Hey Jim Mattis, Can you Spare a Dime?

FY18 Pentagon spending billHey Jim Mattis, Can you Spare a Dime?It’s a good time to be at the Pentagon, budget wise.

National Security  | Research & Analysis
Dec 6, 2017  | 5 min read

On November 21st, the Senate Appropriations Committee released the “Chairman’s Mark” of the Fiscal Year 2018 (FY18) Pentagon spending bill.

  • It’s a good time to be at the Pentagon, budget wise.
  • The Senate proposal is $32.2 billion above the Budget Control Act cap for Fiscal Year 2018.
  • No funding is included for the new slush fund: the National Defense Restoration Fund.

The draft bill would provide $581.3 billion in so-called “base” spending, which the committee notes is $15.4 billion above the president’s budget request. There is also $64.9 billion in Overseas Contingency Operations (OCO) funding, which is roughly the same amount requested by the administration. The Chairman’s Mark also includes another $4.5 billion in “emergency funding” for “Missile Defeat and Defense Enhancements.”

Right off the bat there’s a problem with this draft since the Budget Control Act of 2011 (BCA) caps defense spending in FY18 at $549.1 billion. So if the bill is eventually signed by the president, without a prior or simultaneous deal to lift the caps, it would be in contravention of the law and trigger automatic cuts.

And because we do the math for you, the delta between the FY18 cap and what the Senate Appropriations Committee is proposing is $32.2 billion. For reference, that’s more than the FY18 budget request for the Departments of Agriculture ($17.9 billion), Commerce ($7.8 billion), Interior ($11.6 billion), Justice ($27.7 billion), Labor ($9.6 billion), State ($27.1 billion), Transportation ($16.2 billion), and Treasury ($11.2 billion).

In other words, the Senate Appropriations Committee is proposing to exceed the existing budget cap for the Pentagon with more money than is spent on the entire budgets of eight different federal departments. It’s a good time to be at the Department of Defense, evidently. But it must make for some awkward discussions at cabinet meetings. “Hey Jim (Mattis) can you spare a dime?”

But the committee proposes topping this budget-busting ice cream sundae with an approximately $65 billion cherry on top. That’s the level the bill would provide in “off-budget” OCO spending. The OCO account is called off-budget because it’s magic money that somehow doesn’t count against the BCA caps. It does, however, count against the ballooning deficit. And it’s coming right out of your pockets in the form of your tax dollars.

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We’ve written a lot about the OCO account and, in particular, the lack of accountability and fiscal discipline in how this money is spent. We’re pleased to see the bill language includes a new requirement, Section 8071, requiring the Pentagon to more clearly account for OCO spending in its Fiscal Year 2019 (FY19) budget request. The new language requires the Pentagon to specify spending for each different contingency operation by military service. This means we should be able to see, for instance, how much it costs us to have the Marine Corps in Afghanistan. We applaud this push for greater transparency and hope it remains in the final version of the bill.

And while we’re handing out kudos, we’re also pleased that the Senate Appropriators resisted the latest push for a brand new slush fund, the so-called National Defense Restoration Fund.

Watch this space because we’ll be watching and reporting on any end-of-year deals to lift the cap on Pentagon spending and any other budget shenanigans.