27-368

2006
109TH CONGRESS 2ND SESSION
HOUSE OF REPRESENTATIVES
REPORT

[Including cost estimate of the Congressional Budget Office]

congress.#13

MAY 5, 2006- Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2007

27-368

2006
109TH CONGRESS 2ND SESSION
HOUSE OF REPRESENTATIVES
REPORT

[Including cost estimate of the Congressional Budget Office]

congress.#13

MAY 5, 2006- Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

27-368

2d Session

109-452

--NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2007

[To accompany H.R. 5122]

[Including cost estimate of the Congressional Budget Office]

The Committee on Armed Services, to whom was referred the bill (H.R. 5122) to authorize appropriations for fiscal year 2007 for military activities of the Department of Defense, to prescribe military personnel strengths for fiscal year 2007, and for other purposes, having considered the same, report favorably thereon with amendments and recommend that the bill as amended do pass.

The amendments are as follows:

The amendment strikes all after the enacting clause of the bill and inserts a new text which appears in italic type in the reported bill.

The title of the bill is amended to relfect the amendment to the text of the bill.

EXPLANATION OF THE COMMITTEE AMENDMENTS

The committee adopted an amendment in the nature of a substitute during the consideration of H.R. 5122. The title of the bill is amended to reflect the amendment to the text of the bill. The remainder of the report discusses the bill, as amended.

PURPOSE

The bill would--(1) Authorize appropriations for fiscal year 2007 for procurement and for research, development, test and evaluation (RDT&E); (2) Authorize appropriations for fiscal year 2007 for operation and maintenance (O&M) and for working capital funds; (3) Authorize for fiscal year 2007: (a) the personnel strength for each active duty component of the military departments; (b) the personnel strength for the Selected Reserve for each reserve component of the armed forces; (c) the military training student loads for each of the active and reserve components of the military departments; (4) Modify various elements of compensation for military personnel and impose certain requirements and limitations on personnel actions in the defense establishment; (5) Authorize appropriations for fiscal year 2007 for military construction and family housing; (6) Authorize emergency appropriations for increased costs due to Operation Iraqi Freedom and Operation Enduring Freedom; (7) Authorize appropriations for fiscal year 2007 for the Department of Energy national security programs; (8) Modify provisions related to the National Defense Stockpile; and (9) Authorize appropriations for fiscal year 2007 for the Maritime Administration.

RELATIONSHIP OF AUTHORIZATION TO APPROPRIATIONS

The bill does not generally provide budget authority. The bill authorizes appropriations. Subsequent appropriation acts provide budget authority. The bill addresses the following categories in the Department of Defense budget: procurement; research, development, test and evaluation; operation and maintenance; working capital funds, military personnel; and military construction and family housing. The bill also addresses Department of Energy National Security Programs and the Maritime Administration.

Active duty and reserve personnel strengths authorized in this bill and legislation affecting compensation for military personnel determine the remaining appropriation requirements of the Department of Defense. However, this bill does not provide authorization of specific dollar amounts for personnel.

SUMMARY OF AUTHORIZATION IN THE BILL

The President requested budget authority of $513.3 billion for the national defense budget function for fiscal year 2007. Of this amount, the President requested $491.5 billion for the Department of Defense, including $16.7 billion for military construction and family housing and $50 billion for estimated emergency costs for the Global War on Terror. The defense budget request for fiscal year 2007 also included $17.0 billion for Department of Energy national security programs and the Defense Nuclear Facilities Safety Board.

The committee recommends an overall level of $512.9 billion in budget authority. This amount represents an increase of approximately $21.4 billion from the amount authorized for appropriation by the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109-163).

SUMMARY TABLE OF AUTHORIZATIONS

The defense authorization act provides authorization for appropriations but does not generally provide budget authority. Budget authority is provided in appropriations acts. In order to relate the recommendations to the budget resolution, matters in addition to the dollar authorizations contained in this bill must be taken into account. A number of programs in the national defense function are authorized in other legislation. The following table summarizes authorizations included in the bill for fiscal year 2007 and, in addition, summarizes the implications of the committee action for the budget authority totals for national defense (budget function 050).

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RATIONALE FOR THE COMMITTEE BILL

H.R. 5122, the National Defense Authorization Act for Fiscal Year 2007, reflects the House Armed Services Committee's steadfast support of the courageous, professional and dedicated men and women of the United States armed forces and the committee's appreciation for the sacrifices they make to accomplish their required missions. Events of the last year--ranging from on-going operations in Iraq and Afghanistan to robust counter-terrorism efforts around the globe to time-sensitive disaster and humanitarian responses both at home and abroad--serve to highlight the United States military's flexibility and responsiveness in defending our nation's interests and addressing security challenges, wherever and whenever they may arise.

For example, with the support of our coalition partners and over 220,000 Iraqi Security Forces personnel, members of the United States military helped to establish secure, stable conditions under which more than 12 million Iraqis could cast their votes for new national assembly representatives last December. That month also figured prominently in Afghanistan, where United States, Afghan and allied forces maintained security and stability as 351 men and women from all provinces, tribes and ethnic groups were inaugurated into the National Assembly. At home, United States forces actively contributed to Hurricane Katrina relief efforts with approximately 20,000 Active Duty and 50,000 National Guard troops providing military support to civil authorities.

The committee considers it critical that the capabilities and capacity of the armed forces continue to improve so they can accomplish the full range of diverse 21st century missions, minimize risks associated with such challenges and effectively engage in hostilities, when necessary, as far from American shores as possible. Thus, the committee's top priority remains ensuring that our military personnel receive the best equipment, weapons systems and training possible. As such, H.R. 5122 would provide for both near- and longer-term military personnel and force structure requirements. It also highlights the need for improvements in acquisition processes and cooperation among key federal departments and agencies.

Taking Care of Our Military Personnel

Through H.R. 5122, the committee continues its support for the outstanding Soldiers, Sailors, Airmen and Marines, who selflessly make significant personal sacrifices to protect and defend our nation. To ensure that the United States armed forces remain robust enough to meet the full range of 21st Century security challenges, particularly those related to the Global War on Terrorism, the committee recommends for Fiscal Year 2007 additional active duty growth of 30,000, or 6 percent, for the Army and 5,000, or about 3 percent, for the Marine Corps above the budget request. These recommendations would bring the Army end strength to 512,400 and the Marine Corps to 180,000. In addition, the committee supports the Department of the Army's decision to request an Army National Guard (ARNG) end strength of 350,000 and recommends adding about 2,300 full-time ARNG support personnel. To support this additional manpower, H.R. 5122 would increase ARNG funding by $789 million for personnel and equipment costs.

H.R. 5122 also reflects the committee's on-going commitment to improving the efficiency and effectiveness of servicemembers' benefits. The committee recommends an across-the-board pay raise, which would decrease the 4.5 percent gap between military and private sector pay to about 4.0 percent. Moreover, this legislation completes the transition to full TRICARE health program coverage for selected reserve personnel and, in light of the Department of Defense's proposed TRICARE cost-sharing arrangement, requires further study to ensure that a comprehensive policy and fiscal basis for sustaining future military health care benefits are in place. H.R. 5122 also improves programs for our nation's wounded military personnel and the surviving family members of those who have died or have been seriously injured in service.

Balancing Near- and Longer-Term Military Capabilities

The committee believes strongly that the Department of Defense must not focus on long-term military capabilities at the expense of resetting and recapitalizing the warfighting force that is serving the United States so well in current operations. In particular, this legislation sends a clear signal that force protection remains this committee's top priority. Through oversight hearings, briefings and numerous trips to Iraq and Afghanistan, committee members continue to follow the significant threat to our soldiers and marines from improvised explosive devices (IEDs), or makeshift road-side bombs. H.R. 5122 reflects the committee's initiative to `take back the roads' and provide the best available IED jamming devices and persistent surveillance capability this includes $109.7 million for jamming devices that will prevent the radio-initiation of road-side bombs, which currently cause the majority of U.S. casualties in Iraq and Afghanistan, and $100 million for at least 10 manned persistent surveillance aircraft to patrol road segments and other areas where IED activity is greatest.

H.R. 5122 also provides insight into how the committee believes the Department of Defense should strike the right balance between accepting technical risk and providing increased capabilities to these warfighters. It reflects the committee's continuing concerns about the long lead times required for major systems and the possibility that programs do not focus adequately on the near-term requirements of the United States armed forces.

For example, the committee questions how the Department of the Army plans to fund the Future Combat System (FCS), the Modular Force Initiative and reset programs--three costly efforts that would require funding in excess of the funds programmed for the next five years. H.R. 5122 reflects the committee's decision to balance the health and capability of the current force with the future needs of the Army by reducing the FCS program by $326 million and requiring a Defense Acquisition Board review of the FCS program.

In addition to reflecting concerns about the growing cost of the FCS program, this legislation puts into place spending limits on programs for other major programs for which cost estimates are rapidly increasing. These legislative initiatives would contain shipbuilding costs by holding the Department of the Navy accountable to their cost estimates on the CVN-21 aircraft carrier, the Landing Helicopter Assault (LHA-R) amphibious assault ship, and the LPD-17 Landing Platform Dock amphibious ship and would increase competition for elements of the Joint Strike Fighter (F-35) and next generation destroyer (DD(X)) programs.

The committee notes that the Fiscal Year 2007 budget request included $2 billion for the Department of the Air Force's F-22 aircraft program. However, despite the Fiscal Year 2006 projection for procurement of 29 F-22's in Fiscal Year 2007, the funds requested for Fiscal Year 2007 were for subassemblies and not aircraft. Rather than authorize incremental funding for major aircraft programs, which Congress has not done in decades, the committee recommends an additional $1.4 billion for the full funding for procurement of 20 F-22 aircraft.

Over the last five years, the Global War on Terrorism has demonstrated time and again that U.S. intelligence, surveillance and reconnaissance (ISR) capabilities are critical to military effectiveness. The Department of Defense's most recent Quadrennial Defense Review, released in February 2006, highlighted gaps in ISR capabilities, and as a result of several hearings and briefings over the last year, the committee agrees that the United States currently has insufficient capacity and capability to meet all national and combatant commander requirements or provide tactical control over needed ISR assets at the small-unit level. One key area for improvement is persistent surveillance platforms, which the DOD could usefully deploy for operations ranging from combat and counterterrorism scenarios to stability and humanitarian operations and domestic crises. For example, unmanned aerial vehicles could provide a reliable battlefield picture on a 24-hours-a-day/7-days-a-week basis. However, the committee notes with concern that despite highlighting existing ISR gaps, DOD officials decided to retire U-2 aircraft to achieve savings without identifying a similar capability that will be available in the near-term. H.R. 5122 would prohibit this retirement until the Department certifies to Congress that the U-2 program is not required to mitigate gaps in ISR capabilities.

Finally, H.R. 5122 underscores the need for operationally responsive space capabilities. Adversaries recognize that the backbone of the United States military's command, control, communication, computers, intelligence, surveillance and reconnaissance (C4ISR) system is space-based, making it vulnerable to asymmetric attack and not easily reconstituted. The committee believes that the United States must develop a responsive space infrastructure, including flexible space launch and rapidly deployable C4ISR platforms, to address this vulnerability and reduce the temptation for adversaries to attack our space assets. This legislation would establish an Office of Operationally Responsive Space in the DOD to contribute to the development of low-cost rapid reaction payloads to fulfill joint military operational requirements.

Fielding the Right Equipment at the Right Time

The rising cost and lengthening production schedules of major defense acquisition programs has led to more expensive platforms fielded in fewer numbers. The committee believes that internal DOD pressure to develop follow-on weapons systems that include all necessary and anticipated military capabilities may create an over-reliance on individual `mega' systems that are potentially more expensive and time-consuming to develop than less sophisticated but capable systems. These increases in cost and development time generally result in smaller numbers of platforms purchased, creating a `high demand, low density' situation in which the needed platforms have higher operational tempos, wear out faster, increase stress on military personnel, undermine the ability to conduct traditional presence missions intended to shape the strategic choices of potential adversaries and limit the strategic depth of United States forces responding to multiple contingencies. Moreover, the shrinking pool of skills and experience maintained by the acquisition workforce and the inadequate prioritization of combatant commands' requirements in deference to the military services' priorities are strong concerns of the committee. At the end of the day, the Department needs to recognize that its acquisition process must result in cost-effectively `putting metal on targets'--which in some cases will not require costly, leading-edge technologies. H.R. 5122 would address these issues by requiring training programs, improving management oversight and internal controls and closely monitoring implementation of acquisition reform in the Department of Defense.

Developing Partnerships

The committee notes that international coalition partners have proven essential to military successes in Afghanistan, Iraq and elsewhere and appreciates the diplomatic, financial and military contributions made by foreign governments to the Global War on Terrorism. However, the committee believes that several key federal departments and agencies may lack the same operational commitment to success in the on-the-ground war effort.

Achieving United States security objectives requires the integration of all national power--political, military and economic. In many cases, non-military departments and agencies lack planning, surge and overseas deployment capabilities, and the interagency process--which coordinates national-level policy development--has not been effective in executing national security policy. As a result, our servicemembers routinely fill gaps in civil capabilities, such as reconstruction efforts, coordination of humanitarian relief and training and equipping police forces. These missions are in addition to the full range of military operational requirements and may, in some cases, place an unfair burden on our armed forces.

H.R. 5122 would require that the President assess the non-DOD elements required to achieve the full spectrum of U.S. national security interests, including organizational structures, planning and assessment capabilities, information-sharing policies, command and control systems, personnel policies and acquisition authorities. The President would also provide specific legislative proposals to improve interagency capacity and enhance civilian capabilities for national security purposes.

Supplemental Funding

The committee recommends authorization of $50 billion in funds to support the defense activities principally associated with Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF). These funds are designated for emergency contingency operations to support force protection equipment, operational needs and military personnel requirements of the units deployed and engaged in the Global War on Terrorism.

Included in the force protection recommendation is funding for up-armored Humvees, tactical wheeled vehicle recapitalization and modernization programs for the most heavily used vehicles in OIF and OEF, night vision devices and improvised explosive device jammers. In addition, the committee recognizes the need to replenish critical small-arms and ammunition procurement programs, including funding for the M16 rifle, M240 medium machine gun and M4 carbine modifications, and .50 caliber cartridges, 120mm tank ammunition canisters and 155mm high explosive projectiles. Incorporated in the day-to-day operation recommendation is funding to pay for food, fuel, spare parts, maintenance, transportation, base expenses, as well as costs incurred by stateside installations for increased mobilizations and demobilizations due to OIF and OEF.

Over the past four years, the committee has recommended increases in the active component manpower to sustain the full range of capabilities required of the mission assigned to the armed forces. The committee recommends funding a cumulative active component increase of 30,000 for the Army and 5,000 for the Marine Corps over the budget request.

HEARINGS

Committee consideration of the National Defense Authorization Act for Fiscal Year 2007 results from hearings that began on February 1, 2006, and that were completed on April 7, 2006. The full committee conducted fifteen sessions. In addition, a total of thirty-two sessions were conducted by 6 different subcommittees on various titles of the bill.

DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATION

TITLE I--PROCUREMENT

OVERVIEW

The budget request for fiscal year 2007 contained $84.2 billion for procurement. This represents a $6.2 billion increase from the amount authorized for fiscal year 2006.

The committee recommends authorization of $85.9 billion, an increase of $1.7 billion from the fiscal year 2007 request.

The committee recommendations for the fiscal year 2007 procurement program are identified in the table below. Major issues are discussed following the table.

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AIRCRAFT PROCUREMENT, ARMY

OVERVIEW

The budget request for fiscal year 2007 contained $3.6 billion for Aircraft Procurement, Army. The committee recommends authorization of $3.7 billion, an increase of $148.3 million, for fiscal year 2007.

The committee recommendations for the fiscal year 2007 Aircraft Procurement, Army program are identified in the table below. Major changes to the Army request are discussed following the table.

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ITEMS OF SPECIAL INTEREST

AH-64 modern signal processing unit

The budget request contained $775.6 million for AH-64 modifications, but no funds were requested for the modern signal processing unit (MSPU) initial integration and production for the AH-64.

The MSPU is an embedded digital vibration diagnostic technology al