2005 defense bill beginning to take shape.

Congress is making progress on the National Defense Authorization Act for fiscal year 2005.

The Senate and the House Committees on Armed Services each completed differing versions of the legislation in mid-May and sent them on to their full bodies for consideration.

The House quickly approved its bill, H.R. 4200, by a vote of 391 to 34. The Senate, however, was unable to agree on its measure, S.2400, before the Memorial Day congressional recess and was scheduled to take up the bill again in mid-June, after National Defense went to press.

Once the Senate has passed its version, the House and Senate will meet in a conference committee to work out the differences in each bill. The chairmen of both committees have said they want to complete work on the legislation before the August District Work period, which is scheduled to begin on July 25th.

Both the Senate and the House committees authorized $422.2 billion for the Department of Defense and national security programs of the Department of Energy for fiscal year 2005. This is $20.9 billion above the amount authorized for 2004.

In addition, both committees authorized $25 billion in additional supplemental funding that will be needed early in the next fiscal year for un-programmed costs of operations in Iraq and Afghanistan.

The defense authorization bill sets policy and funding levels. After Congress and the administration agree on authorizations, Congress enacts an appropriations bill, which assigns specific amounts of money to each program. The main defense authorization legislation includes military construction, but the appropriation for military construction is provided in a stand-alone appropriations bill.

Both the Senate and House bills include a 3.5 percent across the board pay raise for military personnel; additional funding (nearly $2 billion) for increased force-protection equipment, such as body armor and up-armor HMMVVs and other vehicles, and an increase of 30,000 Army personnel to be added over the next several years.

One of the major differences in the two bills concerns the next round of base realignment and closure (BRAC) actions. Current law mandates that the next round be accomplished in 2005.

The House included a provision that would delay this round until 2007. During the House considerations, an amendment to delete this extension was defeated soundly by a vote of 259 to 162, and during the Senate consideration, an amendment to add language similar to the House's two-year delay was defeated by a vote of 49 to 47.

In a "statement of administration policy" issued in mid-May, the White House noted that if the provision to delay the next BRAC round is included in the final bill, advisors to the president would recommend that he veto the entire authorization bill.

Although the votes on this issue are nowhere sufficient to override a veto, the matter could cause a significant delay in conference.

Another major issue that could delay final approval is the language in the House-passed bill known as the "defense trade reciprocity" provisions or--more commonly--trade offset restrictions. Offsets are additional requirements that some U.S. companies have to comply with in order to sell U.S.-manufactured items overseas. Typically, they include agreements for U.S. firms to provide technology, while foreign companies provide parts or sub-assemblies.

This issue, raised by the House, is likely to be opposed strongly by the Senate. As the two bodies' appropriations committees began considering their funding resolutions after the Memorial Day, pressure increased for them to complete their work, especially in view of the coming elections and the increasing demands for personnel, equipment, and funding that current operations in Iraq and Afghanistan are placing on the military.