Everyone should have gotten the message by now that we are in deep budget trouble and the trimming season is upon us. But when it comes to defense spending, members of Congress are using the year-end passage of our spending bills to play budgetary whack-a-mole.

As if August’s debt-ceiling deliberations and last month’s Super Committee failure weren’t exciting enough, this week we had hijinks surrounding the Fiscal Year 2012 defense policy and spending bills —the latter mixed into a mega-spending bill with eight other spending bills. All with the backstop of only hours left before the federal government was scheduled to shut down for lack of funding. (And we had the added excitement of the tax package).

The toplines of those bills had moved up and down due to these budget-shifting events. The original total for the National Defense Authorization Act, the Defense Department’s policy bill, shrank after DOD pledged to shed some $350 billion over the next decade as part of the August debt-ceiling deal. The bill that went to the president’s desk last night contained $670 billion for both base and wartime spending, $20 billion less than the bill passed by the House in May.

But a funny thing happened on the way to this reduced number. More than $6 billion worth of programs migrated from the “base” budget, or funding for DOD’s base operations, into the “overseas contingency operations” budget. This account is exempted from budget caps set in the August budget accords, so it’s an easy place to stash expensive programs. This immediately raised red flags among Pentagon watchers, and a recent memo from the Office of Management and Budget told the Pentagon that it should “provide item-level detail” for activities being shifted into the contingency budget.

The bulk came from the operations and maintenance account within the bill, which funds a wide range of activities from fueling tanks to fixing planes. A whopping $4.7 billion jumped from the base operations and maintenance account to the contingency one for programs such as training centers, depot maintenance, public affairs services—even child care and counseling.

The biggest bundles moved from base budget line items for “undistributed” funds to ones in the contingency budget for “readiness,” a catch-all phrase for keeping the military on trigger-ready alert. Another $1.7 billion jumped over from the procurement account, which funds hardware such as planes and tanks. The majority of that cash is slated to purchase more Reaper and Predator drones.

The architects of this shift are clearly in the Senate, which also moved $9 billion into the contingency budget in its version of the bill, released in September. Though they cut back on their numbers a bit, the underlying dodge is the same. The final FY12 defense spending bill winding its way to final passage this weekend includes a similar scheme, with DOD dollars worming their way into the State Department’s account within the contingency budget.

Such schemes not only reinforce the incorrect idea that defense should be exempt from fiscal discipline but encourage dishonest games of budgetary hide-and-seek. Yes, we are still fighting wars overseas, but that only magnifies the need for DOD to make hard choices and set priorities, not avoid them. And the “emergency” nature of contingency accounts should not be abused, as we have warned for years. Congress and the Pentagon need to realize that our fiscal situation is not a game that can be rigged.

###

TCS Quote of the Week

“We’re now looking at $85-100 a barrel oil on a sustained basis so it’s difficult to go to the taxpayer and ask them to provide an incentive when the marketplace is already providing the incentive.” — Renewable Fuels Association president and CEO Bob Dinneen speaking about the end of the Volumetric Ethanol Excise Tax Credit (VEETC) (Natural Resource Report)