On Wednesday, the Senate passed the Fiscal Year 2019 National Defense Authorization Act (NDAA), the annual bill that sets the funding levels and goals for our military and defense related activities. Recall back to February when Congress passed a bill increasing spending by $300 billion over the next two years, with near equal part increases in defense and non-defense spending. That agreement set defense spending for FY2019 at $647 billion – an $85 billion spending cap increase. The just passed NDAA authorizes $708 billion in discretionary spending. How can that be? OCO. That’s how.
OCO is short for Overseas Contingency Operations. This is spending that is mainly allocated towards war related activities following the 9/11 attacks. Seventeen years ago, operations in Afghanistan (and then Iraq) were not anticipated and were considered an emergency for budgetary purposes. The definition of emergency under the Balanced Budget and Emergency Deficit Control Act is that the spending is “sudden … urgent … unforeseen … and temporary.” Which was true for a while. But after eight years and no end to the operations in sight, the “emergency” moniker became a blatant misnomer and they changed the budget category to “overseas contingency operations” in 2009. Yet, the same principle still applies.
And slush around they did.
A GAO report last year found that $20 to $30 billion of annual OCO funding – nearly half of all OCO spending in some years – was actually for activities that will endure beyond the “contingency” operations. It’s not just the funding of base or enduring operations using uncapped OCO funds, it’s also how they did it.
In 2014, the Senate appropriations chairman tried to shift $4.3 billion in State Department funding into OCO to makeup for a shortfall in FHA receipts that squeezed the discretionary budget. More recently, the Pentagon requested to move OCO money to pay for forklifts and machinists measuring tool sets that should pretty clearly belong in the Army’s base budget. This is like setting a strict monthly entertainment budget and then charging concert tickets to a different uncapped category called “treat yo self.”
This is not a partisan critique. Trump Budget Chief Mick Mulvaney tried to limit the use of the OCO slush fund when he was a Congressman. This year a group of Democratic Congressmen tried to “end the OCO Budget Gimmick” citing “both the Pentagon and Congress have abused this loophole by designating non-war related funding as OCO.”
In total, Congress has used OCO to spend $1.7 trillion outside the budget limitations. Even though Defense spending got a massive $165 billion two-year boost doesn’t mean the same slush fund mechanics will not be used and abused by Congress. After 17 years, it’s hard to believe that Congress cannot plan and budget for overseas war funding. It’s time to take the OCO slush fund off the books and put war spending on budget.