OTHER DEFENSE—CIVIL PROGRAMS

Federal Funds

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The 2017 payment to the Military Retirement Fund includes funds for the amortization of the unfunded liability for all retirement benefits earned by military personnel for service prior to 1985. The amortization schedule for the unfunded liability is determined by the Department of Defense Retirement Board of Actuaries. Included in the unfunded liability are the consolidated requirements of the military departments to cover retired officers and enlisted personnel of the Army, Navy, Marine Corps, and Air Force; retainer pay of enlisted personnel of the Fleet Reserve of the Navy and Marine Corps; and survivors' benefits.

The 2004 National Defense Authorization Act (P.L. 108–136) created additional benefits for certain retirees who receive disability compensation from the Department of Veterans Affairs and moved the responsibility for payments under the Combat Related Special Compensation program to the Military Retirement Fund. Any additional funding requirements for retirees with service prior to 1985 will be included in this payment.

The 2016 National Defense Authorization Act (P.L. 114–92) enacted substantial changes to the current military retirement system. The new retirement system, scheduled to take effect January 1, 2018, is a blend of several components to include a defined retired pay benefit, a defined contribution with the Thrift Savings Plan, and a bonus (continuation pay) paid to the member to maintain Service retention requirements. Currently serving members will remain grandfathered under the current retirement system. The Budget includes a proposal to amend the new blended retirement system to address the military department's priorities to include flexibility in the payment of continuation pay, TSP matching amounts, TSP matching start date, and when TSP matching contributions terminate.

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Trust Funds

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Public Law 98–94 provided for accrual funding of the military retirement system and for the establishment of a Department of Defense Military Retirement Fund in 1985. The fund has three sources of income. The first is payments from the military personnel accounts, which cover the accruing costs of the future retirement benefits being earned by today's service members. The second source is interest on investments of the fund. The third source is made up of two payments from the general fund of the Treasury. The first Treasury payment covers a portion of the accrued unfunded liability for all the retirees and current members who had earned benefits before the accrual funding system was set up. The second Treasury payment covers the liability for concurrent receipt of military retired pay and disability compensation paid by the Department of Veterans Affairs. This benefit was added in the 2004 National Defense Authorization Act.

The 2016 National Defense Authorization Act (P.L. 114–92) enacted substantial changes to the current military retirement system. The new retirement system, scheduled to take effect January 1, 2018 is a blend of several components to include, a defined retired pay benefit, a defined contribution with the Thrift Savings Plan, and a bonus (continuation pay) paid to the member to maintain Service retention requirements. Currently serving members will remain grandfathered under the current retirement system. The Budget includes a proposal to amend the new blended retirement system to address the military department's priorities to include flexibility in the payment of continuation pay, TSP matching amounts, TSP matching start date, and when TSP matching contributions terminate.

The status of the fund is as follows:

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Federal Funds

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Public Law 106–398 provides for accrual funding for health care to Medicare-eligible retirees. The statute establishes an accrual health care fund which has three sources of funding. The first is contributions from employing agencies, which cover the liability for future benefits accruing to current service members. The second is an annual payment from the general fund of the Treasury on the accrued unfunded liability, and the third source is income from the investment of fund balances.

The Budget includes a proposal to implement a modest annual enrollment fee for TRICARE-for-Life coverage for retirees and their family members age 65 and older (with full grandfathering of those Medicare-eligible retirees who are already receiving TRICARE benefits at the time of enactment). Also included is a proposal for increases to pharmacy prescription co-payments for active duty families and all retirees to incentivize usage of mail order and generic drugs. In addition to discretionary savings in the Defense Health Program, the proposals reduce future accrual costs, resulting in reduced discretionary contributions to the Medicare Eligible Retiree Health Care Fund by the Services, Coast Guard, Public Health Service, National Oceanic and Atmospheric Administration and the Department of the Treasury.

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Trust Funds

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The 1985 Department of Defense Authorization Act, Public Law 98–525, as amended by Public Laws 100–48 and 108–375, and the Post 9/11 Veterans Educational Assistance Improvements Act of 2010, Public Law 111–377, provide for the accrual funding of certain education benefits for active duty military personnel under the authority of Chapters 30 and 33, Title 38 U.S.C., and to selected Reserve personnel under the authority of Chapters 1606 and 1607, Title 10 U.S.C. The fund is financed through actuarially determined Government contributions from the Department of Defense military personnel appropriations and interest on investments. Funds are transferred to the Department of Veterans Affairs to make benefit payments to eligible personnel. The status of the fund is as follows:

Status of Funds (in millions of dollars)

Federal Funds

For necessary expenses, not otherwise provided for, of the American Battle Monuments Commission, including the acquisition of land or interest in land in foreign countries; purchases and repair of uniforms for caretakers of national cemeteries and monuments outside of the United States and its territories and possessions; rent of office and garage space in foreign countries; purchase (one-for-one replacement basis only) and hire of passenger motor vehicles; not to exceed $7,500 for official reception and representation expenses; and insurance of official motor vehicles in foreign countries, when required by law of such countries, [$105,100,000] $75,100,000, to remain available until expended. (Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2016.)

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The American Battle Monuments Commission is responsible for: the maintenance and construction of U.S. monuments and memorials commemorating the achievements in battle of our Armed Forces since 1917; controlling erection of monuments and markers by U.S. citizens and organizations in foreign countries; and the design, construction, and maintenance of permanent military cemetery memorials in foreign countries. The Commission requests 422 full-time equivalent (FTE) civilian employees to manage and support the annual investment in maintenance, infrastructure, and interpretive projects.

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Employment Summary

For necessary expenses, not otherwise provided for, of the American Battle Monuments Commission, such sums as may be necessary, to remain available until expended, for purposes authorized by section 2109 of title 36, United States Code. (Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2016.)

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The agency has a currency fluctuation account that insulates its appropriation's buying power from changes in exchange rates. Under "such sums as may be necessary" language, the Commission will reprogram prior year available funds to address exchange rate imbalances in 2017. The Commission will continue to estimate and report its Foreign Currency Fluctuations Account requirements.

Trust Funds

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Repair of non-Federal war memorials.—When requested to do so and upon receipt of the necessary funds, the Commission arranges for and oversees the repair of war memorials to U.S. Forces erected in foreign countries by American citizens, States, municipalities, or associations.

Federal Funds

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Trust Funds

For expenses necessary for the Armed Forces Retirement Home to operate and maintain the Armed Forces Retirement Home—Washington, District of Columbia, and the Armed Forces Retirement Home—Gulfport, Mississippi, to be paid from funds available in the Armed Forces Retirement Home Trust Fund, $64,300,000, of which $1,000,000 shall remain available until expended for construction and renovation of the physical plants at the Armed Forces Retirement Home—Washington, District of Columbia, and the Armed Forces Retirement Home—Gulfport, Mississippi[: Provided, That of the amounts made available under this heading from funds available in the Armed Forces Retirement Home Trust Fund, $20,000,000 shall be paid from the general fund of the Treasury to the Trust Fund]. (Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2016.)

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Public Law 101–510 created an Armed Forces Retirement Home (AFRH) Trust Fund to finance the AFRH-Gulfport and the AFRH-Washington Homes. The Homes are financed by appropriations drawn from the Trust Fund. AFRH provides residences and related services for certain retired and former members of the Armed Forces and the Coast Guard. The members receiving domiciliary and hospital care are:

In 2015, AFRH was awarded accreditation from The Joint Commission for Ambulatory and Nursing Care to supplement the current Commission Accreditation of Rehabilitation Facilities (CARF) recognition, implemented the first in a two-step resident fee increase, leased an underutilized building to a D.C. charter school to generate additional income and earned its 11th consecutive unmodified financial audit opinion. In 2016 and 2017, AFRH will build upon our successes and continue working with our Department of Defense leadership to ensure long-term trust fund solvency and identify areas where additional costs savings can be achieved while maintaining quality services for our residents.

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Federal Funds

For necessary expenses for maintenance, operation, and improvement of Arlington National Cemetery and Soldiers' and Airmen's Home National Cemetery, including the purchase or lease of passenger motor vehicles for replacement on a one-for-one basis only, and not to exceed $1,000 for official reception and representation expenses, [$79,516,000] $70,800,000, of which not to exceed [$15,000,000] $28,000,000 shall remain available until September 30, [2018]2019. In addition, such sums as may be necessary for parking maintenance, repairs and replacement, to be derived from the "Lease of Department of Defense Real Property for Defense Agencies" account. (Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2016.)

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Operation and maintenance.—Funding supports day-to-day operations of Arlington National Cemetery (ANC), including planning and execution for more than 7,000 interments and inurnments annually, as well as routine repairs made to facilities, contracted services, and horticultural work at Arlington National Cemetery and the Soldiers' and Airmen's Home National Cemetery.

Construction.—A ten-year capital investment plan has been developed to manage all construction, major rehabilitation, major maintenance, automation and study efforts. Funding supports long-term planning and capital investments made in construction of facilities, land improvements, and other major infrastructure sustainment, restoration, and maintenance.

The work contemplated includes converting the Millennium land to burial sites and planning and design for future expansion efforts. The Army is addressing the Southern Expansion Project and plans to request those resources in future budget submissions.

Sustainment, Restoration and Modernization (SRM).—Funding supports ANC's infrastructure to include the renovation, sustainment and maintenance of ANC facilities, infrastructure and roadways.

ANC Major Construction.—Funding supports ANC's expansion efforts in construction of facilities and land improvements for expanded burial capacity. Specifically, funding supports the current efforts of Millennium and the Southern Expansion Project. No new funds are requested in this account for 2017.

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Federal Funds

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These appropriations provide for development and conservation of fish and wildlife and recreational facilities on military installations. Proceeds from the sale of fishing and hunting permits are used for these programs at Army, Navy, Marine Corps, and Air Force installations charging such user fees. These programs are carried out through cooperative plans agreed upon by the local representatives of the Secretary of Defense, the Secretary of the Interior, and the appropriate agency of the State in which the installation is located.

Federal Funds

For necessary expenses of the Selective Service System, including expenses of attendance at meetings and of training for uniformed personnel assigned to the Selective Service System, as authorized by 5 U.S.C. 4101–4118 for civilian employees; hire of passenger motor vehicles; services as authorized by 5 U.S.C. 3109; and not to exceed $750 for official reception and representation expenses; [$22,703,000] $22,900,000: Provided, That during the current fiscal year, the President may exempt this appropriation from the provisions of 31 U.S.C. 1341, whenever the President deems such action to be necessary in the interest of national defense: Provided further, That none of the funds appropriated by this Act may be expended for or in connection with the induction of any person into the Armed Forces of the United States. (Financial Services and General Government Appropriations Act, 2016.)

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The Selective Service System (SSS) continues to register men as they reach age 18, as required by law, and maintain an active database of registrant records. Should the Nation return to conscription for a national emergency, the agency would have the first draftees at military processing centers according to the mobilization plan. The agency also manages a program for the Nation's conscientious objectors in cooperation with the Department of Defense. All Reserve Force Officers participating in the Selective Service System program will remain at 175 in 2016 and 2017 to reflect requirements.

SSS will continue to strengthen its partnership with the Armed Services. The Agency will continue its national initiative to offer every young man that receives a registration acknowledgment, almost two million annually, the opportunity to volunteer for the military services.

SSS will maintain a modernized information technology system to improve business processes, while helping to sustain an all volunteer military by aiding recruiting with its agency mailings. Relevant technology will ensure faster, more accurate registration processing, as well as more secure storage of personally identifiable information. It will also foster better customer service via the Internet.

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Employment Summary