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1 Lynn M. Williams, FY2018 Defense Spending under an Interim Continuing Resolution 1 (2017)

handle is hein.crs/crsmthmbdot0001 and id is 1 raw text is: I Congressional Research Service ~Info rmrng the Veslat've debate s nce 1914 December 11, 2017 FY2018 Defense Spending Under an Interim Continuing Resolution Background On September 8, 2017, Congress passed and the President signed H.R. 601 (P.L. 115-56), the Continuing Appropriations Act, 2018, and Supplemental Appropriations for Disaster Relief Requirements Act, 2017. In addition to providing supplemental appropriations in response to Hurricane Harvey and temporarily suspending the statutory limitation on public debt, the bill provided temporary funding in FY2018 for certain programs and activities typically funded by regular appropriations bills. Commonly referred to as an interim continuing resolution (CR), Division D of H.R. 601 provided budget authority for continuation of certain projects or activities funded in FY2017. On December 8, 2017, H.R. 601 was amended by H.J.Res. 123 (P.L. 115-90), extending the period covered by the CR through December 22, 2017. H.R. 601 as extended by H.J. Res will be referred to herein as the FY2018 CR. Funding Rate An interim CR typically funds activities under a formulaic approach that provides budget authority at a restricted level-not a specified amount. This method of providing budget authority is commonly referred to as afunding rate. The funding rate for a project or activity is calculated as the total amount of budget authority annually available based on a reference level, multiplied by the fraction of the fiscal year for which the funds are made available in the CR. In recent years, the reference level has generally been based on the amount of budget authority made available under the prior year's appropriations, reduced as required to comply with Budget Control Act (P.L. 112-25) limits. The FY2018 CR provides budget authority for FY2018 for most projects and activities at the rate at which they were funded during FY2017 minus 0.6791% effective October 1, 2017, through December 22, 2017. The law funds Overseas Contingency Operations (OCO) at the full FY2017 rate (not subject to the 0.6791% reduction). Table 1 provides an annualized FY2018 CR rate-an estimation of the budget authority provided to DOD if the terms of the FY2018 CR were extended until the end of FY2018. This estimated annualized CR rate is approximately 9% less than the President's budget request. The rate for operations provided under the CR is 13% below the President's budget request for Operation and Maintenance (O&M) accounts-funding that provides for readiness activities such as training, equipment maintenance, logistics and civilian personnel pay. Research, development, test and evaluation (RDT&E) funding is 15% below the requested funding amount for FY2018. Potential Effects of a CR on DOD Programs Interim CRs typically are designed to preserve congressional funding prerogatives until annual budgetary decisions are made, while avoiding a government shutdown. By its very nature a CR provides funding quite differently from a regular appropriations bill, if only because decisions on funding levels are set to continue at or near the previously appropriated level. The Government Accountability Office testified before the Senate Committee on Homeland Security and Governmental Affairs on March 13, 2013, that CRs can create budget uncertainty, complicating agency operations and causing inefficiencies, and that agency officials report taking varied actions to manage inefficiencies resulting from CRs.... DOD faces these challenges, as do other federal agencies. DOD also faces unique challenges Table I. DOD Base Discretionary Budget Authority and Estimated CR Budget Authority (Select Accounts) FY2017 FY2018 CR FY2018 FY2018 CR vs. Percent Appropriation Account Enacted Annualized Rate Request FY2018 Request change Military Personnel Operation and Maintenance (O&M) Procurement Research and Development (R&D) Revolving and Management Funds Defense Health Program Total Selected Accounts $128.7 $167.6 $108.4 $72.3 $1.5 $33.8 $512.3 $127.8 $166.5 $107.7 $71.8 $1.5 $33.6 $508.8 $133.9 $188.6 $113.9 $82.7 $2.1 $33.7 $554.9 -$22.1 -$6.2 -$10.9 -$0.6 -$0.1 -$46.0 -4.8% -13.3% -5.8% -15.2% -41.0% -0.4% -9.1% Source: H.Rept. 115-219, Committee Report to Accompany Department of Defense Appropriations Bill, 2018, and H.R. 601 (P.L. 115-56). Notes: The annualized FY20 18 CR rate is an estimation of the budget authority provided if the terms of H.R. 601 were extended until the end of FY20 18. Does not include Overseas Contingency Operations funding. Dollars in billons; totals may not reconcile due to rounding. wwwcrs.gov i 7-570 S

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