Spending bill clears committee 

Julie Rudowski

Assistant Director, Government Affairs

Senate panel advances defense bill. The Senate Appropriations Committee approved the $604.5 billion fiscal 2013 defense spending bill before heading out for the August recess.

The bill provides $511.2 billion in base funding and $93.3 in overseas contingency operation funding.

The bill:

Funds an active duty end strength of 1,401,697, and reserve component end strength of 846,163.

Funds a 1.7 percent authorized pay raise for military personnel

Adds $392 million above the budget request to cover shortfalls in military personnel accounts which were identified by the services after the budget was submitted.

Recommends $33.2 billion for the Defense Health Program which will provide medical services for military personnel and their families; continues advancements in medical research; modernizes and maintains medical infrastructure, and develops the next generation of electronic health records.

Aligns with the National Defense Authorization Act reported by the Senate Armed Services Committee, which rejects the proposed increase to TRICARE fees.

Fully funds family support programs and provides enhancements for programs such as impact aid and the Educational Partnership Program that assist military dependent students.

Adds $1 billion in the National Guard and Reserve Equipment Account.

What’s next?

Nothing! The Senate leadership refused to bring the bill to the floor for a full vote before they left town.

In fact, it is highly unlikely it will go to the floor after the November elections.

Instead, House and Senate leaders have agreed on a six-month continuing resolution (CR) that would fund the government from October through March 2013, but at the Fiscal Year 2012 level.

This means that we will see a repeat of last year when the defense bills were finally approved six months after the start of the new fiscal year.

Senate Majority Leader Harry Reid, D-Nev., said the long term CR "will provide stability for the coming months."

Stability for whom? Not the Defense Department.

Working under a continuing resolution severely hampers normal day to day business for the Pentagon. Program managers are unable to initiate any new programs, procurement accounts are frozen, military bases will probably issue only short-term contracts and training hours will be affected.

These are but a few of the factors that will drive up costs at a time when the Pentagon could have to trim billions of dollars more from its budget under sequestration.

The rest of the story? We reported in last month’s column on the Defense Department’s request to reprogram $708 million in excess funds from the military’s healthcare budget to higher priority items.

We, along with a couple of dozen members of Congress, questioned how they had any excess funds when they have told us repeatedly that the spiraling costs of health care threaten the active force and are "eating us alive."

On Aug. 2, the department provided an explanation.

Robert Hale, DoD comptroller and chief financial officer, and Dr. Jonathan Woodson, assistant secretary of defense for health affairs, held a conference call with reporters.

Hale said, "Two years ago, we made an estimate of the amount of funding we would need for the Defense Health Program, which pays TRICARE bills, and was approved by Congress."

Adding, "Uncertainties inherent in such forecasting resulted in an estimate that was 2 percent, or $708 million, higher than the actual $32.5 billion budget for fiscal 2012."

Okay, but this is not the first time this has happened.

Defense officials overstated the Defense health care budget by over $772 million for fiscal 2010 and $1.4 billion for fiscal 2011.

When asked about the department's plan to raise fees, Hale said the department believes that the issue of TRICARE fee increases is separate from the reprogramming issue.

"In 2001 through 2012, the overall military healthcare budget went up 175 percent, … and it is that growing trend line that has caused us to look at issues like changing the TRICARE fees and [finding] a way to reduce the growth in health care costs, as well as the fact that [TRICARE] fees haven’t been significantly increased for 15 years," he said.

We aren’t buying this. We continue to believe that the department wants to fund other "higher priority" items on the backs of military retirees.

It’s wrong and AUSA will continue to fight this vigorously.

Congress isn’t buying it either.

In addition to the letter from lawmakers to Defense Secretary Leon Panetta asking for an explanation, House and Senate appropriators are putting the money where the mouth is by recommending that millions of dollars be cut from the military health care budget because, they say, the Pentagon has consistently overstated its costs by exaggerating medical inflation.

In its defense spending bill for fiscal 2013, the Senate Appropriations Committee recommended that $807 million be cut from the $16.2 billion request for private sector care for defense personnel.

The report that accompanied the spending bill said, "The Department recently submitted an omnibus reprogramming for Fiscal Year 2012 in which they identified an additional $707,949,000 of unexecuted funding due to lower than budgeted private sector care cost growth rates.

Given this continued trend of prior-year under-execution, the committee recommends a reduction of $807,413,000 to the Fiscal Year 2013 budget request, a 5-percent reduction, which is consistent with the Fiscal Year 2012 anticipated execution level.

The committee urged the DoD to submit future year budgets that are "more closely aligned with recent provided care patterns."

Citing the same reason, the House-passed defense spending bill would cut $400 million.