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House Bill Seeks Backdoor Effort to Boost Defense

The 2017 defense authorization bill before the House Armed Services Committee today would shift $18 billion from overseas contingency operations (OCO) to the core defense budget, starting a two-step process that would breach the defense funding limits of last year’s Bipartisan Budget Act.  Policymakers would fill the $18 billion OCO hole by enacting supplemental appropriations early next year, committee chairman Mac Thornberry said.  That’s a backdoor way to boost defense funding, thus violating a key principle of last year’s agreement — to provide equal sequestration relief for defense and non-defense.

OCO funding, which is exempt from the 2011 Budget Control Act’s annual appropriations caps, was created to cover costs tied to operations in Afghanistan, Iraq, and other trouble spots, but policymakers have expanded its uses in recent years to costs not strictly associated with such operations.

Last year’s budget agreement continued that practice by specifying OCO levels for 2016 and 2017 that enable OCO to supplement core funding for defense and international affairs.  The President’s 2017 budget estimates that the agreed-upon OCO level for 2017 can cover about $5 billion of core defense needs.

Chairman Thornberry’s bill takes this practice a big step further.  His committee’s bill specifies that $23 billion of the 2017 OCO funds will cover core defense needs — $18 billion more than the President’s budget says is available — and authorizes $18 billion less for actual OCO operations than the President requests.  The chairman acknowledges that the bill’s OCO funding would cover the expected cost of overseas operations only through April 2017, at which time the new President would request additional funds.

Indeed, the bill takes concrete steps to force the new President to request supplemental funding.  It authorizes funding for key OCO categories such as military personnel and operations and maintenance only until April 30, pro-rating the amounts to cover the shorter period.

If policymakers do shift $18 billion from OCO to the core defense budget and later enact supplemental appropriations to fill the shortfall, defense appropriations will be about $18 billion above the level specified in last year’s budget agreement.  That would violate the principle, in last year’s agreement, of equal treatment for defense and non-defense needs, since this Congress won’t likely enact similar increases on the non-defense side.

In fact, the OCO maneuver could prompt proposals to cut non-defense programs if House Republicans insist on offsetting the cost of the supplemental funding with cuts in other areas — just as many House Republicans now insist on offsetting the much smaller supplemental appropriations requested to help address the Zika virus outbreak.