Senate Passes FY2016 Defense Authorization, But Blocked on Defense Appropriations

The Senate passed the FY2016 National Defense Authorization Act (NDAA) today despite the threat of a Presidential veto.  Shortly thereafter, however, the Senate Republican leadership was blocked in an attempt to bring up the FY2016 defense appropriations bill as Democrats fulfilled their pledge to block all appropriations bills until Republicans agree to negotiate a new budget deal to replace the sequester.  The White House issued a veto threat against the appropriations bill, too.

Authorization.  Some top Senate Democrats earlier said they would block passage of the NDAA (S. 1376/H.R. 1735) because of the debate over budget caps, but Senate Armed Services Committee (SASC) chairman John McCain (R-AZ) argued that although the NDAA recommends funding levels, it does not actually provide any funding. The policy provisions at the heart of the legislation are so important that the bill needed to pass, he argued.  His reasoning apparently persuaded a number of Democrats.  The bill passed by a healthy margin (71-25) despite the veto threat from the White House. (Not sure of the difference between an authorization and an appropriation?  See SpacePolicyOnline.com’s “What’s a Markup” fact sheet.)

The House has already passed its version of the NDAA.  The next step is coming up with a compromise between the House and Senate versions.  One important space-related issue on which the two sides of the Capitol disagree is the pace at which an American-made alternative to Russia’s RD-180 rocket engine must be in service.

The RD-180 issue has been debated extensively in Congress and elsewhere over the past year and a half as reported in these pages.  Essentially, the Russian-built RD-180s are used for the United Launch Alliance’s (ULA’s) Atlas V
rocket, one of two Evolved Expendable Launch Vehicles (EELVs) used to
launch national security satellites for DOD and the intelligence
community.  The other is the Delta IV.  Russia’s annexation of Crimea and the resulting chill in U.S.-Russian relations galvanized Congress to require DOD and the Air Force to stop purchasing RD-180s and develop an American alternative instead.  The FY2015 NDAA set 2019 as the last year when RD-180s can be used for national security launches (there is no prohibition against using them for civil or commercial launches, although the number of engines that may be purchased is restricted). 

The Air Force is trying to convince Congress to give it a few more years
to make the transition, arguing that it needs more time to develop,
test and certify a new launch system (of which an engine is part).  It wants an extension to 2022.  The
House-passed FY2016 NDAA provides that flexibility, but the Senate bill
insists on 2019.

The RD-180 and launch competition issues have become entwined.  ULA has been a monopoly provider of launch services to the Air Force and intelligence community since it was created in 2006, but now a competitor, SpaceX, has emerged.   DOD, the Air Force and ULA assert that they embrace the drive for competition, but want to make certain SpaceX does not itself become a monopoly provider in the 2019-2022 time frame when Atlas V’s no longer can be launched (because RD-180s are prohibited), but a ULA alternative is not ready.  These issues not only split the House and Senate authorizing committees, but the Senate authorizing and appropriations committees.  McCain’s Senate Armed Services Committee (SASC) is the one holding DOD’s feet to the fire on 2019, while the other three are siding with DOD.

Appropriations.  Shortly after Senate passage of the NDAA today (June 18), Senate Majority Leader Mitch McConnell (R-KY) tried to bring up the defense appropriations bill (S. 1558/H.R. 2685), which was approved by the Senate Appropriations Committee last week.  He needed 60 votes to allow the bill to be debated, but it fell short 50-45. 

Senate Democrats have vowed to prevent any of the appropriations bills from being debated until Republicans agree to negotiate a new budget deal to replace the spending caps set in the 2011 Budget Control Act (BCA).  They and the White House are particularly incensed that Republicans are using a “gimmick” to add tens of billions of dollars to defense spending by adding it to an off-budget account (Overseas Contingency Operations — OCO) to which the caps do not apply, while leaving non-defense spending subject to the BCA caps and a sequester if they are not met. That top level disagreement is shaping congressional action on funding bills this year and some Democrats are warning that a government shutdown is possible if Republicans refuse to negotiate a new agreement.

Even if Congress did pass appropriations bills, the White House has said it will veto them. The main reason is the overarching debate about the budget caps and the OCO gimmick, but specific issues also are mentioned.

In its Statement of Administration Policy (SAP) on the Senate defense appropriations bill, issued today, the White House called out three space-related issues as being of particular concern:  the addition of $143.6 million for building a U.S. alternative to the RD-180; the rescission of $125 million from FY2015 funds for an EELV launch, which is related to the RD-180 issue; and the elimination of funding to launch the last Defense Meteorological Satellite Program weather satellite (DSMP-20),

As explained in the committee’s report, Sec. 8045 rescinds the $125 million because of the requirement in Sec. 1608 of  the FY2015 NDAA that use of RD-180s cease in 2019.  The money was provided, the report says, to double the number of competitive launch opportunities in FY2015.  However, the committee agrees with the Air Force and ULA that a new U.S. launch system to replace the Atlas V will not be ready by 2019, and, since ULA’s Delta IV is not cost competitive, only SpaceX could win launch contracts.  That means no competition, “nullifying the intent” of the addition. 

The committee goes on to say that it is not recommending fewer competitive opportunities in FY2016 because “true competition” may still be possible if Congress modifies the Sec. 1608 requirement as requested by DOD and “enable a responsible transition” away from the RD-180 “as soon as possible.”  As noted above, the appropriations committee’s position is at odds with the just-passed Senate FY2016 NDAA, which maintains the 2019 requirement.  Sen. Lindsey Graham (R-SC) tried to remove Sec. 8045 during markup of the appropriations bill last week, but he withdrew his amendment when it became clear it would not pass.  Sen. Thad Cochran (R-MS), chairman of the full committee and its defense subcommittee; Sen. Richard Durbin (D-IL), the top Democrat on the defense subcommittee; and Sen. Richard Shelby (R-AL), argued stridently against the Graham amendment.  (ULA manufactures its rockets in Decatur, AL.)

Meanwhile, to “ensure expeditious development” of a U.S. alternative to the RD-180, the committee added $143.6 million for rocket engine development above the $84.4 million requested.

The Obama Administration agrees with the committee’s position on modifying the 2019 requirement, but not with the rescission of $125 million from FY2015 EELV procurement or the addition of $143.6 million in FY2016 for rocket engine development.  Regarding the latter, It argues that the committee’s “engine-centric approach … would not preserve the Nation’s assured access to space” because an engine is only one of many critical components of a launch system and developing a propulsion system independent of the rest of the system risks “hundreds of millions of dollars without ensuring the availability of operational launch systems.”  (The White House’s threat to veto the Senate version of the NDAA also included concerns about space launch issues, objecting to four sections of that bill.)

As for DMSP-20, the Air Force changed its mind this year about the need for this last of the 1990s-era DMSP series.  The tortuous history of DOD weather satellites and the failure of the DOD-NOAA-NASA National Polar-orbiting Operational Environmental Satellite System (NPOESS) program need not be repeated here. DOD is still trying to determine its future path for weather satellites needed to support military operations.  Congress seems exasperated, especially with the high costs of storing and launching the DMSPs. The appropriations committee report says that the Air Force is proposing to launch DMSP-20 in FY2018 or FY2019 at a cost of between $410-$455 million in addition to the $500 million already spent.  It notes that the Air Force previously said DMSP-20 was not needed.  It not only denied the $89.3 million requested for FY2016, but rescinded $50 million of the FY2015 funding and directed the Air Force to bring the program to an “orderly close” with the remaining FY2015 funds.

The Administration’s SAP says it strongly objects to the committee’s position because by 2017 only one of the DMSP satellites now in orbit will still be within its design life.  DOD is concerned about a potential gap in polar orbiting weather satellite data that could lead to “reduced accuracy in weather prediction models and degraded efficiency of surveillance and reconnaissance platforms.”  (The White House’s threat to veto the Senate version of the NDAA also included objections to that committee’s DMSP provisions, which limited the availability of funds until certain prerequisites are met, which the White House termed “onerous.”)

The space issues are only a small part of the list of Administration objections to the appropriations bill.  While they are all important to reaching agreement on a final FY2016 appropriations measure, the fundamental issue of budget caps and balancing defense versus non-defense spending portends a lengthy and fractious appropriations season this year.