House Report 111-491 - NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2011

[House Report 111-491]
[From the U.S. Government Publishing Office]

111th Congress Rept. 111-491
HOUSE OF REPRESENTATIVES
2d Session Part 2

======================================================================

NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2011

_______

May 26, 2010.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Skelton, from the Committee on Armed Services, submitted the
following

SUPPLEMENTAL REPORT

[To accompany H.R. 5136]

This supplemental report shows the cost estimate of the
Congressional Budget Office with respect to the bill (H.R.
5136), as reported, which was not included in part 1 of the
report submitted by the Committee on Armed Services on May 21,
2010 (H. Rept. 111-491, pt. 1).

U.S. Congress,
Congressional Budget Office,
Washington, DC, May 26, 2010.
Hon. Ike Skelton,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5136, the National
Defense Authorization Act for Fiscal Year 2011.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Kent
Christensen.
Sincerely,
Robert A. Sunshine
(For Douglas W. Elmendorf, Director).
Enclosure.

H.R. 5136--National Defense Authorization Act for Fiscal Year 2011

Summary: H.R. 5136 would authorize appropriations totaling
$726 billion for fiscal year 2011 for the military functions of
the Department of Defense (DoD), for certain activities of the
Department of Energy (DOE), and for other purposes. That total
includes $159 billion for the cost of overseas contingency
operations, primarily in Iraq and Afghanistan. The bill also
would authorize an additional $34 billion for fiscal year 2010
for costs associated with those operations and for DoD relief
efforts associated with the recent earthquake in Haiti. In
addition, H.R. 5136 would prescribe personnel strengths for
each active-duty and selected reserve component of the U.S.
armed forces. CBO estimates that appropriation of the
authorized amounts would result in outlays of $749 billion over
the 2010-2015 period.
The bill also contains provisions that would increase costs
of discretionary defense programs in future years. Those
provisions would affect force structure, DoD compensation and
benefits, the defense health program, and various other
programs and activities. In total, such provisions would raise
costs by an average of about $4.5 billion annually from 2012 to
2015, assuming appropriation of the necessary amounts.
H.R. 5136 contains several provisions that would affect
direct spending. CBO estimates that, in total, those changes
would decrease direct spending by $15 million over the 2011-
2015 period and by $2 million over the 2011-2020 period. In
addition, CBO and the Joint Committee on Taxation (JCT)
estimate that the bill would decrease revenues by $2 million
over that 10-year period. On balance, enacting H.R. 5136 would
have a negligible net impact on the deficit over those 10
years.
Because enacting the legislation would affect both direct
spending and revenues, pay-as-you-go procedures apply.
H.R. 5136 contains intergovernmental and private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
CBO estimates that the aggregate costs of the intergovernmental
mandates would not exceed the threshold established in UMRA
($70 million in 2010, adjusted annually for inflation). CBO
cannot determine whether the costs to the private sector of
complying with the mandates in the bill would exceed the annual
threshold ($140 million in 2010, adjusted annually for
inflation).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 5136 is summarized in Table 1. Almost
all of the $760 billion that would be authorized by the bill is
for activities within budget function 050 (national defense).
Some authorizations, however, fall within other budget
functions, including: $125 million for the Maritime
Administration (function 400--transportation); $71 million for
the Armed Forces Retirement Home (function 600--income
security); and $24 million for the Naval Petroleum Reserves
(function 270--energy).
Basis of estimate: For this estimate, CBO assumes that H.R.
5136 will be enacted near the start of fiscal year 2011 and
that the authorized amounts will be appropriated, including
supplemental appropriations for 2010.

Spending subject to appropriation

The bill would specifically authorize appropriations
totaling $726.1 billion for 2011 (see Table 2). Of that amount,
$566.8 billion would be for authorizations of regular
appropriations--for ``base budget'' costs not directly related
to overseas contingency operations--as follows: $548.9 billion
for DoD, $17.7 billion for DOE, and $0.2 billion for other
programs.
Compared to the current level of 2010 appropriations
enacted for DoD's base budget, the $548.9 billion that would be
authorized for 2011 represents an increase of $18.1 billion
(3.4 percent). The categories of DoD funding that would receive
the largest increases are operation and maintenance at $15.5
billion (8.4 percent), and procurement at $7.9 billion (7.5
percent). Authorizations for military construction and family
housing would decline by $4.5 billion (19.5 percent)--largely
due to lower amounts necessary for implementing the most recent
round of base closures--while authorizations for research and
development would be reduced by $3.6 billion (4.5 percent).
Funding for military pay and other programs would increase by
$2.8 billion (2.0 percent).

TABLE 1.--BUDGETARY IMPACT OF H.R. 5136, THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2011
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
----------------------------------------------------------------------------
2010-
2010 2011 2012 2013 2014 2015 2015
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION

Authorization of Regular
Appropriations for 2011, primarily
for the Departments of Defense and
Energy:
Authorization Level............ 0 566,804 0 0 0 0 566,804
Estimated Outlays.............. 0 366,802 123,760 45,193 15,995 6,122 557,872
Authorization of Appropriations for
Overseas Contingency Operations
and for Other Activities:
Authorization Level\1\......... 33,661 159,335 0 0 0 0 192,997
Estimated Outlays.............. 7,632 91,864 60,638 22,283 6,307 1,968 190,691
Total:
Authorization Level........ 33,661 726,140 0 0 0 0 759,801
Estimated Outlays.......... 7,632 458,666 184,398 67,476 22,302 8,090 748,563

CHANGES IN DIRECT SPENDING\2\

Estimated Budget Authority......... 0 -71 3 7 12 4 -45
Estimated Outlays.................. 0 3,973 -3,972 -11 -4 -1 -15

CHANGES IN REVENUES\2\

Taxation of Certain Disability
Retirees:
Estimated Revenues............. 0 * * * * * *

NET INCREASE OR DECREASE (-) IN THE DEFICIT
FROM CHANGES IN DIRECT SPENDING AND REVENUES

Estimated Deficit Impact\3\........ 0 3,973 -3,972 -11 -4 -1 -15
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\1\The $34 billion that would be authorized for 2010 would be for costs associated with overseas contingency
operations, primarily in Iraq and Afghanistan, and with DoD activities in Haiti following the recent
earthquake in that country. That amount is in addition to the $130 billion already appropriated for those
operations in Public Law 111-118, the Department of Defense Appropriations Act, 2010.
\2\In addition to the changes in direct spending and revenues shown above, H.R. 5136 would have effects beyond
2015. CBO and the Joint Committee on Taxation estimate that over the 2011-2020 period, H.R. 5136 would
decrease direct spending by $2 million and would decrease revenues by $2 million (see Table 4).
\3\Negative numbers indicate a reduction in the deficit; positive numbers indicate the opposite.

\4\Numbers may not sum up to totals because of rounding; * = between -$500,000 and zero.
Notes: The authorization levels in this table reflect amounts specifically authorized by the bill. The bill also
implicitly authorizes some activities in 2012 and future years; those authorizations are not included above
(but are shown in Table 3) because funding for those activities would be covered by specific authorizations in
future years.

TABLE 2.--SPECIFIED AUTHORIZATIONS IN H.R. 5136
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By fiscal year, in millions of dollars--
----------------------------------------------------------------------------
2010-
2010 2011 2012 2013 2014 2015 2015
----------------------------------------------------------------------------------------------------------------
Authorization of Regular
Appropriations:
Department of Defense:
Military Personnel:\1\
Authorization Level.... 0 138,541 0 0 0 0 138,541
Estimated Outlays...... 0 136,269 1,554 167 36 * 138,026
Operation and Maintenance:
Authorization Level.... 0 200,027 0 0 0 0 200,027
Estimated Outlays...... 0 144,291 41,844 9,108 2,140 766 198,149
Procurement:
Authorization Level.... 0 112,713 0 0 0 0 112,713
Estimated Outlays...... 0 28,060 40,454 24,843 10,387 4,174 107,918
Research and Development:
Authorization Level.... 0 76,473 0 0 0 0 76,473
Estimated Outlays...... 0 40,677 28,091 4,983 1,377 350 75,478
Military Construction and
Family Housing:
Authorization Level.... 0 18,745 0 0 0 0 18,745
Estimated Outlays...... 0 3,060 6,883 5,082 2,101 842 17,968
Revolving Funds:
Authorization Level.... 0 2,369 0 0 0 0 2,369
Estimated Outlays...... 0 1,901 346 66 38 18 2,369
General Transfer Authority:
Authorization Level.... 0 0 0 0 0 0 0
Estimated Outlays...... 0 392 -84 -168 -84 -28 28
Subtotal, Department of
Defense:
Authorization Level.... 0 548,869 0 0 0 0 548,869
Estimated Outlays...... 0 354,650 119,088 44,081 15,995 6,122 539,936
Atomic Energy Defense
Activities:
Authorization Level\2\. 0 11,716 0 0 0 0 11,716
Estimated Outlays...... 0 11,971 4,639 1,106 0 0 17,716
Other Programs:
Authorization Level\3\..... 0 220 0 0 0 0 220
Estimated Outlays.......... 0 181 33 6 0 0 220
Subtotal, Authorization of
Regular Appropriations:
Authorization Level.... 0 566,804 0 0 0 0 566,804
Estimated Outlays...... 0 366,802 123,760 45,193 15,995 6,122 557,872
Authorization of Appropriations for
Overseas Contingency Operations
and for Other Activities:
Military Personnel:
Authorization Level........ 1,896 15,276 0 0 0 0 17,171
Estimated Outlays.......... 1,701 15,101 321 8 * * 17,130
Operation and Maintenance:
Authorization Level........ 25,149 114,972 0 0 0 0 140,121
Estimated Outlays.......... 5,173 68,989 46,365 13,722 3,420 994 138,663
Procurement:
Authorization Level........ 4,843 26,249 0 0 0 0 31,092
Estimated Outlays.......... 483 5,948 12,404 7,923 2,687 904 30,349
Research and Development:
Authorization Level........ 277 1,097 0 0 0 0 1,374
Estimated Outlays.......... 59 684 488 93 23 6 1,353
Military Construction:
Authorization Level........ 521 1,257 0 0 0 0 1,778
Estimated Outlays.......... 2 316 668 476 182 74 1,718
Working Capital Funds:
Authorization Level........ 975 485 0 0 0 0 1,460
Estimated Outlays.......... 214 704 418 96 21 7 1,460
Special Transfer Authority:
Authorization Level........ 0 0 0 0 0 0 0
Estimated Outlays.......... 0 123 -26 -35 -26 -18 18
Subtotal, Overseas
Contingency Operations and
for Other Activities:
Authorization Level.... 33,661 159,335 0 0 0 0 192,997
Estimated Outlays...... 7,632 91,864 60,638 22,283 6,307 1,968 190,691
Total Specified Authorizations:
Authorization Level............ 33,661 726,140 0 0 0 0 759,801
Estimated Outlays.............. 7,632 458,666 184,398 67,476 22,302 8,090 748,563
----------------------------------------------------------------------------------------------------------------
\1\The authorization of appropriation in section 421 for military personnel includes $10.9 billion for accrual
payments for the TRICARE For Life program.
\2\This authorization is primarily for atomic energy activities within the Department of Energy.
\3\This authorization is for the Maritime Administration ($125 million), the Armed Forces Retirement Home ($71
million), and the Naval Petroleum Reserves ($24 million). The authorized level for the Maritime Administration
does not include the amounts specified in the bill for maritime loan guarantees or payments to shipping
companies under the maritime security program because those programs are authorized for 2011 by existing
statute.

Notes: This table summarizes the authorizations of appropriations explicitly stated in the bill--in specified
amounts. Various provisions of the bill also would authorize activities and provide authorities that would
result in additional costs in 2011 and in future years. Because the bill would not specifically authorize
appropriations to cover those costs, they are not reflected in this table. Rather, Table 3 contains the
estimated costs of a select number of those provisions.
Numbers may not sum to totals because of rounding; * = less than $500,000.

For DOE, the $17.7 billion that would be authorized for
2011 represents a $1.1 billion (6.6 percent) increase over the
level appropriated for 2010.
The $159.3 billion that would be authorized for 2011
overseas contingency operations--primarily for military
operations in Iraq and Afghanistan--represents a decrease of
about $4.3 billion (3.3 percent) compared to the $130 billion
appropriated thus far for 2010, plus the $33.7 billion in
supplemental appropriations that would be authorized by the
bill. Authorizations for most major categories of DoD funding
would be reduced by between $0.5 billion and $1.5 billion; the
exception is research and development, which would have
increased authorizations totaling $0.5 billion.
The bill also contains provisions that would increase the
cost of defense discretionary programs in future years. Most of
those provisions would affect end strength, military
compensation, health benefits, and multiyear procurement
authorities. The estimated costs of those provisions are shown
in Table 3 and discussed below. The following discussion does
not address the timing of outlays from those estimated
authorizations. All such spending would be subject to
appropriation of the estimated amounts.
Force Structure. The bill would affect the force structure
of the various military services by setting end-strength levels
for 2011 and the minimum end-strength authorization in
permanent law.
Under title IV, the authorized end strengths in 2011 for
active-duty personnel and personnel in the selected reserves
would total 1,432,400 and 846,200, respectively. Of those
selected reservists, about 78,900 would serve on active duty in
support of the reserves. In total, active-duty end strength
would increase by 400 and selected-reserve end strength would
increase by 1,700 when compared with levels authorized under
current law for 2011.
Active-Duty End Strength. Section 401 would authorize 7,000
additional active-duty personnel for the Army, 500 additional
active-duty personnel for the Air Force, 100 fewer active-duty
personnel for the Navy, and maintain the current authorized end
strength for the Marine Corps, compared with authorized end-
strength levels for 2010. However, because the Army has
temporary authority to exceed its 2010 authorized end-strength
level by 30,000 personnel in the years 2011 and 2012, the
increase under section 401 would not affect Army active-duty
end-strength levels until 2013. CBO estimates that the net
increase in active-duty personnel--an additional 400 in 2011
and 2012 and an additional 7,400 in 2013, 2014, and 2015--would
increase costs to DoD by $3.1 billion over the 2011-2015
period. Those costs include the pay and benefits of the
additional personnel, as well as costs for operation and
maintenance.
Reserve Component End Strengths. Sections 411 and 412 would
authorize the end strengths for the reserve components,
including those who serve on active duty in support of the
reserves. Under this bill, the Air Force Reserve would
experience an increase in end strength of 1,700, while the
other reserve components would maintain the levels authorized
in 2010. On net, the number of full-time reservists who serve
on active-duty in support of the reserves would decline by 5
compared with authorized end-strength levels for 2010. CBO
estimates that the net result of implementing those provisions
would be an increase in costs for salaries and other expenses
for selected reservists of $284 million over the 2011-2015
period.
Reserve Technicians End Strengths. Section 413 would
authorize the minimum end-strength levels for dual-status
military technicians, who are federal civilian personnel
required to maintain membership in a selected reserve component
as a condition of their employment. On net, the bill would
increase the required number of technicians by 384 relative to
the levels currently authorized. CBO estimates the costs in
civilian salaries and expenses that would result from those
additional military technicians would total $186 million over
the 2011-2015 period.
Non-dual Status Technicians. Section 414 would increase the
maximum end strength authorized for military technicians
employed by the Army National Guard in a non-dual status by 920
above the maximum level of 1,600 for 2010. Unlike dual-status
technicians, non-dual status technicians are not members of the
Selected Reserve. CBO estimates the increase in costs for
civilian salaries and other expenses for these 920 additional
technicians would be about $70 million in 2011 and $370 million
over the 2011-2015 period. However, under an emergency hiring
authority delegated by the Office of Personnel Management, the
Army National Guard is currently employing about 920 such
technicians over the maximum level for 2010. That emergency
authority will expire at the end of fiscal year 2012. Thus,
compared to the personnel level authorized under both the
permanent authority and the expiring authority, CBO estimates
that section 414 would authorize about 920 additional Army
National Guard technicians to be employed in a non-dual status
starting in 2013. CBO estimates the cost for those additional
technicians would be $183 million over the 2013-2015 period.
Coast Guard Reserve End Strengths. The bill also would
authorize an end-strength level of 10,000 servicemembers in
2011 for the Coast Guard Reserve. Because this authorization is
the same as that under current law, CBO does not estimate any
additional costs for this provision.
Compensation and Benefits. H.R. 5136 contains several
provisions that would affect compensation and benefits for
uniformed personnel. The bill would specifically authorize
regular appropriations of $138.5 billion for the costs of
military pay and allowances in 2011. For related costs due to
overseas contingency operations (primarily in Iraq and
Afghanistan), the bill would authorize the appropriation of an
additional $15.3 billion for 2011.
Pay Raises. Section 601 would raise basic pay for all
individuals in the uniformed services by 1.9 percent, effective
January 1, 2011. CBO estimates the total cost of a 1.9 percent
military pay raise would be $1.4 billion in 2011. Compared with
current law (under which CBO estimates the across-the-board
increase that will go into effect on January 1 will be 1.4
percent), this section would increase the pay raise in 2011 by
an additional 0.5 percent. CBO estimates that the incremental
cost of this larger raise would be $377 million in 2011 and
$2.5 billion over the 2011-2015 period.
Expiring Bonuses and Allowances. Sections 611 through 616
would extend for another year DoD's authority to enter
agreements to pay certain bonuses and allowances to military
personnel. Those bonuses and allowances are scheduled to expire
on December 31, 2010. Some bonuses are paid in a lump sum,
while others are paid in annual or monthly installments over
the period of obligated service. Based on DoD's budget
submission for fiscal year 2011, CBO estimates that extending
those authorities for one year would cost $3.5 billion over the
2011-2015 period.
Family Separation Allowance. Section 604 would increase
from $250 to $285 the monthly allowance paid to servicemembers
with dependents who are separated from their families while
assigned to certain types of duty. Based on information from
DoD, CBO estimates that about 186,000 servicemembers would earn
an average of 12 months of family separation pay in fiscal year
2011, and that the provision would cost $288 million over the
2011-2015 period. Because CBO expects deployments for overseas
contingency operations to decline over time, our estimate of
the annual cost of this $35 a month increase in the family
separation allowance similarly declines over time.
Hostile Fire and Imminent Danger Pays. Under current law,
DoD has permanent authority to pay servicemembers up to $225 a
month for undertaking certain types of hazardous duty. DoD also
has temporary authority (through December 31, 2010) to pay up
to $450 a month for service in a hostile fire area and up to
$250 a month for other types of hazardous duty. Section 618
would increase--to $260 a month--the maximum amount paid under
the permanent authority and the maximum amount paid under the
temporary authority for service in an imminent danger area. In
addition, section 614 would extend the expiring authority by
one year, to December 31, 2011.
Based on information from DoD, CBO estimates that
increasing these special pays would cost $188 million over the
2011-2015 period. (Our estimate of the cost of extending the
expiring authority is included in the section above on expiring
bonuses and allowances.)
Other Military Compensation Provisions. CBO estimates that
certain other provisions in title VI--sections 602, 603, 632,
and 671--would increase DoD military compensation costs by $87
million over the 2011-2015 period.

TABLE 3.--ESTIMATED AUTHORIZATIONS OF APPROPRIATIONS FOR SELECTED PROVISIONS IN H.R. 5136
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------------
2011 2012 2013 2014 2015 2011-2015
----------------------------------------------------------------------------------------------------------------
FORCE STRUCTURE

Active-Duty End Strengths............................... 29 56 613 1,184 1,196 3,078
Reserve Component End Strengths......................... 32 62 62 63 65 284
Reserve Technicians End Strengths....................... 20 40 41 42 43 186
Non-Dual Status Technicians............................. 0 0 36 73 74 183

COMPENSATION AND BENEFITS (DOD)

Pay Raises.............................................. 377 509 516 525 539 2,466
Expiring Bonuses and Allowances......................... 1,834 836 319 353 163 3,505
Family Separation Allowance............................. 78 64 54 47 45 288
Hostile Fire and Imminent Danger Pay.................... 3 57 54 39 35 188
Other Military Compensation Provisions.................. 16 18 18 18 17 87

DEFENSE HEALTH PROGRAM

TRICARE for Dependents.................................. 10 100 240 310 330 990
TRICARE for Early Reserve Retirees...................... 13 19 25 31 37 125
Hearing Exams........................................... 7 10 7 5 4 33
Neurocognitive Assessments.............................. 5 5 5 5 5 25
Prohibition on Fee Increases............................ 12 0 0 0 0 12

SEXUAL ASSAULT RESPONSE PROGRAMS

Response Coordinators and Victim Advocates.............. 24 46 70 96 99 335
Prevention Training..................................... 20 19 17 15 15 86
Forensic Examiners...................................... 6 9 11 11 11 48
Other Title XVI Provisions.............................. 2 2 2 2 2 10

OTHER PROVISIONS

Multiyear Procurement................................... 3,423 2,900 2,399 273 28 9,023
IMPCA Programs.......................................... 0 0 0 558 624 1,182
Naval Battle Force Fleet................................ 123 144 217 311 352 1,147
Assistance to Guam...................................... 198 200 202 204 206 1,010
Insulation Retrofitting................................. 160 0 0 0 0 160
Euro-NATO Joint Jet Pilot Training Program.............. 5 5 5 5 5 25
Decontamination of Flamenco Beach....................... 15 0 0 0 0 15
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Notes: For every item in this table, the 2011 levels are assumed to be included in amounts specifically
authorized to be appropriated by the bill (and reflected in Tables 1 and 2). Amounts shown in this table for
2012 through 2015 are not included in Tables 1 or 2 because authorizations for those amounts would be covered
by specific authorizations in future years.
Figures shown here may not add up to numbers in the text because of rounding; IMPCA = International Materials
Protection, Control, and Accounting; NATO = North Atlantic Treaty Organization.

Defense Health Program. Titles VI and VII contain several
provisions that would affect the health care benefits provided
by DoD.
TRICARE for Dependents. Section 702 would expand TRICARE
eligibility to provide coverage, up to age 26, to the
dependents of military personnel. Under current law, dependents
lose their TRICARE eligibility when they reach the age of 21
(or 23 if they are enrolled in college). Based on data from
DoD, CBO estimates there are about 500,000 children of current
and retired members of the armed forces who are between the
ages of 21 and 26 and who are no longer eligible for TRICARE.
However, because section 702 would require that eligible
dependents have no access to employer sponsored health coverage
as a condition of participation in the new extended benefit,
CBO estimates that only about 175,000 of those dependents would
use the coverage. CBO based this estimate on Center for Disease
Control statistics for employer-sponsored insurance coverage
among young adults, as well as current TRICARE participation
rates.
Section 702 would require the Secretary of Defense to
charge a premium in an amount not to exceed the full cost of
providing the new benefit. Because it is not clear to what
extent the Secretary would choose to subsidize the premiums,
the cost of implementing section 702 is uncertain. The
Secretary could choose to set the premium equal to the cost of
providing the care, in which case the cost of this section
would be minimal. Information from DoD indicates that the
average annual cost of providing health care to people in this
age group is about $2,000. CBO assumes the Secretary would
subsidize about 75 percent of this amount, or about $1,500,
based on an analysis of subsidy rates in the private sector and
other government programs. Including adjustments for inflation,
this would require appropriations for DoD and the other
Uniformed Services of over $300 million annually when fully
implemented.
The amount of appropriations required would be lower in the
first few years because of the time needed to establish rules
and procedures, and because it would take time to notify and
enroll eligible beneficiaries. CBO expects enrollment in the
new extended benefit program would reach a steady state level
by 2014, which is when people are required to have minimal
health coverage under the Patient Protection and Affordable
Care Act (Public Law 111-148). In total, CBO estimates section
702 would require appropriations of $990 million over the 2011-
2015 period.
TRICARE for Early Reserve Retirees. Section 643 would allow
all former servicemembers who are receiving a retirement
annuity for non-regular (reserve) service to become eligible
for the TRICARE health benefit. Currently, those members are
not eligible for TRICARE until they are at least 60 years of
age. Under the early reserve retirement provisions of Public
Law 110-181, CBO estimates that the number of former reserve
members under the age of 60 receiving an annuity will grow from
about 1,000 in 2011 to over 2,500 by 2015.\1\ CBO estimates
that about 75 percent of those former members would use TRICARE
if it were available to them, based on participation rates from
the eligible retiree population. CBO estimates that the average
amount needed to provide health benefits to former members in
this age group would be about $16,500 per household in fiscal
year 2011 and that amount would grow with projected inflation
thereafter. In total, CBO estimates that section 643 would
require appropriations of $125 million over the 2011-2015
period. In addition, this section would increase direct
spending which is discussed in the section on ``Direct Spending
and Revenues'' below.
---------------------------------------------------------------------------
\1\Reserve component members with over 20 years of creditable
service are generally prohibited from receiving their retirement
annuities until age 60. Section 647 of the National Defense
Authorization Act for Fiscal Year 2008 (Public Law 110-181) allows
reserve component members to start receiving their annuities 90 days
prior to age 60 for each 90 day increment they serve on active duty in
support of a contingency operation.
---------------------------------------------------------------------------
Hearing Exams. Section 704 would require DoD to administer
hearing exams to all members before they deploy overseas and
again when they return. Based on current personnel statistics
from DoD, CBO estimates this requirement would result in about
300,000 hearing exams per year. Based on current TRICARE
reimbursement rates, CBO estimates each exam would cost about
$40. Total amounts would be lower in the first year because of
the time needed to establish regulations and would decrease
over time, assuming the number of deployments begins to
subside. In total, CBO estimates that this provision would
require appropriations of $33 million over the 2011-2015
period.
Neurocognitive Assessments. Section 722 would require DoD
to administer neurocognitive testing--examinations that measure
mental speed and acuity--to all members returning from
deployment. Currently, such testing is administered prior to
deployment and then again upon return only in selected
circumstances. Based on information about the cost of
administering computer-based neurocognitive assessments, CBO
estimates expanding such testing would require appropriations
of about $5 million per year.
Prohibition on Fee Increases. Sections 701 and 705 would
prohibit DoD from increasing any fees or copayments under the
TRICARE plans during fiscal year 2011. Because Administration
officials have stated their intent not to increase any fees or
copayments during 2011, CBO generally does not ascribe any
costs to those sections. The exception is a provision in
section 701, which would prohibit DoD from increasing the daily
inpatient deductible under the TRICARE Standard health
option.\2\ Current law sets the daily maximum inpatient
deductible under TRICARE Standard at $535. However, as of
October 1, 2010, the law requires DoD to increase the
deductible to an amount equal to 25 percent of the cost of the
provided care, which CBO estimates will be about $675 per day,
on average. Section 701 would extend the $535 deductible
through 2011.
---------------------------------------------------------------------------
\2\The military's health care program, TRICARE, comprises nine
health plans that cover uniformed service members, retirees, and their
dependents in the United States and abroad. Three of the most commonly
used plans are TRICARE Prime--a managed care option, TRICARE Standard--
a traditional fee-for-service option, and TRICARE-for-Life--which
provides wrap-around coverage for Medicare-eligible beneficiaries.
---------------------------------------------------------------------------
Based on information from DoD, CBO estimates that
beneficiaries who utilize the TRICARE Standard plan accumulate
about 325,000 inpatient days per year. However, after factoring
in the use of other health insurance and the fact that out-of-
pocket costs under TRICARE Standard are limited to $3,000 per
year, we estimate that only about 80,000 of those days would be
affected by the higher deductible. Therefore, CBO estimates
that capping the daily inpatient deductible under TRICARE
Standard at $535 through 2011 would require appropriations of
$12 million for that year.
Sexual Assault Prevention and Response Program. Title XVI
would modify and expand DoD programs designed to prevent and
respond to sexual assault.
Response Coordinators and Victim Advocates. Section 1642
would require DoD to employ at least one full-time Sexual
Assault Response Coordinator (SARC) and one full-time Sexual
Assault Victim Advocate for each brigade or brigade equivalent
of the armed forces. The bill also would require that such
personnel must either be members of the armed forces or DoD
civilian employees. Information from DoD indicates that the
services currently use different combinations of military
personnel, civilians, and contractors, employed both full- and
part-time, to fill such positions.
Assuming an average brigade size of 4,000 personnel and
including the reserve forces of the military services, CBO
estimates that implementing this provision would require
approximately 900 additional civilian personnel. Approximately
half of those personnel would be victim advocates, while the
other half would include approximately 250 additional SARCs and
200 support personnel. Assuming the additional personnel would
be hired over the 2011-2013 period and the provision is fully
implemented by the beginning of 2014, CBO estimates that the
provision would require appropriations of $335 million over the
2011-2015 period. Of that amount, approximately $10 million
would be used to train and certify the additional personnel
while the remainder would cover salaries and benefits.
Prevention Training. Section 1619 would require that within
one year of enactment, secretaries of the military departments
develop curricula to provide training on sexual assault
prevention and response to members of the Armed Forces. Based
on information from DoD about the cost to develop previous
curricula, CBO estimates that developing new training materials
would cost approximately $15 million over the 2011-2013 period.
In addition, the bill also envisions an expanded emphasis on
training to prevent sexual assault through the education system
for military professionals, and would require that the peer
education and specialized first-responder and leadership
training be included in DoD educational programs. While we
cannot predict precisely how those requirements would be
implemented by DoD, CBO based its estimates on similar
programs, such as the ``Bystander Intervention'' training
modules that have been conducted by the Navy and the Air Force.
CBO expects that DoD would use such training modules to provide
the additional training required by the bill and estimates that
implementing this provision would require appropriations of $71
million over the 2011-2015 period.
In total, CBO estimates that implementing section 1619
would require appropriations of $86 million over the 2011-2015
period.
Forensic Examiners. Section 1620 would require DoD to
employ forensic examiners to conduct sexual assault forensic
exams (SAFE) within two years after enactment of the bill. CBO
anticipates that implementing this provision would require
hiring additional personnel to conduct and oversee SAFE
programs at DoD hospitals.
Based on discussions with the Indian Health Service, which
has recently studied the implications of implementing SAFE
programs, CBO anticipates that establishing this capability
within DoD would require hiring a certified Sexual Assault
Nurse Examiner at each of DoD's approximately 60 hospitals. In
addition, CBO anticipates that providing forensic exams at all
of DoD's hospital and medical clinics would require training
and certifying approximately 600 nurses. Assuming this
provision is fully implemented by the beginning of fiscal year
2013, CBO estimates that implementing the provision would
require appropriations of $48 million over the 2011-2015
period.
Other Provisions in Title XVI. CBO estimates that other
provisions in title XVI, including the establishment of a
universal DoD Sexual Assault Hotline (Section 1616) and a
Sexual Assault Advisory Board (Section 1621) would require
appropriations of $2 million annually over the 2011-2015
period.
Other Provisions. Various other provisions would increase
the cost of discretionary programs over the 2011-2015 period.
Multiyear Procurement. Section 122 would authorize the
Department of the Navy to enter into a multiyear procurement
contract for F/A-18 E/F fighter/attack aircraft and EA-18G
electronic attack aircraft. Multiyear procurement is a special
contracting method authorized in current law (title 10, United
States Code, section 2306b) that permits the government to
enter into contracts covering acquisitions for more than one
year but not more than five years, even though the total funds
required for every year are not appropriated at the time the
contracts are awarded. As part of such a contract, the
government commits to purchase all items specified at the time
the contract is signed, including those to be produced and paid
for in subsequent years. Because multiyear procurement allows a
contractor to plan for more efficient production, such a
contract can reduce the cost of an acquisition compared with
the cost of buying the items through a series of annual
procurement contracts.
The President's budget includes a request for $2.9 billion
to purchase 22 F/A-18 E/Fs and 12 EA-18Gs in 2011. In addition,
the Navy plans to purchase another 50 of those aircraft over
the 2012-2013 period at an additional cost of $5.6 billion. DoD
has not requested multiyear procurement authority for those
aircraft.
H.R. 5136 would authorize additional appropriations of $500
million for procurement of F/A-18 aircraft over the level
requested for 2011; section 122 would direct the Navy to use
those funds and the savings from the multiyear contract to
purchase eight additional F-18E/F aircraft in 2011. It would
further direct the Navy to use the savings in subsequent years
to purchase additional aircraft, rather than reduce the amount
budgeted for procurement. CBO estimates that those savings
would be sufficient to purchase three more aircraft than the
Navy plans after 2011. If the department enters a multiyear
contract to purchase 42 aircraft in 2011 and another 53 over
the 2012-2013 period, required appropriations would total $9
billion.
Such contracts frequently include provisions that require
DoD to pay for unrecovered fixed costs in the event that the
contract is canceled before completion. Because the Navy
procured F/A-18 E/F aircraft under two previous multiyear
contracts, CBO estimates that new cancellation liabilities for
a third such contract would likely be small.
International Materials Protection, Control, and Accounting
(IMPCA) Programs. Section 3111 would extend by five years the
authority to provide support to Russia and other countries to
secure and eliminate nuclear weapons and to install detection
equipment at international crossing points. Under current law,
that authority expires in fiscal year 2013. These programs are
managed by the National Nuclear Security Administration (NNSA).
Based on information from the Department of Energy, CBO
estimates that the level of appropriations to extend this
authority would be about $1.2 billion in 2014 and 2015 with
most of that amount going towards installing nuclear detection
equipment.
Naval Battle Force Fleet. Two provisions in the bill would
increase the number of ships in the battle force fleet by
delaying the retirement of certain ships. Section 1024 would
require the Navy to retain the U.S.S Nassau (LHA-4) and the
U.S.S Peleliu (LHA-5) in a commissioned and operational status
until the delivery to the Navy of their replacements (the LHA-6
and LHA-7, respectively). The Navy plans to retire the LHA-4 in
2011 and the LHA-5 in 2013, while the new deliveries would
occur in 2013 and 2016, respectively. Thus, the provision would
have the effect of keeping one additional LHA-class amphibious
assault ship in the operational fleet through 2016 as compared
to current plans.
Section 1023 would require the Navy to limit the total
number of ship retirements in a year to no more than two-thirds
of the number of vessels planned for commissioning into the
battle fleet in that year. This restriction would continue
until the number of vessels in the battle force fleet reaches
313 vessels. Based on an analysis of the Navy's battle force
plans, and discussions with the Navy, CBO expects the Navy
would implement this requirement by delaying the retirement of
about 15 Oliver Hazard Perry class frigates.
CBO estimates that the appropriations required for
operating the additional frigates and amphibious ships at
normal tempo (nearly 3,000 steaming hours a year for both types
of ships) would be $123 million in 2011 and total about $1.1
billion over the 2011-2015 period. That amount includes the
costs for sea pay, fuel, and maintenance. (Because this
estimate assumes an endstrength level specified in section 401
of Title IV, CBO does not include any costs for additional
military personnel.) A significantly lower appropriation would
be required should the Navy decide to operate the ships in a
``not underway'' operating tempo (about 900 steaming hours per
ship, on average).
Assistance to Guam. The Government of Guam must improve its
municipal infrastructure to prepare for the influx to the
island of approximately 40,000 military personnel, family
members, and civilian workers that will result from the
relocation of U.S. forces in the Pacific. Section 2822 would
allow DoD to provide financial assistance to Guam for that
purpose. DoD plans to spend about $12 billion to construct new
facilities for its personnel, but the local government will
also need to expand utilities, roads, port facilities, and
other infrastructure to serve the needs of a population that is
expected to increase by 25 percent.
Section 2822 would authorize DoD to use existing federal
programs to transfer defense appropriations to Guam through the
end of fiscal year 2017, to help it meet the costs of increased
municipal services and facilities. Assistance for constructing
facilities would be capped at $500 million, but assistance for
municipal services would not be similarly limited. Guam
received about $300 million in funding in 2009 from 10 federal
agencies other than the Department of Defense for a variety of
services. If per capita funding remained constant, the expected
growth in population of about 40,000 people would increase
annual assistance through those programs by almost $100
million. In total, under section 2822, assistance to Guam for
construction and services would increase by $1 billion over the
2011-2015 period, CBO estimates.
Insulation Retrofitting. Section 2833 would require DoD to
inspect all of its facilities to determine the costs and
savings that would accrue from retrofitting those facilities
with improved insulation. It would also require the department
to provide the Congress with an assessment of the number of DoD
facilities that could be retrofitted at a cost equal to or less
than half the estimated savings from those improvements and the
total amount of cost and energy that could be saved from making
the improvements. DoD is undertaking an expansive energy audit
of many of its facilities in compliance with the Energy
Independence and Security Act of 2007 (Public Law 110-140). The
department estimates that those audits will cover about half of
the square footage it owns. Section 2833 would compel DoD to
analyze the rest of its facilities. Hiring engineering firms
and energy savings contractors to conduct such audits would
require appropriations of about $160 million in 2011, CBO
estimates.
Euro-NATO Joint Jet Pilot Training Program. Section 1204
would require the Secretary of the Air Force to establish and
maintain a demonstration scholarship program that would fund
undergraduate pilot training for certain foreign personnel at
the Euro-NATO Joint Jet Pilot Training (ENJJPT) Program based
at Sheppard Air Force Base. According to the Air Force, the
ENJJPT Program currently enrolls 206 students a year but has
the capacity to enroll as many as 256 students a year.
Based on existing cost-sharing arrangements with
participating countries, each country's contribution to the
total costs of the program (over $600 million in 2010) are
proportional to the number of students it has enrolled (the
U.S. share has been about 72 percent in recent years). Under
this provision, we expect that the U.S. share would go up and
that the Air Force would pay for an additional five students
each year at an annual level of about $1 million per student.
On that basis, CBO expects providing those scholarships would
require appropriations of about $25 million over the 2011-2015
period.
Decontamination of Flamenco Beach. The Military
Construction Authorization Act, 1974, prohibits the use of the
former naval bombardment range on Culebra, Puerto Rico, for any
purpose that would require decontamination and removal of
expended ordnance. Section 2814 would waive that prohibition to
allow the Army Corps of Engineers to clean up a part of that
bombardment area known as Flamenco Beach and study the extent
of and the cost to remove unexploded ordnance from the
remainder of the bombardment area. Based on information from
the Army Corps of Engineers, CBO estimates that the authorized
cleanup and the study of the remaining area would require the
appropriations of $15 million over the 2011-2015 period.

Direct spending and revenues

Several provisions in H.R. 5136 would affect direct
spending. CBO estimates that, on net, those provisions would
decrease direct spending by $2 million over the 2011-2020
period. In addition, one provision (which would affect
retirement pay for certain retirees with over 30 years of
service) would lower revenues by $2 million over the 2011-2020
period. The net impact on the deficit over that period would be
insignificant (see Table 4).
Pentagon Reservation Maintenance Revolving Fund (PRMRF).
Section 1404 would transfer $77 million of unobligated balances
from the PRMRF to the Treasury, to be deposited as
miscellaneous receipts. This transfer would lower spending
estimated to occur under current law because DoD would be
unable to obligate and expend those amounts without a
subsequent appropriation.
The PRMRF finances the maintenance, repair, and renovation
of the Pentagon and certain other facilities in the national
capital area using appropriations originally provided to
various operation and maintenance accounts (and later
transferred into the fund). The unobligated balances in the
fund have grown in recent years--from $35 million at the end of
2006 to $119 million at the end of 2009. By the end of 2011,
the administration expects those balances to total $120
million. As a result, CBO assumes a portion of those balances--
roughly 20 percent, or $25 million--are excess to current
requirements and will not be spent during the 2011-2020 period
under current law. As a result, CBO expects that section 1404
would have no effect on outlays in 2011, but would lower
spending by $52 million over the 2012-2020 period.
Minimum Service for Retirement as an Officer. Officers who
began their military career as enlisted servicemembers must
complete at least 10 years of commissioned service in order to
retire as an officer. Those with less than 10 years of
commissioned service receive retirement annuities based on the
highest enlisted grade the member achieved. Section 506 would
give the service secretaries the authority to retire members as
officers with a minimum of eight years of commissioned service.
This authority would apply to fiscal years 2011 through 2013
only.
Based on information from DoD, CBO estimates that about 200
officers per year would be allowed to retire under this
authority over the 2011-2013 period. Because those officers
would retire earlier than they otherwise would have, section
506 would initially increase military retirement costs. Savings
would accrue in later years because those retiring early would
accumulate fewer years of service and would therefore accept
smaller annuities. On net, CBO estimates that section 506 would
increase costs for military retirement by $25 million over the
2011-2020 period.
National Defense Stockpile Sales. Section 1412 would
increase by $20 million the target contained in the National
Defense Authorization Act for Fiscal Year 2000 (Public Law 106-
65, as most recently amended by Public Law 110-181, the
National Defense Authorization Act for Fiscal Year 2008) for
continual sales of chromium from the National Defense Stockpile
through 2013. That change would increase receipts by $20
million over the 2012-2013 period. Such receipts are a credit
against direct spending.

TABLE 4.--ESTIMATED IMPACT OF H.R. 5136 ON DIRECT SPENDING AND REVENUES
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011-2015 2011-2020
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING

Pentagon Reservation Maintenance Revolving Fund:
Budget Authority........................................ -77 0 0 0 0 0 0 0 0 0 -77 -77
Estimated Outlays....................................... 0 -8 -18 -16 -5 -3 -1 -1 0 0 -47 -52
Minimum Service for Retirement as an Officer:
Estimated Budget Authority.............................. 4 11 13 8 * -2 -2 -2 -2 -3 36 25
Estimated Outlays....................................... 4 11 13 8 * -2 -2 -2 -2 -3 36 25
National Defense Stockpile Sales:
Estimated Budget Authority.............................. 0 -10 -10 0 0 0 0 0 0 0 -20 -20
Estimated Outlays....................................... 0 -10 -10 0 0 0 0 0 0 0 -20 -20
Reserve Early Retirement Credit for Medical Holdovers:
Estimated Budget Authority.............................. * 1 1 1 1 1 1 2 2 2 4 12
Estimated Outlays....................................... * 1 1 1 1 1 1 2 2 2 4 12
Retired Pay for Reserve Members Wounded in Action:
Estimated Budget Authority.............................. * * 1 1 1 1 1 1 2 2 4 11
Estimated Outlays....................................... * * 1 1 1 1 1 1 2 2 4 11
TRICARE for Early Reserve Retirees:
Estimated Budget Authority.............................. * * 1 1 1 1 1 1 2 2 3 10
Estimated Outlays....................................... * * 1 1 1 1 1 1 2 2 3 10
Authority to Spend Landing Fees:
Estimated Budget Authority.............................. 1 1 1 1 1 1 1 1 1 1 5 10
Estimated Outlays....................................... 1 1 1 1 1 1 1 1 1 1 5 10
Retirement Age of Certain Medical Professionals:
Estimated Budget Authority.............................. * * -1 -1 -1 -1 * * * * -3 -4
Estimated Outlays....................................... * * -1 -1 -1 -1 * * * * -3 -4
Special Survivor Allowance:
Estimated Budget Authority.............................. 1 * * * 1 1 1 0 0 0 2 4
Estimated Outlays....................................... 1 * * * 1 1 1 * 0 0 2 4
Multiplier Cap for Disability Retirees With Over 30 Years of
Service:
Estimated Budget Authority.............................. * * * * * * * * * * 1 2
Estimated Outlays....................................... * * * * * * * * * * 1 2
Payment Date for Retired Pay:
Estimated Budget Authority.............................. 0 0 0 0 0 0 0 0 0 0 0 0
Estimated Outlays....................................... 3,967 -3,967 0 0 0 4,370 142 -4,512 0 0 0 0
Total Changes in Direct Spending:
Estimated Budget Authority.......................... -71 3 7 12 4 2 3 3 5 5 -45 -27
Estimated Outlays................................... 3,973 -3,972 -11 -4 -1 4,369 144 -4,510 5 5 -15 -2

CHANGES IN REVENUES

Multiplier Cap for Disability Retirees With Over 30 Years of
Service:
Estimated Revenues...................................... * * * * * * * * * * * -2

NET INCREASE OR DECREASE (-) IN THE DEFICIT
FROM CHANGES IN DIRECT SPENDING AND REVENUES

Estimated Deficit Impact\1\................................. 3,973 -3,972 -11 -4 -1 4,369 144 -4,510 6 6 -15 0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\Negative numbers indicate a reduction in the deficit; positive numbers indicate the opposite.
Notes: Numbers may not add up to totals because of rounding.
* = between -$500,000 and $500,000.

Reserve Early Retirement Credit for Medical Holdovers.
Under section 644, time spent by reserve component members in a
medical holdover status would count towards earning an early--
or earlier--retirement annuity. Reserve members with at least
20 years of service are eligible to receive retirement
annuities at age 60. However, they may receive the annuities 90
days earlier for each 90 days they serve on active duty in a
contingency operation. Based on an analysis of the number and
ages of personnel currently in a holdover status, CBO estimates
this section would increase direct spending for military
retirement by $12 million over the 2011-2020 period.
Retired Pay for Reserve Members Wounded in Action. Section
642 would allow reserve members who retire from the military
because of wounds received in combat to have their retirement
annuities calculated as though their years of service had all
been spent on full-time active duty. (Under current law, such
annuities are based on a combination of active and part-time
reserve duty.) Based on data from DoD, CBO estimates that such
a change would double the retirement annuities paid to
qualifying individuals, from an average of about $7,000 per
year to about $14,000 per year. Based on recent casualty
statistics, CBO estimates that about 90 new disability retirees
would benefit each year from the change in the annuity
calculation and that direct spending for military retirements
would increase by about $11 million over the 2011-2020 period.
TRICARE for Early Reserve Retirees. Section 643 would allow
all former members who are receiving a retirement annuity for
non-regular (reserve) service to become eligible for the
TRICARE health benefit. Currently, those members do not become
eligible for TRICARE until they are at least 60 years of age.
Under the early reserve retirement provisions recently enacted
in Public Law 110-181, CBO estimates that the number of former
reserve members receiving an annuity before reaching age 60
will grow from about 1,000 in 2011 to more than 5,000 by 2020.
Most of the funding associated with health care for those
individuals would be subject to appropriation (see discussion
in the ``Spending Subject to Appropriation'' section above).
However, based on an analysis of the current military
retiree population, CBO estimates that about four percent of
those individuals would be eligible for Medicare. When military
annuitants become eligible for Medicare, they also become
eligible for the TRICARE-for-Life (TFL) health benefit, which
acts as a Medicare supplement. Benefits under TFL are paid from
the Medicare-Eligible Retiree Health Care Fund (MERHCF), a
mandatory account. CBO estimates the average TFL benefit will
be about $4,500 per beneficiary in 2011, and that it will grow
to almost $8,000 by 2020. In total, CBO estimates section 643
would increase spending from the MERHCF by $10 million over the
2011-2020 period.
Authority to Spend Landing Fees. Section 341 would allow
the military departments to retain and spend fees collected
from civilian aviators who utilize military airfields. Under
temporary authority that expires after fiscal year 2010, DoD
can use those fees to defray the costs of operating and
maintaining the airfields where the fees are collected.
Thereafter, any such amounts will be deposited in the Treasury
as miscellaneous receipts, and will be unavailable for
obligation without a subsequent appropriation. Section 345
would provide permanent authority to retain and spend those
fees, leading to an increase in direct spending. Information
from the Department of Defense indicates that those receipts
total almost $1 million dollars annually. Thus, section 345
would increase direct spending by $10 million over the 2011-
2020 period, CBO estimates.
Retirement Age of Certain Medical Professionals. Section
501 would allow certain medical professionals (to be designated
by the Secretary of Defense) to remain in an active status
until age 68. Currently, they must retire at age 62. CBO
estimates that this change would decrease spending for military
retirement because some members would begin receiving
retirement annuities at a later date than they otherwise would
have. Based on information from DoD, we estimate that, under
section 501, about five officers each year would delay their
retirements by an average of two years and would forgo about
$80,000 in annuities for each of those years. The annual
savings would decrease over time however, as those officers
would receive larger annuities when they retire. In total, CBO
estimates this section would reduce net direct spending for
military retirements by $4 million over the 2011-2020 period.
Special Survivor Allowance. Public Law 110-181 authorized a
monthly allowance to be paid to those recipients of Survivor
Benefit Plan (SBP) payments who have their annuities reduced
dollar-for-dollar by the amount of Dependency and Indemnity
Compensation (DIC) they receive from the Department of Veterans
Affairs. The amount of that monthly allowance was $50 in 2009,
and will increase each year until it reaches $310 per month in
2017, at which point the allowance is scheduled to
terminate.\3\ However, survivors of retirees who died prior to
the creation of the SBP benefit do not receive the allowance,
even though their annuities are also offset by any DIC they
might be receiving. Section 645 would eliminate this disparity.
Based on data from DoD's Office of the Actuary, CBO estimates
that fewer than 500 additional survivors would receive the
allowance under this section, which would increase direct
spending for military retirement by $4 million over the 2011-
2020 period. Costs in the first year would include back
payments for fiscal years 2009 and 2010.
---------------------------------------------------------------------------
\3\The amount of the allowance was originally $50 per month in
fiscal year 2009 and was then supposed to increase to $100 by 2014. It
was scheduled to terminate five months into fiscal year 2016. Section
201 of the Family Smoking Prevention and Tobacco Control Act (Public
Law 111-131) subsequently increased the monthly amounts and extended
the payments through 2017.
---------------------------------------------------------------------------
Multiplier Cap for Disability Retirees With Over 30 Years
of Service. Section 641 would increase the annuities of those
members with over 30 years of service who elect a disability
retirement. Currently, the annuity for disability retirees is
capped at 75 percent of the amount of their basic pay. Under
this section, disability retirees would have their annuities
increased by 2.5 percent for each year in which the member
serves past 30 years. This would make the calculation for
disability retirement consistent with the calculation of
annuities for those who elect a non-disability retirement.
Eliminating that cap would affect both direct spending and
revenues. Direct spending would increase because those retirees
with over 30 years of service who will elect to receive a
disability retirement under current law would see their
annuities increased. Based on information from DoD, CBO
estimates that each year about five new retirees would see
their annuities increased by an average of $5,000. In total,
CBO estimates this change would increase spending for military
retirement by $2 million over the 2011-2020 period.
In addition, because those portions of disability retired
pay that are related to combat-related disabilities are non-
taxable, CBO estimates that each year about 10 new retirees who
would otherwise elect a non-disability retirement would now
choose a disability retirement. CBO and JCT estimate that this
would decrease federal revenues by $2 million over the 2011-
2020 period.
Payment Date for Retired Pay. Section 646 would change the
payday for military retirement annuities from the first
business day of each month to the first calendar day of each
month. For most months this would have no effect, since the
first business day usually falls on the first of the month.
However, for months in which the first day falls on a weekend
or holiday, DoD would instead make the payments on the last
business day of the preceding month. Because the first day of
fiscal years 2012, 2017, and 2018 will fall on weekends,
changing the payday to the first of the month would result in
paydays shifting into fiscal years 2011, 2016, and 2017.\4\
Each payday would cost about $4 billion, CBO estimates; thus,
the provision would shift that amount to an earlier fiscal year
in three of the next 10 years. However, we estimate that there
would be no net impact over the 2011-2020 period.
---------------------------------------------------------------------------
\4\The federal fiscal years begins on October 1.
---------------------------------------------------------------------------
Other Provisions. The following provisions would have an
insignificant effect on direct spending, primarily because they
would affect few individuals or because they authorize both the
collection and spending of funds so that the net budgetary
impact would be small.
Section 353 would allow DoD to retain fees
collected for transporting civilian passengers and cargo when
such transportation is provided in response to an emergency, or
in response to a request for humanitarian assistance.
Section 532 would give former enlisted members the
ability to appeal separation decisions to certain disability
review boards. This could result in a small number of
disability separations being changed to disability retirements.
Section 576 would award the Medal of Honor to four
former members of the Army. An award of the Medal of Honor
includes a monthly stipend, unless the Medal is awarded
posthumously. Because only one of the recipients is still
living, CBO estimates this section would have an insignificant
effect on direct spending.
Section 578 would allow the Secretary of Defense
to accept voluntary services provided to assist with the
Commemoration of the 60th Anniversary of the Korean War.
Because those volunteers would be eligible for mandatory
compensation if they are injured while volunteering, CBO
estimates that section 578 could have an insignificant effect
on direct spending.
Section 606 would authorize higher rates of pay
for the senior enlisted members at each of the combatant
commands and would require DoD to use those higher rates of pay
when computing the annuities of those members.
Section 619 would make certain members of the
Armed Forces or civilian employees of DoD who were killed or
wounded eligible to receive additional compensation. CBO
estimates that a small number of people would receive this
compensation, including certain tax benefits and mandatory
benefits, such as retroactive combat-related special pay and
combat related special compensation. Any impacts on direct
spending and revenues would be small, CBO estimates.
Section 701 would prohibit DoD from increasing the
daily inpatient deductible under the TRICARE Standard health
benefit. This prohibition would increase mandatory health care
spending for certain TRICARE beneficiaries who live overseas,
as well as for former members of the Coast Guard and other
uniformed services.
Section 702 would require the Secretary of Defense
to establish a new TRICARE benefit for dependents of current
and former members who are under the age of 26. To offset the
cost of the new benefit, the Secretary would be required to
charge a premium for the new benefit and would be allowed to
spend the proceeds without further appropriation.
Section 933 would extend by two years the
authority to allow DoD to waive payment of reimbursable
expenses at the various Defense Regional Centers for Security
Studies by non-governmental and international organizations.
Under current law, the waiver authority would expire after
fiscal year 2010. DoD has the authority to retain and spend
such reimbursements.
Pay-as-you-go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that are
subject to those pay-as-you-go procedures are shown in the
following table.

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 5136 AS REPORTED BY THE HOUSE COMMITTEE ON ARMED SERVICES ON MAY 21, 2010
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
----------------------------------------------------------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010-2015 2010-2020
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact................... 0 3,973 -3,972 -11 -4 -1 4,369 144 -4,510 6 6 -15 0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Intergovernmental and private-sector impact: H.R. 5136
contains intergovernmental and private-sector mandates as
defined in the Unfunded Mandates Reform Act. CBO estimates the
costs of the intergovernmental mandates would not exceed the
threshold established in UMRA ($70 million in 2010, adjusted
annually for inflation). CBO cannot determine whether the costs
to the private sector would exceed the annual threshold ($140
million in 2010, adjusted annually for inflation).

Increasing the end strength of active duty forces

Section 401 would increase the costs of complying with
existing intergovernmental and private-sector mandates by
increasing the number of servicemembers on active-duty by more
than 7,000 for fiscal year 2011. Those additional
servicemembers would be eligible for existing protections under
the Servicemembers Civil Relief Act (SCRA).
SCRA allows servicemembers to maintain a single state of
residence for purposes of paying state and local personal
income taxes and to request deferrals for certain state and
local fees. CBO estimates that the additional cost of those
mandates on state and local governments would be small.
SCRA also requires creditors to reduce the interest rate on
servicemembers' loan obligations to 6 percent when the
acquisition of such obligations predate active-duty service,
allows courts to temporarily stay certain civil proceedings,
such as evictions, foreclosures, and repossessions, and
precludes the use of a servicemember's personal assets to
satisfy the member's trade or business liability while he or
she is in military service.
CBO does not have sufficient information to estimate
precisely the increased costs of complying with these
provisions in SCRA. Servicemembers' utilization of the various
provisions of the SCRA depends on a number of uncertain
factors, including how often and how long they are deployed.
While some of the SCRA protections might affect a greater
number of service members, the cost per person could be
relatively small. On the other hand, other SCRA protections
could have relatively high per-person costs even though they
affect a small number of servicemembers. Because of those
uncertainties, CBO cannot determine whether the costs to
private-sector entities would exceed the annual threshold.

Preemptions of state law

Section 713 would authorize health care professionals who
are members of the National Guard and who are serving in
response to actual or potential disasters to practice in
military and civilian health care facilities regardless of
state licensing laws. That preemption of state laws would
impose an intergovernmental mandate as defined in UMRA, but CBO
estimates that the cost of complying with the mandate would be
small.
Section 544 would preempt state laws governing child
custody if they are inconsistent with or provide less
protection to the rights of a parent who is a servicemember
than those provided under the bill. Because the preemption
would simply limit the application of state laws, CBO estimates
that it would not impose significant costs on state
governments.

Providing benefits to state and local governments

The bill would authorize aid to local educational agencies
that have significant numbers of students who are dependents of
members of the Armed Forces and Department of Defense civilian
employees. Any costs to those governments would be incurred
voluntarily as conditions of receiving that federal assistance.
Estimate prepared by: Federal costs: Defense
Authorizations--Kent Christensen; Military Construction and
Multiyear Procurement--David Newman; Military and Civilian
Personnel--Dawn Regan; Military Retirement and Health Care--
Matthew Schmit; Operation and Maintenance--Jason Wheelock; Ship
Acquisition and Stockpile Sales--Raymond J. Hall; Euro-NATO
Joint Jet Pilot Training Program--John Chin; Impact on state,
local, and tribal governments: Burke Doherty; Impact on the
private sector: Elizabeth Bass.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.