ASMC Viewpoint

Defense Financial Highlights

DoD on the Hill

Congress reconvenes:  The Senate returned this week from its winter recess to begin the second session of the 111th Congress.  The House held a pro forma session on January 5th and will return next week to begin its work.  The Senate began to debate the House-passed bill to increase the public debt limit.  The main issue this month will be the Health Care Reform bill.  Congressional Democrats are working to resolve the differences between the House and Senate versions of the Bill.  It remains unclear when negotiators will have a final bill ready for a vote.  Some had hoped that the bill would be ready for the President's signature before he gave his State of the Union speech (normally presented to a joint session of Congress sometime in late January).  House Speaker Nancy Pelosi (D-CA) has said that it was "possible" that they may finish by the end of the month. 

Defense Budget and Financial Management News

FY2011 Budget countdown:  The FY2011 federal budget is scheduled to go to Congress on Monday February 1, 2010.  Highlights will track progress towards that date and provide readers with scheduling information (press conferences, congressional hearings, etc) as it becomes available.

FY2010 Enterprise Plan to be digital:  The Business Transformation Agency (BTA) announced that the FY2010 Enterprise Transition Plan (ERT) will be entirely digital.  The new electronic plan will replace earlier print versions that had become very bulky and increasingly difficult to use.  The new digital version has been streamlined and will present program milestones for DoD's business information investments and IT systems in easy to use charts and graphs. 

Other Issues of Interest

President issues executive order to set pay for FY2010:  The President set pay levels (beginning January 11, 2010) for federal civilian employees (executive level, senior executives, and general schedule employees), uniformed military personnel, and judges.  The pay levels (and locality pay) set in an executive order issued late last month comply with statutory pay caps and pay raises for civilian employees in the FY2010 Consolidated Appropriations Act, and for uniformed personnel in the FY2010 Defense Authorization Act.  Tables attached to the executive order list the pay levels by grade/rank and by years of service for each category of pay plan.  The Office of Personnel Management (OPM) website includes a detailed explanation of each pay plan and their originating authorities.

GSA issues new POV reimbursement rates:  Effective january 1, 2010,the new reimbursement rate for the use of privately-owned vehicles used for government business was set at 50 cents per mile.  The new rate is 5 cents lower than the previous rate of 55 cents, which was set last January.  This change marks the second consecutive rate reduction since it reached a high of 58.5 cents in March of 2008.

Secretary Gates agrees to stay on the job:  According to Army Times and other news sources, Secretary Robert Gates has agreed to remain as Secretary of Defense at least through the end of 2010.  Gates is the only holdover from the previous administration.  Pentagon press spokesperson Geoff Morrell told reporters that the Secretary and the President agreed to review the situation again at the end of the year. 

DEFENSE FINANCIAL HIGHLIGHTS

DoD on the Hill

Afghanistan and Health Care reform dominate Congress's' attention:  The President's troop increase announcement on Tuesday night and the Senate's continuing debate on Health Care reform (with a sidebar issue of White House security and party crashers) captured most of Congress' time and attention this week.  There was no movement on Appropriations bills.  It is likely that these two major issues will continue to command members' attention until adjournment later this month.  The Senate majority leadership's goal of finishing its Health Care bill before the end of the year means that only limited Senate floor time will be available to debate other legislation.  The President's announcement to commit an additional 30,000 troops to Afghanistan has already spawned four committee hearings  with testimony by State Sec. Hillary Clinton, Defense Secretary Robert Gates, and JCS Chairman ADM Mike Mullen and focused Appropriators' attention on how to pay for this deployment (see below).

FY2010 Omnibus Appropriations Bill(s) growing more certain:  With the end of the current Continuing Resolution (Dec. 18) approaching, congressional appropriators are working to come up with a plan to complete FY Appropriations Bills.  House Majority Leader Steny Hoyer (D-MD) expressed hope that final action on appropriations bills could be completed in the next two weeks.  But, the question now is:  In what form will the endgame be accomplished?  For some time, Hill observers have speculated that the remaining seven appropriations bills would be wrapped up into one bill, possibly the DoD bill.  Now they are talking about two bills.  GovernmentExecutive.com reported today that House Democrats are considering one bill that would include six Appropriations bills, as well as some job-related legislation and a short-term expansion of the Patriot Act.  The second bill, according to the report, would be the FY2010 DoD Appropriations bill, which could include an increase in the debt ceiling.  This latter approach might change due to strong opposition to including debt limit increases in other legislation. 

Defense Budget and Financial Management News

Congress proposes ways to fund Afghanistan troop increase:  When the President announced an increase in troop strength in Afghanistan by 30,000, he said he would work with Congress to fund his plan and strategy.  He didn't have to wait long for Congress' response.  Even before the announcement was made, members of Congress had begun sharing their ideas on how the $30 billion (Administration estimate) should be funded.  House Appropriations Chair Dave Obey (D-WI) proposed a special surtax to fund the additional costs.  Some Senate Democrats are taking about a special war tax.  Rep. Jerry Lewis (R-CA), also an appropriator, recommended reducing all nondefense agencies' FY2010 budgets by two percent.  Others have recommended transferring unused stimulus funding to DoD for the war.  In any case, Congress is likely to press for early consideration of a supplemental so they will have the opportunity to debate not only the funding but the strategy.

Other Issues of Interest

President formally recommends a 2 percent civilian pay increases 2010:  In a letter to House Speaker Nancy Pelosi (D-CA), President Obama reiterated his support for a two percent pay raise for federal civilian personnel and a freeze on locality pay at the 2009 level and issued an executive order to this effect,  The President cited sacrifices being made by employees in the private sector during the current economic downturn and budget affordability given the high deficits as the main reasons for his decision.  The Congress could still overrule the President if they pass and the President signs legislation providing for a higher raise.  This has often been done in past years.  Legislation for a higher raise would come in the FY2010 Financial Services Appropriations bill.  The House version of the bill, passed earlier this year, provides a 2 percent raise.  The Senate Appropriations Committee's bill, which has yet to come to the Senate floor, supports a 2.9 percent pay increase.  Hill observers think that is unlikely that the final bill will include a raise above 2 percent.

DEFENSE FINANCIAL HIGHLIGHTS

DoD on the Hill

Senate passes FY2010 Military Construction./VA appropriations bill:  The first piece of work for the Senate upon returning from the Veteran's Day recess was to pass, unanimously, the FY2010 Appropriations bill.  The House passed the bill In July.  The Senate bill provides $23.2 billion for total Military Construction appropriations, over $285 million above the request and $50 million over the House bill.  The Senate adds $350 million (not included in the House bill) to fund the remaining requirements of the temporary expansion of the Homeowners Assistance Program (HAP) provided in the economic stimulus legislation.  This expansion funds assistance to military members and certain civilians who have orders to relocate and have difficulty selling their homes or experience extreme loses in selling as a result of the current economic downturn.  For military facilities construction, the Senate bill reduces active forces funding by $350 million and adds $260 million to reserve forces construction.  The Senate makes no change to the Family Housing request and adds $25 million to funding for BRAC.  You can find additional detail in the Senate Appropriations Committee report.  The Senate will now conference with the House to resolve the differences in the bills.

Congress makes little progress on FY2010 Appropriations bills:  Except for the Senate's action on the Military Construction/VA bill, no FY2010 appropriations bills advanced in Congress this week.  The House has passed all 12 appropriations bills, while the Senate still has not passed three (Financial Services, Labor/HHS/Education, and State/Foreign Operations).  There are four bills in conference (Commerce/Justice/Science, DoD, Military Construction/VA, and Transportation).  Hill observers indicate that it is now looking more likely that the DoD bill, or any other bill for that matter, will not be reported out of conference before the Thanksgiving recess next week.  Under this scenario, it is a better than even chance that the DoD bill could include the other unfinished bills (in an Omnibus bill) and carry them into enactment. 

Defense Budget and Financial Management News

FY2010 Defense Authorization Act contains financial management-related legislation:  Want to know what financial management-related legislative language is in the FY2010 Defense Authorization Act?  No need to read the entire bill to find relevant items.  The Defense Finance and Accounting Center (DFAS) has done the work for you.  You will find all pertinent FY2010 legislative language on the DFAS web site in the legislative affairs section.  DFAS also has similar list for FY2009 and FY2008 on the same site.

Business Transformation Agency releases BEA 6.2:  The Business Transformation Agency (BTA) announced the release of Business Enterprise Architecture (BEA) 6.2, the second informational release since BEA 6.0 was delivered in March 2009.  The BEA defines DoD's business transformational requirements and the business capabilities to meet those requirements.  The annual informational releases contain interim content updates that allow stakeholders to better understand future requirements and for planning purposes and give them the opportunity to accelerate implementation.  This year's update (6.2) includes enhanced mapping of 15 End-to-End (E2E) business flows into the BEA and realignment of DoD Architecture Framework products:  OV-5 Node Tree and OV-5 Operational Activity Models.  According to BTA's announcement, the E2E improvement will provide a better alignment between business capabilities and Enterprise Resource Planning (ERP), which will make both more useful to decisionmakers.  The realignment of OV-5 Node Tree and OV-5 Operational Activity Models will make for a more consistent numbering of both activities.

 Other Items of Interest

Erin Conaton nominated to be new Air Force Under Secretary:  Last week, the President nominated Ms. Erin Conaton to be the new Under Secretary of the Air Force.  The position has been vacant since Ron Sega resigned in 2007.  Ms. Conaton has been on the staff of the House Armed Services Committee since 2001 and currently serves as the Staff Director.  Before that, she was a research director for the U.S. Commission on National Security (Hart-Rudman Commission).  She is a graduate of Georgetown University and received a master's degree from Tufts University Fletcher School of Law and Diplomacy.

Sen. Byrd becomes longest serving sember of Congress:  Sen. Robert C. Byrd (D-WVA) this week became the longest serving member of Congress in history--56 years and 320 days.  Sen. Byrd passed the previous record set by Sen. Carl Hayden (D-AZ), who served from 1912 to 1969.  Those who have followed much of his time in Congress, remember the many interesting aspects of his character and his legislative life.  Over his career, he has a 98 percent attendance record and has cast over 18,000 votes.  For many years as Chair and ranking minority member of the Senate Appropriations Committee, Sen. Byrd has underscored his strong belief in Congress' "power of the purse" to thwart presidential policies.  He has been referred to as the "king of pork" for his unapologetic support for congressionally-funded projects for his native West Virginia.  He is a recognized expert on Senate traditions (he wrote a four-volume Senate history) and is a master of congressional procedure.  He routinely quotes classical literature, especially Caesar, Plutarch, and Livy, during Senate debates.  If you have watched him over the years in the Senate, as this reporter has, you will remember how he would often reach into his pocket and retrieve a copy of the Constitution (which he always carries with him) to make a debating point and his frequent references to his dog Billy.  Congratulations to Sen. Byrd.

DEFENSE FINANCIAL HIGHLIGHTS

DoD on the Hill

Appropriations bills make little progress:  The President signed the FY 2010 Agriculture Appropriations bill this week, making it only the second appropriations bill signed so far (the Legislative Branch bill--including the Continuing Resolution (CR)--was signed in early October).  In the only other action of note, the final Homeland Security Appropriations bill passed the Senate and, along with the Energy and Water bill, awaits the President's signature.  House Majority Leader Steny Hoyer (D-MD) criticized the Senate for not passing five appropriations bills still on their docket.  There are three bills in conference that could be completed and be ready for the President next week (DoD, Interior & Water, and Transportation).  But even if this should happen, Congress will have to pass an extension of the current CR, which expires on October 31.  It is being reported on the Hill that the House is now working up a bill to extend the current CR until December 15.  there is also a possibility that Congress will not be able to finish all appropriations bills before Congress adjourns for the year.  If that happens, they will have to package the remaining bills in an Omnibus FY 2010 Appropriations bill.  Students of legislative history will remember the President signed an FY 2009 Omnibus appropriation bill in March of this year that contained 9 appropriations bills (all but DoD, Homeland Security, and Transportation, which were passed together on September 30, 2008). To follow the action on the FY 2010 appropriations bills, go to the Library of Congress' Thomas website.

FY2010 DoD Appropriations conference could end soon:  House and Senate conferees are winding down their work on the Fy 2010 DoD Appropriations bill.  They could be ready to pass and send the conferenced bill to the President next week.  House Appropriations Defense Subcommittee chair Jack Murtha (D-PA) stated in an interview this week that there are just a few items remaining to be resolved, including funding for the new presidential helicopter (which had drawn a presidential veto threat).  Action could slow down if, as reported, some members push to include unpassed appropriations bills in one Omnibus bill attached to the DoD bill, which is considered politically a must-pass bill.  However, there is no widespread support for such a move at this time so the bill is likely to go forward. 

FY2010 Defense Authorization bill sent to the President:  After voting to cut off debate, the Senate yesterday approved the final FY2010 Defense Authorization bill and sent it to the President for signature.  The President had earlier threatened to veto the bill if it contained funding for the F-35 alternative engine program.  The final bill contains this funding, but Senate leaders believe the White House will approve the bill notwithstanding.  The final bill contains a 3.4 percent military pay raise, repeals the National Security Personnel System (NSPS), and provides authority for federal retirees under the Federal Employment Retirement System (FERS) to receive credit for unused sick leave when calculating retirement payments.  It also funds more than requested F/A-18-E/F and C-17 aircraft and ends F-22 buys.  To read a summary of the FY2010 Defense Authorization conference report, go to the Senate Armed Services Committee website.

Other Items of Interest

Public-Private pay gap widens in 2009:  CovExec,com reported this week the Federal Salary Council announced that the difference between the average pay for federal and private-sector employees increased from 25.17 percent in 2008 to 26.42 percent in 2009.  However, the Council made no further recommendation on the 2010 federal pay increase, citing the lack of final congressional action on the raise.  Analysts expect the raise to be between 2 percent proposed by the President and approved in the House-passed Financial Services Appropriations bill and the 2.9 percent raise included in the Senate Appropriations committee version of the bill.  The FY2010 Defense Authorization bill includes a 3.4 percent military pay raise.

President nominates Gladys Commons to be Navy FM:  In case you missed it, President Obama has nominated Ms. Gladys J. Commons to be Assistant Secretary of the Navy (Financial Management and Comptroller).  The Senate Armed Services Committee held her confirmation hearing yesterday.  Most recently, Ms. Commons served as Comptroller of the Military Sealift Command.  Many ASMC members will remember that she was the Principal Deputy Assistant Secretary of the Navy (Financial Management and Comptroller) for eight years ans was Acting Assistant Secretary for a short time.

DEFENSE FINANCIAL HIGHLIGHTS

DoD on the Hill

Appropriations bills move forward, slowly:  After showing a flash of activity last week, congressional action to complete FY 2010 Appropriations bills slowed a bit this week.  Only two bills moved forward:  1) the final FY2010 Energy and Water bill passed the Senate and joined the Agriculture bill in the queue for the President's signature; and 2) the Homeland Security bill finished conference, was passed in the House, and now awaits Senate final action.  In a press interview, Sen. Inouye (D-HI), chair of the Senate Appropriations Committee, again stressed his desire to move appropriations bill along before floor action begins on the Health Reform bill later this month.  He has set his sights on the DoD, Transportation, and Interior & Environment bills.  To follow the action on the FY 2010 appropriations bills, go to the Library of Congress "Thomas" web site.

FY 2010 DoD Appropriations bill conference continues:  House ans Senate conferees continued work on the Fy 2010 DoD Appropriations bill this week, but no agreement was reached.  In a letter to the conferees, Secretary Gates again stated that he would recommend that the President veto a bill that provides funding for a new presidential helicopter and the F-35 alternative engine program.  Appropriators appear to be more supportive of the F-35 second engine program than funding for the new helicopter.  They may be helped by the authorizers in their efforts to save the engine funding.  The FY 2010 Defense Authorization conferenced bill also contains funding for the engine program.

FY 2010 Defense Authorization bill not yet ready for the President:  Last week it appeared that the FY 2010 Defense Authorization bill was going to the President for signature very soon.  The House had passed the bill and the Senate seemed ready to act.  However, a week has gone by and the Senate still has not brought the bill to the floor.  It may be that the Senate is waiting for the Appropriations conference to finish before they act.

Other Issues of Interest

No COLA adjustment for federal retirees and Social Security recipients in 2010:  A number of press sources reported this week that there will be no cost of living increase for federal retirees and Social Security recipients next year.  In 2009, federal retirees under CSRS received a 5.8 percent increase in their annuity checks and FERS retirees got a 4.8 percent increase.  The 2009 Social Security increase  was 5.8 percent.  To partially offset the lack of increase for those on Social Security, the President has announced his support for a one-time payment of $250.  This payment could come from already enacted stimulus funding.

More PDI Input Needed

Thursday night has traditionally been Chapter Fair night at PDI, an event that has provided an opportunity for friendly chapter competition and camaraderie.  In the past few years, ASMC has seen a declining attendance at this event, due largely to lack of chapter participation and the competition from corporate events. In addition, available volunteer resources are needed more critically in the areas of Program Support and Hospitality.

Of the following options, which would you like to see at PDI 2008?

Option one: Hold the traditional chapter fair on Thursday night.

Option two: Hold a Silent Auction

Each chapter would provide an item or gift basket on Tuesday of the PDI, to a secure area in the registration lobby. Attendees of PDI would offer silent bids on these items, using their PDI registration number to remain anonymous. The winning bidder would return on Thursday to claim the prize, and leave a payment for that particular chapter. Each chapter would receive the bid amount for their scholarship funds, or other charitable activities.

Option three: Play “PDI Survivor”

Each participating chapter would pay a $25.00 registration fee. Before the PDI, registered chapters will be given the opportunity to earn points through the PDI website, to include trivia questions and puzzle solving. Each participating chapter will create an Immunity Idol prior to PDI who will represent the “spirit” of their chapter. (can also be auctioned off at PDI) PDI attendees will have an opportunity to “vote” on the best idol. Participating chapters will have an opportunity to earn points Tuesday – Thursday of the PDI, with puzzles hidden throughout the conference center with information about their location. There would be three short Immunity Challenges. The chapter with the most points wins as “PDI Survivor” and monetary prizes will be given for the top three places.

Option four: Host both Silent Auction and PDI Survivor.