Overseas Contingency Operations Account Overthrown

Weekly WastebasketOverseas Contingency Operations Account OverthrownGoodbye and good riddance to this budget abuse

National Security,  | Weekly Wastebasket
Apr 29, 2021  | 5 min read | Print Article

You may have missed it what with vaccines and trillions of dollars of spending, but the brief initial budget outline spoke volumes about a long-standing bipartisan budget dodge that has been used to evade budget caps. We are of course talking about the Biden Administration ending the practice of asking for additional Pentagon funds through the Overseas Contingency Operations (OCO) account.

“The discretionary request also discontinues requests for Overseas Contingency Operations as a separate funding category, instead funding direct war costs and enduring operations in the DOD base budget, a significant budgetary reform.”

As a faithful Weekly Wastebasket reader (share with your friends and family) you know we’ve been railing against this practice for years. It amounted to a hostile takeover of the OCO Transfer Fund which has existed for decades, buried deep in the Pentagon budget. This transfer fund originally swept up unobligated balances from various Pentagon accounts at the end of the fiscal year to cover genuinely unexpected costs. For instance, the Clinton Administration used the fund to cover costs 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. In other words, a legitimate use of overseas contingency funds.

But the Obama and Trump Administrations used it to pump more funding into the Pentagon as end run around statutory budget caps originally established by the Budget Control Act.

The Trump Administration dropped all pretense in its Fiscal Year 2020 budget request by openly requesting “OCO for Base Requirements”. As we wrote in detail at the time:

“The Trump Administration is owning up to something 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. You’d think maybe they would come up with a new name and acronym to go along with all this honesty.”

We found tens of billions of dollars in OCO abuse. Including, ironically: “$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.) This isn’t complying, folks. This is evading the budget caps set back in 2011 and amended several times since. If the administration was complying with the BCA, they would have sent forth a Pentagon budget capped at $576 billion for FY20.”

Fiscal Year 2022 (FY22) Pentagon Budget Topline

In addition, that same year the Trump Administration even requested every single procurement dollar for Pentagon ammunition accounts from the OCO portion of the budget. Say what? In what universe is ammunition used only at overseas locations and only for contingencies? Training, anyone? We use real ammunition to train up the troops but, somehow, Congress was supposed to believe that all ammunition should be funded from an “off-budget” account.

This abuse of the budget process also helped the Pentagon dodge the usual level of Congressional accountability and oversight and cleared the way for programs of lesser quality and reliability to be funded.

As the House Appropriations Committee wrote in a Committee report last year, “The OCO experiment has been an abject failure and has given the Department a budgetary relief valve that has allowed it to avoid making difficult decisions.

Enough delving into the past, we’re just glad to see an end to this abuse. Of course, we also know a big reason for its demise. Sadly it wasn’t some new budget backbone from the new administration, but that the need for the “dodge” has come to an end. The discretionary budget caps created by the Budget Control Act (and all the subsequent amendments) ends with Fiscal Year 2021. Hence, no caps to end run in FY22. That said, we’re chalking this up in the “win column” for American taxpayers and will keep our eyes peeled for any future such shenanigans.

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