National Defense Authorization Act for Fiscal Year 2016--Conference Report

Floor Speech

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Mr. REED. Mr. President, I rise to discuss the conference report of the fiscal year 2016 National Defense Authorization Act, which we will be voting on in the next hour. This conference report is the product of months of negotiation and compromise between the House and the Senate. I want to commend Chairman McCain, Chairman Thornberry, and Ranking Member Smith for a thoughtful, inclusive and cordial process.

There are many provisions in this bill that provide the support we owe to our servicemembers and their families--the funding, authorities, and equipment necessary for our troops to succeed in combat; and significant and critical reforms to the military retirement, compensation, and acquisition systems--many of which I will talk about in further debate on this bill in the days and hours ahead.

However, I regret that I am unable to support this conference report because it shifts $38 billion requested by the President for enduring or base military requirements--the base budget, if you will--to the overseas contingency operations, or OCO, account, essentially, skirting the law known as the Budget Control Act, or BCA.

Again, this is a maneuver to get around a statute that was signed by the President, voted for by Congress, and which has imposed budget caps on every department. Central to that agreement was the significant consensus that domestic and defense discretionary spending would be capped. What this conference report does is violate that consensus by using OCO in a way that it was not originally intended to be so used.

This budget gimmick allows the majority to fully fund the Defense Department without breaking caps imposed by the BCA on both defense and nondefense spending. However, the OCO account provides no relief for nondefense departments and agencies, and that includes many agencies that are critical to our national security. Because of this device, I and nearly all of the Democratic conferees on the bill did not sign the conference report.

Abusing OCO, as this bill would do, is counter to the intent of the Budget Control Act. The BCA imposed proportionally equal cuts to defense and nondefense discretionary spending to force a bipartisan compromise to our ongoing budget difficulties. OCO and emergency funding are outside budget caps for a reason. They finance the cost of ongoing military operations or they respond to other unforeseen events such as national disasters. In my view, to suddenly ignore the true purpose of OCO and treat it as a budgetary gambit in order to skirt the BCA caps is an unacceptable use of this important tool for our warfighters in the field.

Adding funds to OCO does not solve--and actually complicates--DOD's budgetary problems. Defense budgeting needs to be based on our long-term military strategy, which requires the Department of Defense to focus at least 5 years into the future. A 1-year plus-up to OCO does not provide DOD with the certainty and stability it needs when building its 5-year budget.

Just to highlight how this OCO gimmick skews defense spending, consider the amount of OCO in relation to the number of troops deployed. Again, I think it is a useful metric because OCO evolved when we were deploying troops overseas--first in response to Afghanistan during Operation Enduring Freedom and then with respect to Iraq. And there is a correlation, at least in the minds of most people, between our efforts overseas with troops engaged and the size of OCO.

In 2008, at the height of our Nation's troop commitment in Iraq and Afghanistan and with approximately 187,000 total troops deployed, we spent approximately $1 million in OCO for every servicemember deployed to those countries. Under this bill, we will spend approximately $9 million in OCO for every servicemember deployed to Iraq and Afghanistan--roughly about 9,930 people, in DOD projections. So this increase has gone some place. It hasn't gone overseas, directly to the men and women who are fighting, but it has gone to other accounts within the Department of Defense.

In addition to this phenomenon, within the next few years the services will begin procuring new weapons systems while modernizing and maintaining legacy weapons systems. For example, in the Future Years Defense Program, or FYDP, the Department will spend $48 billion to procure the F-35 Joint Strike Fighter; $10.6 billion for the Ohio-class replacement program; $13.9 billion for the Long Range Strike Bomber; and $29.7 billion for the Virginia-class submarine program.

Each of these programs is critically important to our national defense, and we must ensure they are robustly funded. But if the BCA caps remain in place, it is likely tough budget choices will need to be made. As a result, if we decide to stay within the stringent budge caps, we may be forced to fund these programs at the expense of other, equally meritorious programs. We will have a choice of not investing fully in these necessary strategic improvements or using legacy systems, which are still important, to pay for them--tough choices.

Alternatively, and what I think is more likely to happen, these programs will be funded in the base budget. However, in order to ensure the budget caps are not breached, funding will be shifted from the operations and maintenance accounts to the OCO account in order to accommodate increased procurement for new weapons systems. In many respects, that is what is happening with this $38.3 billion that shifted from the traditional base budget into the OCO budget account for O&M requirements.

What you have here is a sense of budgetary sleight of hand. We know we have these increased demands coming to us because we do have to recapitalize on strategic systems, in particular. If we have the BCA caps in place, we have to find money some place, and that is likely to be the OCO account. We will see a fund, OCO, which was designed to support ongoing operations overseas suddenly be used to pay for long-term base budget items, i.e., recapitalization of our strategic deterrent forces.

If we use this scheme this year--maybe with good intentions and the only honest intention of 1 year to get us ahead--it will be easier to do it next year and the year after that, ensuring that this imbalance between security and domestic spending continues. As we all recognize, effective national security requires that non-DOD departments and agencies also receive relief from the BCA caps. The Pentagon simply cannot meet the complex set of national security challenges without the help of other government departments and agencies--including State, Justice, and Homeland Security.

Under Secretary of Defense for Policy Christine Wormuth made this point when she was before the Armed Services Committee a few weeks ago to testify on our strategy to counter ISIL, which many Americans believe to be the top national security threat facing our country. The Department of Defense is only one part of a whole-of- government approach to defeating ISIL. Secretary Wormuth said:

``It will take more than just the military campaign to be successful [against ISIL]. We also will need to dry up ISIL's finances, stop the flows of foreign fighters into Iraq and Syria in particular, protect the United States from potential ISIL attacks, provide humanitarian assistance to rebuild areas cleared of ISIL forces, and find ways to more effectively counter ISIL's very successful messaging campaign.''

Unfortunately, we will effectively diminish our national capabilities to do all these things by underfunding non-DOD departments and agencies that are critical to our national security. Use of the OCO gimmick--it has been referred to that by many people--in this bill facilitates underfunding those departments, and it should not be supported. We need an all-out governmental effort to provide for our national security. Underfunding State, Treasury, and other departments is not going to get us that all-out effort. And when it no longer becomes easy to underfund nondefense agencies, my suspicion is that nondefense programs will begin appearing in OCO. There is some precedent to this. For example, in fiscal year 1992, Congress added funds to the defense bill for breast cancer research. At the time, discretionary spending was subject to statutory caps under the Budget Enforcement Act of 1990--the follow-on legislation to the Gramm-Rudman-Hollings Act of 1985.

That was a situation where they were capping discretionary domestic spending, but defense spending was uncapped, and this is a situation that I think we are recreating in this conference report. That initial funding led to the establishment of the Congressionally Directed Medical Research Program, and I think every Senator is familiar with this important program. It has strong bipartisan support, and each fiscal year Congress authorizes and appropriates hundreds of millions of dollars to the program for cutting-edge and critically essential medical research.

In fact, since 1992, this program has received over $13 billion in funding. While this program is funded through the annual Defense bill and the program is managed by the Army, the Department of Defense does not execute any of the money itself. It is a competitive grant process, and proposals are subject to stringent peer and programmatic review criteria. Essentially, the money goes out to medical research facilities throughout the United States. For all intents and purposes, it is a medical research program much like we fund through NIH.

I am a strong supporter of medical research and a strong supporter of this program, and indeed this program has, through its research and through its efforts, saved countless lives, but my concern is that under the aegis of OCO, approaches and budgetary maneuvers like this will become common. It will be a way to skirt the budget caps. If we do it this year, we have set a precedent for next year and the following year, and 10 years from now the Defense bill could authorize billions of dollars of funding for programs that may be meritorious but will have little or nothing to do with national defense and should be properly budgeted within our base budget from other departments. Indeed, some programs should be properly funded within the Department of Defense's base budget.

Simply put, this approach, which circumvents the Budget Control Act, is not fiscally responsible or honest accounting. It is time we come together as a Congress--before the short-term continuing resolution expires--to fulfill our responsibilities to the American people, especially our troops and their families, to fully fund our government by revising or eliminating the budget caps proposed by the BCA on both defense and nondefense spending.

In fact and indeed, if it were not for the OCO issue, I would have likely signed the conference report and voted for this bill. However, I believe this OCO issue is too important. The Secretary of Defense believes it is too important, the President believes it is too important, and he said he will veto this bill and any other bill that relies on this OCO gimmick. As Secretary of Defense Carter said last week:

``Without a negotiated budget solution in which everyone comes together at last, we will again return to sequestration-level funding, reducing discretionary funding to its lowest real level in a decade despite the fact that members of both parties agree this result will harm national security. ..... Making these kinds of indiscriminate cuts is managerially inefficient, and therefore wasteful, to taxpayers and industry. It's dangerous to our strategy, and frankly, it's embarrassing in front of the world.''

These are the words of the Secretary of Defense, echoing the comments that we have heard from uniformed military leaders about the inherent dangers of sequestration if it is allowed to continue forward.

The BCA was created by Congress to address the immediate threat of what would have been a catastrophic national default and to compel Congress to come together and reach a balanced compromise on the budget. It is time for Congress to make the hard choices, modify or eliminate the caps in the BCA, and end the threat of sequestration. It is not just an appropriations issue. It is affecting everything we do. Unfortunately, it affects the Fiscal Year 2016 National Defense Authorization Act and therefore I will not be prepared to support this legislation.

With that, I yield the floor.

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