On November 7, 2003, the House passed the conference report on H.R. 1588 ,the FY2004 DOD authorization, by a vote of 362 to 40, after the conference report was filed earlyThursday morning. The Senate passed the bill by 95 to 3 on November 12. On November 24, thePresident signed the bill ( P.L. 108-136 ). Compromises were reached on the main issues that had heldup the conference for several months: Buy American provisions, the Air Force lease of BoeingKC767 aircraft, a new National Security Personnel System, concurrent receipt, and TRICARE fornon-deployed reservists. The conference version ( H.Rept. 108-283 ) of H.R. 2658 , the FY2004Department of Defense (DOD) appropriations bill, provided $368.7 billion in funding. It passed theHouse on September 23, 2003, and the Senate on the following day, in both cases quickly and withlittle debate. On September 30, 2003, the President signed the bill into law ( P.L. 108-87 ). The FY2004 DOD Authorization Act included several contentious issues, which were settledonly after long negotiations. On domestic preference restrictions in the Buy American Act and theBerry Amendment, the DOD authorization added provisions to assess the U.S. defense industrialbase and the extent of U.S. reliance on foreign suppliers but dropped proposals to require DOD topurchase certain items only from American suppliers. In the case of the tanker lease, DOD agreedto a proposal by Senator Warner to lease 20 and buy 80 Boeing KC767 tankers rather than lease 100aircraft, a proposal less costly than the original lease but more costly than a straight multiyear buy. The fate of the deal remains uncertain in light of Boeing's recent firing of high-level officials forimproprieties and an ongoing investigation by the DOD Inspector General. Compromises were also brokered on other contentious issues on which the Administrationhad threatened a veto. The Administration agreed to a new benefit that provides concurrent receiptof military retirement and disability payments to all military retirees with disability ratings of 50%or higher as well as an expansion of those eligible under the "Purple Hearts Plus" program enactedlast year that provides benefits to military retirees with combat or combat-related disabilities. TheAdministration also agreed to a 15-month pilot program to offer access to TRICARE tonon-deployed reservists who are unemployed or do not qualify for health benefits offered by theiremployer. H.R. 1588 also authorizes the Secretary of Defense to develop a new NationalSecurity Personnel System for DOD's civilian employees, gives DOD special exemptions to certainenvironmental statutes, and lifts the current ban on development of low-yield nuclear weapons. Both the House and Senate versions of H.R. 1588 , the authorization bill, provide$400.5 billion for national defense programs, about $1.5 billion above the request of $399.7 billionthat the Administration submitted in February. The authorization covers not only defense programsfunded in the defense appropriations bill but also programs funded in the military construction,energy and water, and some other appropriations measures. The FY2004 DOD appropriations bill provides a total of $368.7 billion for the defenseprograms it covers, $500 million less than the $369.2 billion that was included in both the House andSenate versions. The total in the conference agreement is slightly below the amounts provided fordefense by the budget committees under Section 302(b) allocations of the Congressional Budget Actand $3.1 billion below the request. This decrease freed up the same amount for other appropriationsbills while staying within the cap on discretionary spending established by the FY2004 budgetresolution ( H.Con.Res. 95 ). Final funding for DOD could also be affected by a $1.8billion rescission included in the conference version of the FY2004 Omnibus Appropriations bill( H.R. 2673 ) that was passed by the House on December 8 but is unlikely to beconsidered by the Senate until January 2004. The final version of DOD's FY2004 appropriations cushioned the programmatic impact ofthe $3.5 billion cut to the request by making an offsetting rescission of $3.6 billion from the $62.6billion in FY2003 supplemental appropriations that Congress approved in April. Under budgetscoring rules, rescissions are counted as a credit in the year when they are enacted, even though prioryear monies -- in this case, FY2003 -- are cut. This allowed the appropriators to meet their FY2004targets without reducing funding for FY2004 programs by $3.5 billion. After a conference that spanned over five months, the conferees reached agreement and fileda report on November 7, 2003, on H.R. 1588 , the FY2004 DOD Authorization Act( H.Rept. 108-354 ). The bill was passed by the House by a vote of 362 to 40 on that same day andby the Senate by a vote of 95 to 3 on November 12, the following week. The President signed thebill on November 24, 2003 ( P.L. 108-136 ). On May 22, the House and the Senate passed their respective versions of the FY2004 DODAuthorization bills after several days of floor debate. The House version, H.R. 1588 ,passed by 361 to 68. Although the Senate passed its version, S. 1050 , by 98 to 1 on thesame date, the Senate adopted a unanimous consent agreement on the next day providing forconsideration of several specific amendments. On June 4 after the Memorial Day recess, the Senateadopted amendments on concurrent receipt and expedited immigration approval for selectedreservists and their families during wartime and rejected an amendment to cancel the 2005 round ofbase closures before passing the bill again by voice vote and appointing its conferees (see Table1A ). (1) Debate in the Housetook place on May 20 and May 21, and in the Senate on May 19, 20, 21, 22, and June 4, 2003. On May 13, the Senate Armed Services Committee (SASC) reported S. 1050 , after completing markup on May 9 ( S.Rept. 108-46 ). The bill as reported did not include the DODproposal to redesign its civilian personnel system. The House Armed Services Committee (HASC)reported its bill on May 16 after completing markup on May 14 ( H.Rept. 108-106 ). On May 21, theHouse adopted a rule ( H.Res. 245 ) that limited general debate to two hours andamendments to those specified in the rule. The Senate rule required that all amendments beconsidered relevant by the Parliamentarian. The House bill included much of DOD's legislativeproposal for a new civilian personnel system as initially marked up by the House GovernmentReform Committee ( H.R. 1836 ). (2) Table 1A. Status of FY2004 Defense Authorization: H.R.1588 and S. 1050 a. The Senate initially passed S. 1050 by 98 to 1 on May 22, 2003, but then adopteda unanimous consent agreement on May 23, 2003, to continue debate on selectedamendments after the recess; see Congressional Record , p. S7115. Those amendments wereconsidered on June 4, and the bill was then passed by voice vote. The conference report reached compromises on seven major issues that held up the authorization bill for several months: Buy American restrictions proposed by the House and opposed by the Senateand the Administration; proposals to provide costly concurrent receipt of military retirement andVeterans Administration (VA) disability benefits; proposals to allow the Air Force to initiate acquisition of a $29 billion programto lease and buy 100 Boeing KC767 tanker airplanes; fashioning of the new National Security Personnel System requested byDOD; expanding access to DOD's TRICARE health system to non-deployedreservists; exempting DOD from certain environmental statutes;and changing current restrictions on research on low-yield nuclearweapons. The compromises reached are described below. Details on other conference action, includingRDT&E and weapon system funding, will be included in a later update. In its request, the Administration proposed a series of changes to long-standing domesticpreference restrictions codified in the Buy American Act and the Berry Amendment in order to giveDOD additional flexibility to buy from foreign sources. Since 1933, the federal government hasbeen required in the Buy American Act to purchase from American producers unless the head of theagency finds that it is in the "public interest" to waive the restriction and purchase items from foreignsources. (4) For specific types of items -- food, clothing, tents, textiles, specialty metals and measuringtools -- the Berry Amendment requires that DOD buy from U.S. sources unless the purchases are insupport of combat operations outside the United States. (5) In the case of other items such as machine tools and ball bearings,DOD can buy from foreign sources if the foreign country is part of the U.S. national technology andindustrial base (defined as the United States and Canada), if it is in the "national security interestsof the United States," or if DOD would face unreasonable costs or delays. The Secretary of Defensehas waived these various domestic preference restrictions in certain circumstances. (6) This year's debate focused on the extent of DOD's waiver authorities in terms of both thecriteria and the items that could be covered. The Administration sought to widen circumstancespermitting waivers, whereas the House would have either required domestic purchase of additionalitems (such as machine tools) or made it more difficult for the Secretary of Defense to waive currentrestrictions.