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I n t e g r i t y - S e r v i c e - E x c e l l e n c e Headquarters U.S. Air Force Unclassified//FOUO 1 Julie Hogan SAF/AQPM 9 Jul 13 Sequestration 101.

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Presentation on theme: "I n t e g r i t y - S e r v i c e - E x c e l l e n c e Headquarters U.S. Air Force Unclassified//FOUO 1 Julie Hogan SAF/AQPM 9 Jul 13 Sequestration 101."— Presentation transcript:

1 I n t e g r i t y - S e r v i c e - E x c e l l e n c e Headquarters U.S. Air Force Unclassified//FOUO 1 Julie Hogan SAF/AQPM 9 Jul 13 Sequestration 101

2 Overview Do Ask Questions Do Take Notes Ensure you claim CLP/CLU (8) DO NOT FALL ASLEEP 2 Background Federal Budget Process Appropriation vs. Authorization Types of Funding Continuing Resolution Defense Budget Budget Control Act Sequestration Illustration

3 President’s Budget (PB) Requests funds to run Government Includes operations, research & development, procurement Begins authorization and appropriations cycle Usually submitted to Congress First Monday in February After State of the Union Address Explained to Congress through additional documentation and hearings

4 How Defense Bills Become Laws: How Defense Bills Become Laws: The Products 4 President’s Budget (PB) Sent to Congress in February CONGRESS SENATE Passes DoD APPROP BILL SENATE Passes DoD AUTH BILL  Bill as passed May include amendments  Bill as passed May include amendments  Bill as passed May include amendments  Bill as passed May include amendments HOUSE Passes DoD AUTH BILL HOUSE Passes DoD APPROP BILL Final DoD Approps Bill Final DoD Auth Bill CONGRESS CONGRESS AUTHORIZATIONPROCESS SASC HASC SAC-D HAC-D  Draft Bill  Committee Report  Draft Bill  Committee Report  Draft Bill  Committee Report  Draft Bill  Committee Report APPROPRIATIONSPROCESS PRESIDENT SIGNS BILL PRESIDENT SIGNS BILL DoD AUTH LAW DoD APPROPS LAW (FEDERAL BUDGET)  Draft Bill  Conf Report AUTH CONFERENCE APPROPS CONFERENCE  Draft Bill  Conf Report

5 Authorization vs. Appropriation 5 Constitutionally mandated Provides budget authority Permission to draw funds from US Treasury One-year budget focus Limited language Defense is only 1 of 12 Bills SAC-D and HAC-D (D = Defense) Statutorily authorized Provides permission & direction on how to spend funds Policy oriented Fiscal Year focus Extensive language Authorization Appropriation Example: Mom, Can I go to the movies? “Yes, I approve (authorize) you to go, but you cannot see “Zombie Blood Bath” (Prohibitive content) Authorizers: HASC & SASC (House Armed Services Committee & Senate Armed Services Committee) Example: Dad, Can I have money to go to the movies? “Yes, here is $20 (appropriated).” (Cannot spend the $20 to see “Zombie Blood Bath” due to Prohibitive Content) Appropriators: HAC & SAC (House Appropriations Committee & Senate Appropriations Committee)

6 Real-life Definitions O.K. But you have to wear a helmet. I need $200 for a new bike. Request Authorization Appropriation Obligation Outlay Expenditure SEARS $ Aug 1997 $200 Bank SEARS Bike You can charge it to us. SEARS

7 Types of Funding RDT&E Procurement MILCON O&M MILPERS Incremental Full Annual

8 Continuing Resolution Authority (CRA) Used by Congress to fund government agencies if a formal appropriations bill has not been signed into law by 30 Sep Allows operations to continue until formal appropriation is approved Can last from a few days to several months Restrictions under CRA New Starts Quantity Increases 8

9 How Big is the DoD Budget?

10 I n t e g r i t y - S e r v i c e - E x c e l l e n c e 10 Some Issues How big should the defense budget be? Percent of gross domestic product? (currently ~4%) Percent of the budget? (currently ~20%) How do we balance the budget? Raise taxes? Decrease spending? Where should we cut defense? Cancel programs? Close bases? Reduce personnel/benefits?

11 I n t e g r i t y - S e r v i c e - E x c e l l e n c e Budget Control Act Enacted due to debt ceiling crisis Reduces spending by $1.2 trillion over 10 years ( ) Discretionary spending is capped each year for next decade 11 Created “super committee” to make recommendations (tax increases & spending cuts) – failed As a result, there is an across the board cut to eliminate excess spending (sequester)

12 12 Sequestration  Theory: “Meat-ax” approach to budget-cutting whose consequences were so dire Congress would not let it occur  Reality: It happened!  Enacted 1 March 2013 (after extension)  Drove $42.7B cut to DoD budget in FY13

13 I n t e g r i t y - S e r v i c e - E x c e l l e n c e 13 Typical Monthly College Budget Tuition$1,000 Housing 500 Food 400 Car 200 Insurance 175 Gas 100 Cell Phone 50 Entertainment 50 Savings 25 $2,500

14 I n t e g r i t y - S e r v i c e - E x c e l l e n c e 14 10% Budget Reduction Tuition$1,000 1,000 Housing Food Car Insurance Gas Cell Phone Entertainment Savings 25 5 $2,500$2,250

15 I n t e g r i t y - S e r v i c e - E x c e l l e n c e 15 Sequestration (10%) Tuition$1, Housing Food Car Insurance Gas Cell Phone Entertainment Savings $2,500$2,250

16 I n t e g r i t y - S e r v i c e - E x c e l l e n c e 16 Impacts  Tuition – Can’t take a class; may delay graduation  Housing – Move to a cheaper place? Get a roommate?  Food – Buy cheaper food; eat less  Car – Can’t make car payment; defer oil change  Gas – Consolidate trips; take bus  Insurance – Cancel healthcare policy; assume risk  Cell Phone – Use more inefficient processes  Entertainment – Have less fun 

17 I n t e g r i t y - S e r v i c e - E x c e l l e n c e 17 Air Force Impacts Limit supply/IT purchases Defer building maintenance Cancel trips, conferences, training Cancel non-mission flying hours (e.g., airshows, flyovers) Fire temporary employees/impose hiring freeze Furlough civilians one day per week Cancel combat exercises Reduce weapon system sustainment Ground airplanes

18 I n t e g r i t y - S e r v i c e - E x c e l l e n c e 18 Looking Ahead One time opportunity to move money between accounts Still waiting for Congress to approve the DoD request If Congress can’t agree on budget this year, we will sequester again Continue to trade modernization for readiness


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