DoD likely to lean on overseas accounts for sequestration safety valve

The spending caps Congress enacted as part of the 2011 Budget Control Act were supposed to take a roughly equal bite out of both domestic and Defense discretionary spending. But DoD has a safety valve nondefense agencies don’t: an ongoing war account. And a new analysis suggests the budget the department will propose Monday will use it to at least partially sidestep the cuts.

Although the official U.S. combat mission in Afghanistan ended at the end of last year, military leaders have long insisted that they will continue to need funding in their overseas contingency operations (OCO) accounts to pay the costs of drawing down from the country and to repair equipment that was damaged in the 13-year war.

But an analysis of the 2016 budget by the Center for Strategic and Budgetary Assessments, based on early media leaks, says those costs don’t explain what’s reported to be a $51 billion OCO request.

Instead, according to Todd Harrison, the center’s senior fellow for defense budget studies, DoD likely is shifting spending that it would ordinarily request in its base budget into its OCO accounts because spending in the wartime budget does not count against the budget caps.

“A lot of it is funding that appears to be in excess of need [for Afghanistan],” Harrison told reporters Friday.

He concluded this based on the calculations of the size of the OCO account versus how many service members actually are deployed. From 2005 to 2013, the ratio was remarkably constant, at about 1.2 million dollars per troop, per year.

Things changed in 2014 — the fiscal year after the Budget Control Act caps kicked in for the first time. The OCO spending, per deployed service member, nearly doubled that year. In 2015, there are $4.5 million OCO dollars being spent for every troop. The 2016 request would mean almost $4 million per service member.

“Why is that? Obviously we’ve got this loophole in the law. There’s an incentive to put money in there, and if you read DoD’s formal budget descriptions from past years, they do hint at this,” he said. “They talk about how the funding for operations outside of Afghanistan is being used to support troops in Afghanistan — okay,

that fair — but they also talk about how the money’s also being used for our presence in the Persian Gulf, off the Horn of Africa, in the Philippines, and you start to think, ‘Wait a second. There seem to be an awful lot of things in there that aren’t actually Afghanistan.'”

Partial sequestration workaround

Harrison said it’s difficult to track precisely how budget dollars are moving back and forth or identify specific areas of the OCO budget that are, perhaps, being used inappropriately, because a large proportion of both the OCO request and the base budget are made up of operating and maintenance dollars — a particularly opaque part of the budget.

But in past years, the use of OCO to fund items not strictly related to Iraq and Afghanistan has been a technique favored by both the executive and legislative branches. Even though Congress has not found a way to reverse the Budget Control Act, it has been more than willing to use OCO as a partial work- around to sequestration — and to resist DoD’s own proposals to cut programs.

“In fiscal ’14, for example, Congress did that for about $10 billion worth of items in the appropriations bill. They said, ‘We are taking this out of DoD’s base budget and we’re moving it to OCO,'” he said. “And they’re allowed to do that. They can declare anything they want to be OCO funding-the law’s pretty simple that way.”

Also, in fairness, DoD officials have not been shy about the fact that they intend to continue using the accounts that were originally set up for the wars in Iraq and Afghanistan for things that aren’t directly connected to the longstanding operations there, including several of the Middle Eastern military facilities that are now being used as launching points for strikes against the Islamic State in Iraq and Syria.

In a speech at the Center for a New American Security last week, Robert Work, the deputy secretary of Defense, said DoD will propose a budget larger than allowed under the Budget Control Act, and said the global security strategies it’s working off of right now still hold, despite recent global crises in the Middle East, Africa and the Ukraine.

He said DoD started building its budget back in the fall of 2014, when it was still “early days” in the Ebola outbreak, the Islamic State’s territorial gains in Iraq and Russia’s incursion into Ukraine.

“We started with one important question: Did these surprises fundamentally change the assumptions that underpinned the current defense strategy we outlined in the 2014 Quadrennial Defense Review? And in short, we concluded, no. At least not yet,” he said. “We think the five strategic priorities that were identified in the QDR still are germane.”

Critical part of the JRSS

And in terms of the shape and size of the military, Work said the 2016 budget will reflect that DoD’s believes its current plans are still about right- with one exception: it needs more intelligence, surveillance and reconnaissance assets.

“You can never have enough ISR,” he said. “It’s a constant guess, and you’ll see on Monday that we’re probably going to be adding more.”

As to modernization priorities in the 2016 budget, Work named several categories the department will put front and center: the department’s nuclear enterprise, new space control capabilities, advanced sensors, communications, munitions for power projection, missile defense and cyber capabilities.

To defend the military’s own networks, Work said DoD will fully fund a critical part of forthcoming Joint Information Environment: The Joint Regional Security Stacks that first began to come online last year.

“Right now, DoD has over 1,000 firewalls that it has to defend on a daily basis,” he said. “Just solving basic hygiene like keeping people from giving their passwords to someone-that’s an impossible problem to completely solve. Through the JRSS-a relatively small amount of money, and we fully funded it – we will drop to 50 defendable firewalls by fiscal 2017. That will make us far more defendable as a network.”

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