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For immediate release January 14, 2014
Omnibus spending bill invests heavily in nuclear warheads but falls short of funds requested, signaling shifts and uncertainties as troubles mount
Resolution of many outstanding issues deferred; DOE Secretary to appoint commission to study DOE lab missions, redundancies, and efficiencies; Secretary to gain expanded powers to appoint new senior DOE staff
Contact: Greg Mello, 505-265-1200 office and 505-577-8563 cell
Albuquerque – Last night House and Senate appropriators filed their proposed omnibus spending bill for fiscal year (FY) 2014 (1,582-page bill text here).
The Bill funds federal discretionary spending within the framework of the Ryan-Murray agreement of October 2013 (“Bipartisan Budget Agreement,” BBA) (4-page graphical background from House Appropriations here).
Division D of this bill is called the “Energy and Water Development and Related Agencies Appropriations Act, 2014” (2-page House Appropriations summary here). Within Division D, Title III addresses Department of Energy (DOE) programs, including the National Nuclear Security Administration (NNSA) (pp. 365 – 446).
A 103-page joint Explanatory Statement for Division D, (which is, as the bill explains in Section 4, p. 4, legislatively equivalent to a conference committee report), also was filed. DOE and NNSA programs are discussed on pages 61-103 of this document. This Statement contains line item funding, explanations of congressional intent, and reporting requirements.
Congress must pass a spending bill by tomorrow to keep the federal government running. A stopgap three-day continuing resolution is widely expected to pass both houses by tomorrow to allow a brief debate on the omnibus spending bill.
The NNSA “Weapons Activities” (WA) budget line funds DOE’s warhead research, development, production, and related activities. In FY2012, DOE spent $7.215 billion (B) in WA. FY2013 WA spending was first established by continuing resolution (the annualized level prior to sequestration: $7.577 B), which was then subjected to 8% sequestration to give a current annualized spending level of $6.971 B.
Last night’s bill would increase WA spending in FY2014 to $7.781 B over the year, i.e. by 11.6% over the current level.
This large proposed increase does not, however, bring WA spending up anywhere close to the level originally requested, which was $8.159 B (using an apples-to-apples comparison with this bill’s figure). For core WA programs, this represents a decrease of 5.7% from NNSA’s request of April 2013.
The Administration’s June 2013 FY2014 Stockpile Stewardship and Management Plan (FY14 SSMP) included rapid, large budget increases to fund aggressive modernization projects for both infrastructure and warheads. (Study Group press release here). The budgets given in the FY14 SSMP imply that without immediate and continuing annual large budget increases, as shown there, the administration’s modernization plans cannot succeed.
The Government Accountability Office (GAO) questioned whether these cost estimates were high enough in July, and again in December of last year (GAO: Modernizing the Nuclear Security Enterprise, NNSA’s Reviews of Budget Estimates and Decisions on Resource Trade-offs Need Strengthening, July 2013, and GAO: Modernizing the Nuclear Security Enterprise: NNSA’s Budget Estimates Do Not Fully Align with Plans, Dec 2013). These reports were summarized by veteran reporter Todd Jacobson here and here. Various other government reports, some published openly and some not, and too numerous to list, have also been critical of NNSA’s cost and schedule projections for specific large projects.
In addition to the funding shortfall highlighted here, a close reading of the present bill reveals the uncertainty that now surrounds specific NNSA projects. These include: maintenance of the B83 gravity bomb; the fate of the B61-12 Life Extension Program (LEP); the future of the W78/W88 “interoperable” warhead (and therefore of subsequent “interoperable” warheads, slated to comprise three out of the five warhead and bomb types in the “enduring” U.S. nuclear stockpile according to the FY2014 SSMP); the future of plutonium warhead core (“pit”) manufacturing; the future of pit testing at Lawrence Livermore National Laboratory (LLNL) (and hence of plutonium work at that site and the security posture and costs associated with it); the future of the Uranium Processing Facility (UPF), NNSA’s largest infrastructure project; the future of the Mixed Oxide (MOX) program and the MOX Fuel Fabrication Facility (MFFF) within it; and finally the number and missions of DOE laboratories, including the three NNSA nuclear weapons laboratories. Some examples follow.
Interestingly, the bill (at section 313, pp. 426 – 428) provides authority, over four years, for the Secretary of DOE to appoint and establish the pay of up to 120 senior DOE staff members outside the usual civil service channels.
The interesting non-defense portion of DOE spending is beyond the scope of this press release.
Study Group Director Greg Mello:
“Despite heroic efforts by the staff involved, this bill mostly temporizes on the major warhead and infrastructure issues, perpetuating NNSA’s problems. However, given the atmosphere of extreme partisanship and the general lack of understanding of the issues involved, this might be considered a positive result, the best we could hope for. At least Congress didn’t try to ‘fix’ things by throwing gobs of new money at the contractors.
“This spending bill is studiously middle-of-the-road as regards nuclear warheads and bombs. It gives NNSA much more money than would be needed given a better structure and good management, but much less than actually is needed, given the contracting and management structure now existing.
“Congress is a cause of NNSA’s failures. It enables them. NNSA, which is not holding its own against the powerful contractors, needs closer supervision, and a housecleaning. Neither the DoD nor the White House, nor even the military, have succeeded in injecting sufficient rationality. NNSA is just broken – its mission, it’s “semi-autonomy” from close secretarial supervision, and its for-profit model for running nuclear weapons sites. "All the King’s horses and all the King’s men" – including General Klotz, whose confirmation vote is expected soon – will not be able to fix it.
“This bill is a 6% cut from NNSA’s requested Weapons Activities funding level, before inflation. NNSA’s warhead plans were gravely imperiled before this cut. Now, taken together with the specific warnings provided in this bill, NNSA’s plans should now be seen by all as impossibly grandiose. As next year’s budget request is developed, OMB and NNSA must scale back current plans or face more setbacks and cancellations. The “trillion-dollar triad” will never be built. (“New study of nuclear deterrent costs: current plans to cost $1 trillion over 30 years, therefore impossible, Study Group press release, Jan 8, 2014.)
“We applaud the portions of this bill that expand the managerial power of the Secretary of Energy. DOE has a hundred fiefdoms that need firmer guidance – including 'guidance' by reduction or elimination as appropriate.
“The U.S. nuclear warhead program cannot be well-managed at its present scale without placing the stockpile, budgets, and staffing all on downward paths. Too many dollars are chasing too many programs. The stockpile should be conservatively managed as it is downsized, not grandiosely ‘modernized’ for deterrence missions that exist only as dark fantasies.”
 This 270-page document also covers divisions E and F.
 As the above formal explanation states, all Energy and Water Development bill reporting requirements previously passed by the House and Senate appropriations committees for the FY14 appropriations cycle, where they are not specifically superseded in this bill or in conflict with one another, are also included in this bill by reference. The legislative reports containing these agency reporting requirements can be found on this web page under HR 2609 and S 1245.
 See for example the DOE FY2014 congressional Budget Request, Volume 1: NNSA, p. 9.
 From a July, 2013 Office of Management and Budget (OMB) program-by-program breakdown for NNSA; Study Group files. We have been unable to learn the actual rate of NNSA spending under sequester and the temporary government shutdown and so do not know with any precision how the proposed new spending level will affect short-term cash flow at NNSA. Upon information and belief, NNSA carries a cushion of a few months of unspent appropriated balances in its WA accounts and so the actual spend rate under the present partial-year sequestration has been somewhat flexible.
 The new bill proposes to move $62 million (M) in funding for a uranium enrichment research, development, and demonstration project to WA from its previous home in another NNSA budget line (Defense Nuclear Nonproliferation, DNN). So an apples-to-apples comparison would give a corrected proposed WA spending level for FY2014 in this bill of $7.719 B, a $10.7% increase from current levels, and a 7.0% increase from FY2012.
 I.e. after correction for uranium enrichment (see previous note) and for $228.2 M for Nuclear Counterterrorism and Incident Response, which this week’s bill includes in WA. The budget request attempted to shift this large program to DNN for the first time to help mask the proposed growth in WA and the proposed decline in DNN.