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The President’s Budget includes $612 billion of national defense discretionary funds, a $26 billion, or 4.5 percent, increase from the 2015 enacted level, to provide the resources needed to sustain the President’s national security and defense strategies. The Budget reverses the decline in national defense spending of the past five years and proposes to transition enduring overseas contingency operations (OCO) costs to the base budget, to fully fund and account for the costs of keeping the Nation secure. Discretionary national defense function spending has fallen by 18 percent since 2010 as the military has ended its ground combat missions in Iraq and Afghanistan, and adjusted to the sequestration cuts of 2013 and flat base budget funding levels of 2014 and 2015. This spending — which comprises all base and OCO funding for DOD, as well as funding for certain programs in DOE, DOJ, and other Departments and agencies — peaked in 2010 at $714 billion, and has since decreased $128 billion, to the 2015 enacted level of $586 billion. Accounting for the effects of inflation, the decrease over this period is even steeper, at 24 percent.

Part of the decrease reflects the declining costs of OCO-funded operations in Iraq and Afghanistan, as highlighted below. However, sequestration also reduced the base budget significantly in 2013, and the Bipartisan Budget Act essentially straight-lined the defense base budget in 2014 and 2015. These levels required sharp cuts to training, maintenance, and modernization. Combined with a continued demand for U.S. forces to respond to emergent crises while preparing for a widening spectrum of future challenges, reduced budgets contributed to degraded levels of readiness throughout the military, and delays in fielding equipment and technology that will be critical for future security. Going forward, defense base budgets at or near the sequestration level would undermine the military’s capacity and capability to respond to contingencies, deter aggression, project power, and decisively win against potential adversaries — leaving it insufficiently prepared to protect and advance U.S. interests.

The President’s Budget provides $561 billion in base discretionary funding for national defense (of which $534 billion is for DOD), which is $40 billion, or eight percent, above the 2015 enacted level. The Budget makes strategic investments to sustain and advance U.S. global leadership while ensuring the Nation’s long-term fiscal health. It provides for the training, maintenance, and support needed to restore military readiness over the next several years, and for investment in recapitalization and modernization needed to ensure America’s continued technological edge. Along with these funding increases, the Budget provides savings (detailed below) through critical reforms that slow growth in compensation and divest unnecessary overhead, infrastructure, weapons, and end strength. The Budget also increases outyear projections for defense spending across the 2017 to 2020 period to accommodate select investments in key capabilities, such as space security, nuclear deterrence, power projection, and intelligence, surveillance, and reconnaissance. These targeted increases will further enhance the U.S. military’s ability to execute the defense strategy as the Nation continues to adapt to a changing threat environment. The Budget presents a responsible alternative to current law, since risks to the Nation would grow significantly if sequestration-level funding returns, if proposed reforms are not accepted, or if uncertainty over budget levels continues.

DOD’s OCO request is $51 billion, which is $13 billion, or 21 percent, below the 2015 enacted level. It provides the funding needed to combat diverse terrorist groups, such as the Islamic State of Iraq and the Levant (ISIL); to ensure a responsible transition in Afghanistan, where the United States and international partners will train, advise, and assist Afghan-led operations; and to counter Russia’s aggressive actions and reassure allies and partners in Europe. The OCO budget includes certain costs that will endure past these current contingencies, and thus the Budget proposes to transition enduring OCO costs to the base budget, as described later in this chapter.

The President’s Budget also provides $53.4 billion for the Department of State and Other International Programs (State/OIP), including $46.3 billion in base funding and $7.0 billion in OCO, which is a $4.0 billion, or eight percent, increase from the 2015 enacted level, excluding emergency Ebola funding. This funding will make strategic investments that will help provide not only for a stronger and safer America, but also for a more stable and prosperous world. The Budget supports sustainable security and shared prosperity at home and abroad through critical investments in diplomacy and development, from life-saving humanitarian assistance to counterterrorism programs aimed at defeating terrorist organizations. It provides strong support for U.S. diplomatic personnel and facilities abroad, security partnerships, global engagement, and development programs that advance economic growth, health, education, and democratic governance. The Budget advances American leadership and engagement at a time when diplomacy is most needed to confront the many challenges facing the world today.

2.7.1
Advancing National Security Priorities
Degrading and Defeating ISIL and Responding to the Syria Crisis. As part of the U.S. effort to degrade and ultimately defeat ISIL, support security and governance, continue efforts in Iraq, support regional partners, and bring stability and promote the conditions for a negotiated settlement to end the conflict in Syria, the Budget proposes $8.8 billion in OCO funds for DOD and State/OIP. ISIL poses an immediate threat to Iraq, Syria, and American allies and partners throughout the region as it seeks to overthrow governments, control territory, terrorize local populations, and attack the United States and coalition partners throughout the world. The ongoing conflict in Syria also continues to threaten regional stability and has displaced over 10 million people. The Budget provides funding for military operations, diplomacy, governance, and humanitarian and security assistance programs to address these challenges. This includes $5.3 billion for DOD to continue Operation Inherent Resolve, which includes conducting airstrikes, collecting intelligence, as well as training, advising, and equipping the Iraqi security forces and properly vetted members of the moderate Syrian opposition. For State/OIP, the Budget provides $3.5 billion to strengthen regional partners, counter ISIL, provide humanitarian assistance, and strengthen Syria’s moderate opposition to advance the conditions for a negotiated political transition.

Ensuring a Responsible Transition in Afghanistan. The Budget continues to support long-term national security and economic interests in Afghanistan and help sustain political, economic, and security gains in the country as the United States draws down its forces, assistance levels gradually decline, and the Afghans assume greater responsibility for securing their country. The Budget includes resources to reinforce Afghanistan’s security and development by supporting military training and assistance, as well as health, education, justice, economic growth, governance, and other civilian assistance programs necessary to preserve the gains of the last decade, strengthen diplomatic ties with the international community, and promote stability. The Budget also facilitates the transition of the U.S. military from a combat mission to a mission of training, advising, and assisting the Afghan National Security Forces and maintaining a limited counterterrorism capability to continue targeting the remnants of al Qaeda.

Countering Russian Pressure and Aggressive Action. In response to the Russian Federation’s aggressive acts and attempts to constrain the foreign and domestic policy choices of neighboring countries, the Budget includes proposals for political, economic, and military support to NATO allies and partner states in Europe. To increase resilience within the governments and economies most targeted by Russian pressure, the Budget provides an additional $117 million in foreign assistance funds directed specifically toward countering Russian aggressive acts in Ukraine, and $51 million for countering Russian pressure and destabilizing activities in Moldova and Georgia. This assistance will support efforts to bolster democracy and good governance, increase the capabilities of security forces, strengthen the rule of law and anti-corruption measures, and promote European Union integration, trade, and energy security. In addition, through a $16 million investment in U.S. international media activities, the United States will seek to engage vulnerable populations in periphery countries, expand U.S. support to freedom of press and independent journalism in the region, and advance America’s foreign policy interests. Building on the $1 billion sovereign loan guarantee provided in 2014 and the forthcoming $1 billion sovereign loan guarantee in 2015, the Budget includes funding that could support an additional loan guarantee providing up to $1 billion in financing in 2016, if conditions warrant, to help Ukraine continue on its path of economic recovery, reforms, and normalized access to international financial markets in the wake of destabilizing Russian actions and violations of Ukrainian sovereignty. To bolster security and reassure NATO allies and partner states in Europe, the Budget provides $789 million to continue the European Reassurance Initiative (ERI). ERI funding will enable the Unites States to continue increased military exercises, training, and rotational presence in Europe, enhance U.S. preparedness to reinforce NATO allies through the prepositioning of equipment, and build the capacity of partner states in Europe to operate alongside the United States and NATO in strengthening regional security.

Strengthening Government-wide Efforts to Combat Terrorism. The Budget provides $2.5 billion for the Counterterrorism Partnerships Fund to support a sustainable and effective approach for combating terrorism, with a focus on enabling and empowering partners facing terrorist threats. The $2.1 billion proposed for DOD would increase partner capacity-building, facilitate partner counterterrorism operations, and enhance DOD’s counterterrorism activities. The $390 million proposed for State/OIP would enable the Department to bolster global counterterrorism partnerships, as well as address underlying conditions conducive to terrorism.

Countering Violent Extremism. The Administration has developed a strategy to address recent domestic terror incidents and the emergence of groups attempting to recruit Americans to take part in ongoing conflicts in foreign countries. As part of this effort, DOJ’s Countering Violent Extremism (CVE) initiative is an Administration priority and supports the United Nations’ efforts to address foreign terrorist fighters. Additional resources are provided to support community led-efforts, including $4 million to conduct research targeted toward developing a better understanding of violent extremism and advancing evidence-based strategies for effective prevention and intervention; $6 million to support flexible, locally-developed CVE models; $2 million to develop training and provide technical assistance; and $3 million for demonstration projects that enhance the ability of law enforcement agencies nationwide to partner with local residents, business owners, community groups, and other stakeholders to counter violent extremism.

Rebalancing to the Asia-Pacific Region. The Budget supports the Presidential priority of advancing security, prosperity, and human dignity across the Asia-Pacific region. Recognizing that security in the Asia-Pacific region underpins regional and global prosperity, the Budget aligns resources and activities to strengthen U.S. alliances, to forge deeper partnerships with emerging powers, and to pursue a productive relationship with China. Building on the President’s successful November 2014 trip, the Budget provides resources to help deepen U.S. trade in the region as the United States leads the way in negotiating the high-standard Trans-Pacific Partnership with 11 countries in the Asia-Pacific region, which will boost American exports and create jobs at home by promoting strong rules to protect labor, the environment, and intellectual property. To promote universal and democratic values, the Budget expands education and cultural exchanges and strengthens regional cooperation with organizations such as the Asia-Pacific Economic Cooperation forum and the Association of Southeast Asian Nations. In pursuit of security cooperation, the Budget enhances and modernizes U.S. defense relationships, posture, and capabilities with a focus on maritime security. DOD funding remains consistent with the priorities identified in the 2012 Defense Strategic Guidance and the 2014 Quadrennial Defense Review. To address security, development, and economic challenges, the Budget prioritizes advancing regional and country capabilities. These investments are critical to the Administration-wide effort to promote regional security and economic cooperation.

Investing in Adolescent Girls’ Education, Safety, and Health. In collaboration with the Office of the First Lady and building on ongoing U.S. efforts that currently support more than a million adolescent girls worldwide every year, the Budget provides $250 million in new and reallocated funds to broaden opportunities for adolescent girls around the world. This new, expanded Let Girls Learn initiative — building on USAID’s initial funding and programs — will improve access to quality education and health care, and help address violence and other barriers to education that adolescent girls face. The Budget also continues support for the President’s Emergency Plan for AIDS Relief (PEPFAR) interventions to reduce HIV infections in young women, and expands USAID’s programs in support of adolescent girls’ education, including expanded investments in educating adolescent girls in Afghanistan. These and other investments will deepen the United States’ commitment to adolescent girls, helping girls and young women thrive and play a fuller role in their respective societies and economies.

Maintaining Technological Superiority. Technological superiority enables the United States to project power to dangerous environments, defend against threats in all domains, and continuously adapt, innovate, and prevail as new threats arise. Maintaining this superiority is becoming increasingly challenging as potential adversaries have accelerated their investments in modernizing their militaries, and as disruptive technologies have proliferated, resulting in growing threats where U.S. access had formerly been assured. The Budget makes needed investments in DOD and National Nuclear Security Administration (NNSA) procurement, and research, development, test and evaluation (RDT&E) to address this challenge and maintain technological superiority. Base budget funding for DOD’s procurement and RDT&E accounts — which took disproportionate reductions under sequestration to achieve rapid savings in recent years — and funding for NNSA increase to $190 billion, a $22 billion, or 13 percent, increase compared to the 2015 enacted level. With this funding, the Administration is prioritizing investments in cybersecurity; missile defense; nuclear deterrence; space; precision strike; intelligence, surveillance, and reconnaissance; and air and sea capabilities for projecting power and operating in denied environments. In addition, DOD recently announced in November 2014, the establishment of a broad, Department-wide initiative to pursue innovative ways to sustain and advance U.S. military superiority for the 21st Century and improve business operations throughout the Department. The Defense Innovation Initiative will pursue breakthrough technologies and new concepts of operations to enhance the U.S. military’s dominance even as the diffusion of disruptive technology to potential adversaries makes the future operating environment more challenging. Scientific discovery and applied research are central to all these efforts, and thus the proposed funding for DOD’s RDT&E accounts includes $12 billion for science and technology investments in areas including quantum information science, cognitive neuroscience, nanoscience, synthetic biology, autonomy, cybersecurity, and countering weapons of mass destruction, among other investments.

Strengthening Space Security. Space capabilities are vital to U.S. national security and the ability to understand emerging threats, project power globally, conduct operations, support diplomatic efforts, and enable global economic prosperity. It is also the shared interest of all nations to act responsibly in space to help prevent mishaps, misperceptions, and mistrust. The Budget supports a variety of measures to help assure the use of space in the face of increasing threats to U.S. national security space systems. The Budget also supports the development of capabilities to defend and enhance the resilience of these space systems. These capabilities help deter and defeat interference with, and attacks on, U.S. space systems.

Transitioning Overseas Contingency Operations Spending.

Since 2001, the Nation has financed the incremental costs of overseas conflicts, primarily in Iraq and Afghanistan, outside of the base budget. From 2001 to 2009 these funds were designated for the “Global War on Terror” (GWOT), and from 2009 to the present these funds have been designated for “overseas contingency operations” (OCO). Following the institution of statutory budget caps in the Budget Control Act of 2011, funding designated as OCO/GWOT has remained flexible and separate from base budget constraints, which has enabled the United States to fully fund wartime costs principally associated with these major combat operations.

As the U.S. combat mission in Afghanistan ends, it is time to reconsider the appropriate financing mechanism for costs of overseas operations that are enduring. As the chart below shows, the Administration’s transitions in Iraq and Afghanistan have resulted in a $129 billion, or 69 percent, reduction in OCO costs, from their peak of $187 billion in 2008 to the Administration’s 2016 request for $58 billion. Beyond 2016, some costs currently funded in the OCO budget will endure. The United States will continue to provide support to its Afghan partners, counter terrorism abroad, maintain a strong forward presence in the Middle East region, and ensure U.S. military forces are ready to respond to a wide range of potential crises. The Nation’s fiscal and defense policies must fully plan and account for these costs, and the transition must be accomplished in a manner that protects the defense strategy. Accordingly, early this year the Administration will propose a plan to transition all enduring costs currently funded in the OCO budget to the base budget beginning in 2017 and ending by 2020. This plan will describe which OCO costs should endure as the United States shifts from major combat operations, how the Administration will budget for the uncertainty surrounding unforeseen future crises, and the implications for the base budgets of DOD, the Intelligence Community, and State/OIP. This transition will not be possible if the sequester-level discretionary spending caps remain in place. The Administration continues to support the replacement

Addressing Cyber Threats. Cyber threats targeting the private sector, critical infrastructure, and the Federal Government demonstrate that no sector, network, or system is immune to infiltration by those seeking to steal commercial or Government secrets and property or perpetrate malicious and disruptive activity. Addressing these threats requires a comprehensive approach that brings all elements of government together with private industry, academia, and the public, while also protecting individual privacy. The Budget identifies and promotes initiatives and priorities, including the deployment of intrusion detection and prevention capabilities and enhancement of Government information sharing capabilities with the private sector so that they can be more vigilant and better protect themselves against emerging threats. It also makes investments in cyber research and development to strengthen U.S. cybersecurity defenses and make cyberspace inherently more secure. In addition, the Budget includes funding to enhance U.S. capabilities to respond to cyber threats and incidents once they have occurred, begin building a civilian cyber campus to better share information on cyber threats and incidents with those being targeted, improve the ability to share evidence of cyber-crimes with other nations, and maintain efforts to increase the Nation’s cyber workforce.

As cybersecurity challenges continue to impact Federal agencies, the protection of the Government’s information and information systems has become critical to protecting national infrastructure. The Budget funds key investments to enhance the Federal Government’s cybersecurity posture. These include Continuous Diagnostics and Monitoring of Federal systems, the EINSTEIN intrusion detection and prevention system, and Government-wide testing and incident response training to mitigate the impact of evolving cyber threats. These resources will allow the Government to more rapidly protect American citizens, systems, and information from cyber threats.

Modernizing Military Compensation. The Budget continues to provide a robust compensation and benefits system that honors the service of the Nation’s men and women in uniform and their families. For 2016, the Budget provides a 1.3 percent increase to basic pay, a 1.5 percent increase in the Basic Allowance for Housing, and a 3.4 percent increase in the Basic Allowance for Subsistence. In addition, the Budget proposes to modernize the TRICARE Program and continues to pursue commissary operational efficiencies and revenue generating enhancements. These proposals will ensure that DOD continues to recruit and retain a high quality All-Volunteer Force, while addressing costs in a responsible and balanced manner. In addition to these proposals, the Administration looks forward to reviewing the report from the Military Compensation and Retirement Modernization Commission, and working with the Congress to ensure a strong and sustainable military compensation and retirement system.

Promoting Defense Reforms. The defense strategy depends on investing every dollar where it will have the greatest effect, which the Budget will accomplish through critical reforms that divest unneeded force structure, slow growth in compensation, and reduce wasteful overhead. To direct investments toward a ready, technologically superior force, the military must shed unnecessary force structure now that ground combat missions in Iraq and Afghanistan have ended. Venerable weapons systems, such as the A-10 aircraft, have performed decades of service, yet would now face survivability challenges against a technologically advanced adversary. Therefore, the Budget reproposes the retirement of this and other systems, and directs the money saved toward investment in the most capable, versatile, and survivable systems to perform their missions. The Budget also reduces overhead and waste by continuing the initiative to reduce DOD’s major headquarters’ operating budgets by 20 percent, pursuing acquisition reform through the Better Buying Power initiative, and proposing another round of Base Realignment and Closure (BRAC) to free resources currently consumed by maintaining unneeded facilities. The need to reduce unneeded facilities is so critical that, in the absence of authorization of a new round of BRAC, the Administration will pursue alternative options to reduce this wasteful spending.

Suitability and Security. It is critical to the safe and effective operation of the Federal Government to ensure that Federal employees continue to be good stewards of sensitive information and worthy of the public trust their positions require. In order to protect against threats from individuals within the Government, and drive increased efficiency of the security clearance processes, the Administration is pursuing several reforms in the personnel security, suitability, and credentialing mission space.

Following the Washington Navy Yard shooting, the President directed OMB to conduct a comprehensive review of Federal procedures for background investigations and security clearances. The Performance Accountability Council delivered a Report to the President (120 Day Report), which was approved in March 2014. The Report established a set of recommendations to increase the availability of critical information, reduce risk inherent in the system, and increase oversight and accountability. The Administration established an interagency Program Management Office focused on implementing the Report’s recommendations. The immediate and meaningful progress to date includes:

Continuous Evaluation. The Administration is committed to shifting security and suitability evaluations to a continuous evaluations approach, allowing agencies to gather real-time information that may be relevant to these clearances. In the past year, initial pilots have successfully demonstrated the effectiveness of more frequent investigations of cleared personnel. The Budget provides funding in DOD and the Office of the Director of National Intelligence to expand these initial pilots and move to making “Continuous Evaluation” a Government-wide practice. While agencies transition to Continuous Evaluation, the Federal Investigative Standards has already established a new five-year re-investigation requirement for all individuals with a security clearance.
Improved Access to Law Enforcement Records. The National Defense Authorization Act-mandated Records Access Task Force report provided recommendations for improving information sharing among State, local, and Federal law enforcement entities when conducting background investigations. The Budget continues to invest in improving agencies’ information technology (IT) systems to enhance data sharing between the Federal Government and State and local entities.
Access to Classified Information. The Director of National Intelligence issued a requirement for all agencies to validate whether each individual identified as eligible for access to classified information still required eligibility. Through this process, the Administration achieved its objective to reduce the total number of security-cleared individuals by 10 percent. This reduction will allow agencies to better deploy resources to priority activities, such as completing periodic reinvestigations for the most sensitive populations.

2.7.2
Honoring America’s Commitment to Veterans
The Budget includes $70.2 billion in discretionary 2016 resources for the Department of Veterans Affairs (VA), a 7.8-percent increase over 2015. The Budget also includes an advance appropriation request of $63.3 billion for 2017 medical care, a 5.5-percent increase over the 2016 request. This funding will ensure continued investment in the five pillars the President has outlined for supporting the Nation’s veterans: providing the resources and funding they deserve; ensuring high-quality and timely health care; getting veterans their earned benefits quickly and efficiently; ending veteran homelessness; and helping veterans and their families get good jobs, education, and access to affordable housing.

Implementing the Veterans Access, Choice, and Accountability Act of 2014. On August 7, 2014, the President signed into law the Veterans Access, Choice, and Accountability Act of 2014 (Veterans Choice Act). The Budget supports implementation of the Veterans Choice Act and the Administration’s goal of providing timely, high-quality health care for the Nation’s veterans. The Veterans Choice Act provided $5 billion in mandatory funding to increase veterans’ access to health care by hiring more physicians and staff and improving VA’s physical infrastructure. It also provided $10 billion in mandatory funding through 2017 to establish a temporary program (Veterans Choice Program) improving veterans’ access to health care by allowing eligible veterans who meet certain wait-time or distance standards to use health care providers outside of the VA system. The Veterans Choice Program provides a measure of short-term relief from the pressure of escalating health care requirements as current patients in the VA system elect to receive their care through the program. These investments, together with the Budget request of $70.2 billion, will provide authorities, funding, and other tools to enhance service to veterans in the short term while strengthening the underlying VA system to better serve veterans in the future. However, more resources will be required to ensure that the VA system can provide timely, high-quality health care into the future. In the coming months, the Administration will submit legislation to reallocate a portion of Veterans Choice Program funding to support essential investments in VA system priorities in a fiscally-responsible, budget-neutral manner.

Speeding the Processing of Disability Compensation Claims. VA has made tremendous progress reducing the veteran disability claims backlog. The Budget provides additional funding to continue investment in the Veterans Claims Intake Program and paperless claims, helping provide faster and more accurate benefits claims processing decisions. The Budget also includes funding to hire additional employees to address the growth in related claims and improve the VA’s timeliness in resolving appeals. Further, the Budget funds efforts to ensure consistent, personalized, and accurate information about services and benefits, especially in the delivery of compensation and pension claims processing.

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