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A Bipartisan Budget Agreement

December 12, 2013

Dear Members and Friends of NDIA and its affiliates:

Tuesday afternoon, the Chairmen of the House and Senate Budget Committees, Rep. Paul Ryan and Sen. Patty Murray, jointly announced that they had reached a bipartisan budget agreement. The Senate Budget Committee has posted a summary of the legislation, a section-by-section analysis, and the full text on their website, and the Congressional Budget Office has posted an analysis of the various spending cuts and revenue increases.

Overall, the budget deal appears to extend the fiscal year 2013 level of Department of Defense appropriations into fiscal years 2014 and 2015, a better outcome for the defense budget than the cuts that were scheduled to take place in the coming two years. The agreement is paid for by reducing waste, ending special carve-outs for some corporations, modifying federal retirement programs (both civilian and military), increasing user fees (for air travel and other activities) and pension insurance premiums, and extending sequester for mandatory spending for an additional two years (in fiscal years 2022 and 2023). This last provision garners an additional savings of $28 billion, $22 billion of which goes to deficit reduction. That leaves $63 billion of the $85 billion total to be shared between defense and non-defense discretionary spending in fiscal years 2014 and 2015, to reduce defense sequester by roughly $22 billion in fiscal 2014 and $9 billion in fiscal 2015. By our calculations here at NDIA—which should be considered only estimates—that would make the DoD base budget level for fiscal year 2013 about $496.6 billion, for fiscal year 2014 about $497.0 billion, and for fiscal year 2015 about $497.8 billion. The 2016-2021 spending levels would return to amounts set by Sec. 302 (page 17) of the Budget Control Act of 2011.

The bill also includes a new provision that would cap executive compensation at the rate of $487,000, rather than the $625,000 figure included in the National Defense Authorization Act (NDAA) introduced on Monday. NDIA led a coalition of defense associations in a letter asking Congressional leaders to expeditiously take up and pass the NDAA, given the importance of its provisions to our troops and national security.

Neither bill has received a vote in either chamber; according to the House schedule, both bills will receive a vote in that chamber today, leaving the Senate to consider them at some point next week. NDIA will continue to monitor the budget and NDAA processes and share significant updates with you.

Sincerely and respectfully,

Lawrence P. Farrell Jr.
Lt. General, USAF (Ret.)
President and CEO
National Defense Industrial Association (NDIA)

National Defense Industrial Association, 2111 Wilson Boulevard, Suite 400, Arlington, VA  22201-3061

About the NDIA STL

NDIA St Louis was instituted in January 1928 when the organization was still the Army Ordnance Association and remained an active partner through the 1990s. It was reformed 81 years later in January 2009 based on the recognition of the growth of the “industrial base”, the defense and homeland security industries in Missouri.

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