Despite the drawdown of overseas operations, the practice of pumping money into the “Overseas Contingency Operations” (OCO) fund has persisted, in large part because it isn't subject to normal budgetary caps, like the ones agreed to in the 2011 Budget Control Act (BCA). Instead of making tough choices about how to trim the Pentagon's budget to stay under the BCA's spending limits and avoid sequestration, policymakers have found it more convenient to simply shift more defense spending into OCO. In short, they're breaking the budget promises they made by signing the BCA.
When the President's fiscal year (FY) 2016 budget came out requesting $57.9 billion for OCO, we noted that if OCO were a federal agency, it would be the 5th largest. But that didn't seem to be enough for Congress. In the chambers' respective budget resolutions, the OCO slush fund has ballooned to (possibly) $96 billion – making it the second largest agency in the discretionary budget, easily outpacing HHS in third at $80B, even without its $7 billion State portion.
Defense Secretary Carter has admitted that defense base budget items have oozed into OCO. By adding $38 billion on top of an already very slushy $58 billion, that ooze has become a gushing river of spending to get around the BCA's caps. Just the increase in OCO spending would be more than the discretionary budgets of DOT, Treasury, and Commerce combined, and it would just slightly trail the $41 billion going to DHS.