A plan put forth by the House Armed Services Committee (HASC) to rob the Pentagon’s war funding to patch holes in its fiscal 2017 base budget could have a ripple effect on overseas operations for years, according to the Defense Department’s former chief accountant.
A proposal by the House Armed Services Committee would redirect $18 billion from war funding to pay for items not covered in the Defense Department’s fiscal year 2017 budget proposal.
Robert Hale, former Defense Department Comptroller and current fellow at Booz Allen Hamilton [BAH], told Defense Daily on Friday that the so-called “OCO fix” causes a number of problems for the Pentagon.
Moving money from the fund, officially called the overseas contingency operations (OCO) fund, to the base budget, effectively forces the next president to ask for supplemental funding to pay for ongoing military operations overseas, Hale said.
“Those are always problematic,” he said. “The new administration has a lot to do, so likely it will be a while until they get it to the Hill…They tend to attract extraneous amendments which delay the process. So you could get the money late.”
In response, the Defense Department will have to slow spending elsewhere–personnel, operations and maintenance, modernization–-to cover its wartime costs.
Longterm, patching OCO one year at a time through supplemental funding gives military commanders no outlook to plan for the future, he said.
“The longterm problem is OCO is not a good way to fund base budget needs because it’s a one-year at a time thing,” Hale said. “I happen to agree that defense needs some added funding in readiness and probably modernization as well. I hope they can find another way to do it.”
Secretary of Defense Ash Carter, in an unusually harsh tone, told lawmakers recently that the proposal to dip into overseas contingency operations (OCO) funding as a stopgap budget fix in wartime is “deeply troubling.”
Adding money to the base budget to cover the service’s and DoD’s unfunded requirements would violate caps put in place by the Budget Control Act of 2011. Changing that law, which also activated the specter of across-the-board sequestration cuts, would be a heavy political lift, Hale said. Mustering political will in an election year to repeal the law would be almost impossible, he said.
The Army would be hit particularly hard by the scheme because it owns the largest share of OCO funding, which was established officially by the 2011 budget to protect war spending from automatic cuts.
Using supplemental funding and then OCO, the Army was able to replace equipment–-primarily trucks, but a few aircraft and other weapons–lost to accidents and combat with modern versions. But none of the proposed moves do anything to help the Army with major modernization programs leaders say the service direly needs.
“What the Army hasn’t been able to do is use supplemental funding to undergo major modernizations like replacing the Bradley Fighting Vehicle, which it really needs to do,” Hale said. “The kind of stuff that you use up or gets lost in wartime is what they have been able to fund out of OCO and supplementals.”
The Senate Armed Services Committee holds its markup of the NDAA next week and may choose another approach to patching holes in the defense budget. For the OCO fix to occur, both committees would have to agree and then the president would have to sign the NDAA into law.
Obama threatened to veto the fiscal 2016 defense authorization bill over congressional fiddling with OCO funding. The HASC mechanism, therefore, has several hurdles to clear before becoming law.
SASC could vote to inflate the OCO fund, which would violate the Bipartisan Budget Deal reached this year, Hale said.
“The best way to solve this would be some long-term changes to the Budget Control Act and the sequester caps there,” Hale said. “I guess they would be too heavy to lift this year in an election year, but I am hopeful that Congress next year, and the new administration will engage in a broad negotiation…Out of that I hope we see some increases in defense spending.”