Page 24: of Maritime Reporter Magazine (February 1986)

USS Crommelin—Todd Seattle

UPDATE ON FY 1986 NAVY PROGRAMS by

James R. McCaul, President

International Maritime Associates, Inc.

On 19 December Congress passed a continuing resolution providing defense program appropriations for

FY 1986. It provides total obliga- tional authority of $281 billion for defense programs. The Administra- tion had requested $304 billion and last year's defense appropriation was $278 billion.

Navy Funding

Navy has received obligational authority totalling $95.6 billion—or 34 percent of the defense dollars.

Last year Navy received obligation- al authority totalling $93.5 billion.

Exhibit I summarizes FY 1986 legislative action related to key

Navy programs.

Gramm-Rudman

The Balanced Budget and Emer- gency Deficit Control Act of 1985 (Gramm-Rudman) signed by the

President on 12 December keeps the

FY 1986 budget in suspense. Under the Gramm-Rudman law a compli- cated mechanism has been adopted to reduce future government spend- ing deficits. The law sets a deficit target for each of the next six years.

Budget cuts are automatically man- dated in any year where the deficit target will be exceeded. These cuts will be across the board unless the

President and Congress agree to a deficit reduction plan.

The House Armed Services Com- mittee recently estimated that the

Gramm-Rudman law will require cuts of $10.3-13.3 billion in FY 1986 defense spending authority. Navy funding for operations and procure- ment programs will obviously be affected by these reductions.

The constitutionality of the

Gramm-Rudman law is now being argued in federal court. Meanwhile, as prescribed by the law, the Office of Management and Budget (OMB) and the Congressional Budget Of- fice (CBO) are preparing revised estimates of the FY 1986 deficit. In late January the President is to pro- pose his plan for meeting the FY 1986 Gramm-Rudman deficit tar- get.

Planning in DOD is affected by the uncertainty created by this funding suspense.

Procurement and

Engineering/Design

Congress made a number of changes to the FY 1986 Navy ship procurement program. Funds were provided to begin reactivation of the battleship Wisconsin this year, in- (continued) 26 Maritime Reporter/Engineering News