Policy & Strategy

Defense Department officials take exception to House budget

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The House Budget Committee passed a fiscal 2016 proposal Thursday that would boost defense spending by adding money to a wartime funding account, to make up for caps on the Pentagon’s base budget, but defense leaders say that plan could run into problems. 

The plan would keep defense spending at $523 billion, under caps mandated by the 2011 Budget Control Act, which cut $500 billion from the Pentagon’s budget over 10 years, and were put into place when lawmakers failed to agree on tax and spending reform by 2013. 

However, the plan would provide $90 billion in so-called war funding to the Pentagon’s overseas contingency operations (OCO) account, which is not subject to BCA caps. 

{mosads}But Pentagon comptroller Mike McCord said one problem is that the OCO funds could be unavailable for several months after the new fiscal year begins in October. 

If the annual defense appropriations bill or some other means of funding does not get approved until December, lawmakers would not be able to use the OCO funding, he said at a House Armed Services Committee hearing on Wednesday. 

In the past, lawmakers have approved a continuing resolution, or CR, to fund the Defense Department through the gap. However, a CR only allows for the prior year’s level funding to be extended. 

OCO is $64 billion for 2015 and $94 billion for 2016, leaving a $30 billion gap.

“If this is done without an appropriation that is in line with it, you’re right. We would have that problem,” McCord told lawmakers.  

McCord also said the plan might not be acceptable to the Senate, or the president — both of whom need to approve it before it can become law. Defense Secretary Ash Carter said at the hearing that President Obama has threatened to veto a budget that keeps the spending caps in place. 

Carter also objected to OCO funding for 2016 only, which would make planning for multi-year projects difficult. 

“It doesn’t work because to have the defense we need and the strategy that we have laid out, we need the budget that we have laid out not just in one year, but in the years to come,” Carter said.  

“And so, budgeting one year at a time, and this proposal is a one-year-at-a-time thing, doesn’t work for national defense. It’s not going to permit us to carry out the strategy as we’ve planned,” he said. 

Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey agreed that the use of OCO funding was not ideal. 

“We submit a one-year budget but in the context of a five-year future defense plan, and we won’t have the certainty we need over that period if the current strategy is followed,” said Dempsey.

However, he added, “But look, as you heard the [military] service chiefs say, you know, we’re at the point where this is better than nothing, but frankly, it doesn’t do what we should be doing for defense in a predictable fashion.” 

McCord said there are some Office of Management and Budget and the Department of Defense guidelines on how OCO can be used that were put in place in 2010. 

“I was involved in negotiating that early on in this administration. We felt that it needed to be a little tighter than it had been when we got here,” McCord said. 

“That agreement dates to 2010, and it’s got geographic aspects to it. Things that happened in this country, that country, the other country are OK. Things that happened in countries not in the agreement may not be. And we’ve had some modifications to that,” he said.  

House Armed Services Committee Chairman Mac Thornberry (R-Texas) asked defense officials to submit an overview for how OCO works. 

“This is not the best way to run a railroad. And I hope that we can have a different method of funding the department as we move down the many steps ahead in the budget process,” Thornberry said. 

“If, however, we end up with a substantial amount of OCO to make up for gaps in the base [budget], then I want to understand what all of those restrictions, administrative or legislative, may be, because those are things that we can obviously address in the authorization bill,” Thornberry said, referring to the annual defense policy bill. 

“I don’t know how this is going to go. I just want to be ready, and you can help us in understanding that. I’d appreciate it,” he said. 

Tags Budget Defense Michael McCord OCO Pentagon
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