 387.5286.31 376.0198.81 376.0 211.8
Ballistic Missile Defense (BMDO)— 439.94,204.4— — 7,036.572 676.67,471.0— — 5,747.972 676.6 7658.7
Space-Bsd Infrard Sys-Hi (AF)— — 564.0— 148.1405.2— 148.1405.2— 148.1405.2— — 405.2
Space-Bsd Infrard Sys-Lo (BMDO)— — 238.8— [496.6]*— [470.6]*— [399.0]*— [495.6]*
Guard & Reserve Equipment— 99.1— — — — — 501.5— — 560.5— — 699.1—
: All amounts exclude initial spares, advanced procurement, and military construction. BMDO procurement includes 72 Patriot PAC-3 missiles n the House and Senate authorization report.
are to be drawn from a central Satellite Sensor Technology Program within BMDO and are included within the BMDO total in FY2002. V-22 Osprey, C-17, and Global Hawk data
Office of the Secretary of Defense (Comptroller), Department of Defense Amended Budget, Fiscal Year 2002 (June 2001), Procurement Programs (P-1), Reserve Components (P-1R), RDT&E