The Budget Gimmick Trump Wants to Use to Boost Defense Spending

The Budget Gimmick Trump Wants to Use to Boost Defense Spending


Taking advantage of a loophole in the Budget Control Act, President Trump will propose a big increase in defense spending while cutting discretionary spending in 2020, acting director of the Office of Management and Budget Russ Vought said in an op-ed at RealClear Politics Monday.

The White House’s upcoming budget request will seek to increase Pentagon funding through a special warfighting account that is exempt from budget caps, Vought said. That will allow the administration to avoid matching defense spending increases with discretionary spending increases, as lawmakers have done for several years in spending deals that have effectively removed spending caps from the political equation in Washington.

The Trump administration says it wants to cut discretionary spending by 5 percent across the board in what Vought called “one of the largest spending reductions in history,” while boosting defense spending by more than $30 billion.

How it would work: The White House is expected to request as much as $174 billion in 2020 for the overseas contingency fund, an off-the-books account that is intended to be used for short-term operations – and which some critics have dismissed as a Pentagon “slush fund.” The increase in OCO funding would more than offset the roughly $70 billion in cuts to the defense budget imposed by the caps, should they come into effect. Current OCO funding is about $69 billion.

Embracing a gimmick: Last year, then-OMB director Mick Mulvaney argued against using the overseas contingency account to evade budget caps, calling that approach a “gimmick” that threatened budget accountability. But that argument doesn’t seem to hold much sway in the current White House, where Mulvaney is now acting chief of staff.

Congress not likely to play along: House Budget Committee Chairman John Yarmuth (D-KY) and House Armed Services Committee Chairman Adam Smith (D-WA) released a joint statement Monday making it clear that the president’s budgetary maneuver wasn’t going to fly in the House:

“The President’s budget will apparently rely on a giant OCO gimmick to prop up defense spending. If true, this is nothing more than a blatant attempt to make a mockery of the federal budget process, obscure the true cost of military operations, and severely shortchange other investments vital to our national and economic security. Rather than being honest and responsible about his budgeting, the President is choosing to deceive the American public yet again. Democrats will reject this cynical proposal to flout the basic principles of open and honest governance and will instead—with full transparency—pursue a course that invests in our national priorities and makes us stronger both at home and abroad.”

Republican Rep. Mac Thornberry (TX), the ranking member on the Armed Services Committee, was also critical: "It's ridiculous if that's what they do,” Thornberry said. However, Trump ally Sen. Jim Inhofe (R-OK), chair of the Senate Armed Services Committee, has signaled that he might support the move. “We’ve got to have adequate funding. Now, how do you get there? Are you going to be using some OCO to get there? Yeah you are. I don’t know how much it’s going to be, but I think you’re going to have an exaggerated figure there in order to get up to what we have to have to defend America," Inhofe said last week.

The bottom line: The White House is trying an end run around the budget negotiations that have resulted in higher spending in both defense and non-defense areas over the last few years. But the proposal to raise defense spending through a budget gimmick while cutting discretionary spending will likely be dead on arrival in Congress.