Declaring War on Fiscal Responsibility
The United States faces both security and fiscal threats. However, lawmakers continue to deploy a budget gimmick to increase military spending without paying for it. Increasing the national debt and blasting a hole through the federal budget is not a defensible strategy.
In March, the Trump administration requested defense funding above the limits set in law for the rest of this fiscal year. Congress agreed on about $14 billion in additional funding by exploiting a budget loophole in the new omnibus spending package to circumvent the spending cap by designating the extra funds as Overseas Contingency Operations (OCO) spending.
Unfortunately, this is not a new tactic. Congress did the same thing when President Obama requested defense spending above the cap in the fiscal year 2016 budget. OCO is intended for war-related spending. But in both 2016 and 2017 Congress included items from the regular defense budget not directly related to war costs.
This budgetary sleight of hand threatens both our national security and our fiscal integrity. Instead of directly supporting troops in harm’s way, it provides cover for spending that would not pass muster under the normal rules.
Moreover, this gimmick is threatening to become the new normal. Going forward, policymakers must stand their ground and repulse these attacks on fiscal responsibility.
There are no criteria for or limits on what can be designated as OCO funding, nor is this process subject to the budget caps both parties agreed to under the Budget Control Act. As a result, it is tempting for Congress to include activities not related to war operations under this banner in order to circumvent the spending limits. But using a war spending account as a slush fund creates a dangerous precedent that could unravel the defense budget caps going forward. While designating spending as OCO effectively puts it off budget for purposes of budget rules, the resulting increased spending still adds to the deficit.
As Congress gears up to battle over fiscal year 2018 spending, lawmakers must guard against relying on the OCO slush fund again. There will be much temptation to do so since President Trump is asking for a $54 billion increase in military spending above the limit. There is already talk of designating this increase as OCO instead of passing legislation to increase the cap and pay for it.
Lawmakers should not sound a retreat on fiscal discipline, but, instead, pursue a more responsible way forward. If they feel that the cuts imposed by sequestration do not allow enough spending to meet our national security needs, they should acknowledge the cost of reversing the caps. Congress should be transparent about the costs of the increased spending and find a way to offset them, rather than adding to the deficit.
The 2013 Ryan-Murray budget deal offers a template. That package combined short-term sequester relief with savings that improved longer-term sustainability. This is how budgeting is supposed to work — making tradeoffs in order to fund priorities — instead of using gimmicks.
In addition to agreeing on — and paying for — an acceptable level of funding for the defense budget, Congress and the president should agree on limits for war spending. They should also limit what can be designated under OCO to spending directly related to combat operations or in support of activities in theaters of combat.
Budget trickery is no way to fund our military. Not only does the war spending gimmick increase the debt, it also fails to provide a predictable path for long-term defense planning.
Former Joint Chiefs of Staff Chairman Admiral Mike Mullen (Ret.) has said that the national debt is the biggest security threat facing the country. Escalating the already unsustainable long-term debt in the name of national security is counterproductive.
Our military is prepared to fight on multiple fronts. Congress should follow that lead and address national defense and fiscal discipline simultaneously.
Maya MacGuineas is the president of the Committee for a Responsible Federal Budget, a nonpartisan organization committed to educating the public about issues that have significant fiscal-policy impact.