Playing Pentagon Budget Games

Playing Pentagon Budget Games

Budget & Tax, National Security,  | Quick Take
Sep 7, 2016  | By  | 7 min read | Print Article

Originally published on August 23, 2019 in U.S. News & World Report

Congress is back in session, albeit only until the end of September, and there are lots of things to discuss. Topic number one: The need to keep the government funded into the next fiscal year, which starts on October 1. Funding the government is the one constitutional responsibility that Congress has each year, and everyone knows when the new fiscal year starts. And yet in recent years, the country has been forced to watch a high stakes game of legislative chicken. Who will blink? Who will act to keep the government from closing down?

But the focus in Washington this week isn't on congressional funding. Congress, instead, is clucking about a memorandum written in May by two senior Pentagon officials for Secretary of Defense Ashton Carter. The document, leaked recently to the media, contains a subject line that, to my organization, is quite humorous: “House Overseas Contingency Operations Funding Gimmick ('OCO Gimmick').” We at Taxpayers for Common Sense have called this so-called “war fund” a gimmick and a slush fund for years. And when the House Armed Services Committee wrote the Pentagon policy bill to transfer $18 billion from the war fund to the so-called “base” budget, we started calling it a gimmick within a gimmick.

We continued to apply the gimmick label after the House Appropriations Committee wrote the Pentagon spending bill the same way. So, I was pleased when the Senate Armed Services and Appropriations Committees subsequently refused to follow the path trod by the House. No transfer of funds between the two major accounts is allowed in the Senate versions of the bills.

The five-page memo now transfixing the national security establishment lays out a series of steps Carter can take to encourage the Senate committees to block a transfer of funds in the final versions of the Pentagon policy and spending bills. The transparent reason for transferring funds is to avoid the budget caps on both defense and non-defense spending established in the Bipartisan Budget Act. Since the war fund is considered “off budget,” the House Armed Services Committee believes the transfer of those funds will not violate the budget agreement. The dodge, of course, reduces the balance of the war fund from the president's request of slightly less than $59 billion to $41 billion for the coming fiscal year.

So, that's a problem, right? If House Republican leaders believe the war account is still needed at such a high level, how can they justify transferring so much money out of it? Well, that's the second part of this “gimmick within a gimmick.”

The House Armed Services Committee also placed an artificial deadline on spending the overseas contingency account, set at the end of April, 2017. Assuming – and this is a big assumption – the Pentagon spending bill is actually finalized by October 1, that means the entire account must be spent in seven months. This sets up an artificial crisis point for the Pentagon's budget roughly three months after the new president is sworn in. As we know from past transitions, very few senior political appointees will be confirmed and in place early on in the next administration. The House leadership is playing a dangerous game with the Pentagon budget by introducing such uncertainty. My organization helped lead a coalition of fiscal conservative groups to decry this new, artificial, deadline.

Overseas Contingency Operations Spending Would be 2nd Largest Federal “Agency”

What seems to fascinate Washington is the unabashed political nature of the memorandum. “We should attack the OCO gimmick,'' the authors wrote, “and be prepared to play hardball opposing it.” And: “Speaker [Paul] Ryan supports the gimmick and House Republicans will vote for it. Like last year, we need to help House Democrats justify their voting against both bills on the House Floor.”

The memo also points out: “The principal weapon at our disposal is the veto, which can and should be deployed against both authorization and appropriations if they include the OCO gimmick.” In fact, within days of the May 13 memo, the Office of Management and Budget issued its Statement of Administration Position on the Pentagon policy bill. A month later, OMB issued a similar statement for the Pentagon spending bill. The position papers state that senior advisers would recommend the president veto both bills, including the gimmick.

Although I have no wish to see more gridlock in Washington, the president should veto any bill transferring money from one fund to another or setting up an artificial deadline for spending the war fund. Putting the military services in a “use it or lose it” position with billions of dollars doesn't translate to good stewardship of your tax dollars.

Hopefully the “shock” that politics might be discussed by three political appointees in the Pentagon will wear off and the Congress will get down to fulfilling its constitutionally-mandated duties. Let's get the entire federal government funded prior to the beginning of Fiscal Year 2017.

Meanwhile, I'm happy if this column helps circulate the final message delivered to the Secretary in the memo: “The Department can also ensure outside influencers, such as former Secretaries, former senior military leaders, think tank leaders, and media commentators are fully informed about the Department's concerns.”

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