[House Report 117-397]
[From the U.S. Government Publishing Office]
117th Congress } { Rept. 117-397
HOUSE OF REPRESENTATIVES
2d Session } { Part 2
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NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2023
_______
July 7, 2022.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Smith of Washington, from the Committee on Armed Services,
submitted the following
SUPPLEMENTAL REPORT
[To accompany H.R. 7900]
[Including cost estimate of the Congressional Budget Office]
This supplemental report shows the cost estimate of the
Congressional Budget Office with respect to the bill (H.R.
7900), as reported, which was not included in part 1 of the
report submitted by the Committee on Armed Services on July 1,
2022 (H. Rept. 117-397, pt. 1).
Congressional Budget Office Estimate
In compliance with clause 3(c)(3) of rule XIII of the House
of Representatives, the cost estimate prepared by the
Congressional Budget Office and submitted pursuant to section
402 of the Congressional Budget Act of 1974 is as follows:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 6, 2022.
Hon. Adam Smith,
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. 7900, the National
Defense Authorization Act for Fiscal Year 2023.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matt Schmit.
Sincerely,
Phillip L. Swagel,
Director.
Enclosure.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The bill would
Authorize appropriations in 2023 totaling
$838.8 billion for the military functions of the
Department of Defense and for the Department of
Energy's atomic energy defense activities
Authorize appropriations in 2023 totaling
$1.4 billion for nondefense activities, mainly for the
Maritime Administration
Prescribe personnel levels for the U.S.
Armed Forces and make changes to compensation and
benefits for military personnel and their families
Prescribe changes to various acquisition
programs and authorities of the Department of Defense
and Maritime Administration
Require the Navy and the Air Force to
privatize transient lodging
Expand two existing private-sector mandates
by prohibiting entities from collecting excess interest
and fees on some debt held by military dependents and
requiring reports on financial activity
Bill summary
H.R.7900 would authorize appropriations totaling $840.2
billion for fiscal year 2023. Nearly all of that amount, $838.8
billion, would be specifically authorized for the military
functions of the Department of Defense (DoD) and for the atomic
energy defense activities of the Department of Energy. CBO
estimates that appropriation of the authorized amounts would
result in outlays of $810.1 billion over the 2023-2027 period.
In addition, CBO estimates that enacting H.R. 7900 would
have insignificant effects on direct spending and revenues over
the 2023-2032 period. One section affecting military lodging,
effective 11 years after enactment, would increase direct
spending by more than $5 billion in the 10-year period
beginning in 2033.
Estimated Federal cost
The estimated budgetary effects of H.R. 7900 are shown in
Table 1. Of the $840.2 billion that would be authorized for
2023, nearly all--$838.8 billion--would be for activities
within budget function 050 (national defense).
The other $1.4 billion would fall within budget functions
400 (transportation), 700 (veterans benefits and services); and
270 (energy).
Basis of estimate
For this estimate, CBO assumes that H.R. 7900 will be
enacted near the start of fiscal year 2023 and that the
authorized amounts will be appropriated each fiscal year.
Outlays for existing programs were estimated using historical
spend-out rates.
Spending subject to appropriation
H.R. 7900 would specifically authorize appropriations
totaling $840.2 billion for 2023.
The $838.8 billion that would be authorized for defense
programs includes:
$317.3 billion for operation and maintenance
(including revolving funds);
$174.5 billion for military personnel;
$161.3 billion for procurement;
$138.6 billion for research and development;
$30.5 billion for atomic energy activities;
and
$16.5 billion for military construction and
family housing.
In total, the amount that would be authorized for defense
programs in 2023 is $33.8 billion (or 4 percent) more than the
$805 billion appropriated to date for 2022. The amount
appropriated for 2022 includes $34 billion in emergency
funding--$26.6 billion provided in response to the situation in
Ukraine and $7.4 billion provided to assist Afghan refugees and
to respond to natural disasters.
Excluding that emergency funding, H.R. 7900 would authorize
$67.9 billion more than was appropriated for 2022, an increase
of 9 percent. Authorizations for all categories of spending
would increase--military personnel by $7.7 billion (5 percent),
operation and maintenance by $20.6 billion (7 percent),
procurement by $16.4 billion (11 percent), research and
development by $19.9 billion (17 percent), military
construction and family housing by $1.6 billion (11 percent),
and atomic energy activities by $1.7 billion (6 percent).
The $1.4 billion that would be authorized for nondefense
programs includes the following amounts:
$1,071 million for the Maritime
Administration;\1\
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\1\H.R. 7900 specifically authorizes $1,449 million for the
Maritime Administration in 2023. However, CBO excludes $378 million
that would be specifically authorized for the Maritime Security Program
and Tanker Security Program from the calculation above because that
amount is already authorized under current law.
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$168 million for a medical facility
demonstration fund that is jointly managed by the
Department of Veterans Affairs and DoD;
$152 million for the Armed Forces Retirement
Home; and
$13 million for the Naval Petroleum
Reserves.
Other provisions in the bill would affect the costs of
defense programs in 2024 and future years but would not
specifically authorize appropriations for those years. CBO
expects authorizations of appropriations for those provisions
would be provided in subsequent defense authorization acts and
have not estimated the costs of those provisions for this
estimate.
Direct spending and revenues
Several provisions in H.R. 7900, described below, would
affect direct spending and revenues. CBO estimates the net
effects of those provisions would not be significant over the
2023-2032 period, generally because they would affect very few
people, would have offsetting effects, or involve transactions
of very small amounts.
Section 524 would permanently prohibit DoD
from discharging service members, solely based on their
COVID-19 vaccination status, with a discharge
characterization of anything except honorable or
general under honorable conditions. Veterans must be
honorably discharged to use certain education benefits
from the Department of Veterans Affairs that are paid
from mandatory appropriations.
Sections 535, 555, 778, 841, 1221, 1222, and
3512 would extend or modify agencies' authority to
accept amounts from nonfederal entities for various
purposes. In most cases, the amounts may be spent
without further appropriation.
Sections 705 and 706 would change payment
rates and out-of-pocket costs for certain goods and
services covered by the Military Health System, which
would affect the cost of providing health benefits to
retirees of the other uniformed services (U.S. Coast
Guard, National Oceanic and Atmospheric Administration,
and Public Health Service) and their dependents. Those
benefits are paid from mandatory appropriations.
Sections 541 and 5701 would make it easier
for service members and federal civilian employees to
prove they were subjected to unlawful reprisal. Some of
those people would receive retroactive pay and
benefits. Section 806 could also increase the amount of
administrative fees collected by the judiciary. Those
fees are recorded as revenues and can be spent without
further appropriation.
Sections 581 and 582 would authorize awards
of the Medal of Honor that would not occur under
current law. Recipients who are living receive monthly
pensions that are paid from mandatory appropriations.
Section 641 would allow certain former
spouses of service members to retain eligibility to
shop at commissary stores, which would increase the
number of credit and debit card transactions processed.
The processing costs for those transactions are paid
from mandatory appropriations.
Section 624 would permit military retirees
who have service-connected disabilities rated as
totally disabling and who previously discontinued their
enrollment in the Survivor Benefit Plan to reenroll.
Based on information from DoD, CBO expects the net
change in direct spending resulting from additional
premiums paid by retirees and additional benefits paid
to survivors would be insignificant.
Sections 1211 and 5801 would expand
eligibility for the Afghan Special Immigrant Visa
program. CBO expects that all visas authorized under
current law will be used. Therefore, the provisions
might accelerate when visas are provided, but it would
not increase how many are provided.
Section 5204 would waive application fees
for two immigration benefits if the applicant is the
parent, spouse, or minor child of a service member who
was awarded the Purple Heart.
Section 5802 would allow qualified
Portuguese nationals to be admitted into the United
States as nonimmigrant (temporary) traders or
investors. Those nonimmigrants would be eligible for
health insurance subsidies from the federal government
if they otherwise qualify. Those subsidies are
classified as either an increase in direct spending or
a reduction in revenue.
Section 362 would extend from 2023 to 2025
DoD's authority to use working capital funds for minor
construction projects at military depots. Those funds
are authorized to use contract authority, which is a
form of direct spending that allows agencies to incur
obligations in advance of appropriations.
Section 3524 would authorize the government
to seize property of individuals in violation of
agreements to transport cargo on behalf of federal
agencies. Proceeds from the sale of such assets are
recorded as revenues, deposited into the Assets
Forfeiture Fund, and later spent without further
appropriation.
Section 5301 would increase retirement
benefits for some members of the U.S. Coast Guard.
Those benefits are paid from mandatory appropriations.
Sections 5601 through 5675 would amend the
Inspector General Act of 1978. The changes would
increase collections of fines and penalties, which are
recorded as revenues, some of which can be spent
without further appropriation. It would also increase
fees collected and spent by some agencies that are
financed with nonappropriated funds.
Sections 2851, 2853, 2854, and 2855 would
authorize the conveyance of several parcels of land to
nonfederal entities. DoD could be reimbursed for
administrative costs and could also receive cash
compensation for the value of the property, which could
be spent without further appropriation.
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. CBO estimates that the net effects
of H.R. 7900 on direct spending and revenues would be
insignificant over the 2023-2032 period.
Increase in long-term deficits
Section 2814 would require the Navy and the Air Force to
privatize transient military lodging facilities within the
United States over a 4-year period beginning 11 years after
enactment. CBO considers military lodging run by private
entities to be a governmental activity that uses a private-
sector financial intermediary to serve as an instrument of the
federal government. In CBO's view, investments by those
entities to improve the lodging facilities should be treated as
governmental expenditures because most of the income for the
project would be paid from appropriated funds such as per diem
payments to service members. Because those investments would
not be contingent on the availability of appropriated funds at
the time they are made, CBO classifies them as direct spending.
Using information on the reported costs to improve
privatized Army lodging, CBO estimates that enacting section
2814 would increase direct spending by more than $5 billion in
the 10-year period beginning in 2033.
Mandates
H.R. 7900 would impose private-sector mandates as defined
in the Unfunded Mandates Reform Act (UMRA). CBO estimates that
the total cost of the mandates on private entities would not
exceed the annual threshold established in UMRA for private-
sector mandates ($184 million in 2022, adjusted annually for
inflation). The bill would not impose intergovernmental
mandates as defined in UMRA.
Servicemembers Civil Relief Act
Section 5101 would limit the rate of interest that may be
assessed on the debt of military dependents, an expansion of an
existing mandate. Under current law, private entities in the
United States are prohibited from collecting more than six
percent in interest, fees, and other charges on debt held by
service members and their spouses, including some reservists
who are activated. The prohibition applies to credit card and
loan debt incurred prior to the start of military service and
remains in effect while the service member is on active duty.
The protection on mortgage interest and fees continues for one
year after active-duty service.
Under the bill, military dependents also would receive the
same protections. Dependents generally include adult children
under 23 years of age who are pursing post-secondary coursework
and other adult dependents, such as parents, grandparents,
former spouses, siblings, and disabled older children. CBO
estimates that about 8,000 dependents of active-duty service
members, most of whom are parents, grandparents, and older
adult children, could become eligible for protections under the
Act. Dependents of reservists who are activated also could
become eligible. However, because the protections are generally
limited to periods of active-duty service, dependents of
reservists who are activated would receive limited benefits
during peacetime.
The cost of the mandate would be any revenue lost as a
result. CBO expects this will most directly affect private
entities holding debt that historically carries interest rates
of more than 6 percent. That would include credit card debt,
motor vehicle loans, and private student loans. CBO estimates
private entities would forgo several millions of dollars each
year in uncollectable interest, fees, and other charges as a
result of expanding interest rate protections for military
dependents.
Expansion of the Bank Secrecy Act
Section 5104 would require certified public accountants,
art dealers, auction houses, and attorneys and notaries
involved in financial activity to comply with reporting
requirements of the Bank Secrecy Act. CBO estimates that the
cost for those mandated entities to comply would be small
because under existing federal and state laws several affected
entities are already adhering to some provisions of the Bank
Secrecy Act. Further, entities can meet reporting requirements
under the Act (specifically for cash transactions exceeding
$10,000) through a free electronic system maintained by the
federal government.
Estimate prepared by
Federal Costs: Caroline Dorminey (Weapons Procurement);
Aaron Krupkin (Maritime Administration and Coast Guard);
William Ma (Operation and Maintenance and Military Justice);
Christopher Mann (Military Construction and Family Housing);
Matthew Pickford (General Government); Aldo Prosperi (Research
and Development); David Rafferty (Military Retirement and
Immigration); Dawn Sauter Regan (Military and Civilian
Personnel); Matt Schmit (Specified Authorizations and Military
Health System).
Mandates: Brandon Lever, Rachel Austin, and Fiona
Forrester.
Estimate reviewed by
David Newman, Chief, Defense, International Affairs, and
Veterans' Affairs Cost Estimates Unit; Kathleen FitzGerald,
Chief, Public and Private Mandates Unit; Leo Lex, Deputy
Director of Budget Analysis; Theresa Gullo, Director of Budget
Analysis.
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 7900, AS REPORTED BY THE HOUSE COMMITTEE ON ARMED SERVICES ON JULY
1, 2022
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By fiscal year, millions of dollars--
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2022 2023 2024 2025 2026 2027 2022-2027
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Increases in Spending Subject to Appropriation
Specified Authorizations for Defense
Appropriations
Authorization Level.................... 0 838,789 0 0 0 0 838,789
Estimated Outlays...................... 0 484,281 206,029 68,655 34,954 14,960 808,879
Specified Authorizations for Nondefense
Appropriations
Authorization Level.................... 0 1,404 0 0 0 0 1,404
Estimated Outlays...................... 0 416 148 162 229 261 1,216
Total Changes
Authorization Level................ 0 840,193 0 0 0 0 840,193
Estimated Outlays.................. 0 484,697 206,177 68,817 35,183 15,221 810,095
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The amounts shown here would be specifically authorized by the bill. Some provisions in the bill would affect
the costs of programs in 2024 and future years but would not specifically authorize appropriations for those
years. CBO did not estimate the costs of those provisions, although we expect authorizations of appropriations
for those provisions would be provided in subsequent defense authorization acts.
[all]