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DoD Slush Fund Helps Congress Spend Without Restraint

By Mark Footerman | October 4, 2018

Last week, President Trump signed an $854 billion spending package, of which $674 billion was allocated for defense. The budget, which includes a 2.6 percent pay raise for troops and an order for 93 more F-35’s (despite their already troubled history), is being touted as a win for our military on Capitol Hill—where scoring political points seems to be more important than the long-term fiscal health of this country. Just the two aforementioned changes add an estimated $20 billion to base defense spending compared to last fiscal year—and that does not include the oversized OCO fund that was also included in the package. The wasteful new measure is a loss for Americans who hope that Congress will reign in the spending and address the impending debt crisis.

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According to the Government Accountability Office (GAO), if current tax laws and expenditures remain the same, the United States national debt will exceed the gross domestic product (GDP) just 13 years from now. These are the baseline predictions—optimistic seeing as they assume all tax cut provisions expire as planned. If, per historical norms, the tax cuts are extended than that milestone will be reached in just a decade.

In a poll administered by the Peter G. Peterson Foundation, 71% of Americans say the national debt is a top priority. The political environment in this country, however, refutes these results. With a constant media stream of partisan grandstanding that includes Supreme Court nominations, Russia investigations, and November midterms, the astronomical defense budget passed Congress without a hint of news coverage. Simply create a Twitter account and you will be hard-pressed to ever find “#defensebill” or “#nationaldebt” in your trending topics.

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The apathy towards government spending is a real problem in a nation where millennials, paying roughly 6% of every paycheck in social security taxes, may never receive full social security benefits themselves. According to the Social Security Administration actuaries, current “intermediate assumptions” show the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) trust fund reaching exhaustion by 2034—I will be 41 years old. In order to preserve financial stability for future generations, GAO says a 27% “immediate and permanent reduction in spending” must happen. Defense makes up 15% of total spending, so every time a defense spending bill passes, the nation’s economic future is also at stake. And if members of Congress are given an inch, history shows that they will take a mile.

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Take the Overseas Contingency Operations (OCO) fund, for example. In this FY 2019 budget, Congress and the White House once again used the OCO fund to avoid staying within the defense spending caps. This “slush fund” has exemplified what is wrong with government spending habits. Even after substantially boosting the amount of defense spending allowed under the budget caps, Congress still used the OCO fund as a way to give extra money to the Pentagon without constraints. $68 billion or 10% of this year’s defense spending was designated as OCO. According to the Congressional Research Service, there are less than 30,000 troops deployed to overseas operations; the last time the OCO fund received an amount this high was in FY2014 when overseas troop levels were nearly double what they are today.

The last time the OCO fund received an amount this high was in FY2014 when overseas troop levels were nearly double what they are today.

Eliminating the OCO slush fund would help reign in excessive spending and force Congress and the DoD to make spending decisions within the limits of a defined budget. It would also help address the impending debt crisis. But with little to no public pressure being put on politicians to reign in excessive defense spending, the budget of our military will continue to serve as a political pro-military talking point that is wholly disconnected from what it is doing to hurt the future of the United States economy.

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So when defense budgets pass, all eyes should be on Congress and the Pentagon to ensure proper use of our tax dollars. The problem is that the American people turn a blind eye to irresponsible spending–like that of the annual defense budget–in favor of the more politically motivated “headliners.” The costs of this indifference is enormous. Millennials and every future generation can expect to pay a massive cost for the mistakes of our predecessors. The difference is, we won’t have a slush fund to fall back on.

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