Defense Bill Sets Up Clash With Trump

By Yuval Rosenberg

Defense Bill Sets Up Potential Clash With Trump

The Senate Armed Services Committee this week approved the National
Defense Authorization Act (NDAA), the annual bill that defines the
budget and key policies for the Pentagon. Though the full details
have not yet been released, the committee set a topline defense
spending number of $740.5 billion for 2021 while including some
controversial policy prescriptions.

Here’s what we know so far from the committee’s
19-page summary:

Budget breakdown: The bill authorizes $636.4 billion for
the base Pentagon budget and $69 billion for the off-budget
overseas war-fighting account. In addition, it provides $25.9
billion for defense-related activities at the Department of Energy,
and $9.1 billion for “defense related activities outside NDAA
jurisdiction.”

A larger military: The bill prohibits the Air Force from
shrinking, and it renews calls for a significantly larger Navy. It
authorizes the Defense Department to spend $9.1 billion for 95 F-35
Joint Strike Fighters, 14 more than requested by the Trump
administration, while preventing the Air Force from retiring A-10
Warthog ground-attack jets and some F-15 fighters stationed in
Europe. It also delays the retirements of KC-10 and KC-135 tankers
until their replacement is ready.

The bill would authorize $21.3 billion for Navy shipbuilding,
$1.4 billion more than requested by the White House. And it affirms
the national policy of building a fleet with “not fewer than 355
battle force ships” — a target Navy leaders have been backing away
from in recent months.

The bill also authorizes a slight increase in the size of the
Army, to 485,000 soldiers, up from the 475,000-480,000 troop level
it has sustained over the last year.

Potentially controversial amendments:
The bill comes at a time of growing
tensions between President Trump and his top
military leaders, and some of its provisions could further
destabilize the relationship between the White House and the
Pentagon. The committee approved an amendment from Sen. Tim Kaine
(D-VA) that would prevent the military from deploying active-duty
troops against protesters. In a statement, Kaine said that the
amendment “was something I would never have thought I needed to do
until last week: prevent the use of military force against peaceful
protesters.”

The committee also approved a provision that would require the
Pentagon to change the name of military bases named after
Confederate commanders. "If we're going to have bases throughout
the United States, I think it should be with the names of
individuals who fought for our country," Republican Sen. Mike
Rounds of South Dakota said Thursday. "This is the right time for
it. And I think it sends the right message."

The White House has signaled that it will veto the NDAA if the
final version contains any such a language. In a tweet, Trump said
his “Administration will not even consider the renaming of these
Magnificent and Fabled Military Installations. Our history as the
Greatest Nation in the World will not be tampered with. Respect our
Military!”

What’s next: Just the first step in a complicated annual
process, the bill will head to the Senate floor for debate and a
likely vote. The House will write its own NDAA, which then has to
be reconciled with the Senate’s version. Both chambers must then
pass an appropriations bill that provides the funds for defense
spending – a separate and sometimes lengthy process that could drag
well into the fall.

A Bailout for Defense Contractors

The Pentagon has announced that it is providing financial
assistance to defense contractors who have been hurt by the
coronavirus pandemic, Defense One
reports.

The Defense Department said this week that it has paid $135
million to five “mid-tier defense companies” as part of an effort
to “sustain defense-critical workforce capabilities in body armor,
aircraft manufacturing, and shipbuilding.” The money reportedly
will be used to retain skilled workers and in some cases to rehire
those who have been laid off due to the slowdown in business.

The Pentagon also said that it plans to ask Congress for
funds to defray costs for contractors as they address the crisis,
including reimbursements for the costs of protective gear and the
redesign of factories. The CARES Act allows defense contractors to
be reimbursed for coronavirus-related expenses, but Congress has
not provided any funds to make those payments.

Charts of the Day: More Than Half of Coronavirus Response Funds
Are ‘Out the Door’

Congress and President Trump have responded to the coronavirus
crisis with $4 trillion worth of measures to support the economy.
The Committee for a Responsible Federal Budget, a nonpartisan
fiscal watchdog group, says that just over half that money, $2.1
trillion, has now been disbursed or committed.

“While several programs and policies got off to a rocky starts,
including the
Paycheck Protection Program and
expanded unemployment benefits, disbursement
appears to be moving at record speed,” the group says. “For
comparison, it took
14 months for half of the American
Recovery and Reinvestment Act to be disbursed in 2009 and
2010.”

Here’s CRFB’s breakdown of what’s already “out the door”
and what remains to be spent along with a look at how the money has
been disbursed over time.

Quote of the Day

From the Federal Reserve’s semiannual monetary policy
report to Congress, dated June
12:

"The path ahead is extraordinarily uncertain. First and
foremost, the pace of recovery will ultimately depend on the
evolution of the COVID-19 outbreak in the United States and abroad
and the measures undertaken to contain it. Importantly, some small
businesses and highly leveraged firms might have to shut down
permanently or declare bankruptcy, which could have longer-lasting
repercussions on productive capacity. ... In addition, there is
uncertainty about future labor demand and productivity as firms
shift their production processes to increase worker safety, realign
their supply chains, or move services online. Furthermore, if
employees are not called back to their former jobs, their period of
unemployment could increase, potentially leading to lower wages
when they do eventually find a job.”

Senators Considering Corporate Tax Breaks for Next Coronavirus
Bill: Report

Republicans on the Senate Finance Committee are studying
a proposal from business lobbying groups to speed up some corporate
tax breaks as part of the next coronavirus relief package, The
Washington Post’s Jeff Stein reports:

“Under current law, corporations are generally not allowed to
claim federal tax credits if the credits exceed their overall tax
liability, meaning they cannot receive more from the government
than they pay in. If corporations cannot claim their federal tax
credits, they can roll them into future years. The current proposal
being discussed by several Republicans on the Senate Finance
Committee would void that limit, allowing firms to ‘cash out’ on
all their credits this year.”

The proposal is reportedly one of the top priorities for
business groups and some tax policy experts on the right back the
plan. But Steve Rosenthal, a policy analyst at the Tax Policy
Center, warned that the change presents risks for the federal
government’s finances. “This form of cashing out could strip the
government of revenue in the future to give money away to business
owners today. That’s very dangerous,” Rosenthal told the Post.
“This is another overreach by big businesses to grab tax dollars at
a time when small businesses need assistance.”


Read more at The Washington Post.

Senate GOPers Eye Bill to Prevent Next Shutdown Fight Before It
Starts: Report

It’s safe to say that President Trump and House Speaker
Nancy Pelosi don’t enjoy a
warm working relationship. Senate Republicans
looking ahead to the fall are already worried that tensions between
the two leaders could lead to another government shutdown fight —
and concerned that they may pay the price for any such showdown in
the November elections, The Hill’s Alexander Bolton
reports:

“There is widespread anxiety among GOP senators that Trump’s
penchant for picking fights is a political liability as his
response to nationwide protests against police brutality appears to
be the cause of his declining approval ratings.
“Republicans are now worried that he’s likely to pick a fight
with Pelosi in September over government funding for the next
fiscal year, which starts Oct. 1.”

To defuse the risk of a shutdown, some Senate Republicans are
reportedly considering legislation that would keep the government
running even if the required annual spending bills haven’t been
passed. The Senate hasn’t yet passed any of the 12 appropriations
bills, while House Appropriations Committee Chairwoman Nita Lowey
(D-NY) plans to mark up the spending bills next month.

Sen. Mike Braun (R-IN) tells The Hill that the aim of the
legislation would be to “get rid of shutting down the government as
a lever that can be used by whoever chooses to do it” — or at least
to get Senate Republicans on record as opposing a possible
shutdown, helping them pin any blame on Democratic leaders Chuck
Schumer and Nancy Pelosi. Some Democrats may be wary of
automatically extending spending at previous levels or may object
to the details of GOP proposals to prevent shutdowns.

“If Schumer and/or Pelosi wants to keep that open as an option,
I think it will be pretty easy to connect the dots on whose fault
it would be if we ever have a government shutdown,” Braun told The
Hill.

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