Appropriations for FY1999: Military Construction
Released: 1998-11-10T00:00:00

Most Recent Developments

The military construction appropriations bill became Public Law 105-237 onSeptember 20, 1998. The conference report ( H.Rept. 105-647 ) for H.R. 4059 was passed by the House on July 27 and the Senate on September 1. Theconference recommended $8.450B.

The conference committee added $666M to the President's request. Even with the additional funds, the total for FY1999 is $759M less than what was enacted forFY1998. This is an additional $216M to the House bill and a reduction of $31Mfrom the Senate bill.

Military construction accounts received emergency supplemental appropriations money for FY1999 in the Omnibus Consolidation bill( H.R. 4328 , H.Rept. 105-825 ) in October 1998. Due to monsoons inKorea and Hurricanes Georges & Bonnie, military construction projects secured anadditional $209 million in funding.

Background: Content of Military Construction Appropriations and Defense Authorization Bills

The Department of Defense manages the world's largest dedicatedinfrastructure, covering over 40,000 square miles of land and a physical plant worthover $500 billion. The annual military construction appropriations bill provides mostof the funding to maintain and upgrade this infrastructure. The bill fundsconstruction projects and real property maintenance of the active Army, Navy &Marine Corps, Air Force, and their reserve components; defense-wide construction;U.S. contributions to the NATO Security Investment Program (formerly called theNATO Infrastructure Program); and military family housing operations andconstruction. The bill also provides funding for the Base Realignment and Closure(BRAC) account, which finances most base realignment and closure costs, includingconstruction of new facilities for transferred personnel and functions, andenvironmental cleanup at closing sites.

The military construction appropriations bill is one of several annual pieces of legislation that provide funding for national defense. Other major legislationincludes (1) the defense appropriations bill, that provides funds for all militaryactivities of the Department of Defense, except for military construction; (2) thenational defense authorization bill, that authorizes appropriations for nationaldefense, (1) and (3) the energy and water developmentappropriations bill, that providesfunding for atomic energy defense activities of the Department of Energy. Threeother appropriations -- VA-HUD-Independent Agencies, Commerce-Justice-State,and Transportation -- also include small amounts for national defense. In addition,the energy and water development appropriations bill provides funds for civilprojects carried out by the U.S. Army Corps of Engineers.

The annual defense authorization bill authorizes all the activities in the defense appropriations measures described above. Therefore, major debates over defensepolicy and funding issues, including military construction may also occur in actionon the authorization bill. Since issues in the defense authorization and appropriationsare so interwoven, this report highlights salient parts of the authorization bill, alongwith the military construction appropriations process.

Military construction appropriations are the major, but not the sole, source of funds for facility investments by the military services and defense agencies. Thedefense appropriations bill provides some funds for real property maintenance inoperation and maintenance accounts. In addition, funds for construction andmaintenance of "Morale, Welfare, and Recreation (MWR)" facilities, are partiallyprovided through proceeds from commissaries, recreation user fees, and otherincome.

Most funds appropriated by Congress each year must be obligated in that fiscal year. Military construction appropriations are an exception. (2) These funds aregenerally made available for obligation for five fiscal years.

Consideration of the military construction budget starts when the President's budget is delivered to the Congress each year. For FY1999, the President requested$7.8 billion for military construction, 12% less than the $8.9 billion appropriated forFY1998.

Status

Table 1 shows the key legislative steps necessary for the enactment of theFY1999 military construction appropriations.

1. Status of Military Construction Appropriations, FY1999

Appropriations Process

Emergency Supplemental Appropriations for FY1999. Military construction accounts received emergencysupplemental appropriations money for FY1999 in the Omnibus Consolidation bill( H.R. 4328 , H.Rept. 105-825 ) in October 1998. Due to monsoons inKorea and Hurricanes Georges & Bonnie, military construction projects secured anadditional $209 million in funding.

Conference Agreement. The military construction appropriations bill became Public Law 105-237 on September20, 1998. The conference report ( H.Rept. 105-647 ) for H.R. 4059 waspassed by the House by a vote of 417 - 1 on July 27 and the Senate on September 1by a vote of 87-3.

The conference recommended $8.450B. The conference committee added $666M to the President's request. Even with the additional funds, the FY1999 totalis $759M less than what was enacted for FY1998. This is an additional $216M tothe House bill and a reduction of $31M from the Senate bill.

The conference agreement included full funding of the requested chemical demilitarization program. However, the conference included a general reduction of$50.5M of unobligated prior year funds against the entire program, because of delaysin equipment and environmental & construction permits.

The DOD Family Housing Improvement Fund was reduced to $2M from $242M in the House bill and $7M in the Senate bill. The large reduction in the House billreflects full funding of construction projects in traditional family housing accounts,rather than the Family Housing Improvement Fund. Transfer authority to the Fundis provided for qualified projects from regular family housing accounts.

The conference committee noted that 90% of resources expended for the House Revitalization Support Office (HRSO) for FY1996-98 was for consultant support. Therefore, the conferees reduced support for Family Housing Improvement Fund to$2M, based on available balances and excessive allocation for consultative services.

The conferees also noted the delay in execution of family housing projects, for possible privatization efforts. The conference expects from DOD, a revised,scaled-back, reasonable plan for the privatization effort by October 1, 1998 and anintegrated family housing strategy by December 1, 1998.

The Homeowners Assistance Fund had no funds appropriated by the conference. Instead the conference adopted Section 127, which allows the transfer of funds fromthe Base Realignment and Closure account into the Homeowners Assistance Fund.

House and Senate Actions. Based on the interim 302 (B) allocations (see Budget Agreement section below), themilitary construction appropriations subcommittees finished their work. The SenateAppropriations Committee (SAC) approved their version of the military constructionbill ( S. 2160 ) with report ( S.Rept. 105-213 ) on June 11. SAC approved$8.484 billion. The House Appropriations Committee finished their bill( H.R. 4059 ) with report ( H.Rept. 105-578 ) on June 16. HAC approved$8.235 billion.

The House passed H.R. 4059 on June 2 with the HAC-approved total. The Senate passed their bill on June 25, with the SAC-approved total.

Of the $8.2 billion appropriated in the House FY1999 Military Construction Appropriations Bill ( H.R. 4059 ), 43% is for family housing; 37% forgeneral military construction projects and 21% is to meet the obligations of the BaseRealignment and Closure (BRAC). In the $8.5 billion appropriated in the Senate( S. 2160 ), 42% is for family housing, 37% for general militaryconstruction projects, and 20% is to meet BRAC obligations.

The military construction subcommittees had similar themes in their reports. Both subcommittees rejected Administration proposals for:

advanced appropriations for Army military construction, citingthe difficulty to project future costs and that the requested advance appropriationsprojects were not identified in DOD justification documents;

acquisition of either the leased building or additional land forU.S. Southern Command Headquarters, relocated from Panama to Miami, Florida;and

devolution of chemical demilitarization construction fromOffice of the Secretary of Defense to the Army, because of the importance of thisactivity to overall national security.

Both committees -- like their authorization counterparts -- lamented general underfunding by the DOD of military construction, especially for decreasingmaintenance backlogs and increasing quality of life projects.

The House Appropriations Committee decided to put all requested privatization projects from the Family Housing Construction Account into the Family HousingImprovement Fund, increasing the budget request of $7 million to $242 million. Thisallocation will enforce the use of privatization authorities mechanisms for theseprojects.

Budget Agreement. Usually, the budget resolution sets the stage for the appropriations process. However, the workon this year's agreement is not completed yet. The House and Senate are still inconference deliberations for the FY1999 budget resolution.

While they wait for the completed budget agreements, the appropriations committees are beginning their work. Both committees have released tentative 302(B) allocations to their subcommittees. The Senate Appropriations Committee hasallocated $8.484 billion in budget authority for military construction, which is anadditional $700 million (an increase of 8.9% ) than the President's request of $7.8billion. The House Appropriations Committee gave $8.235 billion (an increase of400 million or 5%) to the Military Construction Appropriations Subcommittee forFY1999.

Authorization Process

On May 21, the House approved $8.2 billion for military construction in its FY1999 defense authorization bill ( H.R. 3616 ), which is $450 millionmore than the President's request. The House National Security Committee reportedthat 40% ($183 million) of the increase is dedicated to quality of life enhancements. The committee highlighted additions to family housing, troop housing, childdevelopment centers, and fitness centers. (For more detailed information on theFY1999 House authorization bill, see the press releases and committee reports andbill sections on the House National Security Home Page at http://www.house.gov./nsc/ .

On May 7, the Senate Armed Services Committee (SASC) approved $500 million more than the Administration's FY1999 budget in S. 2057 . TheSASC designated $164 million of the additional money for unaccompanied personnelquarters, child development centers, dining facilities, education centers, and militaryfamily housing. The remaining $336 million is for high-priority projects submittedby the military services that were not funded in the President's request.

The Senate passed S. 2057 on June 25. It added $200 million of quality of life military construction projects to the SASC bill, by amendment. TheSenate also made it harder for DOD to close military bases passing the Inhofeamendment. The amendment makes the DOD seek congressional approval forclosing bases if 225 jobs are at stake, instead of current law's 300 jobs limit. Also,the Inhofe amendment contained a Sense of the Senate statement that Congress willnot consider another round of base closures until the latest round is completed.

The HNSC and SASC came to some similar decisions about the FY1999 President's military construction budget request.

In their respective reports, both the HNSC ( H.Rept. 105-532 ) and the SASC ( S.Rept. 105-189 ) noted the low budget request compared to prioryears (15% less than the FY1998 enacted amount).

Both defense authorizing committees rejected theAdministration's proposal for two more base closure rounds, and for acquiring aleased building or land in Miami, Florida for U.S. Southern CommandHeadquarters.

Both committees rejected the Administration's proposal tomove funding for chemical demilitarization construction from the Office of Secretaryof Defense (OSD) to the Army. Because of the national importance of this issue, thecommittees believe that authority should stay within OSD. Each committee noteddelays in DOD's obligation of money for chemical demilitarization projects, oftenbecause of construction and environmental permit problems. The Senate cut $50million from the program because of the backlog of unobligatedfunds.

The Senate authorizers noted the trend for the DOD to fund military construction projects with prior year savings instead of including full funding for themilitary construction budget. The trend started in the FY1997 and continued throughto the FY1999 proposal. The SASC denied the use of prior year savings and expectsthe DOD to fully fund military construction requests in future budgets.

The defense authorization conference report ( H.Rept. 105-736 ) passed the House on September 24, and the Senate on October 1. The FY1999 authorizationbill became P.L. 105-261 on October 17, 1998.

Key Policy Issues

Recent History and Context

The Funding Pattern for Military Construction Budgets. In recent years, the Congress has added significantamounts to annual Administration's military construction budget requests. Congressadded $479 million in FY1996, $850 million in FY1997 and $800 million in FY1998 to the military construction accounts.

Three themes explain the pattern of reoccurring congressional additions. First, some members of the military construction subcommittees believe that militaryconstruction has been chronically underfunded. Military construction proponents,including facility advocates in the military services, argue that military facilities havebeen systematically underfunded for many years -- even, some say, in the midst ofthe defense buildup of the 1980s.

In arguing that military construction has been chronically underfunded, DOD facility managers state that they have not met their goal of budgeting 3% of the plantreplacement value of DOD facilities for annual construction and maintenance (calledreal property maintenance at the Pentagon). Although this 3% goal is below theaverage for public facilities nationwide, actual DOD funding has typically run at 1to 2% of plant replacement value. For example, the Air Force testified on March 11,1998 to the House National Security Subcommittee for Military Installations andFacilities that the Air Force could manage to budget only 1% for real propertymaintenance. Thus, facility proponents welcome congressional additions. (3)

Second, other Members of Congress, as Senator Bond commented during the floor debate on FY1996 military construction appropriations, believe that thePentagon counts on Congress to add money to Guard and Reserve programs. Inrecent years, Congress has added as much as $401.8 million (FY1995) for NationalGuard and Reserve construction projects. (See Table 5.)

Third, often Congress has different priorities from the Administration. Congressional military construction subcommittees -- authorization as well asappropriations subcommittees -- have often taken issue with Administration militaryconstruction priorities. In the 1990s, for example, the committees frequently reducedamounts requested for construction overseas -- on the grounds that troop levelsabroad should be reduced and that allied burden-sharing contributions shouldincrease -- and reallocated the funds to domestic projects. In addition, congressionalcommittees have added unrequested funds for quality of life improvements, such asday care centers and barracks renovation. The congressional defense committees have argued that the military services have tended to neglect these areas in favor ofwarfighting investments.

Funding and Long-term Planning for Military Construction: Inadequate? Along with concern about the level offunding, Members of Congress have also complained that poor Pentagon planningmake it difficult for the Congress to insure that added military construction projectsmeet pressing priorities.

The military construction budget request is created within the Department of Defense's Planning, Programming and Budgeting System (PPBS). (4) The PPBSprocess is used to prepare DOD's internal, long-term financial plan. The long-termplan extends over a six-year period and is known as the Future Years Defense Plan(FYDP). In the 1990s, congressional defense committees repeatedly criticized thePentagon's long-term planning for military construction.

In the FY1998 hearings, the Chairman of the House Subcommittee on Military Construction, Representative Ron Packard chastised the Department of Defense forrepeatedly failing to submit "honest" budgets reflecting real service priorities. Hecomplained that the military construction request traditionally leaves out necessaryprojects, especially for the National Guard and Reserve, which the services expectCongress to add. Mr. Packard wanted the subcommittee to get out of the businessof adding money for projects that the administration had not requested, but yetapparently needs. He also wanted DOD and the Services to use the Future YearsDefense Plan (FYDP) rigorously to set priorities for their construction projects andto integrate Guard and Reserve needs.

In testimony on the FY1998 request to the Military Construction Subcommittee of the House Appropriations Committee, then-DOD Comptroller, John Hamreadmitted that DOD needs to undertake good detailed planning for the militaryconstruction budget and has not done this in the past. Hamre also conceded that theDOD has not evaluated the accuracy of the military construction FYDPs, and that hesaw a need for that assessment.

Its report on the FY1998 Military Construction Appropriations Bill ( H.Rept. 105-150 ), the House Appropriations Committee called for DOD to prepare a FutureYears Defense Plan (FYDP) for military construction at the project level of detail,including Guard and Reserve requirements.

The FY1999 military construction hearings reviewed service efforts to integrate Guard and Reserve needs into the budget request. The Services -- especially theArmy -- testified that they have produced integrated military construction plans withGuard and Reserve input. Alma Moore, Principal Deputy Secretary of the Army forInstallations, Logistics and Environment, testified at a House Military ConstructionSubcommittee that:

"This year's military construction budget was built on the Army's one team, one fight concept. We made a conscientious effort to balance our resources amongall components, the active Army, the National Guard and the Army Reserve."

The Debate Over Added Projects and the McCain Criteria. Since the Congress has added significant amounts tomilitary construction budgets over the last 10 years, congressional debate hascentered on how to prioritize additional projects.

In 1994, the Senate debate on the military construction appropriations bill heavily focused the amount of congressional additions to the request despiteconstraints on overall defense spending. Senator McCain, in particular, objected tothe provision of substantial amounts for projects that the Administration had notrequested. He argued that such projects largely represent "pork barrel" spending, andcome at the expense of higher priority defense programs. In Senate floorconsideration of the military construction bill that year, the managers accepted aMcCain amendment that called for criteria to be applied to additional projects. Hisamendment included a provision that any added project should be on the military listsof critical yet unbudgeted projects. The McCain amendment was not incorporatedinto the final conference version of the bill, however, and the conference agreementprovided over $900 million for unrequested construction projects.

The National Defense Authorization Act for FY1995 ( P.L. 103-337 ), however, incorporated Senator McCain's criteria as a sense of the Senate provision, providingthat the unrequested projects should be:

1. essential to the DOD's national security mission,

2. not inconsistent with planned base closures,

3. in the services' Future Years Defense Plans (see above),

4. executable in the year they are authorized and appropriated, and

5. offset by reductions in other defense accounts, through advice from theSecretary of Defense.

The purpose of these criteria is to help Congress rate the relative importance of different projects. Though a sense of the Senate provision does not have the forceof law, the McCain criteria have been cited repeatedly in Senate authorization andappropriations debates for FY1996 and FY1997. The criteria were also cited in theHouse FY1997 debates by members of the "porkbusters" coalition. In practice,debates have focused on justifying projects according to the first four criteria, whileignoring the offset requirement.

In debate on the FY1998 military construction appropriations conference report, Senator McCain continued to challenge congressional add ons. He noted that theCongress added 129 projects, totaling $800 million. The National Guard andReserve received $220 million of the additional congressional money. SenatorMcCain listed the extra projects in the Congressional Record , in a letter to thePresident, and on his web page at the following address: (http://www.senate.gov/~mccain/milconf.txt).

Since the 104th Congress, the House military construction authorizing and appropriations committees have used criteria, in collaboration with the Pentagon, toadd projects to the military construction budget. Each added project needs to passcriteria like the McCain criteria: Is the project essential to the DOD mission,consistent with BRAC plans, in the Future Years Defense Plan and "executable" inthe coming fiscal year? If the project can meet those criteria, the militaryconstruction authorizing and appropriations committees may add the project.

The FY1998 Line Item Veto. Debate over whether congressionally added projects are pork or important to theDOD mission contributed to the President's first use of his line item veto authority (5) in October 1997. The line item veto was used on the military constructionappropriations law ( P.L. 105-45 ) to eliminate 38 projects in 24 states, totaling $287million. According to the line item veto law (6) , the$287 million in savings would godirectly to deficit reduction and not back to the Department of Defense.

The White House cited three criteria in explaining why the President vetoed these projects. These criteria are similar to the McCain criteria and the Housecommittees' criteria for adding projects.

1. The projects were not in the Department of Defense's future years defenseplan (FYDP).

2. Design work for the projects was not completed and therefore the projectcould not be executed in the coming fiscal year.

3. The projects would provide no "substantial" contribution to improving thequality of life of U.S. troops.

According to the Clinton Administration, the vetoed projects needed to meet all three criteria to be put on the veto list. The Administration's criteria, however, didnot square with the data on particular projects that the military officers provided intestimony to the Senate Appropriations Committee in October 1997. First, the datashowed that 33 of the 38 projects were in the Pentagon's FYDP. Second, some ofthe projects did have design work in progress and so it appeared that the informationthat the President received on design work was inaccurate. Many of the projectsappeared to be "executable" in FY1998. Finally, the committee questioned the WhiteHouse's judgement of the quality of life merit of the 38 projects.

It appeared that most of the vetoed 38 projects did not meet two out of three Administration criteria for inclusion on the veto list. Based on this assessment, theHouse and Senate passed a disapproval bill ( H.R. 2631 ) in October 1997to overturn the veto. (7) The President vetoed thedisapproval bill in November 1997,despite the White House's admission that erroneous data were used to cancel someprojects. The Office of Management and Budget (OMB) refused to confirm whichprojects or how many were vetoed by mistake. The canceled projects were restoredby a veto override of H.R. 2631 in February 1998 by the House andSenate. The veto override restored funding for the 38 canceled projects.

The debate on the military construction line item veto highlights the issues that arise with adding projects to the military construction budget. Which projects areurgent? According to which criteria? And if projects are important, why doesn't theAdministration request them?

Prospects for Congressional Additions to the FY1999 Military Construction Budget. The Budget EnforcementAct of 1997 ( P.L. 105-33 ) set caps on budget authority and outlays forFY1998-FY2002 (8) . The President's FY1999 budgetproposal for national defenseequals the cap of $270.6 billion. Unless Congress revises the budget agreement,there would appear to be no room for Congress to add funding to the defense budget.

This will be the first time in three years that Congress has not been able to add money to the defense budget. The Congress added budget authority of about $7billion in FY1996, $11.2 billion in FY1997 and $2.9 billion in FY1998 to the defensebudget. With those increases to the defense budget, military construction accountsreceived congressional additions of $479 million in FY1996, $850 million in FY1997and $800 million in FY1998.

Despite these budget agreement constraints, the defense authorizing committees and the military construction appropriators added military construction money to thePresident's request. The House National Security Committee added $450 millionand the Senate Armed Services Committee added $500 million, in their deliberationsover the FY1999 defense authorization bills. The conference for the FY1999Military Construction Appropriations Bill recommended $8.450B, which is anadditional $666M to the President's request.

Ongoing Issues

Importance of Housing to the Quality of Life for Servicemembers. Quality of life issues are considered to beimportant to recruitment and retention of servicemembers. Review of the militaryconstruction budget brings up quality of life issues for family housing, barracks andchild care facilities in congressional debates.

The Department of Defense has found that about two-thirds of military housing -- both family quarters and barracks -- are substandard because of size, safety orcondition. (9) In 1995, then-Defense Secretary Perryestablished an external advisorycommittee and an in-house executive committee to look at quality of life issues forthe men and women in uniform.

Two major housing initiatives for family housing and barracks renewal emanated from Perry's quality of life committees. First, private sector financing andmethods for family housing were proposed and implemented in the FY1996 DefenseAuthorization Act ( P.L. 104-106 ). Second, a new barracks standard was set, called"1 + 1". This standard provides each servicemember at sergeant or below anindividual room plus a shared bathroom with an adjoining room. (10) Congress hasbeen concerned, however, about the pace of both programs.

Privatization of Military Family Housing. To alleviate the family housing problem, the Congressgave the Pentagon new authorities (see above) to obtain private sector financing andexpertise for family housing. The Pentagon estimates that with these authorities,defense dollars can be leveraged to more quickly build three times the amount ofhousing units financed the traditional way. The authorities are:

guarantees, both loan and rental;

conveyance or lease of existing property andfacilities;

differential lease payments;

investments, both limited partnerships and stock/bondownership; and

direct loans.

These new authorities can be used individually, or in combination in variousprojects. (11)

On February 26, 1998, John Goodman, Deputy Under Secretary of Defense (Industrial Affairs and Installations) testified to the Military Installations andFacilities Subcommittee of House National Security Committee about the use ofthese authorities over the past two years. He listed the following accomplishments:

Two Navy projects -- in Corpus Christi, TX and Everett, WA -- were awarded, producing 589 units. These units are already occupied and wereprimarily privately financed.

Two projects -- Army at Ft. Carson, CO and Air Force atLackland AFB in TX -- should be awarded this spring. The Ft. Carson project willrevitalize 1824 existing units and build 840 new ones. The Lackland AFB projectwill supply 400 units.

A Request for Proposal (RFP) has been released for a MarineCorps Logistics Base in Georgia for 155 units.

RFPs are being developed for 3 Army projects, 2 Air Forceprojects and 1 Marine Corps project, with up to 29 potential projects underconsideration.

Because these are new authorities, however, start-up issues have delayedlarge-scale pursuit of privatization. The Department of Defense's HousingRevitalization Support Office (HRSO) is coordinating the implementation of the newauthorities for each of the Services (12) . HRSO isstaffed with 16 full-time housing andreal estate experts from each of the Services and the Office of Secretary of Defense,along with consultant support.

It has taken some time for DOD to learn how to work in the commercial real estate market. The Office of Management and Budget had to determine rules toaccount for government obligations with each of the authorities, and the rules werenot devised until June 1997. Also, the Pentagon needed to translate loan and loanguarantee concepts into actual documents that the private financial community wouldtrust for investment grade financing.

Representative Joel Hefley, chairman of the Military Installations and Facilities Subcommittee of the House National Security Committee pointed out in a March 10,1998 hearing that the military housing privatization's authorities expire on September30, 2000 unless extended by Congress or made permanent law. Mr. Hefley statedthat, "My inclination at this time would be to extend the authorities once the five-yearperiod expires, but in order to justify an extension, Congress will have to seesignificantly better execution."

The Senate is interested in how the use of housing privatization initiatives could affect future Base Realignment and Closure (BRAC) rounds. This concern came upin a March 3, 1998 Senate Appropriations Subcommittee on Military Constructionhearing on the FY1999 military construction budget. Senator Stevens expressedconcern that many of the housing privatization initiatives contain variousmechanisms that shift financial risk and liability to the government, especially withrespect to BRAC actions. Senator Stevens commented that housing projects withthese guarantees could be an advantage to a base in future BRAC rounds and this issomething the committee should monitor. The FY1998 Senate AppropriationsCommittee report on Military Construction continued similar themes.

Barracks Improvements. To improve the conditions of barracks, the Department of Defense is enforcing newstandards. According to DOD official John Goodman's February 26, 1998 testimonyto the House National Security Committee on the FY1999 military constructionbudget, the Pentagon directed that gang latrine barracks be eliminated by FY2008. The Air Force will meet that goal in FY1999, with the Marine Corps following inFY2005 and Army & Navy in FY2008.

Implementation of the 1 + 1 standard (see above) for barracks housing will not be completed until well into the next century. John Goodman testified that thestandard will be met in FY2020 by the Army, in FY2013 by the Navy, and in FY2019by the Air Force. The Marine Corps plans to build to an interim 2+0 (two Marinesin one room, sharing a bath) standard by FY2035. These timetables were noted inthe FY1998 House Appropriations Committee report ( H.Rept. 105-150 ), whichstated that it will take $14.3 billion and 20 years to reach the 1 + 1 standard.

Base Realignment and Closure (BRAC) Concerns. Legislation for more BRAC rounds would start in theauthorizing defense committees of the House and Senate. Also -- if passed --budget authority for future BRAC rounds would reside in military constructionappropriations accounts.

However, this year's Administration request for two more BRAC rounds in FY2001 and FY2005 has been received by the Congress with skepticism. (13) Duringthe FY1998 review of the defense budget, both the House and Senate rejectedlegislation to approve more military base closures. Instead, the Congress passedSection 2824 of the FY1998 National Defense Authorization Act ( P.L. 105-56 ),which required the Pentagon to report the costs and savings from previouslyapproved domestic military base closures.

The required report, entitled " The Report of the Department of Defense on Base Realignment and Closure " was released by the Pentagon in April 1998. The reportmakes the case that:

the DOD has 23% excess base capacity;

two new BRAC rounds will save about $3 billion per year, afterfully implemented;

actual BRAC costs reflect budgetestimates;

the BRAC process overstates costs for environmentalrestoration, and

previous BRAC rounds in 1988, 1991, 1993 and 1995 aresaving billions. (14)

Both defense authorizing committees rejected the Administration's proposal for twomore base closure rounds in May 1998.

Environmental Issues. The Senate continues to raise concerns about the cost of environmental clean-up and its effectson military functions and readiness. The Chairman of the Senate AppropriationsSubcommittee on Military Construction, Senator Burns mentioned environmentalissues, during his subcommittee hearing on March 3, 1998. Senator Burns noted that45% of the Army's FY1999 BRAC funding ($489M) is for studies, clean-up andrestoration of BRAC facilities and that these costs are a growing concern to him. Senator Burns said that the subcommittee will look at where the clean-up money isgoing, how it is being spent and to what degree military construction facilities arecleaned when they are turned over to the private sector.

Use of Advanced Procurement for Army Military Construction. This year, the Congress will consider the Army'sproposal to use advanced procurement procedures for military construction. Thiswill be an exception to current practices for defense funding.

When Congress appropriates money for defense programs, it generally pays all the costs up front in one fiscal year. This practice is known as full funding. It wasmandated by Congress in the 1950s to give full visibility to the cost of weaponsprocured. Therefore, all the money estimated at the time to complete the entireproject -- such as production of 21 Trident missiles, overhaul of an aircraft carrier,or construction of an ammunition depot -- is approved as a single package by theCongress. Often, the procurement of these weapons systems can span many years.

As an exception to this practice, Congress sometimes provides funding for advance procurement of "long-leadtime" weapons components, such asnuclear-power plants for Navy warships. (15)

The FY1999 Army military construction request proposes to use advanced procurement for some of its projects. Acting Assistant Secretary of the Army(Installations, Logistics and Environment) Alma Moore stated at the House NationalSecurity Committee hearing on February 26, 1998 that with advance appropriations,the contract will not define the work to be performed by the contractor, but only limitthe work by the amount appropriated in a given year. Advance appropriations of$555,050,000 are requested for:

the U.S. Disciplinary Barracks,$13,000,000;

the Roi Namur Power Plant,$36,000,000;

the Fort Hood Railhead facility,$15,000,000;

the Cadet Physical Development Center, $73,000,000, and

four Chemical Demilitarization projects (Umatilla, Pine Bluff,Aberdeen and Newport) at $418,050,000.

To get these large military construction projects started, the Office of Management and Budget allowed the Army to propose advanced procurementfunding to the Congress. By approving advanced procurement, the Congress limitsits discretion on future military construction budgets, since it is committing futurefunding.

The Army has been the executive agent of the Department of Defense chemical demilitarization (chem demil). The Pentagon decided, in response to its DefenseReform Initiative, that the Army now has total responsibility for chemicaldemilitarization. Therefore, a total of $125 million was transferred from the DODmilitary construction budget to the FY1999 Army military construction budget forsix chem demil military construction projects.

The House National Security Committee and the Senate Armed Services Committee rejected the transfer of chem demil from the Office of Secretary ofDefense (OSD) to the Army in their FY1999 defense authorization bills. Bothcommittees felt that chem demil is of national importance and therefore needs to bein OSD. Each committee also cut funding from the chem demil program, becauseof a large amount of unobligated funds already in the accounts. The militaryconstruction appropriators did the same.

Major Funding Trends

The Administration proposed significant reductions in military constructionspending for FY1999, compared to the enacted FY1998 amount. The President'sFY1999 proposal of $7.8 billion is a 12% reduction from the FY1998 $8.9 billionlevel approved by Congress. The military construction conference committeerecommended $8.450B for FY1999, an additional $666M to the President's request.

Table 2 shows overall military construction funding since FY1995, including family housing. Table 3 breaks down the FY1999 request by appropriations accountand compared to FY1997 and FY1998. Table 4 shows congressional action on theFY1999 military construction appropriations bills. Table 5 shows congressionalmilitary construction add-ons for Guard and Reserve projects since FY1985.

Legislation

H.R. 3616 (Spence)

Referred to the House Committee on National Security, April 1, 1998. Fullcommittee markup held, May 6, 1998. Ordered to be reported as amended, May 6,1998. Reported to House, amended, by House Committee on National Security( H.Rept. 105-532 ), May 12, 1998. Rules Committee Resolution ( H.Res. 435 ) reported to House, May 14, 1998. Passed House (Amended) by recorded vote:357 - 60 (Roll No. 183), May 21, 1998. Senate took up H.R. 3616 ,struck all after the enacting clause, inserted the text of S. 2057 , approvedthe bill as amended, by unanimous consent, and requested a conference, June 25,1998. Conference agreement announced, September 17, 1998 and reported ( H.Rept.105-736 ), September 22, 1998. Conference report approved in the House (373-50),September 24, 1998 and Senate, October 1, 1998. Became P.L. 105-261 on October17, 1998.

S. 2057 (Thurmond)

Committee on Armed Services ordered to be reported an original measure( S. 2057 ), May 7, 1998. Committee on Armed Services. Originalmeasure reported to Senate by Senator Thurmond, without written report. Acompanion bill, S. 2060 , ordered to be reported ( S.Rept. 105-189 ). Placed on Senate Legislative Calendar under General Orders, Calendar No. 362, May11, 1998. Considered by the Senate, May 13, 14, and 15, and June 19, 22, and 231998.

S. 2160 (Burns)

Committee on Appropriations. Original measure reported to Senate by SenatorBurns, with written report ( S.Rept. 105-213 ), on June 11, 1998. Placed on SenateLegislative Calendar under General Orders. Calendar No. 410. Measure laid beforeSenate by unanimous consent, June 25, 1998. Senate passed companion measure H.R. 4059 in lieu of this measure by Unanimous Consent, June 25,1998.

H.R. 4059 (Packard)

House Committee on Appropriations reported an original measure, with writtenreport ( H.Rept. 105-578 ) on June 16, 1998. Placed on the Union Calendar, CalendarNo. 326. Rules Committee Resolution ( H.Res. 477 ) reported to Houseon June 18, 1998. Rule H.Res. 477 passed House, on June 19, 1998. Passed House by Yea-Nay Vote: 396 - 10 (Roll No. 254), June 22, 1998. Thelanguage of S. 2160 was adopted as an amendment by UnanimousConsent in the Senate, amended and passed in the Senate on June 25, 1998. Conference report H.Rept. 105-647 filed in House on July 24, 1998. House Agreedto Conference Report by the Yeas and Nays: 417 - 1 (Roll No. 353) on July 29, 1998. Senate Agreed to Conference Report by the Yeas and Nays: 87-3 on September 1,1998. Became P.L. 105-237 on September 20, 1998.

2. Mil. Con. Appropriations, FY1994-98 (budget authority in millions of dollars)

Source: Actual FY1995-97 data and Request FY 1999 data from Department of Defense, Financial Summary Tables, February 1998 and previous years' reports andFY1999 Military Construction Appropriations Conference Report ( H.Rept. 105-647 ).

Note: May not add exactly, due to rounding errors.

3. Mil. Con. Appropriations by Account: FY1997-99 (in thousands of dollars)

Source: Department of Defense, "Financial Summary Tables," February 1998.

4. Mil. Con. Appropriations by Account - CongressionalAction (in thousands of dollars)

Sources: H.Rept. 105-578 , S.Rept. 105-213 & Congressional Record, 6/25/98 and 6/26/98; H.Rept. 105-647 .

Notes:

* Sec. 127 of the conference report provides transfer authority from the BRAC accounts tothe Homeowners Assistance Program.

** The Paine Field, WA project was included in the Family Housing, Navy & Marine Corps total in the conference report.

5. Congressional Additions to Annual Department of Defense Budget Requests for National Guard and Reserve Military Construction, FY1985-98 (current yeardollars in thousands)

Source: Department of Defense, Financial Summary Tables, successive years.

For Additional Information

CRS Issue Briefs

CRS Issue Brief IB96022. Defense Acquisition Reform: Status and Current Issues , by [author name scrubbed].

CRS Reports

CRS Report 93-317. A Defense Budget Primer , by Keith Berner and [author name scrubbed].

CRS Report 98-205 . Appropriations for FY1998: Defense , by [author name scrubbed].

CRS Report 98-155. Defense Budget for FY1999: Data Summary , by [author name scrubbed] and [author name scrubbed].

CRS Report 94-515(pdf) . Defense Burdensharing: Is Japan's Host Nation Support a Model for Other Allies? , by [author name scrubbed].

CRS Report 91-669. Military Construction: Current Controversies and Long-Term Issues , by Martin Cohen and [author name scrubbed].

Selected World Wide Web Sites

House Committee on Appropriations http://www.house.gov/appropriations

Senate Committee on Appropriations http://www.senate.gov/~appropriations/

CRS Appropriations Products Guide http://www.loc.gov/crs/products/apppage.html#la

Congressional Budget Office http://www.cbo.gov

General Accounting Office http://www.gao.gov

Office of Management & Budget http://www.whitehouse.gov/WH/EOP/OMB/html/ombhome.html