House Fires First Shot on Defense Bill as Senate Loads Their Chamber
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House Fires First Shot on Defense Bill as Senate Loads Their Chamber

Brownstein Client Alert, June 25, 2024

On June 14, the House voted 217-199 to pass its version of the fiscal year 2025 National Defense Authorization Act (NDAA) (H.R. 8070), and the Senate Armed Services Committee voted 22-3 to advance their chamber’s version of the bill to the Senate floor. Despite the House NDAA emerging from the House Armed Services Committee with a nearly unanimous vote of 57-1 on May 22, the NDAA passed the House on a nearly party-line vote due to the inclusion of partisan amendments. Representatives submitted almost 1,400 amendments under the structured rule, of which just over 350 were made in order. The limited consideration of amendments resulted from pressure from both the House and Senate Armed Services committees to tailor their bills strictly to matters within their jurisdictions. The bill is now awaiting action in the Senate, but staff has already started work to begin negotiating conferencing positions. The Senate’s version is unlikely to see floor consideration this summer and the formal conference process is not expected to occur until later this year.

While the full text of the Senate bill has not yet been released, according to the SASC Executive Summary, the most significant difference between the House and Senate versions will likely be their respective toplines. Under the Fiscal Responsibility Act (FRA) passed on June 3, 2023, the spending cap for the FY25 defense bill was set at $895 billion. The House bill is consistent with FRA spending levels, while SASC is reporting its topline well over the cap, at $923.3 billion. Currently, the House bill only results in a 1% increase over last year’s top line, resulting in an overall cut in real defense spending due to inflation. This topline and the FRA cap have been issues of contention as members seek to fund national security objectives and increase compensation and benefits to service members. Whether this funding level is adhered to in the conference committee and how the appropriations process to allocate the funds shakes out will not be decided until after the election in November.


House-Passed Bill

Despite the House-passed FY25 NDAA’s 1% increase in defense spending over last year’s bill, it makes significant efforts to combat emerging threats and persistent national security challenges facing the armed services. The bill primarily targets improvements to: (1) the quality of life for servicemembers and their families; (2) deterrence in the Indo-Pacific and of global adversaries; and (3) enhancing oversight of DOD contracts.

Concerns over recruitment and retention, facing all branches and levels of the armed services, were consistently raised throughout posture hearings in the lead-up to the drafting of the House bill. In response, the FY25 NDAA makes significant investments toward the compensation, housing and health care of servicemembers and their families. Most notably, the House bill authorizes a 19.5% pay increase for junior enlisted and a 4.5% increase for all other servicemembers. Other highlights include the adjustment of servicemember housing allowances to fully cover average local rental rates and over $693 million in funding for the construction of new family housing units. The bill also provides servicemembers with access to specialty medical providers by waiving TRICARE referral requirements and extending recruitment bonuses for doctors working for the Department of Defense (DOD). To further support servicemembers’ families, the bill makes improvements to the process of transferring military spouses’ professional licenses between states, extends access to DOD child care for military spouses seeking employment and authorizes over $225 million to build new schools for children of servicemembers.

Focusing on maintaining deterrence and countering adversarial cooperation, the FY25 NDAA makes significant efforts to build partnerships, bolster allied security and invest in emerging technologies. Critically, the bill resources the European and Pacific Deterrence Initiatives to include $1.15 billion for Pacific Deterrence Initiative infrastructure projects, $650 million in INDOPACOM Commander priorities, $3.9 billion in support for the North Atlantic Treaty Organization (NATO) and efforts to counter Russian aggressions through U.S. commitments to European allies and partners. It also provides funding for a second Virginia-class submarine, not included in the Navy’s FY25 budget request, to assist in Indo-Pacific operations and maintain timelines for the future sale of the vessel to Australia as part of the AUKUS security partnership. The bill works to strengthen alliances with critical Indo-Pacific partners through the expansion of joint military exercises with regional allies and partners and increased support for Taiwan through the Taiwan Relations Act and consideration for bilateral defense industrial base cooperation. The bill also authorizes funding for the development of innovative technologies such as hypersonics, artificial intelligence (AI), cyber capabilities and the creation of a drone corps for manned, unmanned and counter-unmanned aerial systems.

Oversight matters also received attention with members taking several actions to cut contractor waste and better manage expensive programs. During the committee’s markups and hearings, HASC members were vocal in their desires to address the cost of the F-35 program and insistent in ensuring the program was modernized to meet changing DOD requirements. To address these concerns, the House bill reduced the procurement of F-35s by 10 aircraft and reallocated that procurement funding to improving testing, modeling and production capacity programs that make certain the aircraft meets performance requirements. The bill also requires reviews of DOD biodefense policies and reports on the Sentinel and Ford Class aircraft carrier programs to evaluate costs and developments.

As the bill moved through the HASC and Rules Committee, several high-profile amendments were not ruled-in-order or approved in the final bill. Notably, both the BIOSECURE Act and the Enhancing National Frameworks for Overseas Restriction of Critical Exports (ENFORCE) Act were not made in order by the Rules Committee. These bipartisan amendments, originating from members of the Select Committee on the Chinese Communist Party and the Foreign Affairs Committee, respectively, would have prohibited executive agencies from contracting with biotechnology companies and exporting AI systems related to national security to entities connected to the Chinese government. These provisions were some of the many that were not considered by the House, as the HASC worked to narrowly focus the chamber’s bill to specific national security guidelines and objectives.


Senate Executive Summary:

The SASC version of the FY25 NDAA, as outlined in the SASC Executive Summary, takes a notably different approach to a handful of key issues in the House version, namely reproductive care, diversity and climate change. The SASC FY25 NDAA positions itself to meet four core objectives: (1) equipping the force for long-term strategic competition; (2) modernizing for the future battlefield; (3) strengthening the Joint Force and defense workforce; and (4) building American combat power.

For managing long-term strategic competition, the SASC FY25 NDAA authorizes the full budget request of the Pacific and European Deterrence Initiatives. It also authorizes the Indo-Pacific Security Assistance Initiative and urges the DOD to provide defense articles and services to allies and partners in the Indo-Pacific. The bill additionally requires a plan to establish a joint force headquarters, operating subordinate to the U.S.-Indo-Pacific Command (INDOPACOM), located in Japan and Australia. SASC also included provisions to condemn the Oct. 7 terrorist attack on Israel, support DOD activities to increase humanitarian assistance to civilians in Gaza and increase further support for U.S.-Israel cooperation efforts.

SASC’s plan to modernize DOD for the future battlefield focuses on investing in the development of and countermeasures for emerging military technologies. Regarding drones, the SASC bill includes increased funding for unmanned aircraft systems (UAS) defenses and capabilities and a requirement for a strategy for counter-drone technologies, referring drone offenses for investigation and prosecution and how to respond to drone incursions. On AI, the bill contains language directing the DOD to establish a pilot program to optimize artificial intelligence-enabled software for the workflow and operations of DOD, especially at DOD depots, shipyards and manufacturing facilities. SASC also notes the bill requires the Defense Advanced Research Projects Agency (DARPA) to establish a Quantum Scaling Initiative to rapidly expand and support the development of quantum computing capabilities for DOD. The bill also requires actions to improve supply chain security, including establishing secondary domestic production sources at existing arsenals, depots and ammunition plants to address munition supply chain chokepoints.

To strengthen the Joint Force and defense workforce, the SASC bill authorizes funding to support a 4.5% pay raise for servicemembers and a 2% pay raise for DOD civilian employees. It would increase monthly basic pay for junior enlisted servicemembers, in addition to the force-wide pay raise. The bill also authorizes servicemembers without dependents who live in military unaccompanied housing to be paid higher rates of the Partial Basic Allowance for Housing. The bill works to further improve the quality of life for service members by authorizing increased funding to repair and improve enlisted barracks across the services as well as establish the Commission on Quality of Life for the All-Volunteer Armed Forces to assess the quality-of-life considerations for the military and civilian workforces.

Regarding improving U.S. combat power, the SASC bill authorizes an additional $1.43 billion for a third DDG Arleigh Burke-class destroyer, as well as increased funding to enhance the submarine industrial base and support the construction of a second Virginia-class submarine. The bill would also authorize increased funding for military construction projects and establish a cross-functional team to implement the recommendations of the Commission on Planning, Programming, Budgeting and Execution Reform. SASC further targets continental defense concerns by requiring the development of a national integrated air and missile defense architecture.


What to Watch in Conference

The most significant difference between the two bills is SASC’s adoption of a bipartisan amendment to add $25 billion to the budget, resulting in the SASC bill’s topline reaching $923.3 billion in defense discretionary budget, while the House’s bill is $895.2 billion. The difference in these amounts and whether conferees will adhere to the $895 billion cap set by the FRA will be key points of contention during the conference committee. Beyond the toplines, conferees will have to manage numerous partisan provisions included in the House-passed bill to secure bicameral support and ultimate passage of the bill.

While Senate Majority Leader Chuck Schumer (D-NY) has yet to schedule the consideration of the Senate FY25 NDAA, , committee staff and other conference participants have already informally begun the conference process. Brownstein has been consistently engaged with notable points of contact and is in a unique position to help those interested in learning more and engaging in the NDAA process. For more information, please contact the authors.


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