House GOP’s Creative Accounting Lifts Defense Budget

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Mar 18 2015

Republican House Budget Committee members on Tuesday technically made good on what they pledged: They preserved statutory caps on defense spending over the strong objections of President Obama and many GOP defense hawks on Capitol Hill. But wait – there’s more. 

Congressional Republicans have been bitterly divided over whether to stick with discretionary spending limits imposed on defense and domestic programs by the 2011 Budget Control Act. Many have argued persuasively that the world has become too dangerous for the Defense Department to operate under tight budgetary restrictions, even if it means adding to the deficit.

Related: House GOP Budget Would Wipe Out Deficit in 10 Years

While acknowledging, “Our nation, our allies and our interests at home and around the world are threatened by radical Islamic terrorists,” the Budget Committee Republicans also declared in their budget document, “It would be irresponsible to promise our military leaders and our troops” a certain level of funding. “We know, without a change in law, [that it] would be indiscriminately struck down once it rose above the current allowance.”

Yet rather than holding the Pentagon’s fiscal 2016 base budget below the spending cap, GOP House budget experts devised a gimmick. It would funnel tens of billions of dollars more to the DOD without technically violating the controversial spending cap. Overall, the House GOP budget calls for a total of $613 billion in national defense spending in the fiscal year that begins Oct. 1 – or $28 billion more than Obama wants to spend even with the caps lifted. 

The Republicans were able to exceed the president’s request by substantially beefing up funding for the so-called Overseas Contingency Operations (OCO). It finances U.S. military operations in Afghanistan and Iraq and is not restricted by spending caps or any other limits on deficit spending.

The House Budget Committee Republicans proposed about $40 billion more for the OCO next year than Obama requested – and then dedicated that surplus money to a new “Defense Readiness and Modernization Fund.” This fund could be used for the DOD’s general operations and programs.

Related: Obama Would Violate Budget Control Act with $34B More for Defense

“We recognize the imperative of providing for our military men and women and their families and the resources that are needed to protect our national security,” House Budget Committee Chair Tom Price (R-GA) told reporters. “In fact, our budget spends more on national defense than the president would, in a responsible way that addresses current law and lays out a path to address the ongoing concerns of the military so that they can plan and prepare.”

Some budget analysts said Republicans were playing budget games to sidestep the spending cap and in the process upstage Obama on defense spending. Edward Lorenzen, a senior adviser to the Committee for a Responsible Federal Budget, a spending watchdog group, dismissed the new defense readiness and modernization fund as the “OCO slush fund” that constitutes a fiscal backward step.

“The OCO level for fiscal year 2016 is high enough to fully fund the administration’s OCO request and leave enough room for a slush fund,” he said in a statement. “That [fund] would allow appropriators to fund virtually the president’s entire defense budget, which is $37 billion above caps, without increasing caps or offsetting higher spending.”

Related: The New U.S. Price Tag for the War Against ISIS: $40 Billion a Year

It was unclear whether the budget maneuver would win over defense hawks like Senate Armed Services Committee Chair John McCain (R-AZ), who has characterized the use of the OCO fund as a gimmick. He didn’t rule it out entirely, however, as a path towards compromise. By contrast, House Armed Services Committee Chairman Mac Thornberry (R-TX) appeared today to endorse the idea, according to The Hill.

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