Don't Mess With Taxes

Donald J. Trump addresses troops at the Fort Drum, New York, army base prior to signing the 2019 fiscal year defense authorization bill. (White House photo; click image to watch Trump's address, as well as opening remarks by Vice President Mike Pence, on Twitter)

Donald J. Trump today signed a defense spending bill that's received almost as much attention for the lawmaker it honors as for the billions in military funding it authorizes over the next fiscal year.

Capitol Hill lawmakers dubbed H.R. 5515 the "John S. McCain National Defense Authorization Act for Fiscal Year 2019" in tribute to the ailing senior U.S. Senator from Arizona.

McCain is a decorated Navy veteran and often lauded for surviving years of torture as a Vietnam prisoner of war. He also has burnished his reputation as a political maverick since Trump's election, often being a vocal critic of the Trump Administration.

McCain's most notable Trump push back came in July 2017, when the Grand Canyon State lawmaker returned from Arizona where he was receiving treatment for brain cancer to cast a deciding procedural vote that blocked White House's attempt to repeal of the Affordable Care Act, aka Obamacare.

In signing the bill, Trump lauded its provisions, but did not mention its legislative namesake.

Military money details: The 2019 defense budget passed with overwhelmingly bipartisan support. The House approved by a 359-54 vote, with the Senate giving its OK by an 87-10 margin.

The bill authorizes $639.1 billion in base funding, along with an additional $69 billion in the Overseas Contingency Operations (OCO) fund to cover those operations. When $8.9 billion for mandatory defense spending is factored in, the bill authorizes a total of $717 billion to be appropriated.

One of the bill's most significant components, at least as far as servicemen and women are concerned, is a 2.6 percent military pay hike, the largest pay bump in nine years.

The fiscal 2019 defense authorization act also:

• Hikes rates for both the Basic Allowance for Subsistence (used by enlisted members to pay for food) and the Basic Allowance for Housing (to help reduce service personnel's out-of-pocket housing costs) by 3.4 percent and 2.9 percent, respectively;
• Increases the overall authorized active-duty size of the Army, Navy, Air Force, Naval and Air Reserve and Air Guard by 15,600;
• Directs next steps for a Space Force;
• Strengthens cyber defenses, prioritizes U.S. Cyber Command readiness and affirms the cyber authorities of the Secretary of Defense;
• Recognizes the importance of modernizing and strengthening the Committee on Foreign Investment in the United States to more effectively guard against the risk to national security posed by certain types of foreign investment; and
• Provides waiver relief to key U.S. partners and allies from certain Russian-related sanctions under the Countering America’s Adversaries through Sanctions Act.

Authorized but not appropriated: But the Department of Defense can start shopping just yet.

The McCain-named bill signed today simply authorizes the military expenditures. The House and Senate now must come up with the actual funding for the policy bill.

Based on prior military spending measures, Congress likely will not have much of a problem with that appropriation.

The infographic below by Statista shows how much money the United States and other NATO (North Atlantic Treaty Organization) members spend on defense, as well as those dollars' estimated share of each nation's gross domestic product, or GDP.

"While Germany spent over $45 billion on its military equating to 1.2 percent of GDP in 2017, the U.S. spent $686 billion — 3.6 percent of GDP," notes Niall McCarthy of Statista, a market and consumer data provider.

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