The Senate Budget Committee released its draft of a Budget Resolution for fiscal year 2020 and it represents an important step toward fiscal responsibility.
My staff and I haven’t read all the fine details – and no doubt we will have more to say when we do. But the topline numbers tell an important story.
The Budget Control Act of 2011 (BCA) set the defense spending topline at $576 billion with non-defense capped at $542 billion. This resolution maintains those caps. But unlike the President’s Budget Request which stuffed nearly $165 billion into the uncapped Overseas Contingency Operations (OCO) account to “comply” with the BCA, the Senate Budget Committee funded OCO $67 billion to add to the Pentagon’s topline. Would I like that to be lower? Yes. Would I like the indefensible gimmick that is OCO to go away completely? Sure. But this budget resolution is an important step in the right direction – and far better than the shameless dodge that the president used.
As a reminder for those of us who do not live and breathe budget jargon, and as I wrote in these pages last month, “back in the 1990s, the Clinton administration used a transfer fund for emerging OCO expenses that the Army faced during operations in the Balkans. These expenses were both overseas and contingencies the Army had not anticipated when drafting its annual budget request. The transfer fund swept up unobligated balances from various Pentagon accounts at the end of the fiscal year to cover those unexpected costs to the Army accounts.”
But any fiscal controls on this account have long since been abandoned. From a high of roughly $187 billion in FY08, when the country was in two shooting wars, OCO was on a fairly steady downward course until it reached a “low” of $59 billion in FY16. Then, to avoid the BCA caps, the upward creep began again.
The Trump administration did own up to something Taxpayers for Common Sense (TCS) and other budget watchdogs have been saying for years: OCO is a giant slush fund. It’s no longer reserved for actual contingency operations that occur overseas. Here is what the president’s budget briefing lays out for us:
- $25.4 billion in this year’s request is for “Direct War Requirements” defined as “Combat or combat support costs that are not likely to continue once contingency operations end.” Read: for actual contingencies that are overseas.
- $41.3 billion is for “OCO for Enduring Requirements” described as “Enduring in-theater and CONUS costs that will remain after combat operations end.” Enduring requirements are by definition, ongoing. Not contingent. CONUS, for the uninitiated, is the acronym for “CONtinental United States.” And that means that it cannot possibly be overseas.
- $97.9 billion is devoted to “OCO for Base requirements” which is defined as, “Base budget requirements financed in the OCO budget to comply with the Budget Control Act (BCA) of 2011.” (Emphasis added. Irony implied.)
And that last one is the big whopper of an abuse. Using OCO funds “for Base requirements” is not compliance with the BCA – it is straight up evasion. If the Trump administration was complying with the BCA, they would have proposed a Pentagon budget capped at $576 billion for FY20.
If the Senate holds to $67 billion in this draft Resolution, this roughly equals the first two categories of OCO listed in the President’s Budget Request. It is also slightly lower than the FY19 OCO total of $67.9 billion. Add that to the BCA defense spending cap of $576 and you bring total defense spending to $643 billion. Contrast that with the president’s combined request of $750 billion and the Senate Budget Committee draft looks like a fiscally sensible alternative.
We’ll continue to comb through the details, but on Pentagon spending, I like what I see.