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[House Report 111-491]
[From the U.S. Government Publishing Office]

111th Congress                                            Rept. 111-491
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 2

======================================================================

 
        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2011

                                _______
                                

  May 26, 2010.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Skelton, from the Committee on Armed Services, submitted the 
                               following

                          SUPPLEMENTAL REPORT

                        [To accompany H.R. 5136]

    This supplemental report shows the cost estimate of the 
Congressional Budget Office with respect to the bill (H.R. 
5136), as reported, which was not included in part 1 of the 
report submitted by the Committee on Armed Services on May 21, 
2010 (H. Rept. 111-491, pt. 1).

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 26, 2010.
Hon. Ike Skelton,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5136, the National 
Defense Authorization Act for Fiscal Year 2011.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kent 
Christensen.
            Sincerely,
                                         Robert A. Sunshine
                              (For Douglas W. Elmendorf, Director).
    Enclosure.

H.R. 5136--National Defense Authorization Act for Fiscal Year 2011

    Summary: H.R. 5136 would authorize appropriations totaling 
$726 billion for fiscal year 2011 for the military functions of 
the Department of Defense (DoD), for certain activities of the 
Department of Energy (DOE), and for other purposes. That total 
includes $159 billion for the cost of overseas contingency 
operations, primarily in Iraq and Afghanistan. The bill also 
would authorize an additional $34 billion for fiscal year 2010 
for costs associated with those operations and for DoD relief 
efforts associated with the recent earthquake in Haiti. In 
addition, H.R. 5136 would prescribe personnel strengths for 
each active-duty and selected reserve component of the U.S. 
armed forces. CBO estimates that appropriation of the 
authorized amounts would result in outlays of $749 billion over 
the 2010-2015 period.
    The bill also contains provisions that would increase costs 
of discretionary defense programs in future years. Those 
provisions would affect force structure, DoD compensation and 
benefits, the defense health program, and various other 
programs and activities. In total, such provisions would raise 
costs by an average of about $4.5 billion annually from 2012 to 
2015, assuming appropriation of the necessary amounts.
    H.R. 5136 contains several provisions that would affect 
direct spending. CBO estimates that, in total, those changes 
would decrease direct spending by $15 million over the 2011-
2015 period and by $2 million over the 2011-2020 period. In 
addition, CBO and the Joint Committee on Taxation (JCT) 
estimate that the bill would decrease revenues by $2 million 
over that 10-year period. On balance, enacting H.R. 5136 would 
have a negligible net impact on the deficit over those 10 
years.
    Because enacting the legislation would affect both direct 
spending and revenues, pay-as-you-go procedures apply.
    H.R. 5136 contains intergovernmental and private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
CBO estimates that the aggregate costs of the intergovernmental 
mandates would not exceed the threshold established in UMRA 
($70 million in 2010, adjusted annually for inflation). CBO 
cannot determine whether the costs to the private sector of 
complying with the mandates in the bill would exceed the annual 
threshold ($140 million in 2010, adjusted annually for 
inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5136 is summarized in Table 1. Almost 
all of the $760 billion that would be authorized by the bill is 
for activities within budget function 050 (national defense). 
Some authorizations, however, fall within other budget 
functions, including: $125 million for the Maritime 
Administration (function 400--transportation); $71 million for 
the Armed Forces Retirement Home (function 600--income 
security); and $24 million for the Naval Petroleum Reserves 
(function 270--energy).
    Basis of estimate: For this estimate, CBO assumes that H.R. 
5136 will be enacted near the start of fiscal year 2011 and 
that the authorized amounts will be appropriated, including 
supplemental appropriations for 2010.

Spending subject to appropriation

    The bill would specifically authorize appropriations 
totaling $726.1 billion for 2011 (see Table 2). Of that amount, 
$566.8 billion would be for authorizations of regular 
appropriations--for ``base budget'' costs not directly related 
to overseas contingency operations--as follows: $548.9 billion 
for DoD, $17.7 billion for DOE, and $0.2 billion for other 
programs.
    Compared to the current level of 2010 appropriations 
enacted for DoD's base budget, the $548.9 billion that would be 
authorized for 2011 represents an increase of $18.1 billion 
(3.4 percent). The categories of DoD funding that would receive 
the largest increases are operation and maintenance at $15.5 
billion (8.4 percent), and procurement at $7.9 billion (7.5 
percent). Authorizations for military construction and family 
housing would decline by $4.5 billion (19.5 percent)--largely 
due to lower amounts necessary for implementing the most recent 
round of base closures--while authorizations for research and 
development would be reduced by $3.6 billion (4.5 percent). 
Funding for military pay and other programs would increase by 
$2.8 billion (2.0 percent).

      TABLE 1.--BUDGETARY IMPACT OF H.R. 5136, THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2011
----------------------------------------------------------------------------------------------------------------
                                                       By fiscal year, in millions of dollars--
                                    ----------------------------------------------------------------------------
                                                                                                         2010-
                                        2010       2011       2012       2013       2014       2015       2015
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Authorization of Regular
 Appropriations for 2011, primarily
 for the Departments of Defense and
 Energy:
    Authorization Level............          0    566,804          0          0          0          0    566,804
    Estimated Outlays..............          0    366,802    123,760     45,193     15,995      6,122    557,872
Authorization of Appropriations for
 Overseas Contingency Operations
 and for Other Activities:
    Authorization Level\1\.........     33,661    159,335          0          0          0          0    192,997
    Estimated Outlays..............      7,632     91,864     60,638     22,283      6,307      1,968    190,691
    Total:
        Authorization Level........     33,661    726,140          0          0          0          0    759,801
        Estimated Outlays..........      7,632    458,666    184,398     67,476     22,302      8,090    748,563

                                          CHANGES IN DIRECT SPENDING\2\

Estimated Budget Authority.........          0        -71          3          7         12          4        -45
Estimated Outlays..................          0      3,973     -3,972        -11         -4         -1        -15

                                             CHANGES IN REVENUES\2\

Taxation of Certain Disability
 Retirees:
    Estimated Revenues.............          0          *          *          *          *          *          *

                                   NET INCREASE OR DECREASE (-) IN THE DEFICIT
                                  FROM CHANGES IN DIRECT SPENDING AND REVENUES

Estimated Deficit Impact\3\........          0      3,973     -3,972        -11         -4         -1       -15
----------------------------------------------------------------------------------------------------------------
\1\The $34 billion that would be authorized for 2010 would be for costs associated with overseas contingency
  operations, primarily in Iraq and Afghanistan, and with DoD activities in Haiti following the recent
  earthquake in that country. That amount is in addition to the $130 billion already appropriated for those
  operations in Public Law 111-118, the Department of Defense Appropriations Act, 2010.
\2\In addition to the changes in direct spending and revenues shown above, H.R. 5136 would have effects beyond
  2015. CBO and the Joint Committee on Taxation estimate that over the 2011-2020 period, H.R. 5136 would
  decrease direct spending by $2 million and would decrease revenues by $2 million (see Table 4).
\3\Negative numbers indicate a reduction in the deficit; positive numbers indicate the opposite.

 \4\Numbers may not sum up to totals because of rounding; * = between -$500,000 and zero.
Notes: The authorization levels in this table reflect amounts specifically authorized by the bill. The bill also
  implicitly authorizes some activities in 2012 and future years; those authorizations are not included above
  (but are shown in Table 3) because funding for those activities would be covered by specific authorizations in
  future years.

                                 TABLE 2.--SPECIFIED AUTHORIZATIONS IN H.R. 5136
----------------------------------------------------------------------------------------------------------------
                                                       By fiscal year, in millions of dollars--
                                    ----------------------------------------------------------------------------
                                                                                                         2010-
                                        2010       2011       2012       2013       2014       2015       2015
----------------------------------------------------------------------------------------------------------------
Authorization of Regular
 Appropriations:
    Department of Defense:
        Military Personnel:\1\
            Authorization Level....          0    138,541          0          0          0          0    138,541
            Estimated Outlays......          0    136,269      1,554        167         36          *    138,026
        Operation and Maintenance:
            Authorization Level....          0    200,027          0          0          0          0    200,027
            Estimated Outlays......          0    144,291     41,844      9,108      2,140        766    198,149
        Procurement:
            Authorization Level....          0    112,713          0          0          0          0    112,713
            Estimated Outlays......          0     28,060     40,454     24,843     10,387      4,174    107,918
        Research and Development:
            Authorization Level....          0     76,473          0          0          0          0     76,473
            Estimated Outlays......          0     40,677     28,091      4,983      1,377        350     75,478
        Military Construction and
         Family Housing:
            Authorization Level....          0     18,745          0          0          0          0     18,745
            Estimated Outlays......          0      3,060      6,883      5,082      2,101        842     17,968
        Revolving Funds:
            Authorization Level....          0      2,369          0          0          0          0      2,369
            Estimated Outlays......          0      1,901        346         66         38         18      2,369
        General Transfer Authority:
            Authorization Level....          0          0          0          0          0          0          0
            Estimated Outlays......          0        392        -84       -168        -84        -28         28
        Subtotal, Department of
         Defense:
            Authorization Level....          0    548,869          0          0          0          0    548,869
            Estimated Outlays......          0    354,650    119,088     44,081     15,995      6,122    539,936
        Atomic Energy Defense
         Activities:
            Authorization Level\2\.          0     11,716          0          0          0          0     11,716
            Estimated Outlays......          0     11,971      4,639      1,106          0          0     17,716
    Other Programs:
        Authorization Level\3\.....          0        220          0          0          0          0        220
        Estimated Outlays..........          0        181         33          6          0          0        220
        Subtotal, Authorization of
         Regular Appropriations:
            Authorization Level....          0    566,804          0          0          0          0    566,804
            Estimated Outlays......          0    366,802    123,760     45,193     15,995      6,122    557,872
Authorization of Appropriations for
 Overseas Contingency Operations
 and for Other Activities:
    Military Personnel:
        Authorization Level........      1,896     15,276          0          0          0          0     17,171
        Estimated Outlays..........      1,701     15,101        321          8          *          *     17,130
    Operation and Maintenance:
        Authorization Level........     25,149    114,972          0          0          0          0    140,121
        Estimated Outlays..........      5,173     68,989     46,365     13,722      3,420        994    138,663
    Procurement:
        Authorization Level........      4,843     26,249          0          0          0          0     31,092
        Estimated Outlays..........        483      5,948     12,404      7,923      2,687        904     30,349
    Research and Development:
        Authorization Level........        277      1,097          0          0          0          0      1,374
        Estimated Outlays..........         59        684        488         93         23          6      1,353
    Military Construction:
        Authorization Level........        521      1,257          0          0          0          0      1,778
        Estimated Outlays..........          2        316        668        476        182         74      1,718
    Working Capital Funds:
        Authorization Level........        975        485          0          0          0          0      1,460
        Estimated Outlays..........        214        704        418         96         21          7      1,460
    Special Transfer Authority:
        Authorization Level........          0          0          0          0          0          0          0
        Estimated Outlays..........          0        123        -26        -35        -26        -18         18
        Subtotal, Overseas
         Contingency Operations and
         for Other Activities:
            Authorization Level....     33,661    159,335          0          0          0          0    192,997
            Estimated Outlays......      7,632     91,864     60,638     22,283      6,307      1,968    190,691
Total Specified Authorizations:
    Authorization Level............     33,661    726,140          0          0          0          0    759,801
    Estimated Outlays..............      7,632    458,666    184,398     67,476     22,302      8,090   748,563
----------------------------------------------------------------------------------------------------------------
\1\The authorization of appropriation in section 421 for military personnel includes $10.9 billion for accrual
  payments for the TRICARE For Life program.
\2\This authorization is primarily for atomic energy activities within the Department of Energy.
\3\This authorization is for the Maritime Administration ($125 million), the Armed Forces Retirement Home ($71
  million), and the Naval Petroleum Reserves ($24 million). The authorized level for the Maritime Administration
  does not include the amounts specified in the bill for maritime loan guarantees or payments to shipping
  companies under the maritime security program because those programs are authorized for 2011 by existing
  statute. 

 Notes: This table summarizes the authorizations of appropriations explicitly stated in the bill--in specified
  amounts. Various provisions of the bill also would authorize activities and provide authorities that would
  result in additional costs in 2011 and in future years. Because the bill would not specifically authorize
  appropriations to cover those costs, they are not reflected in this table. Rather, Table 3 contains the
  estimated costs of a select number of those provisions.
Numbers may not sum to totals because of rounding; * = less than $500,000.

    For DOE, the $17.7 billion that would be authorized for 
2011 represents a $1.1 billion (6.6 percent) increase over the 
level appropriated for 2010.
    The $159.3 billion that would be authorized for 2011 
overseas contingency operations--primarily for military 
operations in Iraq and Afghanistan--represents a decrease of 
about $4.3 billion (3.3 percent) compared to the $130 billion 
appropriated thus far for 2010, plus the $33.7 billion in 
supplemental appropriations that would be authorized by the 
bill. Authorizations for most major categories of DoD funding 
would be reduced by between $0.5 billion and $1.5 billion; the 
exception is research and development, which would have 
increased authorizations totaling $0.5 billion.
    The bill also contains provisions that would increase the 
cost of defense discretionary programs in future years. Most of 
those provisions would affect end strength, military 
compensation, health benefits, and multiyear procurement 
authorities. The estimated costs of those provisions are shown 
in Table 3 and discussed below. The following discussion does 
not address the timing of outlays from those estimated 
authorizations. All such spending would be subject to 
appropriation of the estimated amounts.
    Force Structure. The bill would affect the force structure 
of the various military services by setting end-strength levels 
for 2011 and the minimum end-strength authorization in 
permanent law.
    Under title IV, the authorized end strengths in 2011 for 
active-duty personnel and personnel in the selected reserves 
would total 1,432,400 and 846,200, respectively. Of those 
selected reservists, about 78,900 would serve on active duty in 
support of the reserves. In total, active-duty end strength 
would increase by 400 and selected-reserve end strength would 
increase by 1,700 when compared with levels authorized under 
current law for 2011.
    Active-Duty End Strength. Section 401 would authorize 7,000 
additional active-duty personnel for the Army, 500 additional 
active-duty personnel for the Air Force, 100 fewer active-duty 
personnel for the Navy, and maintain the current authorized end 
strength for the Marine Corps, compared with authorized end-
strength levels for 2010. However, because the Army has 
temporary authority to exceed its 2010 authorized end-strength 
level by 30,000 personnel in the years 2011 and 2012, the 
increase under section 401 would not affect Army active-duty 
end-strength levels until 2013. CBO estimates that the net 
increase in active-duty personnel--an additional 400 in 2011 
and 2012 and an additional 7,400 in 2013, 2014, and 2015--would 
increase costs to DoD by $3.1 billion over the 2011-2015 
period. Those costs include the pay and benefits of the 
additional personnel, as well as costs for operation and 
maintenance.
    Reserve Component End Strengths. Sections 411 and 412 would 
authorize the end strengths for the reserve components, 
including those who serve on active duty in support of the 
reserves. Under this bill, the Air Force Reserve would 
experience an increase in end strength of 1,700, while the 
other reserve components would maintain the levels authorized 
in 2010. On net, the number of full-time reservists who serve 
on active-duty in support of the reserves would decline by 5 
compared with authorized end-strength levels for 2010. CBO 
estimates that the net result of implementing those provisions 
would be an increase in costs for salaries and other expenses 
for selected reservists of $284 million over the 2011-2015 
period.
    Reserve Technicians End Strengths. Section 413 would 
authorize the minimum end-strength levels for dual-status 
military technicians, who are federal civilian personnel 
required to maintain membership in a selected reserve component 
as a condition of their employment. On net, the bill would 
increase the required number of technicians by 384 relative to 
the levels currently authorized. CBO estimates the costs in 
civilian salaries and expenses that would result from those 
additional military technicians would total $186 million over 
the 2011-2015 period.
    Non-dual Status Technicians. Section 414 would increase the 
maximum end strength authorized for military technicians 
employed by the Army National Guard in a non-dual status by 920 
above the maximum level of 1,600 for 2010. Unlike dual-status 
technicians, non-dual status technicians are not members of the 
Selected Reserve. CBO estimates the increase in costs for 
civilian salaries and other expenses for these 920 additional 
technicians would be about $70 million in 2011 and $370 million 
over the 2011-2015 period. However, under an emergency hiring 
authority delegated by the Office of Personnel Management, the 
Army National Guard is currently employing about 920 such 
technicians over the maximum level for 2010. That emergency 
authority will expire at the end of fiscal year 2012. Thus, 
compared to the personnel level authorized under both the 
permanent authority and the expiring authority, CBO estimates 
that section 414 would authorize about 920 additional Army 
National Guard technicians to be employed in a non-dual status 
starting in 2013. CBO estimates the cost for those additional 
technicians would be $183 million over the 2013-2015 period.
    Coast Guard Reserve End Strengths. The bill also would 
authorize an end-strength level of 10,000 servicemembers in 
2011 for the Coast Guard Reserve. Because this authorization is 
the same as that under current law, CBO does not estimate any 
additional costs for this provision.
    Compensation and Benefits. H.R. 5136 contains several 
provisions that would affect compensation and benefits for 
uniformed personnel. The bill would specifically authorize 
regular appropriations of $138.5 billion for the costs of 
military pay and allowances in 2011. For related costs due to 
overseas contingency operations (primarily in Iraq and 
Afghanistan), the bill would authorize the appropriation of an 
additional $15.3 billion for 2011.
    Pay Raises. Section 601 would raise basic pay for all 
individuals in the uniformed services by 1.9 percent, effective 
January 1, 2011. CBO estimates the total cost of a 1.9 percent 
military pay raise would be $1.4 billion in 2011. Compared with 
current law (under which CBO estimates the across-the-board 
increase that will go into effect on January 1 will be 1.4 
percent), this section would increase the pay raise in 2011 by 
an additional 0.5 percent. CBO estimates that the incremental 
cost of this larger raise would be $377 million in 2011 and 
$2.5 billion over the 2011-2015 period.
    Expiring Bonuses and Allowances. Sections 611 through 616 
would extend for another year DoD's authority to enter 
agreements to pay certain bonuses and allowances to military 
personnel. Those bonuses and allowances are scheduled to expire 
on December 31, 2010. Some bonuses are paid in a lump sum, 
while others are paid in annual or monthly installments over 
the period of obligated service. Based on DoD's budget 
submission for fiscal year 2011, CBO estimates that extending 
those authorities for one year would cost $3.5 billion over the 
2011-2015 period.
    Family Separation Allowance. Section 604 would increase 
from $250 to $285 the monthly allowance paid to servicemembers 
with dependents who are separated from their families while 
assigned to certain types of duty. Based on information from 
DoD, CBO estimates that about 186,000 servicemembers would earn 
an average of 12 months of family separation pay in fiscal year 
2011, and that the provision would cost $288 million over the 
2011-2015 period. Because CBO expects deployments for overseas 
contingency operations to decline over time, our estimate of 
the annual cost of this $35 a month increase in the family 
separation allowance similarly declines over time.
    Hostile Fire and Imminent Danger Pays. Under current law, 
DoD has permanent authority to pay servicemembers up to $225 a 
month for undertaking certain types of hazardous duty. DoD also 
has temporary authority (through December 31, 2010) to pay up 
to $450 a month for service in a hostile fire area and up to 
$250 a month for other types of hazardous duty. Section 618 
would increase--to $260 a month--the maximum amount paid under 
the permanent authority and the maximum amount paid under the 
temporary authority for service in an imminent danger area. In 
addition, section 614 would extend the expiring authority by 
one year, to December 31, 2011.
    Based on information from DoD, CBO estimates that 
increasing these special pays would cost $188 million over the 
2011-2015 period. (Our estimate of the cost of extending the 
expiring authority is included in the section above on expiring 
bonuses and allowances.)
    Other Military Compensation Provisions. CBO estimates that 
certain other provisions in title VI--sections 602, 603, 632, 
and 671--would increase DoD military compensation costs by $87 
million over the 2011-2015 period.

            TABLE 3.--ESTIMATED AUTHORIZATIONS OF APPROPRIATIONS FOR SELECTED PROVISIONS IN H.R. 5136
----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2011     2012     2013     2014     2015   2011-2015
----------------------------------------------------------------------------------------------------------------
                                                 FORCE STRUCTURE 

Active-Duty End Strengths...............................       29       56      613    1,184    1,196     3,078
Reserve Component End Strengths.........................       32       62       62       63       65       284
Reserve Technicians End Strengths.......................       20       40       41       42       43       186
Non-Dual Status Technicians.............................        0        0       36       73       74       183 

                                         COMPENSATION AND BENEFITS (DOD) 

Pay Raises..............................................      377      509      516      525      539     2,466
Expiring Bonuses and Allowances.........................    1,834      836      319      353      163     3,505
Family Separation Allowance.............................       78       64       54       47       45       288
Hostile Fire and Imminent Danger Pay....................        3       57       54       39       35       188
Other Military Compensation Provisions..................       16       18       18       18       17        87 

                                             DEFENSE HEALTH PROGRAM 

TRICARE for Dependents..................................       10      100      240      310      330       990
TRICARE for Early Reserve Retirees......................       13       19       25       31       37       125
Hearing Exams...........................................        7       10        7        5        4        33
Neurocognitive Assessments..............................        5        5        5        5        5        25
Prohibition on Fee Increases............................       12        0        0        0        0        12 

                                        SEXUAL ASSAULT RESPONSE PROGRAMS 

Response Coordinators and Victim Advocates..............       24       46       70       96       99       335
Prevention Training.....................................       20       19       17       15       15        86
Forensic Examiners......................................        6        9       11       11       11        48
Other Title XVI Provisions..............................        2        2        2        2        2        10 

                                                OTHER PROVISIONS 

Multiyear Procurement...................................    3,423    2,900    2,399      273       28     9,023
IMPCA Programs..........................................        0        0        0      558      624     1,182
Naval Battle Force Fleet................................      123      144      217      311      352     1,147
Assistance to Guam......................................      198      200      202      204      206     1,010
Insulation Retrofitting.................................      160        0        0        0        0       160
Euro-NATO Joint Jet Pilot Training Program..............        5        5        5        5        5        25
Decontamination of Flamenco Beach.......................       15        0        0        0        0       15
----------------------------------------------------------------------------------------------------------------
Notes: For every item in this table, the 2011 levels are assumed to be included in amounts specifically
  authorized to be appropriated by the bill (and reflected in Tables 1 and 2). Amounts shown in this table for
  2012 through 2015 are not included in Tables 1 or 2 because authorizations for those amounts would be covered
  by specific authorizations in future years.
Figures shown here may not add up to numbers in the text because of rounding; IMPCA = International Materials
  Protection, Control, and Accounting; NATO = North Atlantic Treaty Organization.

    Defense Health Program. Titles VI and VII contain several 
provisions that would affect the health care benefits provided 
by DoD.
    TRICARE for Dependents. Section 702 would expand TRICARE 
eligibility to provide coverage, up to age 26, to the 
dependents of military personnel. Under current law, dependents 
lose their TRICARE eligibility when they reach the age of 21 
(or 23 if they are enrolled in college). Based on data from 
DoD, CBO estimates there are about 500,000 children of current 
and retired members of the armed forces who are between the 
ages of 21 and 26 and who are no longer eligible for TRICARE. 
However, because section 702 would require that eligible 
dependents have no access to employer sponsored health coverage 
as a condition of participation in the new extended benefit, 
CBO estimates that only about 175,000 of those dependents would 
use the coverage. CBO based this estimate on Center for Disease 
Control statistics for employer-sponsored insurance coverage 
among young adults, as well as current TRICARE participation 
rates.
    Section 702 would require the Secretary of Defense to 
charge a premium in an amount not to exceed the full cost of 
providing the new benefit. Because it is not clear to what 
extent the Secretary would choose to subsidize the premiums, 
the cost of implementing section 702 is uncertain. The 
Secretary could choose to set the premium equal to the cost of 
providing the care, in which case the cost of this section 
would be minimal. Information from DoD indicates that the 
average annual cost of providing health care to people in this 
age group is about $2,000. CBO assumes the Secretary would 
subsidize about 75 percent of this amount, or about $1,500, 
based on an analysis of subsidy rates in the private sector and 
other government programs. Including adjustments for inflation, 
this would require appropriations for DoD and the other 
Uniformed Services of over $300 million annually when fully 
implemented.
    The amount of appropriations required would be lower in the 
first few years because of the time needed to establish rules 
and procedures, and because it would take time to notify and 
enroll eligible beneficiaries. CBO expects enrollment in the 
new extended benefit program would reach a steady state level 
by 2014, which is when people are required to have minimal 
health coverage under the Patient Protection and Affordable 
Care Act (Public Law 111-148). In total, CBO estimates section 
702 would require appropriations of $990 million over the 2011-
2015 period.
    TRICARE for Early Reserve Retirees. Section 643 would allow 
all former servicemembers who are receiving a retirement 
annuity for non-regular (reserve) service to become eligible 
for the TRICARE health benefit. Currently, those members are 
not eligible for TRICARE until they are at least 60 years of 
age. Under the early reserve retirement provisions of Public 
Law 110-181, CBO estimates that the number of former reserve 
members under the age of 60 receiving an annuity will grow from 
about 1,000 in 2011 to over 2,500 by 2015.\1\ CBO estimates 
that about 75 percent of those former members would use TRICARE 
if it were available to them, based on participation rates from 
the eligible retiree population. CBO estimates that the average 
amount needed to provide health benefits to former members in 
this age group would be about $16,500 per household in fiscal 
year 2011 and that amount would grow with projected inflation 
thereafter. In total, CBO estimates that section 643 would 
require appropriations of $125 million over the 2011-2015 
period. In addition, this section would increase direct 
spending which is discussed in the section on ``Direct Spending 
and Revenues'' below.
---------------------------------------------------------------------------
    \1\Reserve component members with over 20 years of creditable 
service are generally prohibited from receiving their retirement 
annuities until age 60. Section 647 of the National Defense 
Authorization Act for Fiscal Year 2008 (Public Law 110-181) allows 
reserve component members to start receiving their annuities 90 days 
prior to age 60 for each 90 day increment they serve on active duty in 
support of a contingency operation.
---------------------------------------------------------------------------
    Hearing Exams. Section 704 would require DoD to administer 
hearing exams to all members before they deploy overseas and 
again when they return. Based on current personnel statistics 
from DoD, CBO estimates this requirement would result in about 
300,000 hearing exams per year. Based on current TRICARE 
reimbursement rates, CBO estimates each exam would cost about 
$40. Total amounts would be lower in the first year because of 
the time needed to establish regulations and would decrease 
over time, assuming the number of deployments begins to 
subside. In total, CBO estimates that this provision would 
require appropriations of $33 million over the 2011-2015 
period.
    Neurocognitive Assessments. Section 722 would require DoD 
to administer neurocognitive testing--examinations that measure 
mental speed and acuity--to all members returning from 
deployment. Currently, such testing is administered prior to 
deployment and then again upon return only in selected 
circumstances. Based on information about the cost of 
administering computer-based neurocognitive assessments, CBO 
estimates expanding such testing would require appropriations 
of about $5 million per year.
    Prohibition on Fee Increases. Sections 701 and 705 would 
prohibit DoD from increasing any fees or copayments under the 
TRICARE plans during fiscal year 2011. Because Administration 
officials have stated their intent not to increase any fees or 
copayments during 2011, CBO generally does not ascribe any 
costs to those sections. The exception is a provision in 
section 701, which would prohibit DoD from increasing the daily 
inpatient deductible under the TRICARE Standard health 
option.\2\ Current law sets the daily maximum inpatient 
deductible under TRICARE Standard at $535. However, as of 
October 1, 2010, the law requires DoD to increase the 
deductible to an amount equal to 25 percent of the cost of the 
provided care, which CBO estimates will be about $675 per day, 
on average. Section 701 would extend the $535 deductible 
through 2011.
---------------------------------------------------------------------------
    \2\The military's health care program, TRICARE, comprises nine 
health plans that cover uniformed service members, retirees, and their 
dependents in the United States and abroad. Three of the most commonly 
used plans are TRICARE Prime--a managed care option, TRICARE Standard--
a traditional fee-for-service option, and TRICARE-for-Life--which 
provides wrap-around coverage for Medicare-eligible beneficiaries.
---------------------------------------------------------------------------
    Based on information from DoD, CBO estimates that 
beneficiaries who utilize the TRICARE Standard plan accumulate 
about 325,000 inpatient days per year. However, after factoring 
in the use of other health insurance and the fact that out-of-
pocket costs under TRICARE Standard are limited to $3,000 per 
year, we estimate that only about 80,000 of those days would be 
affected by the higher deductible. Therefore, CBO estimates 
that capping the daily inpatient deductible under TRICARE 
Standard at $535 through 2011 would require appropriations of 
$12 million for that year.
    Sexual Assault Prevention and Response Program. Title XVI 
would modify and expand DoD programs designed to prevent and 
respond to sexual assault.
    Response Coordinators and Victim Advocates. Section 1642 
would require DoD to employ at least one full-time Sexual 
Assault Response Coordinator (SARC) and one full-time Sexual 
Assault Victim Advocate for each brigade or brigade equivalent 
of the armed forces. The bill also would require that such 
personnel must either be members of the armed forces or DoD 
civilian employees. Information from DoD indicates that the 
services currently use different combinations of military 
personnel, civilians, and contractors, employed both full- and 
part-time, to fill such positions.
    Assuming an average brigade size of 4,000 personnel and 
including the reserve forces of the military services, CBO 
estimates that implementing this provision would require 
approximately 900 additional civilian personnel. Approximately 
half of those personnel would be victim advocates, while the 
other half would include approximately 250 additional SARCs and 
200 support personnel. Assuming the additional personnel would 
be hired over the 2011-2013 period and the provision is fully 
implemented by the beginning of 2014, CBO estimates that the 
provision would require appropriations of $335 million over the 
2011-2015 period. Of that amount, approximately $10 million 
would be used to train and certify the additional personnel 
while the remainder would cover salaries and benefits.
    Prevention Training. Section 1619 would require that within 
one year of enactment, secretaries of the military departments 
develop curricula to provide training on sexual assault 
prevention and response to members of the Armed Forces. Based 
on information from DoD about the cost to develop previous 
curricula, CBO estimates that developing new training materials 
would cost approximately $15 million over the 2011-2013 period. 
In addition, the bill also envisions an expanded emphasis on 
training to prevent sexual assault through the education system 
for military professionals, and would require that the peer 
education and specialized first-responder and leadership 
training be included in DoD educational programs. While we 
cannot predict precisely how those requirements would be 
implemented by DoD, CBO based its estimates on similar 
programs, such as the ``Bystander Intervention'' training 
modules that have been conducted by the Navy and the Air Force. 
CBO expects that DoD would use such training modules to provide 
the additional training required by the bill and estimates that 
implementing this provision would require appropriations of $71 
million over the 2011-2015 period.
    In total, CBO estimates that implementing section 1619 
would require appropriations of $86 million over the 2011-2015 
period.
    Forensic Examiners. Section 1620 would require DoD to 
employ forensic examiners to conduct sexual assault forensic 
exams (SAFE) within two years after enactment of the bill. CBO 
anticipates that implementing this provision would require 
hiring additional personnel to conduct and oversee SAFE 
programs at DoD hospitals.
    Based on discussions with the Indian Health Service, which 
has recently studied the implications of implementing SAFE 
programs, CBO anticipates that establishing this capability 
within DoD would require hiring a certified Sexual Assault 
Nurse Examiner at each of DoD's approximately 60 hospitals. In 
addition, CBO anticipates that providing forensic exams at all 
of DoD's hospital and medical clinics would require training 
and certifying approximately 600 nurses. Assuming this 
provision is fully implemented by the beginning of fiscal year 
2013, CBO estimates that implementing the provision would 
require appropriations of $48 million over the 2011-2015 
period.
    Other Provisions in Title XVI. CBO estimates that other 
provisions in title XVI, including the establishment of a 
universal DoD Sexual Assault Hotline (Section 1616) and a 
Sexual Assault Advisory Board (Section 1621) would require 
appropriations of $2 million annually over the 2011-2015 
period.
    Other Provisions. Various other provisions would increase 
the cost of discretionary programs over the 2011-2015 period.
    Multiyear Procurement. Section 122 would authorize the 
Department of the Navy to enter into a multiyear procurement 
contract for F/A-18 E/F fighter/attack aircraft and EA-18G 
electronic attack aircraft. Multiyear procurement is a special 
contracting method authorized in current law (title 10, United 
States Code, section 2306b) that permits the government to 
enter into contracts covering acquisitions for more than one 
year but not more than five years, even though the total funds 
required for every year are not appropriated at the time the 
contracts are awarded. As part of such a contract, the 
government commits to purchase all items specified at the time 
the contract is signed, including those to be produced and paid 
for in subsequent years. Because multiyear procurement allows a 
contractor to plan for more efficient production, such a 
contract can reduce the cost of an acquisition compared with 
the cost of buying the items through a series of annual 
procurement contracts.
    The President's budget includes a request for $2.9 billion 
to purchase 22 F/A-18 E/Fs and 12 EA-18Gs in 2011. In addition, 
the Navy plans to purchase another 50 of those aircraft over 
the 2012-2013 period at an additional cost of $5.6 billion. DoD 
has not requested multiyear procurement authority for those 
aircraft.
    H.R. 5136 would authorize additional appropriations of $500 
million for procurement of F/A-18 aircraft over the level 
requested for 2011; section 122 would direct the Navy to use 
those funds and the savings from the multiyear contract to 
purchase eight additional F-18E/F aircraft in 2011. It would 
further direct the Navy to use the savings in subsequent years 
to purchase additional aircraft, rather than reduce the amount 
budgeted for procurement. CBO estimates that those savings 
would be sufficient to purchase three more aircraft than the 
Navy plans after 2011. If the department enters a multiyear 
contract to purchase 42 aircraft in 2011 and another 53 over 
the 2012-2013 period, required appropriations would total $9 
billion.
    Such contracts frequently include provisions that require 
DoD to pay for unrecovered fixed costs in the event that the 
contract is canceled before completion. Because the Navy 
procured F/A-18 E/F aircraft under two previous multiyear 
contracts, CBO estimates that new cancellation liabilities for 
a third such contract would likely be small.
    International Materials Protection, Control, and Accounting 
(IMPCA) Programs. Section 3111 would extend by five years the 
authority to provide support to Russia and other countries to 
secure and eliminate nuclear weapons and to install detection 
equipment at international crossing points. Under current law, 
that authority expires in fiscal year 2013. These programs are 
managed by the National Nuclear Security Administration (NNSA). 
Based on information from the Department of Energy, CBO 
estimates that the level of appropriations to extend this 
authority would be about $1.2 billion in 2014 and 2015 with 
most of that amount going towards installing nuclear detection 
equipment.
    Naval Battle Force Fleet. Two provisions in the bill would 
increase the number of ships in the battle force fleet by 
delaying the retirement of certain ships. Section 1024 would 
require the Navy to retain the U.S.S Nassau (LHA-4) and the 
U.S.S Peleliu (LHA-5) in a commissioned and operational status 
until the delivery to the Navy of their replacements (the LHA-6 
and LHA-7, respectively). The Navy plans to retire the LHA-4 in 
2011 and the LHA-5 in 2013, while the new deliveries would 
occur in 2013 and 2016, respectively. Thus, the provision would 
have the effect of keeping one additional LHA-class amphibious 
assault ship in the operational fleet through 2016 as compared 
to current plans.
    Section 1023 would require the Navy to limit the total 
number of ship retirements in a year to no more than two-thirds 
of the number of vessels planned for commissioning into the 
battle fleet in that year. This restriction would continue 
until the number of vessels in the battle force fleet reaches 
313 vessels. Based on an analysis of the Navy's battle force 
plans, and discussions with the Navy, CBO expects the Navy 
would implement this requirement by delaying the retirement of 
about 15 Oliver Hazard Perry class frigates.
    CBO estimates that the appropriations required for 
operating the additional frigates and amphibious ships at 
normal tempo (nearly 3,000 steaming hours a year for both types 
of ships) would be $123 million in 2011 and total about $1.1 
billion over the 2011-2015 period. That amount includes the 
costs for sea pay, fuel, and maintenance. (Because this 
estimate assumes an endstrength level specified in section 401 
of Title IV, CBO does not include any costs for additional 
military personnel.) A significantly lower appropriation would 
be required should the Navy decide to operate the ships in a 
``not underway'' operating tempo (about 900 steaming hours per 
ship, on average).
    Assistance to Guam. The Government of Guam must improve its 
municipal infrastructure to prepare for the influx to the 
island of approximately 40,000 military personnel, family 
members, and civilian workers that will result from the 
relocation of U.S. forces in the Pacific. Section 2822 would 
allow DoD to provide financial assistance to Guam for that 
purpose. DoD plans to spend about $12 billion to construct new 
facilities for its personnel, but the local government will 
also need to expand utilities, roads, port facilities, and 
other infrastructure to serve the needs of a population that is 
expected to increase by 25 percent.
    Section 2822 would authorize DoD to use existing federal 
programs to transfer defense appropriations to Guam through the 
end of fiscal year 2017, to help it meet the costs of increased 
municipal services and facilities. Assistance for constructing 
facilities would be capped at $500 million, but assistance for 
municipal services would not be similarly limited. Guam 
received about $300 million in funding in 2009 from 10 federal 
agencies other than the Department of Defense for a variety of 
services. If per capita funding remained constant, the expected 
growth in population of about 40,000 people would increase 
annual assistance through those programs by almost $100 
million. In total, under section 2822, assistance to Guam for 
construction and services would increase by $1 billion over the 
2011-2015 period, CBO estimates.
    Insulation Retrofitting. Section 2833 would require DoD to 
inspect all of its facilities to determine the costs and 
savings that would accrue from retrofitting those facilities 
with improved insulation. It would also require the department 
to provide the Congress with an assessment of the number of DoD 
facilities that could be retrofitted at a cost equal to or less 
than half the estimated savings from those improvements and the 
total amount of cost and energy that could be saved from making 
the improvements. DoD is undertaking an expansive energy audit 
of many of its facilities in compliance with the Energy 
Independence and Security Act of 2007 (Public Law 110-140). The 
department estimates that those audits will cover about half of 
the square footage it owns. Section 2833 would compel DoD to 
analyze the rest of its facilities. Hiring engineering firms 
and energy savings contractors to conduct such audits would 
require appropriations of about $160 million in 2011, CBO 
estimates.
    Euro-NATO Joint Jet Pilot Training Program. Section 1204 
would require the Secretary of the Air Force to establish and 
maintain a demonstration scholarship program that would fund 
undergraduate pilot training for certain foreign personnel at 
the Euro-NATO Joint Jet Pilot Training (ENJJPT) Program based 
at Sheppard Air Force Base. According to the Air Force, the 
ENJJPT Program currently enrolls 206 students a year but has 
the capacity to enroll as many as 256 students a year.
    Based on existing cost-sharing arrangements with 
participating countries, each country's contribution to the 
total costs of the program (over $600 million in 2010) are 
proportional to the number of students it has enrolled (the 
U.S. share has been about 72 percent in recent years). Under 
this provision, we expect that the U.S. share would go up and 
that the Air Force would pay for an additional five students 
each year at an annual level of about $1 million per student. 
On that basis, CBO expects providing those scholarships would 
require appropriations of about $25 million over the 2011-2015 
period.
    Decontamination of Flamenco Beach. The Military 
Construction Authorization Act, 1974, prohibits the use of the 
former naval bombardment range on Culebra, Puerto Rico, for any 
purpose that would require decontamination and removal of 
expended ordnance. Section 2814 would waive that prohibition to 
allow the Army Corps of Engineers to clean up a part of that 
bombardment area known as Flamenco Beach and study the extent 
of and the cost to remove unexploded ordnance from the 
remainder of the bombardment area. Based on information from 
the Army Corps of Engineers, CBO estimates that the authorized 
cleanup and the study of the remaining area would require the 
appropriations of $15 million over the 2011-2015 period.

Direct spending and revenues

    Several provisions in H.R. 5136 would affect direct 
spending. CBO estimates that, on net, those provisions would 
decrease direct spending by $2 million over the 2011-2020 
period. In addition, one provision (which would affect 
retirement pay for certain retirees with over 30 years of 
service) would lower revenues by $2 million over the 2011-2020 
period. The net impact on the deficit over that period would be 
insignificant (see Table 4).
    Pentagon Reservation Maintenance Revolving Fund (PRMRF). 
Section 1404 would transfer $77 million of unobligated balances 
from the PRMRF to the Treasury, to be deposited as 
miscellaneous receipts. This transfer would lower spending 
estimated to occur under current law because DoD would be 
unable to obligate and expend those amounts without a 
subsequent appropriation.
    The PRMRF finances the maintenance, repair, and renovation 
of the Pentagon and certain other facilities in the national 
capital area using appropriations originally provided to 
various operation and maintenance accounts (and later 
transferred into the fund). The unobligated balances in the 
fund have grown in recent years--from $35 million at the end of 
2006 to $119 million at the end of 2009. By the end of 2011, 
the administration expects those balances to total $120 
million. As a result, CBO assumes a portion of those balances--
roughly 20 percent, or $25 million--are excess to current 
requirements and will not be spent during the 2011-2020 period 
under current law. As a result, CBO expects that section 1404 
would have no effect on outlays in 2011, but would lower 
spending by $52 million over the 2012-2020 period.
    Minimum Service for Retirement as an Officer. Officers who 
began their military career as enlisted servicemembers must 
complete at least 10 years of commissioned service in order to 
retire as an officer. Those with less than 10 years of 
commissioned service receive retirement annuities based on the 
highest enlisted grade the member achieved. Section 506 would 
give the service secretaries the authority to retire members as 
officers with a minimum of eight years of commissioned service. 
This authority would apply to fiscal years 2011 through 2013 
only.
    Based on information from DoD, CBO estimates that about 200 
officers per year would be allowed to retire under this 
authority over the 2011-2013 period. Because those officers 
would retire earlier than they otherwise would have, section 
506 would initially increase military retirement costs. Savings 
would accrue in later years because those retiring early would 
accumulate fewer years of service and would therefore accept 
smaller annuities. On net, CBO estimates that section 506 would 
increase costs for military retirement by $25 million over the 
2011-2020 period.
    National Defense Stockpile Sales. Section 1412 would 
increase by $20 million the target contained in the National 
Defense Authorization Act for Fiscal Year 2000 (Public Law 106-
65, as most recently amended by Public Law 110-181, the 
National Defense Authorization Act for Fiscal Year 2008) for 
continual sales of chromium from the National Defense Stockpile 
through 2013. That change would increase receipts by $20 
million over the 2012-2013 period. Such receipts are a credit 
against direct spending.

                                                             TABLE 4.--ESTIMATED IMPACT OF H.R. 5136 ON DIRECT SPENDING AND REVENUES
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           By fiscal year, in millions of dollars--
                                                             -----------------------------------------------------------------------------------------------------------------------------------
                                                                 2011       2012       2013       2014       2015       2016       2017       2018       2019       2020    2011-2015  2011-2020
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   CHANGES IN DIRECT SPENDING 

Pentagon Reservation Maintenance Revolving Fund:
    Budget Authority........................................        -77          0          0          0          0          0          0          0          0          0        -77        -77
    Estimated Outlays.......................................          0         -8        -18        -16         -5         -3         -1         -1          0          0        -47        -52
Minimum Service for Retirement as an Officer:
    Estimated Budget Authority..............................          4         11         13          8          *         -2         -2         -2         -2         -3         36         25
    Estimated Outlays.......................................          4         11         13          8          *         -2         -2         -2         -2         -3         36         25
National Defense Stockpile Sales:
    Estimated Budget Authority..............................          0        -10        -10          0          0          0          0          0          0          0        -20        -20
    Estimated Outlays.......................................          0        -10        -10          0          0          0          0          0          0          0        -20        -20
Reserve Early Retirement Credit for Medical Holdovers:
    Estimated Budget Authority..............................          *          1          1          1          1          1          1          2          2          2          4         12
    Estimated Outlays.......................................          *          1          1          1          1          1          1          2          2          2          4         12
Retired Pay for Reserve Members Wounded in Action:
    Estimated Budget Authority..............................          *          *          1          1          1          1          1          1          2          2          4         11
    Estimated Outlays.......................................          *          *          1          1          1          1          1          1          2          2          4         11
TRICARE for Early Reserve Retirees:
    Estimated Budget Authority..............................          *          *          1          1          1          1          1          1          2          2          3         10
    Estimated Outlays.......................................          *          *          1          1          1          1          1          1          2          2          3         10
Authority to Spend Landing Fees:
    Estimated Budget Authority..............................          1          1          1          1          1          1          1          1          1          1          5         10
    Estimated Outlays.......................................          1          1          1          1          1          1          1          1          1          1          5         10
Retirement Age of Certain Medical Professionals:
    Estimated Budget Authority..............................          *          *         -1         -1         -1         -1          *          *          *          *         -3         -4
    Estimated Outlays.......................................          *          *         -1         -1         -1         -1          *          *          *          *         -3         -4
Special Survivor Allowance:
    Estimated Budget Authority..............................          1          *          *          *          1          1          1          0          0          0          2          4
    Estimated Outlays.......................................          1          *          *          *          1          1          1          *          0          0          2          4
Multiplier Cap for Disability Retirees With Over 30 Years of
 Service:
    Estimated Budget Authority..............................          *          *          *          *          *          *          *          *          *          *          1          2
    Estimated Outlays.......................................          *          *          *          *          *          *          *          *          *          *          1          2
Payment Date for Retired Pay:
    Estimated Budget Authority..............................          0          0          0          0          0          0          0          0          0          0          0          0
    Estimated Outlays.......................................      3,967     -3,967          0          0          0      4,370        142     -4,512          0          0          0          0
    Total Changes in Direct Spending:
        Estimated Budget Authority..........................        -71          3          7         12          4          2          3          3          5          5        -45        -27
        Estimated Outlays...................................      3,973     -3,972        -11         -4         -1      4,369        144     -4,510          5          5        -15         -2 

                                                                                       CHANGES IN REVENUES 

Multiplier Cap for Disability Retirees With Over 30 Years of
 Service:
    Estimated Revenues......................................          *          *          *          *          *          *          *          *          *          *          *         -2 

                                                                           NET INCREASE OR DECREASE (-) IN THE DEFICIT
                                                                          FROM CHANGES IN DIRECT SPENDING AND REVENUES 

Estimated Deficit Impact\1\.................................      3,973     -3,972        -11         -4         -1      4,369        144     -4,510          6          6        -15         0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\Negative numbers indicate a reduction in the deficit; positive numbers indicate the opposite.
Notes: Numbers may not add up to totals because of rounding.
      * = between -$500,000 and $500,000.

    Reserve Early Retirement Credit for Medical Holdovers. 
Under section 644, time spent by reserve component members in a 
medical holdover status would count towards earning an early--
or earlier--retirement annuity. Reserve members with at least 
20 years of service are eligible to receive retirement 
annuities at age 60. However, they may receive the annuities 90 
days earlier for each 90 days they serve on active duty in a 
contingency operation. Based on an analysis of the number and 
ages of personnel currently in a holdover status, CBO estimates 
this section would increase direct spending for military 
retirement by $12 million over the 2011-2020 period.
    Retired Pay for Reserve Members Wounded in Action. Section 
642 would allow reserve members who retire from the military 
because of wounds received in combat to have their retirement 
annuities calculated as though their years of service had all 
been spent on full-time active duty. (Under current law, such 
annuities are based on a combination of active and part-time 
reserve duty.) Based on data from DoD, CBO estimates that such 
a change would double the retirement annuities paid to 
qualifying individuals, from an average of about $7,000 per 
year to about $14,000 per year. Based on recent casualty 
statistics, CBO estimates that about 90 new disability retirees 
would benefit each year from the change in the annuity 
calculation and that direct spending for military retirements 
would increase by about $11 million over the 2011-2020 period.
    TRICARE for Early Reserve Retirees. Section 643 would allow 
all former members who are receiving a retirement annuity for 
non-regular (reserve) service to become eligible for the 
TRICARE health benefit. Currently, those members do not become 
eligible for TRICARE until they are at least 60 years of age. 
Under the early reserve retirement provisions recently enacted 
in Public Law 110-181, CBO estimates that the number of former 
reserve members receiving an annuity before reaching age 60 
will grow from about 1,000 in 2011 to more than 5,000 by 2020. 
Most of the funding associated with health care for those 
individuals would be subject to appropriation (see discussion 
in the ``Spending Subject to Appropriation'' section above).
    However, based on an analysis of the current military 
retiree population, CBO estimates that about four percent of 
those individuals would be eligible for Medicare. When military 
annuitants become eligible for Medicare, they also become 
eligible for the TRICARE-for-Life (TFL) health benefit, which 
acts as a Medicare supplement. Benefits under TFL are paid from 
the Medicare-Eligible Retiree Health Care Fund (MERHCF), a 
mandatory account. CBO estimates the average TFL benefit will 
be about $4,500 per beneficiary in 2011, and that it will grow 
to almost $8,000 by 2020. In total, CBO estimates section 643 
would increase spending from the MERHCF by $10 million over the 
2011-2020 period.
    Authority to Spend Landing Fees. Section 341 would allow 
the military departments to retain and spend fees collected 
from civilian aviators who utilize military airfields. Under 
temporary authority that expires after fiscal year 2010, DoD 
can use those fees to defray the costs of operating and 
maintaining the airfields where the fees are collected. 
Thereafter, any such amounts will be deposited in the Treasury 
as miscellaneous receipts, and will be unavailable for 
obligation without a subsequent appropriation. Section 345 
would provide permanent authority to retain and spend those 
fees, leading to an increase in direct spending. Information 
from the Department of Defense indicates that those receipts 
total almost $1 million dollars annually. Thus, section 345 
would increase direct spending by $10 million over the 2011-
2020 period, CBO estimates.
    Retirement Age of Certain Medical Professionals. Section 
501 would allow certain medical professionals (to be designated 
by the Secretary of Defense) to remain in an active status 
until age 68. Currently, they must retire at age 62. CBO 
estimates that this change would decrease spending for military 
retirement because some members would begin receiving 
retirement annuities at a later date than they otherwise would 
have. Based on information from DoD, we estimate that, under 
section 501, about five officers each year would delay their 
retirements by an average of two years and would forgo about 
$80,000 in annuities for each of those years. The annual 
savings would decrease over time however, as those officers 
would receive larger annuities when they retire. In total, CBO 
estimates this section would reduce net direct spending for 
military retirements by $4 million over the 2011-2020 period.
    Special Survivor Allowance. Public Law 110-181 authorized a 
monthly allowance to be paid to those recipients of Survivor 
Benefit Plan (SBP) payments who have their annuities reduced 
dollar-for-dollar by the amount of Dependency and Indemnity 
Compensation (DIC) they receive from the Department of Veterans 
Affairs. The amount of that monthly allowance was $50 in 2009, 
and will increase each year until it reaches $310 per month in 
2017, at which point the allowance is scheduled to 
terminate.\3\ However, survivors of retirees who died prior to 
the creation of the SBP benefit do not receive the allowance, 
even though their annuities are also offset by any DIC they 
might be receiving. Section 645 would eliminate this disparity. 
Based on data from DoD's Office of the Actuary, CBO estimates 
that fewer than 500 additional survivors would receive the 
allowance under this section, which would increase direct 
spending for military retirement by $4 million over the 2011-
2020 period. Costs in the first year would include back 
payments for fiscal years 2009 and 2010.
---------------------------------------------------------------------------
    \3\The amount of the allowance was originally $50 per month in 
fiscal year 2009 and was then supposed to increase to $100 by 2014. It 
was scheduled to terminate five months into fiscal year 2016. Section 
201 of the Family Smoking Prevention and Tobacco Control Act (Public 
Law 111-131) subsequently increased the monthly amounts and extended 
the payments through 2017.
---------------------------------------------------------------------------
    Multiplier Cap for Disability Retirees With Over 30 Years 
of Service. Section 641 would increase the annuities of those 
members with over 30 years of service who elect a disability 
retirement. Currently, the annuity for disability retirees is 
capped at 75 percent of the amount of their basic pay. Under 
this section, disability retirees would have their annuities 
increased by 2.5 percent for each year in which the member 
serves past 30 years. This would make the calculation for 
disability retirement consistent with the calculation of 
annuities for those who elect a non-disability retirement.
    Eliminating that cap would affect both direct spending and 
revenues. Direct spending would increase because those retirees 
with over 30 years of service who will elect to receive a 
disability retirement under current law would see their 
annuities increased. Based on information from DoD, CBO 
estimates that each year about five new retirees would see 
their annuities increased by an average of $5,000. In total, 
CBO estimates this change would increase spending for military 
retirement by $2 million over the 2011-2020 period.
    In addition, because those portions of disability retired 
pay that are related to combat-related disabilities are non-
taxable, CBO estimates that each year about 10 new retirees who 
would otherwise elect a non-disability retirement would now 
choose a disability retirement. CBO and JCT estimate that this 
would decrease federal revenues by $2 million over the 2011-
2020 period.
    Payment Date for Retired Pay. Section 646 would change the 
payday for military retirement annuities from the first 
business day of each month to the first calendar day of each 
month. For most months this would have no effect, since the 
first business day usually falls on the first of the month. 
However, for months in which the first day falls on a weekend 
or holiday, DoD would instead make the payments on the last 
business day of the preceding month. Because the first day of 
fiscal years 2012, 2017, and 2018 will fall on weekends, 
changing the payday to the first of the month would result in 
paydays shifting into fiscal years 2011, 2016, and 2017.\4\ 
Each payday would cost about $4 billion, CBO estimates; thus, 
the provision would shift that amount to an earlier fiscal year 
in three of the next 10 years. However, we estimate that there 
would be no net impact over the 2011-2020 period.
---------------------------------------------------------------------------
    \4\The federal fiscal years begins on October 1.
---------------------------------------------------------------------------
    Other Provisions. The following provisions would have an 
insignificant effect on direct spending, primarily because they 
would affect few individuals or because they authorize both the 
collection and spending of funds so that the net budgetary 
impact would be small.
     Section 353 would allow DoD to retain fees 
collected for transporting civilian passengers and cargo when 
such transportation is provided in response to an emergency, or 
in response to a request for humanitarian assistance.
     Section 532 would give former enlisted members the 
ability to appeal separation decisions to certain disability 
review boards. This could result in a small number of 
disability separations being changed to disability retirements.
     Section 576 would award the Medal of Honor to four 
former members of the Army. An award of the Medal of Honor 
includes a monthly stipend, unless the Medal is awarded 
posthumously. Because only one of the recipients is still 
living, CBO estimates this section would have an insignificant 
effect on direct spending.
     Section 578 would allow the Secretary of Defense 
to accept voluntary services provided to assist with the 
Commemoration of the 60th Anniversary of the Korean War. 
Because those volunteers would be eligible for mandatory 
compensation if they are injured while volunteering, CBO 
estimates that section 578 could have an insignificant effect 
on direct spending.
     Section 606 would authorize higher rates of pay 
for the senior enlisted members at each of the combatant 
commands and would require DoD to use those higher rates of pay 
when computing the annuities of those members.
     Section 619 would make certain members of the 
Armed Forces or civilian employees of DoD who were killed or 
wounded eligible to receive additional compensation. CBO 
estimates that a small number of people would receive this 
compensation, including certain tax benefits and mandatory 
benefits, such as retroactive combat-related special pay and 
combat related special compensation. Any impacts on direct 
spending and revenues would be small, CBO estimates.
     Section 701 would prohibit DoD from increasing the 
daily inpatient deductible under the TRICARE Standard health 
benefit. This prohibition would increase mandatory health care 
spending for certain TRICARE beneficiaries who live overseas, 
as well as for former members of the Coast Guard and other 
uniformed services.
     Section 702 would require the Secretary of Defense 
to establish a new TRICARE benefit for dependents of current 
and former members who are under the age of 26. To offset the 
cost of the new benefit, the Secretary would be required to 
charge a premium for the new benefit and would be allowed to 
spend the proceeds without further appropriation.
     Section 933 would extend by two years the 
authority to allow DoD to waive payment of reimbursable 
expenses at the various Defense Regional Centers for Security 
Studies by non-governmental and international organizations. 
Under current law, the waiver authority would expire after 
fiscal year 2010. DoD has the authority to retain and spend 
such reimbursements.
    Pay-as-you-go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table.

                                    CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 5136 AS REPORTED BY THE HOUSE COMMITTEE ON ARMED SERVICES ON MAY 21, 2010
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      By fiscal year, in millions of dollars--
                                                  ----------------------------------------------------------------------------------------------------------------------------------------------
                                                      2010       2011       2012       2013       2014       2015       2016       2017       2018       2019       2020    2010-2015  2010-2020
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           NET INCREASE OR DECREASE (-) IN THE DEFICIT 

Statutory Pay-As-You-Go Impact...................          0      3,973     -3,972        -11         -4         -1      4,369        144     -4,510          6          6        -15          0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 5136 
contains intergovernmental and private-sector mandates as 
defined in the Unfunded Mandates Reform Act. CBO estimates the 
costs of the intergovernmental mandates would not exceed the 
threshold established in UMRA ($70 million in 2010, adjusted 
annually for inflation). CBO cannot determine whether the costs 
to the private sector would exceed the annual threshold ($140 
million in 2010, adjusted annually for inflation).

Increasing the end strength of active duty forces

    Section 401 would increase the costs of complying with 
existing intergovernmental and private-sector mandates by 
increasing the number of servicemembers on active-duty by more 
than 7,000 for fiscal year 2011. Those additional 
servicemembers would be eligible for existing protections under 
the Servicemembers Civil Relief Act (SCRA).
    SCRA allows servicemembers to maintain a single state of 
residence for purposes of paying state and local personal 
income taxes and to request deferrals for certain state and 
local fees. CBO estimates that the additional cost of those 
mandates on state and local governments would be small.
    SCRA also requires creditors to reduce the interest rate on 
servicemembers' loan obligations to 6 percent when the 
acquisition of such obligations predate active-duty service, 
allows courts to temporarily stay certain civil proceedings, 
such as evictions, foreclosures, and repossessions, and 
precludes the use of a servicemember's personal assets to 
satisfy the member's trade or business liability while he or 
she is in military service.
    CBO does not have sufficient information to estimate 
precisely the increased costs of complying with these 
provisions in SCRA. Servicemembers' utilization of the various 
provisions of the SCRA depends on a number of uncertain 
factors, including how often and how long they are deployed. 
While some of the SCRA protections might affect a greater 
number of service members, the cost per person could be 
relatively small. On the other hand, other SCRA protections 
could have relatively high per-person costs even though they 
affect a small number of servicemembers. Because of those 
uncertainties, CBO cannot determine whether the costs to 
private-sector entities would exceed the annual threshold.

Preemptions of state law

    Section 713 would authorize health care professionals who 
are members of the National Guard and who are serving in 
response to actual or potential disasters to practice in 
military and civilian health care facilities regardless of 
state licensing laws. That preemption of state laws would 
impose an intergovernmental mandate as defined in UMRA, but CBO 
estimates that the cost of complying with the mandate would be 
small.
    Section 544 would preempt state laws governing child 
custody if they are inconsistent with or provide less 
protection to the rights of a parent who is a servicemember 
than those provided under the bill. Because the preemption 
would simply limit the application of state laws, CBO estimates 
that it would not impose significant costs on state 
governments.

Providing benefits to state and local governments

    The bill would authorize aid to local educational agencies 
that have significant numbers of students who are dependents of 
members of the Armed Forces and Department of Defense civilian 
employees. Any costs to those governments would be incurred 
voluntarily as conditions of receiving that federal assistance.
    Estimate prepared by: Federal costs: Defense 
Authorizations--Kent Christensen; Military Construction and 
Multiyear Procurement--David Newman; Military and Civilian 
Personnel--Dawn Regan; Military Retirement and Health Care--
Matthew Schmit; Operation and Maintenance--Jason Wheelock; Ship 
Acquisition and Stockpile Sales--Raymond J. Hall; Euro-NATO 
Joint Jet Pilot Training Program--John Chin; Impact on state, 
local, and tribal governments: Burke Doherty; Impact on the 
private sector: Elizabeth Bass.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                                  
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