A monthly roundup of defense policy news

Welcome back to Holland & Knight's monthly defense news update. We are excited to bring you the latest in defense policy, regulatory updates and other significant developments. If you see anything in this report that you would like additional information on, please reach out to authors or members of Holland & Knight's National Security, Defense and Intelligence Team.

LEGISLATIVE UPDATES

Debt Ceiling Update

House Speaker Kevin McCarthy (R-Calif.) on April 17, 2023, delivered a speech before the New York Stock Exchange on his party's plan to reduce federal spending through negotiations over the debt ceiling. McCarthy's speech comes as the June deadline for the debt ceiling deal nears and the White House and Congress prepare to negotiate a debt ceiling measure. The remarks provided the first official view into the House Republican majority's plan to raise the debt ceiling and lower government spending.

In his speech, McCarthy asserted that the House would vote on legislation to raise the debt ceiling for a year in the coming weeks. The speaker added that this measure would include various proposals, such as permitting reform and decreasing discretionary spending to Fiscal Year (FY) 2022 levels. The legislation to address the debt ceiling, the Limit, Save, Grow Act of 2023, includes a series of cuts over a 10-year period. While negotiations will continue, reports have indicated that defense advocates in the House have been adamant that defense and national security funding should not be decreased or capped. This will be a point of contention as the amount of savings proposed ultimately will indicate where allocations to appropriations subcommittees go.

Congress Continues Posture Hearings

This past month has been busy with House and Senate Armed Services Committees (HASC, SASC) holding posture hearings on the Biden Administration's FY 2024 budget request to Congress. Leaders of the services and defense agencies have testified on behalf of their respective budget requests, and members of Congress had the chance to dive deeper into various funding lines. As House Republicans seek to cut civil spending, U.S. Department of Defense (DOD) officials allow them an opportunity to defend the administration's budget request and members of Congress to question the appropriate usage of tax dollars.

As a reminder, the Biden Administration released its FY 2024 budget request to Congress on March 9, 2023. The DOD budget request, which is typically seen as a reflection of the administration's policy goals for the upcoming fiscal year, seeks to provide resources necessary to sustain and strengthen U.S. deterrence, advance vital national security interests, bolster America's technological edge, preserve economic competitiveness and combat 21st-century security threats. The request seeks $842 billion in discretionary budget authority for FY 2024, which is a $26 billion, or 3.2 percent, increase over FY 2023 enacted levels. When including overall national defense funding, which includes the DOD, U.S. Department of Energy and other national security programs throughout the government, the request totals $866 billion. If enacted, this DOD budget would be the largest in history.

In FY 2023, Congress appropriated $858 billion in national defense funding, which was $45 billion more than President Joe Biden requested for FY 2022. Of the total funding, $817 billion went to the DOD, and billions more went to other national security programming.

After these posture hearings, the HASC and SASC will write their annual National Defense Authorization Act (NDAA) legislation. The House and Senate Appropriations Subcommittees on Defense will also author their bills. The HASC and SASC are expected to write and markup the NDAA in May and June. Appropriators have expressed a desire for a similar timeline, but this could be delayed by the debt limit debate.

National Security and SASC Nominations

Once the 117th Congress ended, all executive branch nominations not confirmed by the Senate were sent back to the White House and the nomination process started over. As such, on Jan. 3, 2023, President Biden nominated and renominated roughly 60 people for Senate-confirmed jobs and judicial nominations.

Various pending nominations to serve in key DOD and national security positions include:

  • Ronald T. Keohane to be Assistant Secretary of Defense for Manpower and Reserve Affairs
  • Anjali Chaturvedi to be General Counsel at the U.S. Department of Veterans Affairs
  • Nickolas Guertin to be Assistant Secretary of the Navy for Research, Development and Acquisition
  • Cara Abercrombie to be Assistant Secretary of Defense for Acquisition

On March 28, 2023, the SASC advanced by voice vote the nominations of Guertin and Keohane. Both nominations will head to the Senate floor for a vote by the full Senate chamber.

The Senate on March 30, 2023, voted 63-27 to confirm the nomination of Laura Taylor-Kale to be Assistant Secretary of Defense for Industrial Base Policy. Additionally, after a two-week recess for the spring holidays, the Senate on April 18, 2023, confirmed the nomination of Radha Iyengar Plumb to be Deputy Under Secretary of Defense for Acquisition and Sustainment (USD(A&S)) by a vote of 68-30. This is the first time during the Biden Administration that the USD(A&S) position has been filled on a permanent basis and comes long after defense industry groups began urging senators to confirm both Taylor-Kale and Plumb, given their jurisdiction in acquisition and the need to replenish military inventories after the U.S. had sent weapons to Ukraine and to prepare for posturing in a potential conflict between China and Taiwan.

On April 20, 2023, the White House nominated Cara Abercrombie to be Assistant Secretary of Defense for Acquisition. She currently serves as Coordinator for Defense Policy and Arms Control at the National Security Council. Prior to that position, she served as the acting deputy director of the Defense Security Cooperation Agency overseeing foreign military sales. Her experience in the former position is expected to be particularly beneficial to the role for which she was nominated, as that role works very closely with Under Secretary of Defense for Acquisition and Sustainment William LaPlante on the DOD's efforts arming Ukraine and replenishing U.S. defense stockpiles for the conflict.

Pentagon Responds to Congressional Letter on Unfunded Priorities Lists

A March 28, 2023, letter publicly confirming DOD support of a proposal to repeal the requirement for the armed services to submit a yearly Unfunded Priorities List (UPL) was sent by DOD Comptroller Michael McCord to Sen. Elizabeth Warren (D-Mass.). The practice of senior military leaders providing a UPL was initiated by Congress first as a request in the 1990s. In the FY 2017 NDAA, Congress required a UPL via statute in 10 U.S.C. 222a. McCord's letter confirms that the DOD supports a repeal of this provision.

In the justification, McCord says that every DOD budget supervised and submitted by U.S. Secretary of Defense Lloyd Austin is built to implement the National Defense Strategy and represents the department's highest priorities. However, the practice of having senior leaders individually submit priorities and wish lists for additional funding "absent the benefit of weighing costs and benefits across the Department is not an effective way to illuminate our top joint priorities," the letter reads.

Congress has typically responded well to UPLs and generally includes additional items that have not been given the amount of attention deserved in an official president's budget request. These are typically items that are seen as equivalent to a service's mission and readiness to ensure the nation's security. In January 2023, Sens. Warren, Angus King (I-Maine), Mike Lee (R-Utah) and Mike Braun (R-Ind.), along with Reps. Pramila Jayapal (D-Wash.) and Tom McClintock (R-Calif.) sent a bipartisan letter to Austin calling on the DOD to "rein in DOD's use of wasteful unfunded priorities lists that help DOD increase spending beyond its core priorities." Holland & Knight's Defense Situation Report newsletter will continue to track updates on the NDAA process.

The following U.S. military UPLs for FY 2024 have been made public:

  • Army, which put forth 28 projects totaling $1.9 billion and includes a $633 million request to update the Abrams tank program and $121 million for the Apache helicopter replacement
  • Navy, which put forth $2.5 billion worth of projects, including many one-off parts, but no ships
  • Air Force, which put forth six projects totaling nearly $2.5 billion, including $596 million for the procurement of two E-7 Wedgetail aircraft and $1.2 billion for a wide variety of 21 military construction projects
  • Space Force, which put forth seven projects totaling $477 million, including six classified programs
  • Marine Corps, which put forth 32 projects totaling $3.6 billion and includes an amphibious combat ship, which the Navy left off of its UPL
  • Coast Guard, which put forth 26 projects totaling $1.6 billion; as a note, the U.S. Coast Guard receives funding not from the Appropriations Subcommittee on Defense, but from the House and Senate Subcommittees on Homeland Security

In addition to the services, geographic combatant commands submit UPLs to Congress. These are:

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