The Insider

By John Liang
May 23, 2012 at 8:15 PM

Overseas contingency operations funding may shrink faster than some folks think, according to a new research note from Credit Suisse analysts issued today. Here's the summary:

NATO Leadership Affirms Withdrawal of Almost All Allied Troops by End of 2014; Result Is Likely End to Most OCO Funding with War's Conclusion in Late-CY14: Yesterday, NATO Leadership issued a joint declaration confirming ISAF/NATO transition to Afghan forces of all combat missions by mid-2013 and withdrawal of NATO troops by end of 2014. The declaration in essence supports President Obama's plan of completing the drawdown by the end of CY14. While Obama's commitment to ending the war has been largely anticipated at this stage by investors, these actions suggest a strong possibility that OCO funding will aggressively contract from the $89B FY13 request to well below the OMB/DOD plan for sustained $44.2B in OCO per year between FY14 and FY22. The comments imply no OCO funding beyond Q1 of FY’15.

More of a Surprise for Contractors than Investors: While this may be obvious to most investors, it appears many contractors have been relying on continued OCO as per the existing budget materials. We have been expecting a sharp decline in OCO funding, but believe most contractors have been relying on the $44.2b annual wedge being used by both OMB and the DoD Comptroller. The $89B in the FY13 OCO request pays for 70k U.S. troops at a cost of $1.3M each. The FY14 placeholder of $44.2B projects a 50.3% drawdown in FY14. This would fund 34k troops at $1.3M each. We assume a more realistic FY14 OCO is $39B-$46B for 30-35k troops. Also, we assume FY15 OCO of $10-11B for the final period of Oct to Dec 2014, plus ~$2.7B for U.S funding of the Afghan National Security Forces (Army Police), translating to a total FY15 OCO of $11-15B. Army & Marines will also likely request temporary RESET funding, with Army focus on 2015-2016 and USMC on 2014-2015. Recent congressional hearings suggest Army is identifying worst-case ceiling of ~$20-23B in RESET total costs, while USMC is projecting ~$3.2B in RESET costs after combat ends.

Primary Impact to O&M; Secondary to Procurement: O&M and procurement account for 72% & 11% of OCO funding respectively. The biggest impact would be to Army, which consumes $50B (56% of FY13 OCO request), with Navy & Air Force likely to suffer less impact because each consumes ~16%. A faster ramp-down in OCO clearly impacts infrastructure, logistics and operations suppliers including KBR, Fluor, Bechtel and DynCorp, which have been feeding from the LogCap contract (Army logistics), but which have also already seen significant downward revenue and EBIT assumptions. It will also impact gov’t services providers such as MANT & CACI as brigades return from Afghanistan and the deployment cycle ends. Contracts such as Army S3 will slow materially.

RESET Directed to Rotary Likely to Be More Robust: This will be predominately directed at rotary wing aviation (Boeing/Sikorsky/Textron) and most radios. This RESET funding will likely be of short duration (2-3 years).

By John Liang
May 23, 2012 at 12:00 PM

The Defense Security Cooperation Agency recently announced a pair of proposed significant foreign military sales, one to Australia and another to South Korea.

Australia is looking to upgrade 12 of its F/A-18F aircraft to the EA-18G Growler configuration, a deal worth up to $1.7 billion if Congress approves it, according to a May 22 DSCA statement, which adds:

Australia is an important ally in the Western Pacific. The strategic location of this political and economic power contributes significantly to ensuring peace and economic stability in the region. Australia's efforts in peacekeeping and humanitarian operations have made a significant impact to regional political and economic stability and have served U.S. national security interests. This proposed sale is consistent with those objectives and facilitates burden sharing with our allies.

The proposed sale will improve Australia's capability in current and future coalition efforts. Australia will use the enhanced capability as a deterrent to regional threats and to strengthen its homeland defense. Australia will have no difficulty absorbing this new capability into its armed forces.

The proposed sale of this equipment and support will not alter the basic military balance in the region.

South Korea, for its part, seeks eight MH-60R Seahawk helicopters and associated equipment valued at $1 billion, along with a separate $84 million deal for 18 UGM-84L Harpoon Block II All-Up-Round Missiles and associated equipment.

According to the May 16 DSCA statement on the proposed Seahawk sale:

The Government of the Republic of Korea is one of the major political and economic powers in East Asia and the Western Pacific and a key partner of the United States in ensuring peace and stability in that region. It is vital to the U.S. national interest to assist our Korean ally in developing and maintaining a strong and ready self-defense capability, which will contribute to an acceptable military balance in the area. This proposed sale is consistent with those objectives.

The proposed sale of the MH-60R SEAHAWK helicopter will improve South Korea's capability to meet current and future threats from enemy Anti-Surface Warfare (ASW) capabilities. The sale of these MH-60R helicopters will enhance interoperability with U.S. Naval forces, and add to the military stability of the region. Korea will have no difficulty absorbing these helicopters into its armed forces.

A fourth proposed sale announced this week concerns Bangladesh:

DSCA Statement On Proposed $180 Million C-130 Sale To Bangladesh

By John Liang
May 22, 2012 at 4:24 PM

The Congressional Research Service recently issued a report  (originally obtained by Secrecy News) on the proliferation of precision strike capabilities around the world. According to the report's executive summary:

The United States took the early lead in the development of precision strike and has enjoyed a monopoly on these systems for over 20 years. However, many experts agree that the U.S. advantage is eroding as these systems spread. A demonstration of this proliferation occurred in 2006, when Hezbollah successfully used a Chinese-designed C-802 Anti-Ship Cruise Missile (ASCM) against an Israeli corvette off the coast of Lebanon. This event demonstrated a non-state terrorist organization’s successful use of precision strike technology. In addition, access to the global commons is fundamental to global commerce and security -- the proliferation of technology could threaten U.S. unfettered access.

Effective use of precision strike weapons goes beyond that of the weapon itself. The weapon is one part of a much greater, elaborate system of capabilities the actor must either possess or to which it must have access. Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR), in particular, plays a critical role in precision strike.

Many experts believe the proliferation of precision strike has already begun and will continue to accelerate as more and more countries continue to develop and purchase precision strike weaponry. Three such countries include China, Iran, and Russia. China’s recent military buildup and its strategy with an apparent focus on anti-access/area denial capabilities entails a number of precision strike weapon systems to include the DF-21D anti-ship ballistic missile, which some defense analysts have labeled a "game changer." Iran, although at a much smaller and less elaborate scale, has also entered the precision-guided munitions regime with an outward belligerence toward closing the economically vital Strait of Hormuz, where 40% of the world's oil passes daily. Russia continues to supply arms to the international community and is focusing on developing its own fifth generation fighter comparable to the U.S. F-22 Raptor. Finally, a Russian defense company is currently marketing a new cruise missile system that can be hidden inside a standard shipping container. The housing of the system blends in with the hundreds of thousands of shipping containers used every day in carrying the world's commerce. Some defense experts have expressed fear that a weapon with such camouflage capability could give any merchant vessel the capability to wipe out an aircraft carrier.

The proliferation of precision strike creates potential issues for Congress. These issues include whether the Department of Defense (DOD) is properly taking adversary precision strike weapons into account in its own plans and programs, and whether Congress should approve, reject, or modify proposed DOD programs for responding to those weapons.

Check out our most recent precision strike coverage:

Key Changes Urged In Amphibious Ops To Counter Precision Weapons (Inside the Pentagon, May 10)

SOCOM Seeks Industry Input On Medium-Range Precision Strike System (Inside the Army, March 5)

DOCUMENT: SOCOM Request For Information On MRPSS

By Thomas Duffy
May 22, 2012 at 3:22 PM

The Senate Armed Services readiness subcommittee this morning strongly rejected the Obama administration's request for another round of military base closings in fiscal year 2013. Subcommittee Chairwoman Sen. Claire McCaskill (D-MO) said the Pentagon has not convinced her that another BRAC round is needed.

The subcommittee marked up its portion of the FY-13 DOD authorization bill today in a public session -- the only open session the Senate Armed Services Committee will hold as it works through the authorization bill.

McCaskill said the subcommittee made only two additions to the DOD budget request: $59 million was added to the Defense Department inspector general's budget, and $21 million was added to the Pentagon's corrosion control program. McCaskill explained that based on the subcommittee's calculations the taxpayer will get a 22-to-1 return on the additional IG money and a 14-to-1 return on the extra corrosion money.

The subcommittee's mark caps operations and maintenance spending at $200 million and codifies Defense Secretary Leon Panetta's edict that the military services and defense agencies will have an audit of budgetary resources prepared by the end of FY-14, McCaskill said.

The full committee expects to complete the authorization bill mark-up by Thursday, according to the committee's website.

By Megan Eckstein
May 21, 2012 at 8:30 PM

Navy Under Secretary Robert Work said at a Cato Institute event this afternoon that eight Littoral Combat Ships would be sent to Bahrain as mine countermeasures ships and patrol coastal ships are retired from the fleet.

While taking questions from reporters after the event, Work first asked that the exact number not be reported just yet, but since the event and his initial comments had been streamed live online and broadcast on C-SPAN, he confirmed the number.

"LCSs will be based in Bahrain," he said. "Ultimately, we hope to replace the PCs and the mine warfare vessels that are out there with eight LCSs. So just as they wash out of the fleet, eight LCSs will go out there. So instead of 10 PCs and four to eight mine warfare vessels, we have multirole vessels, you need fewer."

These eight ships would be in addition to four planned to be based in Singapore. Work said "we're certain to have LCSs in other places" but the Navy hasn't made formal plans for other foreign ports.

By John Liang
May 21, 2012 at 3:01 PM

Biofuel proponents are gearing up for a major fight over Defense Department clean energy and alternative fuel policies when the Senate Armed Services Committee marks up the fiscal year 2013 defense authorization bill this week, as committee Republicans ready amendments to block DOD plans to purchase advanced biofuels, according to a story published in last week's Clean Energy Report:

The Senate mark-up follows House passage of the National Defense Authorization Act (NDAA) for 2013 on May 18, which would block DOD efforts to purchase advanced drop-in biofuels. House Republicans opposed the DOD effort over the program's cost and as a proxy attack on President Obama's clean energy and climate change agendas.

Sens. Mark Udall (D-CO) and Patty Murray (D-WA) will offer amendments in the Armed Services Committee that support DOD's biofuel development priorities, staffers say. Democrats are bracing for an effort by Sen. James Inhofe (R-OK), a vocal critic of DOD's biofuel efforts, to block all military purchases of drop-in fuels with an amendment similar to that of Rep. Mike Conaway (R-TX) that succeeded in the House.

Sources say Inhofe is readying several amendments to block the military's green energy programs. A spokesman for Inhofe says the senator is perplexed that the military plans to spend billions to buy expensive biofuels for its fleets, while DOD is cutting its budget for ships and planes.

Staffers for Udall and Murray briefed industry May 18 on their strategy to preserve the military's biofuel programs during a drop-in fuels forum hosted by the Agriculture Department that drew hundreds of industry representatives as well as staff from the Energy Department and DOD. The forum was part of series of briefings on a multi-agency effort to advance drop-in fuels, which the military eyes as an alternative to petroleum with characteristics that make it superior to other biofuels like ethanol.

A Udall staffer told the industry audience that Inhofe will offer amendments that may go beyond the Conaway amendment. The staffer said it was urgent for industry to show support for the DOD biofuels programs in the coming days, with messaging focused on economic gains that come from DOD's biofuel efforts, the energy security aspects of advanced drop-in fuels, and the support it provides to troops by reducing their vulnerabilities in fossil-fuel supply convoys.

"The attack has been, this is about the green agenda" and that it's a proxy for climate change legislation, said the staffer. But the debate over drop-in fuels needs to shift to, "this is going to win wars," it's about combat effectiveness, energy security and protection. "We have a fight on our hands . . . and a genuine debate needs to happen," the staffer added.

Udall has asked senior military officials to describe the problems posed by the Conaway amendment in an effort to counter that provision in the Senate, according to the staffer, who said Udall expects to get an answer back from the military soon. In the meantime, Udall staff are poring over the Conaway amendment "line by line" to understand it enough to effectively block it in the Senate version of NDAA 2013.

By John Liang
May 21, 2012 at 12:00 PM

The Senate Appropriations defense subcommittee will hold a hearing at 10:00 a.m. on Wednesday to look at the fiscal year 2013 budget for the military reserve forces. Slated to testify, according to a subcommittee statement, are:

Panel I

Gen. Craig R. McKinley, USAF

Chief, National Guard Bureau

LTG William E. Ingram, Jr., USA

Director, Army National Guard

Lt. Gen. Harry M. Wyatt III, USAF

Director, Air National Guard

Panel II

LTG Jack Stultz, USA

Chief, Army Reserve

VADM Dirk Debbink, USN

Chief, Navy Reserve

Lt Gen Steven A. Hummer, USMC

Director, Reserve Affairs

Lt. Gen. Charles E. Stenner Jr., USAF

Chief, Air Force Reserve

By John Liang
May 18, 2012 at 4:57 PM

House lawmakers just passed the fiscal year 2013 defense authorization bill by a 299-120 vote.

Armed Services strategic forces subcommittee Chairman Mike Turner (R-OH) had this to say about the bill's passage:

This year House Republicans have continued to support our men and women in uniform while ensuring the safety and security of this nation. As the Chairman of the Strategic Forces Subcommittee I have sought to place an emphasis on a number of issues which are confronting our national security structure including: missile defense, modernization of our nuclear enterprise, and reform of bureaucratic entities such as the National Nuclear Security Administration.

Earlier this year, President Obama lifted the curtain on his 'secret deal' with the Russians. We still do not know the terms of this 'secret deal.' What does he mean that he will have greater 'flexibility' past his 'last election?' The White House has never made clear what deals it has been offering to the Russians, despite requests for such information by myself and my colleagues. The bill the House passed today will ensure this nation is protected from the threat of a missile attack. This includes the study of an East Coast missile defense site in order to prepare us for emerging threats across the globe.

I look forward to working with my colleagues in the Senate in crafting a final bill which will meet these goals and continue to see that our country remains ready to meet the threats of tomorrow, while providing for our defense today.

Armed Services Committee Chairman Buck McKeon (R-CA):

This year's defense authorization bill helps meet my priorities as chairman: resolve sequestration, restore strategy and sanity to the defense budget, and rebuild our military after a decade of war.

In an era of austerity, it is critical that we carefully allocate every penny that goes to the Defense Department. This bill mandates fiscal responsibility within the Department of Defense, through sound fiscal stewardship, careful prioritization of resources, and reforming the way the Pentagon interacts with the defense industrial base. We’ve taken steps to ensure that competition is promoted for government contracts, worked to ease stresses on small businesses seeking to do business with the Armed Forces, and evaluated the military’s supply chains for weaknesses.

The bill also postures our Armed Forces for potential future threats. Despite a tough fiscal environment, we have provided our Armed Forces with the tools they need to win the war today and deter against the wars of tomorrow.

I am particularly proud of the fact that this bipartisan bill honors the service of our military personnel, veterans and their families. We have kept faith with our all-volunteer military, shielding our troops and veterans from inflated health care and retirement fees. They paid for those benefits with their service, and I am proud that we were able to protect our wartime military from unfair fiscal burdens.

The FY13 NDAA would not have been possible without the partnership and leadership of my friend, Ranking Member Adam Smith. I am also particularly grateful to our subcommittee chairmen, all the Committee members and our staff for their diligent efforts on behalf of the men and women of our armed services.

Ranking Member Adam Smith (D-WA):

I want to thank Chairman McKeon, all members of the House of Representatives and staff for their hard work on this important piece of legislation.

Overall, this bill prioritizes our troops deployed in Afghanistan and around the world by ensuring that they have the tools and resources they need to do their job and protect national security.  It also provides our troops and their families with the benefits and support that they deserve, including a 1.6 percent pay increase.

It continues to make counterterrorism a priority and makes significant investments in all branches of our Armed Services, ensuring that our military is prepared to meet the threats of today as well as the future.  It supports our troops as they continue to fight overseas, invests in new technologies for the future, and protects vital military equipment production capacity here at home.

However, I am troubled by the language throughout the bill that either relies too much on a large and extended combat mission in the case of Afghanistan or, simply, overly confrontational language in the cases of Russia, North Korea, Iran, and China, to name a few.

In many cases, the only thing preventing me from voting against this bill is the qualifying language.  For example, on Afghanistan, the bill requires 68,000 troops through the end of 2014 but then says “if necessary.”  On Iran, it calls for all avenues to be used including military force, but again, only "if necessary."

The language on Russia is particularly troubling.  Much of the rhetoric during debate on this bill echoed sentiments from 1982, when we were at the height of the Cold War. We are no longer in the Cold War, and we should not be treating Russia like an enemy.

On North Korea, the confrontational language went so far as to include a study that suggests deploying tactical nuclear weapons to the region.  This would be dangerous and reckless and could destabilize the entire region.

If this were binding language, I would have to vote against this bill.  Luckily, it is simply a statement of policy by the majority -- policies that I strongly disagree with.

Additionally, given the size of our debt and deficit and growing budgetary pressures, I am concerned the bill supports an overall defense budget that is roughly $8 billion over the Budget Control Act.  Congress made a commitment to get our budget under control, and I fully expect that the Senate will honor the Budget Control Act number.

The bill also includes provisions that discriminate against gay and lesbian service members.  For years, many members of our Armed Services had to hide who they were to fight for the country they love, and I am strongly opposed to efforts that seek to turn back the clock on the progress we have made in the name of equality.

The bill also takes a big step back on energy, by ending support for many kinds of alternative fuels which undermine our national security policy.  Our nation must decrease, if not eliminate, its reliance on imported fuels and maintain our leadership in this area.  China and many other nations are seeking to become leaders in this area, and the committee’s actions will set us back and risk our leadership in this arena.

Again, I supported his bill in its current form because we must support our troops while they are in harm's way.  We must ensure that they have the tools and resources they need to ensure national security and accomplish missions we ask of them.  However, there is still much more work to be done to address many of the issues with this bill.  I look forward to reviewing the Senate’s version of this bill and working with my colleagues here in the House to make sure we send the President a final bill that meets the high standards of the United States Armed Services.

By Christopher J. Castelli
May 18, 2012 at 3:14 PM

The Defense Department today released its annual report on China's military, noting the country is sustaining investments in advanced cruise missiles, short- and medium-range conventional ballistic missiles, anti-ship ballistic missiles, counterspace weapons and military cyberspace capabilities that "appear designed to enable anti-access/area-denial (A2/AD) missions, or what PLA strategists refer to as 'counter intervention operations.'"

China's military has continued to demonstrate, the report adds, “improved capabilities” in advanced fighter aircraft, as demonstrated by initial fight tests of the J-20 stealth fighter; limited power projection, with the launch of China’s first aircraft carrier for sea trials; integrated air defenses; undersea warfare; nuclear deterrence and strategic strike; improved command and control; and more sophisticated training and exercises across China’s air, naval and land forces.

In an assessment issued this morning, Byron Callan of Capital Alpha Partners notes that the Pentagon's report discusses Chinese military modernization programs, but not in the context of annual procurement rates. The report, he adds, stresses China's focus on Taiwan but lacks information on South China Sea, the Korean peninsula and other contingencies related to China's military modernization.

And Callan cautioned the Pentagon might be caught off guard by China's potential to steal sensitive secrets in cyberspace and use the information to develop advanced weapons. “We strongly believe that a potential 'surprise' for the U.S. defense in 2013-15 is that China successfully exploits it extensive cyber-espionage efforts and unveils new weapons systems that are on par with U.S. systems,” Callan writes.

By John Liang
May 17, 2012 at 4:06 PM

The House Appropriations Committee just approved the $519 billion defense-spending bill for fiscal year 2013 by a voice vote. It also approved $88.5 billion for overseas contingency operations.

Click here to view the draft report accompanying the bill, and here to view the committee's statement.

Appropriators on the Senate side have yet to schedule a mark-up date for their version of the bill.

By Christopher J. Castelli
May 17, 2012 at 4:04 PM

Defense Secretary Leon Panetta issued a statement this morning pledging further assistance to Israel's Iron Dome missile defense system after meeting with Israel's defense minister, Ehud Barak.

"The level of security cooperation between the United States and Israel has never been stronger," Panetta said. "One important example of this cooperation is U.S. support for Israel's Iron Dome short range rocket and mortar defense system. I was pleased to inform Minister Barak that the President supports Israel's Iron Dome system and directed me to fill the $70 million in assistance for Iron Dome that Minister Barak indicated to me Israel needs this fiscal year."

Panetta said he wants to ensure Israel has the funding it needs each year to produce these batteries that can protect its citizens. "That is why going forward over the next three years, we intend to request additional funding for Iron Dome, based on an annual assessment of Israeli security requirements against an evolving threat," he added. "This is part of our rock-solid commitment to Israel's security and comes on top of approximately $3 billion in annual security assistance for Israel."

The United States has already provided $205 million in assistance for that system, and operational batteries have already proven effective in defending against rocket attacks on Israel earlier this year, Panetta said, adding, "Iron Dome has already saved the lives of Israeli citizens, and it can help prevent escalation in the future."

Panetta said he and Barak have been discussing additional U.S. support for Iron Dome, and in recent months their respective departments have been working closely to gauge Israel's security needs and production capacity for that system.

"This is assistance that, provided Congress concurs, we can move quickly, to ensure no shortage in this important system," Panetta said. "Meanwhile, we will stay in close consultation in the years ahead to ensure we are making necessary investments in this important system. This announcement is an important step and a reflection of the extraordinarily close defense relationship between our countries."

By John Liang
May 17, 2012 at 3:33 PM

Acting Pentagon acquisition chief Frank Kendall has endorsed the use of next-generation, performance-based logistics strategies.

In a May 14, 2012, memo, Kendall writes:

Operations and Support (O&S) costs comprise 60 to 70 percent of total ownership costs. We must find ways to lower our O&S expenditures while maintaining the right readiness for our Warfighters. A key method to lowering O&S costs is the implementation of sustainment strategies that optimize readiness at best value. Appropriate use of Performance-Based Logistics (PBLs) will help to achieve affordable sustainment strategies and is a method for achieving our Better Buying Power (BBP) goals.

PBLs can be an effective method of achieving notable cost savings while improving readiness and should be broadly applied across the Department. A recently completed study by the Office of the Assistant Secretary of Defense for Logistics and Materiel Readiness (ASD(L&MR)) provided compelling evidence that properly constructed and executed performance-based product support strategies (commonly referred to as PBLs) deliver best-value weapon system support.

ASD(L&MR) is spearheading an effort focused on enabling broader, more effective implementation of PBLs across the inventory of DoD platforms, sub-systems, and components as appropriate based on business case analysis results. The Next-Generation PBL Integrated Product Team will provide effective policies, processes, tools, and training across all functional communities engaged in structuring and executing PBLs.

Developing correctly structured, priced, and executed PBLs is often a more complex task than initiating a standard transactional arrangement. It requires a combined and focused effort by the Program Manager, the Product Support Manager, and the Contracting Community, among others. However, the ability to more affordably support the Warfighter at a greater level of readiness is worth the effort.

I will closely track our progress toward the goal of aggressively implementing PBLs and solicit your endorsement, commitment of resources, and active support.

By John Liang
May 16, 2012 at 12:00 PM

The Senate Appropriations homeland security subcommittee yesterday approved fiscal year 2013 funding legislation totaling $45.2 billion, $1 billion below the previous year's enacted level, according to a subcommittee statement.

Out of that, the spending bill includes the following FY-13 amounts for the Coast Guard:

* The bill provides $10.335 billion, of which $8.913 billion is discretionary spending and $1.423 billion is mandatory spending.  The discretionary level is $20 million above fiscal year 2012 and $307 million and 363 positions above the request (when $254 million is excluded for Overseas Contingency Operations).

* The bill includes funding to support over 41,600 military employees, 250 cutters, 1,800 boats, and 190 aircraft protecting over 95,000 miles of shoreline.  The bill also provides targeted increases above the request to ensure that Coast Guard personnel serving on the front lines have the resources to accomplish their missions in fiscal year 2013 and in the future.  Specific investments include:

–        $620 million for the sixth National Security Cutter;

–        $77 million for long-lead time material for the seventh National Security Cutter;

–        $335 million for six Fast Response Cutters (four above the request);

–        $8 million for initial acquisition planning and design of a new polar icebreaker;

–        $10 million for military housing;

–        $3.1 million for 26 billets to enhance oil spill response capabilities; and

–        $25.2 million to reverse cuts proposed in the request for critical operational assets (one high endurance cutter, three patrol boats, and two air facilities).

Click here to view the prepared testimony of Coast Guard Commandant Adm. Robert Papp during a hearing on his service's FY-13 budget request.

By John Liang
May 15, 2012 at 10:00 PM

The Obama administration late this afternoon threatened a presidential veto if the fiscal year 2013 defense authorization bill includes provisions proposed by House lawmakers on nuclear weapons policy and detainee matters.

According to today's statement of administration policy:

If the cumulative effects of the bill impede the ability of the Administration to execute the new defense strategy and to properly direct scarce resources, the President's senior advisors would recommend to the President that he veto the bill.

Specifically, two provisions would spark a veto:

Limitations on Nuclear Force Reductions and Nuclear Employment Strategy: The Administration strongly objects to sections 1053-1059, which would impinge on the President's ability to implement the New START Treaty and to set U.S. nuclear weapons policy. In particular, sections 1053 and 1055 would set onerous conditions on the Administration's ability to implement the Treaty, and section 1058 would set onerous conditions on the President's ability to retire, dismantle, or eliminate non-deployed nuclear weapons. Further, section 1054 raises constitutional concerns as it appears to encroach on the President's authority as Commander in Chief to set nuclear employment policy -- a right exercised by every president in the nuclear age from both parties. If the final bill presented to the President includes these provisions, the President's senior advisors would recommend that he veto the bill.

Detainee Matters: The Administration strongly objects to sections 1035-1043, which would continue and in some cases expand unwise restrictions that would constrain the flexibility that our Nation's armed forces and counterterrorism professionals need to deal with evolving threats. Section 1035, which would prohibit any detainee who has been repatriated to Micronesia, the Marshall Islands, or the Republic of Palau from traveling to the U.S., is unnecessary and could undermine our relations with a friendly government whose citizens may serve in the U.S. military. Sections 1036, 1037, 1038, and 1043 unnecessarily renew, supplement, or enhance the restrictions on the transfer of Guantanamo detainees into the United States or a foreign country. The Administration continues to strongly oppose these provisions, which intrude upon the Executive branch's ability to carry out its military, national security, and foreign relations activities and to determine when and where to prosecute Guantanamo detainees. Likewise, the Administration opposes the notice and reporting requirements in sections 1040, 1041, and 1042, which would unnecessarily complicate and potentially compromise military operations and detention practices -- including aboard naval vessels at sea. These sections, like section 1039, would also greatly add to the military's administrative burden. Section 1041 is an unprecedented, unwarranted, and misguided intrusion into the military’s detention operations in a foreign combat theater during an active armed conflict. The reporting requirements seek to micromanage the decisions of experienced military commanders and diplomats, threaten to compromise the Executive's ability to act swiftly and flexibly during a critical time for transition in Afghanistan, and could deter or jeopardize the success of effective foreign prosecutions. Sections 1036, 1037, and 1041, moreover, would, under certain circumstances, violate constitutional separation of powers principles. If the final bill presented to the President includes provisions that challenge critical executive branch authority, the President's senior advisors would recommend that he veto the bill.

To view the full statement of administration policy, click here.

By Thomas Duffy
May 15, 2012 at 7:32 PM

The Senate Armed Services Committee announced this afternoon that it was able to form a quorum and favorably reported out the following civilian Defense Department nominations:

Frank Kendall III to be Under Secretary of Defense for Acquisition, Technology, and Logistics;

James N. Miller, Jr. to be Under Secretary of Defense for Policy;

Erin C. Conaton to be Under Secretary of Defense for Personnel and Readiness;

Kathleen H. Hicks to be Principal Deputy Under Secretary of Defense for Policy;

Jessica Lynn Wright to be Assistant Secretary of Defense for Reserve Affairs;

Derek H. Chollet to be Assistant Secretary of Defense for International Security Affairs; and

Heidi Shyu to be Assistant Secretary of the Army for Acquisition, Logistics, and Technology.

All of the nominations have been reported to the Senate floor for action.