Most Recent Developments

On October 6, conferees reached agreement on the FY2000 defenseappropriations bill, H.R. 2561 , and the conference report was filed onOctober 8. The House approved the conference agreement by a vote of 372-55 onOctober 13, and the Senate approved it by a vote of 87-11 on October 14, and thePresident signed the bill into law, P.L. 106-79 , on October 25. The key issue in theconference concerned funding for the F-22 fighter. The conference agreementprovides a total of $2.522 billion for the program, including $1.222 billion for R&D,$1 billion for acquisition of test aircraft, and $300 million in advance FY2001appropriations for program termination liability. The total amount is about $500million below the request ($1.85 billion in procurement and $1.2 billion in R&D). The conference agreement also prohibits award of an initial low-rate productioncontract unless certain testing is successfully completed. 

	Background

Congress provides funding for national defense programs in several annualappropriations measures, the largest of which is the defense appropriations bill. Congress also acts every year on a national defense authorization bill, whichauthorizes programs funded in all of the regular appropriations measures. Theauthorization bill addresses defense programs in almost precisely the same level ofdetail as the defense-related appropriations, and congressional debate about majordefense policy and funding issues usually occurs mainly in action on theauthorization. Because the defense authorization and appropriations bills are soclosely 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 militarypersonnel, operation and maintenance of weapons and facilities, weaponsprocurement, and research and development -- and for other purposes. Most of thefunding in the bill is for programs administered by the Department of Defense,though the bill also provides (1) relatively small, unclassified amounts for the CentralIntelligence Agency retirement fund and intelligence community management, (2)classified amounts for national foreign intelligence activities administered by the CIAand by other agencies as well as by DOD, and (3) very small amounts for some otheragencies. Five other appropriations bills also provide funds for national defenseactivities of DOD and other agencies including:
the military construction appropriations bill, which finances construction of military facilities and construction and operation of military familyhousing, all administered by DOD;
the energy and water development appropriations bill, which funds atomic energy defense activities administered by the Department ofEnergy;
the VA-HUD-independent agencies appropriations bill, which finances civil defense activities administered by the Federal Emergency ManagementAgency and activities of the Selective Service System; 
the Commerce-Justice-State appropriations bill, which funds national security-related activities of the FBI; and 
the transportation appropriations bill, which funds some defense-related activities of the Coast Guard.
The Administration's FY2000 budget includes $280.8 billion for the national defense budget function, of which $262.9 billion is requested in the defense appropriationsbill. 

	Status

Congressional action on defense-related legislation began very early this year;on February 24, the Senate approved S. 4 , a bill to provide pay raisesand improve benefits for military personnel; in March both the Senate and the Houseapproved bills on missile defense policy; and on April 15, both the House and theSenate approved a conference agreement on the annual congressional budgetresolution. On May 18, the House, and on May 20, the Senate, approvedsupplemental appropriations for FY1999. By the beginning of the August recess,both houses had completed floor action on the annual defense authorization andappropriations bills, and the President has now signed both the defense authorizationbill, S. 1059 , and the defense appropriations bill, H.R. 2561 , into law. The status of major legislation to date is as follows: 
Military pay and benefits: On February 24, by a vote of 91-8, the Senate passed S. 4 , a bill to provide pay raises and improve benefitsfor members of the armed forces. The provisions of S. 4 were finallyaddressed in action on the FY2000 defense authorization.
Missile defense policy: On March 17, by a vote of 97-3, the Senate approved S. 257 , the "Cochran-Inouye National Missile DefenseAct of 1999," a bill calling for deployment of a nationwide missile defense systemas soon as technologically feasible. On March 18, by a vote of 317-105, the Houseapproved H.R. 4 , a bill declaring it the policy of the United States todeploy a nationwide missile defense. On May 18, the Senate took up H.R. 4 and substituted the text of S. 257 . On May 20, bya vote of 345-17 the House approved the Senate version, and the President signed thebill into law, P.L. 106-38 , on July 22.
Supplemental appropriations for FY1999: On March 23, the Senate approved a bill, S. 544 , providing supplemental appropriationsfor FY1999, including funds to respond to damage caused by Hurricane Mitch andHurricane Georges and aid to Jordan. The House approved its version of the bill, H.R. 1141 , on March 24. On May 6, the House approved H.R. 1664 , a second emergency supplemental appropriations bill toprovide funds for military operations in Yugoslavia and for some other purposes.Subsequently, Senate and House conferees folded Kosovo-related funding into H.R. 1141 and reported a conference agreement on May 13. (1) The Houseapproved the conference report on May 18 and the Senate on May 20, and thePresident signed the bill into law, P.L. 106-31 , on May 21. H.R. 1141 includes funds for a military pay raise and benefit increases and for defense readinessthat normally would be included in the regular FY2000 defense appropriationsbill.
FY2000 concurrent budget resolution: On March 24, both the House and the Senate approved versions of the FY2000 congressional budgetresolution -- H.Con.Res. 68 in the House and S.Con.Res. 20 in the Senate. On April 15, both chambers approved a conference report on H.Con.Res. 68 .
Defense authorization bill: On May 13 the Senate Armed Services Committee approved its version of the FY2000 defense authorization bill, S. 1059 , and the Senate approved the bill by a vote of 92-3 on May 27. On May 19, the House Armed Services Committee approved its version of theFY2000 defense authorization bill, H.R. 1401 , and the House approvedthe bill by a vote of 365-38 on June 10. A conference agreement was reported on S. 1059 on August 5. The House approved the report by a vote of375-45 on September 15, and the Senate concurred by a vote of 93-5 on September22. The President signed the bill into law ( P.L. 106-65 ) on October5.
Defense appropriations bill: On May 25, the Senate Appropriations Committee approved its version of the FY2000 defenseappropriations bill, S. 1122 , and the Senate approved the bill by a voteof 93-4 on June 8. On July 16, the House Appropriations Committee approved itsversion of the bill, H.R. 2561 , and the House passed it by a vote of379-45 on July 22. A conference report was filed on October 8. The Houseapproved the agreement by a vote of 372-55 on October 13, and the Senate approvedit by a vote of 87-11 on October 14. The President signed the bill into law, P.L.106-79 , on October 25.
302(b) allocations: On May 19, the House Appropriations Committee approved its initial allocation of funds to the 13 subcommittees. Theallocations provided $270.292 billion in budget authority and $261.73 billion inoutlays to the defense subcommittee, a total consistent with the amounts allocated tothe national defense budget function in the budget resolution. These allocations weresubsequently reduced, however, in order to allocate somewhat more money tonon-defense appropriations bills. On May 25, the Senate Appropriations Committeeapproved its initial allocations, providing $265.193 billion in budget authority and$253.104 billion in outlays for the defense subcommittee. These allocations, too,were later reduced -- allocations announced on September 15 provide $263.254billion in budget authority and $254.409 billion in outlays for defense. A reallocationon September 28 further reduced the defense level to $255.167 billion in budgetauthority and $249.727 in outlays, but the difference has been made up bydesignating some funds in the bill as "emergency appropriations" not subject to capson total spending.
 Table 1. Status of FY2000 Defense Appropriations

	Major Issues

In its February budget, the Administration requested $280.8 billion ($280.5billion as reestimated by the Congressional Budget Office) in new budget authorityfor national defense in FY2000. The Department of Defense (DOD) projects modestgrowth in defense spending in following years. Compared to long-term DefenseDepartment projections last year, the proposal represented a significant increase infunding -- as the Administration calculates it, the plan reflects an increase of $12.6billion in budget authority for defense programs in FY2000 and a total increase of$112 billion over the six-year FY2000-2005 period. The main issue in Congress washow to fit defense increases within overall federal budget constraints. 
On April 15, both the House and the Senate approved a conference agreement on the FY2000 congressional budget resolution -- compared to the Administrationrequest, the resolution provided an increase of $8.3 billion in budget authority fornational defense. The conference agreement on the defense authorization billprovides $288.8 billion in budget authority, at the budget resolution level. TheHouse and Senate versions of the defense appropriations bill, however, did not quitereach the budget resolution level, and the Senate version was considerably lower thanthe House. The Senate-passed appropriations bill used about $4.9 billion of fundsprovided in the Kosovo supplemental appropriations bill as an offset for defenseincreases and provided a total of $264.7 billion, $1.4 billion above the request. [Note:The defense appropriations bills are about $20 billion below the amount in theauthorization bills because they do not include military construction and Departmentof Energy defense-related activities.] The House-passed bill, in contrast, provided$268.7 billion in new budget authority for the Defense Department and otheragencies. The amount available to DOD and other agencies in the House bill was$5.4 billion above the request and $4.0 billion above the Senate level. 
The appropriations conference agreement reported on October 8 provides $267.8 billion, $1 billion below the House level and $4.5 billion above the request. Of the total, $7.2 billion is provided as emergency appropriations, which will raisethe cap on total FY2000 discretionary funding by that amount. In addition, $2.6billion of the total is considered to be offset by receipts from auctioning parts of theelectromagnetic spectrum. Table 2 provides an overview of funding in each of themajor defense bills for programs included in the defense appropriations measures.
In addition to debate about the level of defense spending, several other issues arose early in the session, including 
how much to increase military pay and benefits; 
whether to require deployment of a nationwide missile defense;and
whether to approve military operations against Yugoslavia andhow much money to provide for Kosovo-related operations. 
As action on annual defense authorization and appropriations bills progressed, several other issues came onto the agenda, including the following:
Whether to approve one or more additional rounds of military base closures: Neither the House nor the Senate versions of the defense authorizationbill approve new base closures.
Whether to limit peacekeeping operations in Kosovo and Haiti: While operations against Yugoslavia have been funded through the end of FY1999,future costs have not been addressed. The House Armed Services Committee(HASC) version of the authorization included a controversial measure to prohibit usefunds authorized in the bill for operations in Kosovo, but that provision was removedin a floor vote after the White House said that it would seek supplementalappropriations to support a peacekeeping mission. The House also voted to end theU.S. peacekeeping mission in Haiti, and the authorization conference agreementincludes that provision.
How to structure Theater Missile Defense (TMD) programs: The authorization conference agreement rejects an Administration plan to combinefuture funding for high-altitude theater missile defense programs -- the Navy TheaterWide program and the ground-based Theater High Altitude Area Defense (THAAD)system.
 Table 2: FY2000 Defense Authorization and Appropriations By Appropriations Title (budget authority in millionsof dollars)
Sources : H.Rept. 106-162 ; S.Rept. 106-50 ; H.Rept. 106-244 ; S.Rept. 106-53 ; House Appropriations Committee; CRS calculations from H.Rept. 106-301 ; CRS calculations from H.Rept. 106-371 ; Congressional Record , Oct. 13, 1999, July 29, 1999, and September 27,1999.
How to allocate additional funds for major weapons programs: All of the defense bills add money for weapons procurement and R&D. Most of thecongressional additions to the Administration request are for programs identified inunfunded priorities lists from each of the services. The Senate appropriations bill,however, also added funds for four F-15 aircraft. The House AppropriationsCommittee rejected the Administration request for $1.9 billion for F-22 fighteraircraft procurement and allocated the money to several areas, including additionalF-15 and F-16 aircraft procurement. The appropriations conference agreement,however, restored most of the F-22 funding.
How to address perceived shortfalls in military readiness: The Administration's proposed pay and benefits increases were designed to strengthenreadiness by improving personnel recruitment and retention. Congress added to thepay and benefits increases, and also added money for operation and maintenance(O&M) accounts most directly contributing to short-term readiness. The Kosovosupplemental appropriations bill added about $3.1 billion for O&M, and the FY2000authorization conference agreement sets aside $1.6 billion in additional funds. Theappropriations conference agreement, however, adds just $1.1 billion for O&M andthen reduces the total by $1.5 billion to offset amounts in the Kosovo supplementalappropriations bill. A more far-reaching issue is whether improved pay and benefitsand added O&M funds get at the root causes of perceivedproblems.
Whether to restructure the Cooperative Threat Reduction program with states of the former Soviet Union: The House-passed defenseauthorization bill reduced requested funding for chemical weapons demilitarizationand increased funds for some nuclear weapons projects. The authorization andappropriations conference agreements follow suit.
Strategic nuclear force levels: The SASC version of the authorization included a provision allowing a reduction in the number of deployedTrident submarine from 14 to 18, but the bill also continued a prohibition onreductions of other systems until Russia ratifies the START II treaty. The Senaterejected a floor amendment by Senator Kerrey to repeal the restriction. Theauthorization conference agreement includes a compromise that may allowreductions in Trident submarine deployment.
How to coordinate defenses against terrorism and other emerging threats: SASC established a new account in the authorization bill tocoordinate funding to cope with terrorism and other emerging threats and increasedfunding. The authorization conference agreement, however, does not establish aseparate account.
Social issues: Both the House and the Senate rejected amendments to the authorization bill to allow privately funded abortions for DODpersonnel at U.S. military health facilities abroad.
China policy/DOE security: Following the release of the report of the House Select Committee on U.S. National Security and Military/CommercialConcerns with the People's Republic of China, chaired by Rep. Cox, both the Houseand the Senate added provisions to their versions of the defense authorization tobolster security at Department of Energy (DOE) labs and to further regulate relationswith China. The authorization conference agreement went further, establishing anindependent organization within DOE, called the National Nuclear SecurityAdministration (NSSA), to oversee security. Energy Secretary Bill Richardsoninitially objected to this measure and said that he might recommend that the bill bevetoed. Subsequently, the President signed the bill into law but also designated theDOE Secretary as head of the NSSA. Most recently, Secretary Richardson haspromised that the Administration will nominate a separate director of theorganization.
The following sections review the defense budget debate and then discuss major defense policy issues at more length.

		The Defense Budget Debate

The Administration Proposal. The Administration requested a total of $280.8 billion in new budget authority fornational defense in FY2000 and estimated outlays of $274.1 billion. The DefenseDepartment projects that national defense funding will grow to $333.0 billion inbudget authority and $331.4 billion in outlays by FY2005. (2) Adjusted for inflation,this represents a very slow rate of growth -- by FY2005, total budget authority fornational defense will be about 3.6% greater than in FY1999 in constant,inflation-adjusted prices, a growth rate of 0.6% per year -- see Table 3 .
 Table 3: Real Growth/Decline in National Defense Funding Under Administration Projections (currentand constant FY2000 dollars in billions)
Source : Office of Management and Budget and Department of Defense figures for current year dollars; constant dollars calculated using deflators from the Departmentof Defense Comptroller.
Although the projected rate of growth in defense spending is modest, the plan represents an end to the decline in military funding that has been underway since themid-1980s -- the turnaround under Administration projections does not begin untilFY2001, but this is mainly an artifact of the way the Administration has proposedfinancing military construction projects in FY2000 (see below for a discussion). Theprojected growth in spending is particularly substantial in weapons procurement --under the Administration plan, purchases of new weapons will climb from $49billion in FY1999 to $75 billion in FY2005. The long-term decline in funding forweapons acquisition has been a particular focus of congressional concern for sometime, so the upturn in procurement is noteworthy. Table A3 in the Appendix showsthe Administration's long-term plan broken down by appropriations title.
Officials have broken down the $112 billion six-year increase into three components:
$35 billion for improvements in pay and benefits for military personnel, including across-the board pay raises of 4.4% in FY2000 and 3.9% peryear thereafter; pay table reform to provide higher raises in the upper grades; changesin retirement benefits; and increased bonuses and special pay;
$49 billion in operation and maintenance accounts, of whichabout $10 billion is to cover higher pay raises for civilian Defense Departmentemployees;
$29 billion for weapons modernization and facilities repair andreplacement.
When the budget was being prepared, DOD officials say, the chiefs of the military services requested about $148 billion in increased funding over the six-year period. The $112 billion addition, they say, includes all that the chiefs requested forpersonnel and readiness and about half of the amounts requested for weaponsacquisition and facilities. 
Financing the Administration Plan. The overarching budget issue for FY2000 has been how tocope with rather stringent limits on total discretionary spending while permitting anincrease of some magnitude in defense expenditures. Under the Budget EnforcementAct of 1997 (part of the Balanced Budget Act of 1997, P.L. 105-33 ), total budgetauthority for discretionary programs was limited to $537 billion in FY2000,according to CBO's initial estimates this year. This amount is substantially belowthe FY1999 level, though how much below depends on how the FY1999 baseline isdefined. (3) Any increase in the defense budget willfurther reduce funds available fornon-defense discretionary spending. 
The Administration, however, wanted to increase both defense and non-defense discretionary spending while technically adhering to the budget limits. TheAdministration's answer was (1) to propose total discretionary budget authority andoutlays considerably above the caps established in the 1997 budget agreement byapplying savings in mandatory programs and increased revenues as offsets toincreases in the discretionary part of the budget and (2) to use various accountingmeasures within the FY2000 defense budget to offset increases. Table 4 , takendirectly from DOD briefing material, shows how the Administration has explainedits proposed financing measures. 
 Table 4: Administration Plan for Financing the Defense Increase (DOD discretionary budget authority inbillions of current year dollars)*
Source: Department of Defense. 
* Note: Reflects discretionary funds for the Department of Defense only -- does notinclude small, negative amounts of mandatory funds.
Questions have been raised about each of the offsets, including, 
Inflation savings : Of the $112 billion increase that the Administration proposed through FY2005, $26.1 billion was offset by projectedinflation savings -- savings of $3.8 billion were assumed in FY2000. The key issueis whether estimated increases in purchasing power are accurate. Defense officialshave said that almost all of the projected savings are due to lower inflation in 1998,which established a lower base for price trends in the future -- "out-year" inflationprojections are only about 1/10th of 1 percent lower than last year. A perennialquestion is whether decision-makers will agree to add money to the defense budgetin the future if inflation accelerates.
"Split funding" for FY2000 military construction projects : The Defense Department's FY2000 military construction/family housing budget planincluded $8.5 billion worth of projects, but the Administration requested only $5.4billion in appropriations. The remaining $3.1 billion was requested as advanceappropriations to be scored as new budget authority in FY2001. The request toprovide "split funding" for FY2000 projects was not a change in policy, but aone-time exercise done only because of budget rules -- the intent was to reducerequested budget authority in FY2000, when caps on discretionary funding wouldremain in place, and restore the funding in FY2001, when, presumably, the caps willbe adjusted upward.
Rescissions of prior year funds : The Administration proposed applying $1.65 billion of rescissions of prior year defense funds to offset the FY2000total. While it is quite common for the appropriations committees to make suchrescissions, the amount is relatively large. Moreover, congressional committeesusually identify such savings toward the end of the budget process and use them tooffset unexpected costs or to pay for congressional initiatives. The Administrationdid not identify specific rescissions, but this has been common practice in recentyears -- rather than propose cuts that might aggravate some legislators, the ClintonAdministration has preferred to negotiate rescissions with congressionalcommittees.
Congressional Action on the Defense Budget. In Congress, the debate over the level of defense spendingwas intertwined with the broader debate about the overall federal budget. Membersof the congressional defense committees, with considerable support from otherlegislators, called for substantial increases to the military budget in addition to theincreases the Administration proposed. They were also, however, critical of theaccounting mechanisms that the Administration employed to squeeze additionaldefense spending under the discretionary spending caps. Meanwhile, Congressrejected an increase in the discretionary caps and dismissed out of hand the offsetsto increased discretionary spending that the Administration proposed. Concurrently,there was a debate about the use of emergency supplemental appropriations forKosovo as a mechanism to increase funding for defense readiness. 
The result was a rather complicated series of steps in which funds apparently added to the defense budget in one stage of the congressional process were erodedin following stages, only to be restored in the final appropriations. Moreover, at theend of the process, appropriators took a number of steps to reduce projected outlaysin FY2000 in order to help meet overall spending targets. Here is a brief overviewof the process:
The congressional budget resolution for FY2000, H.Con.Res. 68 , approved by both chambers on April 15, provided $8.0billion more in budget authority and $2.5 billion more in outlays for national defensein FY2000 than the Administration's request (using Administration, not CBO,scoring of the request). Over the five year FY2000-2004 period, the resolutionprojected $27.9 billion more in budget authority and $5.3 billion more in outlays fornational defense than the Administration. Table 5 shows the congressional plancompared to the Administration estimate and to the Congressional Budget Officereestimate of the cost of the Administration projection. (4) Two points stand out -- first,projected increases in defense spending in the later years of the five-year period arenot as large as in FY2000, and, second, there appears to be a substantial mismatchin all years between increases in budget authority and projected increases in defenseoutlays -- the mismatch is especially severe according to CBOestimates.
None of the congressional defense committees agreed to the proposed $3.1 billion in split funding for military construction, and neither SASC northe Senate nor the House Appropriations Committees accepted the proposed $1.65billion in offsetting rescissions. The final military construction appropriations billdoes not agree to the split funding, and most of the rescissions in the finalappropriations bill were of amounts earlier provided in the Kosovo supplemental. At least $3.1 billion of the $8 billion increase in defense funding, therefore, wentsimply to restore funds for financing mechanisms that Congressrejected.
 Table 5: Congressional Budget Resolution Compared to Administration National Defense Budget Plan (current year dollars in billions)
Sources: House and Senate Budget Committees; Conference Report on the FY2000 Concurrent Budget Resolution, H.Rept. 106-91 ; Department of Defense.
Congress found its own ways of adding money to defense in spite of the FY2000 discretionary spending caps, first, by providing extra funds in theemergency supplemental appropriations bill for Kosovo, H.R. 1141 , and,second, by using projected revenues from auctioning parts of the electromagneticspectrum as an offset for defense increases. In all, the Kosovo funding bill provided$14.9 billion in supplemental appropriations and made $2.0 billion in offsettingrescissions. Of the supplemental funding, about $11 billion was for the Departmentof Defense (including funds for Central America disaster assistance and disasterrepairs at U.S. facilities), which is $5.3 billion more than the Administrationrequested. Much of the added money was for programs that normally would befinanced in regular FY2000 defense and military construction appropriations bills,including $1.838 billion for increased pay and benefits and $3.1 billion for militaryreadiness-related accounts and for munitions purchases. Most of the added amountswere in "fast-spending" accounts -- i.e., accounts in which almost all new budgetauthority is actually expended as outlays in the first year available. As a result, theadded funds in H.R. 1141 helped to ease the apparent mismatch betweenbudget authority and outlays in the budget resolution. The House, Senate andconference versions of the defense appropriations bill all included $2.6 billion inassumed revenues from electromagnetic spectrum sales as a defenseoffset.
Some of the extra $5 billion for defense in the Kosovo bill, however, was tapped in the FY2000 appropriations process as an offset to defensefunding increases. The Senate-passed version of the FY2000 defense appropriationsbill, S. 1122 , included increases in various defense programs consistentwith the budget resolution and the defense authorization bills but then used $1.838billion provided in the Kosovo bill for personnel and $3.1 billion in the Kosovo billfor readiness and munitions as offsets for the increases (see Table 2 , above). The neteffect was that the Senate used added emergency defense appropriations provided inthe Kosovo bill to provide most of the increase in FY2000 defense spending withoutcounting against the caps on FY2000 discretionary spending, thus freeing up moremoney for non-defense discretionary programs. On June 8, the House leadershipannounced plans to take a similar approach, and the allocation of funds to the defensesubcommittee was subsequently reduced -- the initial allocation, approved in May,provided $270.3 billion, and the bill as reported by the full committee on July 16provides $266.1 billion, $4.2 billion lower. Part of the difference, however, wasmade up by counting anticipated receipts from radio spectrum sales of $2.6 billionas an offset to defense appropriations, so the amount available to DOD and otheragencies in the House bill totaled $268.7 billion. The final conference agreementprovided $267.8 billion, $1 billion less than the House and $4.4 billion more than theAdministration requested. 
In the longer term, projected increases in defense spending in the budget resolution will partly be taken up by the growing impact in future yearsof pay and benefits increases that Congress added to the Administrationrequest.
In the final stages of the budget process, Congress took a number of steps to limit estimated total defense outlays in FY2000 in order to helpkeep the overall budget within limits. These steps include (1) instructing CBO to useOMB scoring in estimating the outlay impact of defense appropriations, which willreduce estimated outlays in FY2000 by about $10.5 billion; (2) declaring $7.2 billionof budget authority, with an outlay impact of about $5.5 billion according to CBO,as emergency appropriations, which will raise caps on total discretionary spendingby those amounts; and (3) requiring DOD to delay progress payments to contractors,which will reduce FY2000 outlays by an estimated $1.2 billion. Also, assumedrevenues of $2.6 billion from radio-frequency spectrum sales reduce projectedoutlays by an equal amount, and the $1.838 billion in emergency appropriations forpay and benefits provided in the Kosovo supplemental will raise the discretionaryspending caps. 

		Increased Military Pay and Benefits

As noted earlier, the Administration proposed a package of pay and benefit improvements for military personnel estimated to cost about $35 billion over the nextsix years compared to earlier Administration plans. The package included (1) payraises of 4.4% in FY2000 and 3.9% per year thereafter, (2) "pay table" reform toreward promotions more than longevity, (3) repeal of the "Redux" retirement plan,restoring benefits to 50% of base pay after 20 years of service, and (4) targeted payand bonus increases for particular skills. Table 6 shows Administration estimatesof the six-year cost. An additional $10 billion in operation and maintenance accountswould be needed to cover comparable pay raises for DOD civilian personnel throughFY2005.
 Table 6: Costs of Administration Pay and Benefits Initiatives (millions of dollars)
Source: Department of Defense. 
The purpose of the proposed pay and benefit increases was to improve recruitment and retention of military personnel. Both the Army and the Navysuffered recruiting shortfalls in 1998, and all of the services have fallen somewhatshort of retention goals recently. In the past, military pay raises, like pay raises forcivilian federal personnel, have been pegged to ï¿½% below the Employment CostIndex (ECI), a measure of overall compensation trends in the economy. As a result,military pay is now about 13% below the level it would have reached if pay raisessince 1982 had equaled the ECI. Some refer to this as the military "pay gap," thoughit is simply a measure of trends since 1982 -- independent comparisons of militarypay scales with the civilian economy generally have not confirmed a shortfall of thatmagnitude. The Administration's proposed pay raises are 0.1% above the ECI inFY2000 and at the projected ECI in the future. 
On February 24, the Senate passed S. 4 , a bill entitled the "Soldiers', Sailors', Airmen's, and Marines' Bill of Right Act of 1999," that wouldhave provided a substantially larger pay and benefits package than the Administrationhas proposed. The bill would implement the Administration proposals and inaddition (1) provide a 4.8% pay raise in FY2000 and peg raises to ï¿½% above ECIthereafter, (2) allow personnel to choose a $30,000 bonus instead of shifting out ofthe Redux retirement plan, (3) provide a subsistence allowance of $180 per monthto personnel eligible for food stamps, (4) make uniformed personnel eligible for theThrift Savings Plan now available to civilian federal employees, and (4) significantlyincrease Montgomery G.I. Bill educational benefits. According to CongressionalBudget Office estimates, S. 4 would cost about $9 billion more over theFY2000-2005 period than the Administration plan. (5) While the Senate votedoverwhelmingly for S. 4 , the House did not act on a military pay andbenefits bill as a freestanding measure, and instead pay and benefits improvementswere considered as part of the FY2000 defense authorization bill. 
Authorization and appropriations action: House and Senate versions of the defense authorization bill both included larger pay and benefits increases thanthe Administration requested. The SASC version of the bill included all of theprovisions of S. 4 except for GI Bill benefits. In action on thefloor, the Senate approved an amendment by Senator Cleland to approve theexpansion of GI Bill benefits, as provided in S. 4 . Pay and benefitprovisions in the HASC version of the authorization were identical to those inthe SASC bill with some exceptions: (1) HASC provided for future raises equalto the ECI rather than ï¿½% higher and (2) HASC did not approve providing theThrift Savings Plan to uniformed personnel but instead required a DOD studyof the proposal; and (3) HASC did not include the $180 per month subsistenceallowance. On the floor, however, the House approved an amendment by Rep.Buyer, the chair of the HASC military personnel subcommittee, to provide thesame Thrift Savings Plan benefits as the Senate. The conference agreement onthe authorization bill reflects a compromise between the House and the Senate. As in the Senate proposal, it provides for higher than ECI pay raises in thefuture, but it does not expand GI Bill benefits, and it does not provide a highersubsistence allowance. Pay and benefits increases are legislative matters to beconsidered in the defense authorization bill, not in appropriations measures,though the amount of money provided for military personnel in theappropriations bill is directly affected by any changes. The Kosovosupplemental appropriations bill, H.R. 1141 , provided $1.838billion for FY2000 pay and benefits increases, enough to cover theAdministration estimate of the costs of the Administration's 4.4% pay raise, paytable reform, and retirement reform. Later, the conference agreement on theregular FY2000 defense appropriations bill provided sufficient funding for the larger congressional pay and benefits packages. 

		Ballistic Missile Defense

The Administration's FY2000-2005 long-term defense plan included several important initiatives on missile defense policy, including (1) a decision to provide atotal of $10.5 billion, an increase of $6.6 billion over the FY1999-2005 period, tofully fund preparations to deploy a national missile defense (NMD) system beginningas early as 2003-2005; (2) a decision to accelerate the Navy Theater Wide (NTW)system to allow it to compete with the Theater High Altitude Area Defense(THAAD) system for the "upper tier" theater missile defense (TMD) role fordeployment as early as 2007; and (3) a decision to restructure the Medium ExtendedAir Defense System (MEADS) to limit costs. In announcing these decisions onJanuary 20, Secretary of Defense Cohen acknowledged that the threat of long-rangemissile attack on U.S. territory appeared to be materializing sooner than earlierintelligence assessments had estimated. In particular, Secretary Cohen cited NorthKorea's test last year of a multistage missile as evidence of the danger, and heendorsed the findings of the Rumsfeld Commission, which reported in August 1998,that rogue states could threaten the United States directly with long-range missileswithin the next five years and without much advanced warning.
The change in the Administration's threat assessment was ultimately reflected in its decision not to oppose an amended version of S. 257 , a billsponsored by Senators Cochran and Inouye that calls for deploying a nationwidemissile defense as soon as technologically possible. Last year, the Administrationopposed an essentially identical bill, and the Senate twice narrowly rejected cloturemotions to bring it to a vote. This year, the Administration relented afteramendments were added, including a statement that the United States seekscontinued negotiated reductions in Russian nuclear forces and a provision that theSecretary of Defense must determine that the system will be operationally effective. The Senate passed the bill by a vote of 97-3 on March 17. On March 18, by a voteof 317-105, the House passed H.R. 4 , a bill stating simply that it is U.S.policy to deploy a nationwide defense. On May 18, the Senate took up H.R. 4 and substituted the text of S. 257 . On May 20, bya vote of 345-17 the House approved the Senate version. The bill was sent to thePresident on July 12 and signed into law ( P.L. 106-38 ) on July 22. 
Although the Administration no longer opposes these measures, officials insist that policy remains what it was -- to decide by mid-2000 whether to deploy a systemand, if a decision to deploy is made, to pursue deployment as the technology permits. Officials had said that deployment could begin as early as three years after a decisionis made to go ahead -- i.e., by 2003 -- but it now appears more likely thatdeployment could begin in 2005 at the earliest. Moreover, the Administration stillargues that the 1972 Anti-Ballistic Missile (ABM) Treaty remains critically importantto U.S. security. Senior officials have said that they will endeavor to negotiatechanges in the Treaty with Russia to permit deployment of a nationwide defense. Many Members of Congress, however, oppose continued adherence to the ABMTreaty. There also continues to be some debate in Congress about missile defensetechnology. Some legislators support a Heritage Foundation proposal to deploy asea-based nationwide defense. Defense officials have said that such a system wouldbe too costly. Also, a sea-based system would clearly be incompatible withcontinued adherence even to an amended version of the ABM Treaty. 
Authorization and appropriations action: Though National Missile Defense remains a matter of some contention, Theater Missile Defense (TMD) programswere the main focus of debate in action on FY2000 defense funding bills. TheSenate-passed authorization bill included a legislative provision that rejected theAdministration plan to combine the Navy Theater Wide and THAAD programsin the future, requiring, instead, that the programs remain separately funded. The authorization conference agreement accepts the Senate language. Theauthorization conference agreement also adds funds for Patriot PAC-3procurement and R&D, as in the Senate version of the bill. The Senateauthorization also added funds for the related Space-Based InfraredSystem-High (SBIRS-High), while the House bill transferred most funding forSBIRS-High from the Air Force to the Ballistic Missile Defense Organization. These steps reflected congressional displeasure with Air Force plans to slow theSBIRS development program. The authorization conference agreement addsfunds for SBIRS-High but does not end Air Force management. Theappropriations conference agreement provides the same amount for SBIRS butmoves SBIRS-Low funding from the Demonstration and Validation account toEngineering and Manufacturing Development. The Senate authorization alsomandated specific tests of the Airborne Laser system, a sign of the SASC'scontinued doubts about the program. The authorization conference agreementincludes the Senate provisions. A key issue in the appropriations conferenceconcerned funding for the Medium Extended Air Defense System (MEADS),which is a cooperative program with European allies to develop a follow-on tothe Patriot for defense of forward-deployed forces. The House-passedappropriations bill eliminated MEADS funding, but the appropriationsconference agreement restores funds. Table 7 provides a detailed list ofmissile defense programs, requested funding, and congressional action. 

		Military Action in Yugoslavia and Forces in Haiti

During the week of May 17, both the House and the Senate approved H.R 1141, a bill providing supplemental appropriations for military operations againstYugoslavia through the end of the fiscal year on September 30. DOD officials havesaid that the amounts provided in the bill will be sufficient to cover the costs of the78 days of the air campaign plus peacekeeping costs through September 30, thoughlittle will be left over to finance costs of peacekeeping operations in FY2000. In abriefing for congressional appropriations committees on September 9, DOD officialsprovided an estimate that costs of U.S. participation in the peacekeeping mission willtotal $2.042 billion in FY2000. Some of these costs, they said, can be covered by leftover funding for the air campaign, operations in the Persian Gulf, and a reduced levelof operations in Bosnia, leaving $1.78 billion to be financed by supplementalappropriations. The White House has not yet submitted a formal request to Congressfor these funds.
Authorization and appropriations action: Funding for operations against Yugoslavia was a major issue in House action on the FY2000 defenseauthorization bill. The HASC version of the bill included a controversialprovision that would have prohibited the use of any funds in the bill foroperations in Yugoslavia and that would direct the Administration to requestsupplemental funds if operations continue into FY2000. There was extensivedebate about this provision during the HASC markup of the bill, and opponentssaid they would offer a floor amendment to delete the provision. Subsequently,the White House sent a letter to the House Speaker explicitly threatening to vetothe measure if it included the provision. The House Rules Committee thenordered the provision removed in the version of the bill to be considered on thefloor. Several Members opposed this decision, however, and their oppositionwas one factor in the leadership's decision to withdraw the proposed rule onMay 27. Subsequently, the authorization was brought to the floor with a revisedrule that did not excise the Kosovo funding provision. On June 10, however,by a vote of 270 to 155, the House approved an amendment by Rep. Skelton toremove the provision, but only after the White House agreed to seek additionalsupplemental funding for peacekeeping operations in Kosovo.
 Table 7: Ballistic Missile Defense Funding (millions of dollars)
Sources: Department of Defense, RDT&E Programs (R-1): Fiscal Year 2000 ,February 1999; S.Rept. 106-50 ; H.Rept. 106-162 ; S.Rept. 106-53 ; H.Rept. 106-301 , H.Rept. 106-371 .
Notes: *NMD total for FY1999 includes $1 billion in supplemental funding provided in the Omnibus Appropriations Act for FY1999 ( P.L. 105-277 ). These funds willactually be allocated over 3 years, through FY2001. 
Operations in Yugoslavia were also an issue in the Senate. In a key vote on May 25, by 52-48, the Senate tabled an amendment to the authorization bill bySenator Specter to direct the President to seek approval from Congress prior tothe introduction of ground troops in Kosovo except for peacekeeping purposes. And in a second key vote on May 26, the Senate rejected by a margin of 77-22an amendment by Senator Bob Smith to cut off funding for operations on Oct.1, 1999, unless Congress authorizes continued spending. Ultimately, Congresshas not imposed restrictions on Administration policy in Kosovo, though arequest for supplemental appropriations to pay for the peacekeeping mission inFY2000 has not yet been submitted, and it could become a focus of debate.
The U.S. troop presence in Haiti was also an issue in the House. On June 9, the House approved an amendment to the authorization bill by Rep. Gossprohibiting the continuous deployment of U.S. forces in Haiti after December31, 1999. The authorization conference agreement includes a prohibition onsuch deployments after May 31, 2000. The Administration had stronglyobjected to this provision but has now announced plans to withdraw forces fromHaiti.

		Base Closures

This year the Defense Department once again urged Congress to approve two more rounds of military base closures, one in 2001 and the second in 2005. Officialsargue that cuts in the defense infrastructure have lagged far behind cuts in the size ofthe force and that funding for major weapons programs in the future depends onimproving efficiency over the next few years. For the past two years, Congress hasrejected additional base closure rounds. In part, opponents have complained that theWhite House politicized the base closure process in 1995 when it acted to keepaircraft maintenance facilities in Texas and California open as privately runoperations after the Base Closure Commission had recommended their closure. 
Authorization and appropriations action: Neither the HASC nor the SASC version of the authorization approved additional base closures. SASC narrowlyrejected an amendment in the committee markup by Senators Levin and McCainto establish one more round in 2001, and the full Senate rejected theiramendment on May 26 by a vote of 60-40. The matter was not an issue in theauthorization conference.

		Major Weapons Programs and Military Service Unfunded Priorities Lists

The House Appropriations Committee version of the defense appropriations bill eliminated $1.9 billion requested to procure six F-22 fighter aircraft, though itapproved $1.2 billion to continue F-22 development. The committee report providedan extensive rationale for a "procurement pause" in the F-22 program -- that the AirForce has been financing the F-22 while suffering from severe and worseningshortfalls in many other areas; that the F-22 has been experiencing technicalproblems; that F-22 affordability is questionable, that costs have not been controlled,and that future cost growth is likely; that the United States has an overwhelmingnumerical advantage in advanced fighters without the F-22; and that there are manyalternatives to the F-22, particulary upgrades of the current generation F-15. In lieuof F-22 procurement, the committee proposed increased funding for Air Forcepersonnel recruitment and retention, for aircraft spare parts, for upgrades of a numberof aircraft programs, and for procuring 8 F-15E aircraft, 5 additional F-16s, and 8KC-130-J cargo aircraft for the Marine Corps. In statements to the press and in thefull committee markup of the defense bill, subcommittee leaders expressed a hopethat the F-22 decision will open a far-reaching discussion of long-term Air Forcerequirements and priorities. 
For its part, the Air Force vigorously defended of the F-22, arguing that even some currently available fighters in the world are more capable than the F-15, thatsome future aircraft will be more capable still, and that a temporary delay in F-22procurement would increase program costs by $6 billion if suppliers were forced toshut down and restart production later. In House Appropriations Committee markup,Rep. Kingston offered and then withdrew an amendment to restore F-22 procurementfunds, and on the House floor, Rep. Barr offered and then withdrew a similaramendment. F-22 production was the major issue in conference with the Senate.
Debate over other weapons issues this year has been relatively muted. In response to a request from the House Armed Services Committee, each of themilitary service chiefs prepared a list of priority programs that are not funded in theAdministration's FY2000 request and FY2000-2005 plan. The unfunded prioritiesamounted to $8.7 billion in FY2000 and $45 billion over the FY2000-2005 period. (6) This total is somewhat higher than the $36 billion in unfunded requests that seniorcivilian DOD officials acknowledged, reflecting changes since the budget review wascompleted. In recent years, Congress has used similar lists from the services as aguide in allocating additions to the Administration defense request. Of the $8.7billion total for FY2000, about $3.9 billion is for weapons procurement and R&D,including about $760 million for the Air Force, $1.2 billion for the Army, $960million for the Navy, and $940 million for the Marine Corps.
Authorization and appropriations action: The conference agreement on the defense appropriations bill provides a total of $2.522 billion for the F-22program, including $1.222 billion for R&D, $1 billion for acquisition of aircraft,and $300 million in advance FY2001 appropriations for program terminationliability. The $1 billion for aircraft acquisition was provided in a transferaccount, and up to $277 million of the total may be used for advanceprocurement of components of aircraft to be fully funded next year. The totalamount provided for the F-22 is about $500 million below the request ($1.85billion in procurement and $1.2 billion in R&D). The conference agreementalso prohibits award of an initial low-rate production contract unless certaintesting is successfully completed
Aside from the F-22 debate, all of the defense bills added some funds for weapons procurement and R&D, -- see Table 2, above for a breakdown ofcommittee action by title, and Table A-2 in the appendix for a comparison ofaction on selected acquisition programs. Almost all of the major congressionaladditions are for items that are on service priority lists or that are included infuture service acquisition plans. The authorization and appropriationsconference agreements add funds for two programs that have been matters ofsome debate in the past, C-130J aircraft and LHD amphibious ship procurement. The Marine Corps included funds for two KC-130Js in its unfunded prioritieslist; the Senate authorization added funds for two KC-130Js, the Senateappropriations added funds for one KC-130J and one EC-130J, the Houseauthorization added funds for 4 KC-130Js, and the authorization conferenceagreement also adds funds for 4 KC-130Js. As noted, the HAC bill addedfunds for 8 KC-130s. The appropriations conference report provides funds for1 KC-130J for the Marine Corps and 1 EC-130J for the Air Force.
The Senate authorization bill provided $375 million and the House authorization $15 million for advance procurement of a new LHD classamphibious ship, while the House appropriations bill provided no funds and theSenate bill $500 million. The authorization and appropriations conferenceagreements provide the $375 million. This ship, LHD-8, is included in theNavy's long-term shipbuilding plan for purchase in FY2005. The Senateapproach, which Congress has used in the past, is to provide about 25% of thecost initially and the remainder next year. This will accelerate procurement and,according to proponents, could lower the cost of the ship, now estimated atabout $1.75 billion, by about $200 million.
Other major congressional additions include (1) funds for additional UH-60 Blackhawk helicopters for the Army, (2) funds for additional V-22 tilt rotoraircraft for the Marine Corps, and (3) funds for advance procurement foradditional E-8 JSTARS radar aircraft. Significantly, neither the House nor theSenate version of the defense authorization endorsed additional funds for F-15aircraft procurement, but the Senate approved an amendment to the defenseappropriations bill by Senator Bond to allocate $220 million to purchase 4F-15Es, and the HAC bill provided $440 million for 8 F-15s. The authorizationconference agreement does not include any funding, but the appropriationsconference provides $300 million for 5 aircraft. Initially, this became an issuebecause Boeing has announced plans to shut down the production line in St.Louis unless additional orders for the aircraft appear, either from foreigngovernments or from the Air Force. 
In one of the few ongoing debates over major weapons programs other than the F-22, Senator Feingold offered two amendments to the defense authorizationbill on the F/A-18 E/F program. One, to ensure compliance with contractspecifications prior to the start of full-rate production, was approved by voicevote on May 27. A second amendment, to place a cost cap on the program, wasrejected by a vote of 87-11 on May 27. 
One other issue concerns procurement of precision-guided munitions, like the Tomahawk cruise missile and the Joint Direct Attack Munition (JDAM), thatwere used extensively in operations against Yugoslavia. The Houseauthorization added $300 million to restart Tomahawk production, $110 millionfor additional Joint Standoff Weapon (JSOW) procurement, and $114 millionfor additional JDAMS. The authorization conference, however, rejectedresumption of Tomahawk production, electing, as the Administration hasproposed, to upgrade older missiles while waiting for production of a new,cheaper replacement, called the Tactical Tomahawk, to begin. The conferenceagreement also adds $50 million for JDAM procurement, but none for JSOW; funding to rebuild munitions stocks was, however, provided in the Kosovosupplemental appropriations bill.
A final, major weapons-related issue this year concerned funding for multi-year procurement of major weapons programs. Multi-year procurement permits theservices to make contracts with industry guaranteeing future purchases in returnfor lower prices. Since such guarantees assume future funding, standing lawrequires that they be approved in advance in authorization and appropriationsbills. This year, the House Appropriations Committee refused to approve anynew multi-year procurement on the grounds that long-term service fundingplans are too unsettled. The Defense Department vigorously protested, and thematter was an issue in the appropriations conference. In the end, theappropriations conference agreement approves most of the multi-yearprocurement programs that were requested, but it puts restrictions on multi-yearprocurement in the M-1A2 tank upgrade program.

		Military Readiness

Perceived shortfalls in levels of military readiness have been a major impetus to Administration and congressional support for higher levels of defense spending. Secretary of Defense Cohen and all of the members of the Joint Chiefs of Staff haveacknowledged some readiness problems, including shortfalls in meeting recruitingtargets; problems in retaining skilled personnel; shortages of spare parts, trainingmunitions, and some other equipment; and, in general, strains caused by the ongoingpost-Cold War pace of military operations. Much debate remains, however, aboutthe extent of the problems and the adequacy of Administration and congressionalefforts to address them. One rationale for adding unrequested funding for pay andbenefits and for military readiness to the Kosovo supplemental bill ( H.R. 1141 ) was to provide encouragement to troops and to bolster readiness accountsbeyond amounts likely to be available within constraints on discretionary spendingin the 1997 budget agreement.
Authorization and appropriations action: In addition to some $2.25 billion in the Kosovo supplemental for readiness-related budget accounts, both the HASCand the SASC authorization bills added more funds -- HASC provided $2.8billion and SASC $1.2 billion more for operation and maintenance (O&M)accounts than was requested -- the conference agreement adds about $1.6billion. The Senate Appropriations Committee, however, approved an increaseof just $626 million in the FY2000 appropriations bill, and the total was to bereduced by amounts provided earlier in the Kosovo supplemental appropriationsbill. In contrast, the HAC bill provided $2.4 billion more than requested forO&M and did not propose an offset. The appropriations conference agreementprovides $1.1 billion more for O&M than was requested but uses about $1.5billion of funds in the Kosovo supplemental as an offset to the total. The mainreadiness-related issue this year has been whether higher pay and benefits willadequately improve recruitment and retention. Considerable debate continuesabout the state of readiness and the likelihood that increased pay and benefitsand added operating funds will solve underlying problems. Neither the Housenor the Senate has systematically addressed factors that have led to a relativelyhigh operational tempo in parts of the military force. Unresolved issues includewhether and how to limit the number of overseas operations, forward presencerequirements, and the organizational ability of each of the services to respondto post-Cold War deployments.

		Cooperative Threat Reduction

The Administration requested $475.5 million for the Nunn-Lugar Cooperative Threat Reduction (CTR) program, which provides assistance to states of the formerSoviet Union in safeguarding nuclear materials, dismantling missiles and otherweapons, and in other demilitarization measures. Although the basic goals of theprogram have been widely supported, there have, in the past, been disputes about thesize of the program, the pace of funding obligations, and particular projects to befunded. In general, the House has been more critical of the program than the Senate.
Authorization and appropriations action: SASC approved the Administration CTR request without change, though it trimmed funds for two related programsin the Department of Energy, cutting the Initiative for Proliferation Preventionfrom $30 million to $25 million, and the Nuclear Cities Initiative from $30million to $15 million. HASC reduced CTR funding for chemical weaponsdemilitarization assistance dramatically, providing $24.6 million, $105.8million below the request. The CTR chemical weapons program, HASC said,should not be directed at the expensive task of destroying weapons stocks butinstead should support Russian efforts to ensure stockpile security. Thismandate was based in large part on a General Accounting Office evaluation ofthe CTR program. (7) HASC also proposed languagemaking into permanent lawvarious restrictions on the program that have been inserted in annual bills,including prohibitions on the use of funds for peacekeeping, housing,environmental restoration, defense conversion, or job retraining. HAC followedthe House authorization with one exception: it proposed adding $12 million forbiological weapons proliferation prevention. The authorization conferenceagreement follows the House approach on chemical weapons demilitarization,cuts DOE programs as in the Senate bill, and makes restrictions on the programpermanent. The appropriations conference agreement provides $460.5 millionfor CTR, $15 million below the request and the authorization, but it does notprovide any policy guidance, except for a general provision that prohibitsexpenditure of funds for housing programs.

		Strategic Nuclear Force Levels

In defense authorization bills since FY1996, Congress has included a prohibition on the reduction of strategic nuclear delivery systems to levels belowthose established by the START I treaty until Russia ratifies the START IIagreement. While there has been some sentiment in the Defense Department formaking further force reductions, the cost of maintaining START I force levels hasbeen relatively modest, so there has been little opposition to the congressionalmandate. This year, however, the Navy has requested permission to plan for areduction from 18 to 14 Trident ballistic missile submarines in order to avoid costsof a refueling overhaul of the oldest vessels.
Authorization and appropriations action : The SASC bill included a provision allowing a reduction in the number of deployed Trident submarines from 18 to14, but the Senate rejected a floor amendment by Senator Kerrey to repeal allrestrictions on reductions in strategic forces. The HASC bill included aprovision that would permanently codify limits on the retirement of strategicsystems unless START II is approved but would allow the President someflexibility to reduce total force levels -- the President would be allowed torestructure forces provided the total force includes at least 98% of the 6,000warheads allowed by START I. The authorization agreement follows the Houselanguage with an amendment that will allow the Administration to reduceTrident submarine levels provided the President makes certain certifications.

		Emerging Threats

In recent years, more and more attention has been focused on new threats to U.S. security, and especially on challenges that may directly endanger the U.S.homeland. Earlier this year, the Senate Armed Services Committee established anew subcommittee on emerging threats and capabilities to focus on new challengesto U.S. security. 
Authorization and appropriations action: SASC established a new budget account in the operation and maintenance title for "combating terrorism." Thepurpose of the account is to consolidate funding for counter-terrorism programsand increase their visibility. SASC provided $1.954 billion for the account,adding about $120 million to amounts requested in various other parts of thebudget. HAC provided $50 million extra for counter-terrorism programs in ageneral provision. The authorization conference agreement does not establisha separate account for counter-terrorism activities. 

		Social Issues

Social issues, such as abortion, gays in the military, and the role of women in the armed forces, have frequently been matters of debate in defense funding bills inrecent years. Last year, gender integrated training was a major issue. This year, acongressionally mandated commission recommended that each of the militaryservices retain the authority to determine the level at which gender integrated trainingbe carried out, and the report appears to have quelled debate.
Authorization and appropriations action: HASC approved a measure to permit abortions at military hospitals for women who are victims of rape or incest. Anamendment during the markup, however, required that women must previouslyhave filed sexual abuse charges to make such a claim. Current law permits theuse of appropriated funds for abortions only if the life of the woman is indanger. On May 26, the Senate rejected by 51-49 an amendment by SenatorsMurray and Snowe to repeal the current law that prohibits U.S. military healthcare facilities overseas from providing abortions for U.S. military personnel atprivate expense. On June 9, the House rejected a similar amendment byRepresentative Meek. The authorization conference agreement does not includethe House provision, leaving the existing prohibition on abortions intact.

		China Policy and Department of Energy Reorganization

Last year, Congress included several measures in the defense authorization bill to limit technology transfers to China, including a provision transferringresponsibility for reviewing licenses for satellite exports from the CommerceDepartment to the State Department. Policy toward China continues to be a matterof great concern in Congress, especially in view of recent evidence of Chinese spyingat nuclear weapons labs. The House Select Committee on U.S. National Security andMilitary/Commercial Concerns, chaired by Rep. Cox, released its report publicly onMay 25. The Committee recommended several measures to tighten restrictions ontechnology exports to China. 
Authorization and appropriations action: The HASC bill included limits on military-to-military contacts with China and established a Center for the Studyof Chinese Military Affairs at the National Defense University. The SASC billincluded measures to tighten security at Department of Energy labs. Severalsignificant amendments were proposed to the authorization bills in both theHouse and the Senate in the wake of the Cox committee report. On May 27, theSenate approved a Lott amendment to increase monitoring of the export ofadvanced satellite technology, to require annual reports about Chinese militarycapabilities against Taiwan, and to further strengthen security andcounterintelligence at Department of Energy facilities. The House addedseveral amendments, including a Cox/Dicks amendment codifying into lawrecent Administration initiatives to improve DOE security andcounterintelligence programs. The House also approved a DeLay amendmentlimiting the substance of U.S.-China military-to-military contacts. The Houserejected a Ryun amendment that would have imposed a two-year moratoriumon the DOE foreign visitors programs. Significantly, Rep. Spence did not offeran amendment that the Administration strongly opposed to transferresponsibility over nuclear weapons programs from the Department of Energyto the Department of Defense. Later, on July 21, the Senate approved anamendment to the Intelligence Authorization bill, H.R. 1555 ,offered by Senator Kyl, to establish an independent organization within theDepartment of Energy to oversee security. The defense authorizationconference agreement includes a revised provision establishing an organizationwithin the Department, called the National Nuclear Security Administration, tooversee security and counterintelligence. On September 15, by a vote of139-281, the House rejected a motion to recommit the conference agreementwith instructions to remove this provision. Secretary of Energy Richardson hadstrongly objected to this measure, but after the House and Senate approved theconference agreement by large margins, he withdrew his objections, clearing theway for the President to sign the bill into law. In signing the bill, however, thePresident announced that he was designated the Secretary of Energy to act as thehead of the new agency. Most recently, however, Secretary Richardson haspromised that the Administration will nominate separate director of the NSSA. The authorization conference agreement also includes measures limitingmilitary-to-military contacts with China, requiring an annual report on Chinesemilitary capabilities, and imposing additional restrictions on technologytransfers.

	Legislation

		Budget Resolution

H.Con.Res. 68 (Kasich) 
A concurrent resolution establishing the congressional budget for the UnitedStates Government for fiscal year 2000 and setting forth appropriate budgetary levelsfor each of fiscal years 2001 through 2009. Ordered to be reported, March 18, 1999,and reported by the House Budget Committee ( H.Rept. 106-73 ), March 23, 1999. Approved by the House (221-208), March 25, 1999.
S.Con.Res. 20 (Domenici) 
An original concurrent resolution setting forth the congressional budget for theUnited States Government for fiscal years 2000 through 2009. Reported by theSenate Budget Committee ( S.Rept. 106-27 ), March 19, 1999. Approved by theSenate, with amendments, (55-44), March 25, 1999.

		Missile Defense

H.R. 4 (Weldon) 
A bill to declare it to be the policy of the United States to deploy a nationalmissile defense. Reported by the House Armed Services Committee, ( H.Rept.106-39 , Part I) and discharged from the House Committee on International Relations,March 2, 1999. Approved by the House (317-105), March 18, 1999. Senate took up H.R. 4 and substituted the text of S. 257 , May 18, 1999. House approved the bill as amended by the Senate (345-17), May 20, 1999. Signedinto law by the President ( P.L. 106-38 ), July 22, 1999.
S. 257 (Cochran) 
A bill entitled, "The Cochran-Inouye National Missile Defense Act of 1999,"stating that it is the policy of the United States to deploy a nationwide missile defenseas soon as technically feasible. Reported by the Senate Armed Services Committee( S.Rept. 106-4 ), February 13, 1999. Considered in the Senate, March 11, 15, 16, and17, 1999, and approved, with amendments (97-3), March 17, 1999. Senate took up H.R. 4 and substituted the text of S. 257 , May 18, 1999.

		Supplemental Appropriations

H.R. 1141 (Young, C.W. Bill) 
A bill making emergency supplemental appropriations for the fiscal year endingSeptember 30, 1999, and for other purposes. Reported by the Committee onAppropriations ( H.Rept. 106-64 ), March 17, 1999. Approved by the House. Senatecalled up the bill, substituted the text of S. 544 , and passed the amendedbill (by unanimous consent), March 25, 1999. Conference report filed ( H.Rept.106-143 ), May 14, 1999. House agreed to conference report (269-158), May 18,1999. Senate agreed to conference report (64-36), May 20, 1999. Signed into lawby the President ( P.L. 106-31 ), May 21, 1999.
S. 544 (Stevens) 
A bill making emergency supplemental appropriations and rescissions forrecovery from natural disasters, and foreign assistance, for the fiscal year endingSeptember 30, 1999, and for other purposes. Reported by the Committee onAppropriations ( S.Rept. 106-8 ), March 4, 1999. Considered in the Senate, March 17,18, 19, 22, and 23, 1999. Approved by the Senate, March 23, 1999. Senate took up H.R. 1141 , substituted the text of S. 544 , and passed H.R. 1411 , as amended, March 25, 1999.
H.R. 1664 (Young, C.W. Bill) 
A bill making emergency supplemental appropriations for military operations,refugee relief, and humanitarian assistance relating to the conflict in Kosovo, and formilitary operations in Southwest Asia for the fiscal year ending September 30, 1999,and for other purposes. Reported by the Appropriations Committee ( H.Rept.106-125 ), May 4, 1999. Passed by the House, with amendments (311-105), May 6,1999.

		Defense Authorization

H.R. 1401 (Spence) 
Authorizes appropriations for fiscal year 2000 for military activities of theDepartment of Defense, for military construction, for defense activities of theDepartment of Energy, and for other purposes. Ordered to be reported by the HouseArmed Services Committee ( H.Rept. 106-162 ), May 19, 1999. Rules CommitteeResolution, H. Res. 195, reported to the House but then withdrawn, May 27, 1999.
S. 1059 (Warner) 
Authorizes appropriations for fiscal year 2000 for military activities of theDepartment of Defense, for military construction, for defense activities of theDepartment of Energy, and for other purposes. Ordered to be reported by the SenateArmed Services Committee, May 13, 1999. Report filed ( S.Rept. 106-50 ), May 17,1999. Considered by the Senate, May 24, 25, 26, and 27, 1999. Approved by theSenate, with amendments (92-3), May 27, 1999. Conference agreement ordered tobe reported ( H.Rept. 106-301 ), August 5, 1999. House approved the conferencereport (375-45), September 15, 1999. Senate approved the conference report (93-5),September 22, 1999. Signed into law by the President ( P.L. 106-65 ), October 5,1999.

		Defense Appropriations

S. 1122 (Stevens) 
A bill making appropriations for the Department of Defense for the fiscal yearending September 30, 2000, and for other purposes. Ordered to be reported by theSenate Appropriations Committee ( S.Rept. 106-53 ), May 25, 1999. Considered bythe Senate, June 7-8, 1999. Approved by the Senate, as amended (93-4), June 8,1999.
H.R. 2561 (Lewis, Jerry) 
A bill making appropriations for the Department of Defense for the fiscal yearending September 30, 2000, and for other purposes. Ordered to be reported by theHouse Appropriations Committee ( H.Rept. 106-244 ), July 16, 1999. Considered bythe House, amended and passed as amended (379-45), July 22, 1999. Called up inthe Senate, amended with the text of S. 1122 , and passed by the Senateby unanimous consent, July 28, 1999. Conference report filed ( H.Rept. 106-371 ),October 8, 1999; passed by the House (372-55), October 13, 1999; and passed by theSenate (87-11), October 14, 1999. Signed into law by the President ( P.L. 106-79 ),October 25, 1999.

		Continuing Resolution

H.J.Res. 68 (Young, C.W. Bill) 
A joint resolution making continuing appropriations for the fiscal year 2000, andfor other purposes. Rules Committee Resolution H. Res. 305 reported to House andreferred to the House Committee on Appropriations, September 27, 1999. Considered under the provisions of rule H. Res. 305 and approved by the House(421-2), September 28, 1999. Received in the Senate, read twice, laid before Senate,and passed without amendment (98-1), September 28, 1999.

	For Additional Reading

		CRS Issue Briefs

CRS Issue Brief IB98018. China-U.S. Relations, by Kerry B. Dumbaugh. 
CRS Issue Brief IB10022. Defense Research: DOD's Research, Development, Test and Evaluation Program , by [author name scrubbed].
CRS Issue Brief IB97002. The Department of Energy's Tritium Production Program , by [author name scrubbed].
CRS Issue Brief IB92035. F/A-18E/F Aircraft Program , by Bert H. Cooper. 
CRS Issue Brief IB87111. F-22 Aircraft Program , by Bert H. Cooper. 
CRS Issue Brief IB98041. Kosovo and U.S. Policy, by [author name scrubbed] and [author name scrubbed].
CRS Issue Brief IB10027. Kosovo: U.S. and Allied Military Operations , by Steven Bowman.
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 [author name scrubbed].
CRS Issue Brief IB10034. National Missile Defense: Issues for Congress , by [author name scrubbed] and Amy Woolf.
CRS Issue Brief IB92115. Tactical Aircraft Modernization: Issues for Congress , by Bert H. Cooper.
CRS Issue Brief IB98028. Theater Missile Defense: Issues for Congress , by [author name scrubbed].
CRS Issue Brief IB86103. V-22 Osprey Tilt-rotor Aircraft , by Bert H. Cooper. 
CRS Issue Brief IB81050. War Powers Resolution: Presidential Compliance , by [author name scrubbed].

		CRS Reports

CRS Report RL30056(pdf) . Appropriations Supplemental for FY1999: Emergency Funding in P.L. 105-277 for Agriculture, Embassy Security, Y2K Problems,Defense, and Other Issues , by Larry Q. Nowels.
CRS Report 97-719. The Army Reserve Components: Strength and Force Structure Issues , by [author name scrubbed].
CRS Report RS20031(pdf) . China and U.S. Missile Defense Proposals: Reactions and Implications , by [author name scrubbed].
CRS Report 97-933. China: Major Legislation in the 105th Congress , by Kerry B. Dumbaugh.
CRS Report 98-802. China: Recent Policy Priorities -- Implications for U.S. Interests and Policy Goals , by [author name scrubbed].
CRS Report RL30220(pdf) . China's Technology Acquisitions: Cox Committee's Report -- Findings, Issues, and Recommendations , by [author name scrubbed].
CRS Report 95-1126. Congressional Use of Funding Cutoffs since 1970 Involving U.S. Military Forces Withdrawals from Overseas Deployments , by Richard F.Grimmett.
CRS Report 98-756 . Defense Authorization and Appropriations Bills: A Chronology, FY1970-1999 , by Gary K. Reynolds.
CRS Report RL30061. Defense Budget for FY2000: Data Summary , by Mary Tyszkiewicz and [author name scrubbed].
CRS Report RL30002(pdf) . A Defense Budget Primer , by Mary Tyszkiewicz and [author name scrubbed].
CRS Report 97-316(pdf) . Defense Research: A Primer on the Department of Defense's Research, Development, Test and Evaluation (RDT&E) Program , by John D.Moteff.
CRS Report 98-873. Department of Defense Anthrax Vaccination Program , by Steven R. Bowman.
CRS Report RS20203(pdf) . The Expanded Threat Reduction Initiative for the Former Soviet Union: Administration Proposals for FY2000 , by Amy Woolf and CurtTarnoff.
CRS Report RL30172. Instances of Use of United States Armed Forces Abroad, 1798-1999 , by [author name scrubbed].
CRS Report RS20125. Kosovo: Issues and Options for U.S. Policy , by Steven J. Woehrel.
CRS Report RS20161(pdf) . Kosovo Military Operations: Costs and Congressional Action on Funding , by [author name scrubbed].
CRS Report 95-409. Long-range Bomber Facts: Background Information , by Jason Woolwine and Dagnija Sterste-Perkins.
CRS Report RL30051 . Military Base Closures: Time for Another Round? , by [author name scrubbed].
CRS Report 98-823(pdf) . Military Contingency Funding for Bosnia, Southwest Asia, and Other Operations: Questions and Answers , by [author name scrubbed].
CRS Report RL30184(pdf) . Military Interventions by U.S. Forces from Vietnam to Bosnia: Background, Outcomes, and "Lessons Learned" for Kosovo , by NinaM. Serafino.
CRS Report 98-764. Military Pilot Retention: Issues and Options , by [author name scrubbed].
CRS Report 97-866(pdf) . Military Readiness: Background to Congressional Debate over Tiered Readiness , by [author name scrubbed] and [author name scrubbed].
CRS Report 98-41(pdf) . Military Readiness, Operations Tempo (Optempo) and Personnel Tempo (Perstempo): Are U.S. Forces Doing Too Much? , by [author name scrubbed].
CRS Report 98-765(pdf) . Military Youth Programs: ChalleNGe and STARBASE , by [author name scrubbed].
CRS Report 98-751(pdf) . Missile Defense: Theater High Altitude Area Defense (THAAD) Flight Testing , by [author name scrubbed].
CRS Report 98-955. National Guard & Reserve Funding, FY1990-1999 , by Mary Tyszkiewicz.
CRS Report RS20062. National Missile Defense and the ABM Treaty: Overview of Recent Events , by [author name scrubbed].
CRS Report 97-862. National Missile Defense: Status of the Debate , by [author name scrubbed].
CRS Report RS20052. National Missile Defense: The Alaska Option , by [author name scrubbed].
CRS Report RL30045. Navy Attack Submarine Programs: Background and Issues for Congress , by [author name scrubbed].
CRS Report 98-359. Navy CVN-77 and CVX Aircraft Carrier Programs: Background and Issues for Congress , by [author name scrubbed].
CRS Report 97-700. Navy DD-21 Land Attack Destroyer Program: Background Information and Issues for Congress , by [author name scrubbed]. 
CRS Report 97-981. Navy/DoD Projected Long-range (FY2004-FY2015) Ship Procurement Rate: Background and Issues for Congress , by [author name scrubbed].
CRS Report 97-1027 . Nunn-Lugar Cooperative Threat Reduction Programs: Issues for Congress , by [author name scrubbed].
CRS Report RL30231. Technology Transfer to China: An Overview of the Cox Committee Investigation Regarding Satellites, Computers, and DOE LaboratoryManagement , by Marcia Smith, Glenn McLoughlin, and William Boesman.
CRS Report 98-767(pdf) . U.S. Military Participation in Southwest Border Drug Control: Questions and Answers , by [author name scrubbed]. 

		Other Resources

Congressional Budget Office, An Analysis of the President's Budgetary Proposals for Fiscal Year 2000: A Preliminary Report , March 1999.
Congressional Budget Office, "Military Pay and Benefits," Statement of Christopher Jehn, Assistant Director National Security Division, before the Subcommitteeon Military Personnel, Committee on Armed Services, U.S. House ofRepresentatives, February 25, 1999.
Congressional Budget Office, "Modernizing Tactical Aircraft," Statement of Christopher Jehn Assistant Director National Security Division before theSubcommittee on Airland Forces, Committee on Armed Services, United StatesSenate, March 10, 1999.
Congressional Budget Office, Paying for Military Readiness and Upkeep: Trends in Operation and Maintenance Spending , by [author name scrubbed], September 1997.
Congressional Budget Office, Review of "The Report of the Department of Defense on Base Realignment and Closure ," July 1998.
U.S. General Accounting Office, DOD Competitive Sourcing: Questions About Goals, Pace, and Risks of Key Reform Initiative , Report No. NSIAD-99-46,Feb. 22, 1999.
U.S. General Accounting Office, F-22 Aircraft: Issues in Achieving Engineering and Manufacturing Development Goals , Report No. NSIAD-99-55, Mar. 15, 1999.
U.S. General Accounting Office, Future Years Defense Program: How Savings From Reform Initiatives Affect DOD's 1999-2003 Program , Report No.NSIAD-99-66, Feb. 25, 1999.
U.S. General Accounting Office, "Military Retirement: Proposed Changes Warrant Careful Analysis," testimony of Mark E. Gebicke, Director of MilitaryOperations and Capabilities Issues, before the Subcommittee on MilitaryPersonnel, House Committee on Armed Services, Report No. T-NSIAD-99-94,Feb. 25, 1999.

		Selected World Wide Web Sites

Information regarding the defense budget, defense programs, and congressional action on defense policy is available at the following web or gopher sites. 
Congressional Sites/OMB 
House Committee on Appropriations http://www.house.gov/appropriations 
Senate Committee on Appropriations 
http://www.senate.gov/~appropriations/enter.htm
House Armed Services Committee http://www.house.gov/hasc/ 
Senate Armed Services Committee http://www.senate.gov/~armed_services/ 
CRS FY2000 Appropriations Products http://www.loc.gov/crs/products/apppage.html 
Congressional Budget Office http://www.cbo.gov 
General Accounting Office http://www.gao.gov 
Office of Management and Budget http://www.whitehouse.gov/OMB/ 
FY2000 Federal Budget Publications http://www.access.gpo.gov/su_docs/budget/index.html 
Defense Department and Related Sites 
Defense LINK http://www.defenselink.mil/ 
Defense Issues (Indexed major speeches) http://www.defenselink.mil/speeches/ 
Under Secretary of Defense (Comptroller) FY2000 Budget Materials http://www.dtic.mil/comptroller/FY2000budget/ 
Army Link -- the U.S. Army Home Page http://www.army.mil/ 
Navy On-Line Home Page http://www.navy.mil/index-real.html 
Navy Budget Resources Directory http://navweb.secnav.navy.mil/budget 
Navy Public Affairs Library http://www.navy.mil/navpalib/.www/subject.html 
United States Marine Corps Home Page http://www.usmc.mil/ 
AirForceLINK http://www.af.mil/ 
Air Force Financial Management Home Page http://www.saffm.hq.af.mil/ 

	Appendix A: Summary Tables

 Table A1. Defense Appropriations, FY1996 toFY2000 (budget authority in billions of current year dollars) a
Sources: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2000 , Feb. 1999, and prior years; House AppropriationsCommittee for latest FY1999 estimate.
a. These figures represent current year dollars, exclude permanent budget authoritiesand contract authority, and reflect subsequent rescissions and transfers.
 Table A2: Congressional Action on Major Weapons Programs: FY2000 Authorization andAppropriations (amounts in millions of dollars)
* Notes : All amounts exclude initial spares and military construction. For Ballistic MissileDefense, the military construction requestis $1.4 million, which is often reported as part of the total elsewhere. For a full breakdown of Ballistic MissileDefense funding, see Table 7 above.
 Table A3: National Defense Budget Function byAppropriations Title Under Administration Projections (budgetauthority, current year dollars in billions)
Source : FY1999-2004 from Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2000 , Feb. 1999; FY2005 fromDepartment of Defense.
 Table A4: Congressional Action on Defense Authorization by Title (budget authority in millions of dollars)
Sources: H.Rept. 106-162 ; S.Rept. 106-50 ; H.Rept. 106-301 . 
*Notes: Request reflects the Congressional Budget Office reestimate of the Administration proposal.

Summary:
On October 6, conferees reached agreement on the FY2000 defense appropriations bill, H.R. 2561 , and the conference report was filed on October 8. The House approved theconference agreement by a vote of 372-55 on October 13, and the Senate approved it by a vote of87 to 11 on October 14, and the President signed the bill into law, P.L. 106-79 , on October 25. Thekey issue in the conference concerned funding for the F-22 fighter. The conference agreementprovides a total of $2.522 billion for the program, including $1.222 billion for R&D, $1 billion foracquisition of test aircraft, and $300 million in advance FY2001 appropriations for programtermination liability. The total amount is about $500 million below the request ($1.85 billion inprocurement and $1.2 billion in R&D). The conference agreement also prohibits award of an initiallow-rate production contract unless certain testing is successfully completed.
Aside from the F-22, major issues in the FY2000 defense debate included whether to approve a new round of military base closures, how much to provide for military pay and benefits, whetherto impose constraints on funding for U.S. military operations in Kosovo, how to fund theater missiledefense programs, and how to respond to security lapses at Department of Energy (DOE) weaponslabs. The conference agreement on the defense authorization bill does not approve a new round ofmilitary base closures. It provides somewhat larger increases in pay and benefits than theAdministration had requested, including a 4.8% pay raise in 2000 and increased retirement benefits,though it does not include a Senate-passed provision to expand Montgomery GI Bill benefits. Although Congress approved supplemental FY1999 appropriations for Kosovo operations, theAdministration's policy remains controversial. The House removed a provision from the defenseauthorization bill prohibiting funds to be used for future operations in Kosovo, but only after theAdministration agreed to seek supplemental appropriations to cover costs of a peacekeeping missionin FY2000. Earlier in the year, both houses approved bills calling for deployment of a nationwidemissile defense, but funding for theater missile defense programs was a matter of dispute. Theauthorization conference agreement establishes an independent organization within DOE to overseesecurity, and the President objected to these provisions even as he signed the bill into law.
Finally, the level of defense spending was resolved only at the very end of the appropriations process. The Senate-passed appropriations bill used about $4.9 billion of funds provided in theKosovo supplemental appropriations bill as an offset for defense increases and provided a net totalof $264.7 billion, $1.4 billion above the request. The House bill provided $268.7 billion in newbudget authority, $5.4 billion above the request and $4.0 billion above the Senate level. Theappropriations conference agreement provides $267.8 billion in FY2000, of which $7.2 billion isdesignated as emergency appropriations.
Key Policy Staff