Future Years Defense Program

Funding Increase and Planned Savings in Fiscal Year 2000 Program Are at Risk Gao ID: NSIAD-00-11 November 22, 1999

The Pentagon's Future Years Defense Program (FYDP) is the official document that summarizes the force levels and funding associated with specific programs that the military would like Congress to approve. The fiscal year 2000 FYDP requested an additional $50.8 billion to the previously requested $1,053 billion total funding for fiscal years 2000 through 2003. This report identifies the major changes and adjustments in the 2000 FYDP as compared to the 1999 FYDP and discusses the risks that the 2000 FYDP faces that may prevent it from being implemented as planned.

GAO noted that: (1) DOD plans to increase the funding of its three priority areas in the 2000 FYDP from an expected overall increase in its budget, as compared to past FYDPs where it planned to finance increases to its priority areas from other program reductions and savings; (2) total funding in the 2000 FYDP is $50.8 billion higher than in the 1999 FYDP over the 2000-2003 period (common years); (3) of the $50.8 billion, DOD plans to request congressional approval for $45.4 billion in additional budget authority and $1.65 billion in rescissions of previously appropriated funds; (4) the remainder is to come from unobligated funds from prior years, which remain available for future obligations; (5) over half of the funding increase in the 2000 FYDP is for operation and maintenance accounts, which reflect DOD's three priority areas; (6) in addition to the $50.8 billion, DOD expects to apply $15.5 billion in savings achieved from existing programs in the 1999 FYDP to the priorities in the 2000 FYDP; (7) there are risks that DOD may not be able to implement its 2000 FYDP as planned because it may not receive all the funds it expects; (8) of DOD's total budget for the common years, at least $50 billion is at risk; (9) the FYDP, which supported the President's budget, projected that the $45.4 billion increase in additional funding for the 2000 FYDP was to come from a share of the overall anticipated government budget surplus, which is uncertain because of its contingency on continued economic growth, legislative agreements that address the financial soundness of the Social Security Program, and adherence to statutory budget caps that limit spending for certain programs; (10) some of the expected $15.5 billion in savings and adjustments in the 2000 FYDP may not occur as planned; and (11) there are several other risks that may impact DOD's ability to implement its 2000 FYDP as planned: (a) Congress authorized a larger military pay and benefits package than proposed by DOD, and provided funds for this package for only fiscal year 2000; (b) funding requirements for the Defense Health Program are routinely understated; (c) no funds were included in the 2000 FYDP for U.S. involvement in Kosovo; (d) DOD has had difficulty in recent years meeting its planned growth in procurement funding because it has had to move those funds to other priorities; (e) family housing accounts may require more funding than programmed in 2000 FYDP; and (f) DOD's projected savings from reductions in infrastructure through further implementation of competitive sourcing are overly optimistic.

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