Now that the House has passed its $612 billion National Defense Authorization Act (NDAA), action on funding for the Department of Defense turns to the House Appropriations Committee. And like the Budget and Armed Services Committees before, House appropriators seem intent on embracing a worst of all worlds approach to the defense budget by increasing overseas contingency operations funding to circumvent Budget Control Act spending limits.
As The Hill reported today,
Lawmakers will likely use a target of just over $579 billion for the Defense Department in fiscal 2016, with $490 billion in base spending and roughly $88.5 billion for the Overseas Contingency Operations (OCO) account, the Pentagon’s war fund, according to budget documents. The final dollar amount, though, could change.
The difference between the NDAA topline of $612 billion and the Appropriations Committee’s target of $579 billion is due to defense-related spending in other departments, most notable nuclear weapons programs at the Department of Energy. The important number, however, is the $88.5 billion for OCO. That amount is $37.6 billion higher than the Obama administration requested in February of this year. That $37.6 billion allows Republicans to pretend that they are remaining faithful to the caps established by the 2011 Budget Control Act, while boosting defense spending because the ostensibly “emergency” OCO account is exempt.
The Republicans have decided to increase defense spending in a way that pleases exactly nobody. Republican budget hawks are displeased at the fiscal irresponsibility of using off-budget measures to plus-up defense. Republican defense hawks simply want the caps on defense removed, though they are learning to live with the OCO solution if it gets them the defense increase they want. Democrats, including both the White House and the ranking members on the House and Senate Armed Services Committees, are irate that the Republicans have found a way around spending limits on defense spending while maintaining the cap on domestic spending. Meanwhile, the Pentagon is complaining that, because OCO is only funded for the fiscal year in question, it cannot engage in long term planning.
Things did not need to be this way. The Obama administration could have submitted a budget in line with the Budget Control Act spending caps. The Department of Defense could have engaged in actual long term planning, which would have taken the caps into account—instead of routinely bemoaning about their existence. The House and Senate Budget Committees could have drafted resolutions consistent with the caps and that did not plus-up the OCO slush fund.
Now it is up to the Appropriations Committee. New Jersey Representative Rodney Frelinghuysen, chairman of the defense appropriations subcommittee, previously declared that the committee would honor the Budget Control Act spending limits. “But unless and until the law is changed, this committee has no choice but to draft our bill to comply with the caps,” Frelinghuysen said in early March, “at least $37 billion below the president’s budget request.” Now he seems ready to embrace the OCO gimmick that would provide that additional $37 billion for the Pentagon. However, it remains unclear how an appropriations bill with that gimmick included will fare on the floor when Democrats and Republican fiscal hawks line up against it.
So where is all this heading?
The likely outcome is that there will be a deal to raise the Budget Control Act spending caps along the lines of the one Paul Ryan and Patty Murray crafted in 2013 when they chaired the House and Senate Budget Committees. The question remains how much the caps will increase though. To get the full $37 billion, Republicans will have to be willing to agree to commensurate increases in defense spending. If they want to maintain any semblance of their image as the party of fiscal responsibility, the GOP will have to find a far lower figure in negotiations.