The 2017 Budget

It seems a bit late to talk about the FY2017 budget, but here we are, eight months into the FY, and it is finally signed into law. This is a bit rambling, forgive me, but that is the budget process.

The Coast Guard’s description of the Obama administration’s original budget request is here. It is fairly detailed, but now obsolete.

A short summary of the Coast Guard budget, as part of a summary of the Department budget, contained in the Omnibus bill is here. It is quoted in full below.

Coast Guard – The bill contains $10.5 billion for the U.S. Coast Guard – an increase of $344 million above the previous Administration’s request and a decrease of $467.3 million below the fiscal year 2016 enacted level. Specifically, the bill:

  • Provides 1.6 percent military pay increase;

  • Provides $7.1 billion for operations and training, military personnel costs, aviation and cutter hours, and to reduce a maintenance backlog that can hinder readiness and response; and

  • Provides $1.37 billion – $233 million above the request – for modernization and recapitalization of vessels, aircraft, and facilities. This includes funding for the Polar Ice Breaking Vessel program, the acquisition of an Offshore Patrol Cutter, an HC130-J aircraft, six Fast Response Cutters, and facility improvements at multiple locations throughout the United States.

The good news here is that the Coast Guard will not see a dramatic cut to pay for “the Wall.” The bad news is that the total budget is down over $600M from the FY2016 enacted budget (I know this is different from the summary above, but that is what I got), most of which is an approximately $580M cut in AC&I which included NSC#9.

There is actually a small increase in operating budget from last year and from the initial budget request, a bit over $100M.

There is a pleasant surprise in the notes explaining budget reductions in the Coast Guard’s explanation of the initial budget request:

“National Security Cutter Energy Efficiency -$13.5M

(O FTE) Reflects savings from a re-calculation of National Security Cutter (NSC) energy costs based on observed energy expenditures during NSC operations, without impacting the ability to carry out those operations”

Apparently the big cutters are not costing a much to fuel as we expected. I suppose this could just reflect current oil prices.

There is also a note that there will be a permanent increase in the crew size for all NSCs.

You can see the actual bill here (pdf), the Coast Guard budget is on pages 28-32.

Unexpected items in the Operating Budget

  • Additional $4.49M for Cyber
  • $5M for the CG museum

Reserves: A total of$112,302,000 is provided for Reserve Training.

The AC&I Budget includes:

  • $2M for design work on Great Lakes icebreaking capacity
  • $1M for design work on Inland AtoN fleet
  • $99M for Shore and AtoN (Almost doubles original request of $51.1M) 
  • National Security Cutter. A total of $255,400,000 is provided for the National Security Cutter (NSC) program. The total includes $95,000,000 for procurement of long lead time materials associated with a tenth National Security Cutter, and $3,400,000 for post-delivery activities for the ninth NSC. In addition, $30,000,000 is included to support a necessary Structural Enhancement Dry-dock Availability (SEDA) for the second NSC.
  • $325M for six FRC (rather than four for $240M in the original request)
  • $55M total for the Polar Icebreaker program.
  • $90M for a missionized C-130J
  • $44.52M for shore facilities
  • Major Acquisition Systems Infrastructure. A total of $50,000,000 is provided, including $22,000,000 to support the Coast Guard’s plan to homeport OPCs in the arctic region to replace aging assets.
  • A total of $36,319,000 is provided for Research, Development, Test, and Evaluation (RDT&E). Includes $18M to evaluate long range shore based Unmanned Air Systems.

There is a change in ship procurement policy:

“The policy requiring the Coast Guard to obtain appropriations for the total acquisition cost of a vessel, including long lead time materials, production costs, and post-production costs, before a production contract can be awarded has the potential to create shipbuilding inefficiencies, force delays in the obligation of production funds, and require post production funds far in advance of when they will be used. The Office of Management and Budget is expected to give the Coast Guard the flexibility to acquire vessels, including the Offshore Patrol Cutter (OPC), in the most efficient manner within the guidelines of strict governance measures.”

Funding for Coast Guard OCO/GWOT activities ($162.7M) is provided directly through the Operating Expenses appropriation instead of through the Navy’s Operation and Maintenance account.

There are some requirements incorporated in the law.

“Not later than 90 days after the date of enactment of this Act, the Coast Guard shall brief the Committees on plans, including a funding strategy,  for improving the cybersecurity posture of the Coast Guard and balancing requirements of operating within the “.mil” domain while adhering to DHS cyber directives.”

“The Coast Guard is directed to submit to the Committees a Capital Investment Plan (CIP) for fiscal years 2018 through 2022 by June 30,2017.”

“The Coast Guard is directed to move quickly in approving additional Ballast Water Management Systems (BWMS)and shall work with the Environmental Protection Agency to reexamine whether the most probable number method can be used as an alternative for testing the effectiveness of treatment systems. The Coast Guard is further directed to brief the Committees on the status of its BWMS testing efforts as set forth in the House report.”

“Not later than 180 days after the date of enactment of this Act, the Secretary shall submit to the Committees a report on the Coast Guard’s plans to ensure long-term search and rescue coverage for the Arctic. This report shall also address the Coast Guard’s capability for conducting response missions throughout the Western Alaska Captain of the Port Zone, including the Bering Sea and Arctic Ocean. The report shall provide details on pollution response equipment; spill response organizations; spill prevention and mitigation methods; and response partnerships with federal, state, and local entities.”

“The Coast Guard is directed to brief the Committees not later than 30 days after the date of enactment of this Act on any changes expected in the funding requirement for OCO/GWOT activities during fiscal year 2017. Further, the Coast Guard is directed to include details of its current and future support to Central Command in the classified annex of the fiscal year 2018 budget request.”

“Under the new strategy, the IPO (Icebreaker Project Office–Chuck) will obtain detailed industry feedback through trade-off analyses to further refine and validate operational requirements. A report on polar icebreaker requirements, preferred design, overall acquisition strategy, and a breakout of funds necessary to support the acquisition shall be submitted to the Committees not later than 90 days after the date of enactment of this Act.” (I personally don’t think this is a realistic deadline–Chuck)

“The Senate report encouraged the Coast Guard to explore the use of water purification systems free of bromine. Within 90 days of the date of enactment of this Act, the Coast Guard shall brief the Committees on the costs, benefits, and feasibility of adopting this new type of system.”

“The Coast Guard is directed to examine the feasibility, costs, and benefits of conducting intelligence, surveillance, and reconnaissance missions in transit zones using long range/ultralong endurance, land based, unmanned aerial systems. Within the total provided for RDT &E, $18,000,000 is included for the Coast Guard, in collaboration with CBP and S&T to perform an analysts of alternatives (AoA) on available systems and mission equipment packages before conducting a proof of .. ~ concept demonstration of selected systems. The Coast Guard shall brief the Committees on its plans for conducting the AoA and proof of concept within 180 days after the date of enactment of this Act. Further, the Coast Guard, along with CBP and S&T, shall brief the Committees on the results of the demonstration within 90 days following its completion. “

3 thoughts on “The 2017 Budget

  1. He will make another run at it next year. I’d say it’s fifty fifty whether it ever gets funded. Depends on how fast the OPC program goes. Once it’s competing for money with Rubios state, Cochran will have trouble getting it through. But if it goes slow, he’s got a good shot at getting it.

    • There is $95M in the 2017 budget for long lead time items. I thought I remembered $100M in the 2016 budget for long lead time items. Dont object to getting NSC#10, Just hope money for the OPC does not get diverted to NSC#10.

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