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Congress’s Defense Spending Is Nothing More Than a Shell Game

And with the new appropriations bill it might just get away it.

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For budgetary courage, Congress does not measure up to Henry V’s standard, but they are increasingly consistent with using the Overseas Contingency Operations (OCO) budget as a piggy bank, as the newly-passed “cromnibus” appropriations bill reveals.

The use of OCO is an act of almost perfect budgetary hypocrisy that almost everyone in Congress buys into; the members of Congress can vigorously argue that they have held the line on discretionary spending, including defense — the line drawn by Sen. Patty Murray and Rep. Paul Ryan at the end of 2013. The FY 2015 defense budget holds the line – just under $500 billion — that was laid down in that agreement.

At the same time, the same members can argue that they have supported a strong defense — putting $64 billion into the OCO budget, $64 billion that does not count against the caps. So DOD really walks away with nearly over $560 billion. It’s a shell game, using magic money to fit both narratives. Not bad for a few weeks’ work.

The shell game is exposed in the cromnibus. For the last couple of years, the appropriators have discovered the true miracle of OCO — it is a safety valve that allows members to shift spending that would otherwise be in the base defense budget, making room in the base budget (under the caps) for things the members would like to put in, but for which there seemed to be no room.

OK, so what am I talking about? I am talking about the appropriators cutting Operations and Maintenance (O&M) spending in the base budget below what the administration asked for (which is bad because some of that money funds military readiness), but then shifting some of that money to the OCO budget (readiness restored!). O&M funds cover everything from readiness to training and education to military exercises, to buying fuel, to repairing equipment, to paying civil servants.

Having made room in the base budget by this sleight of hand, the appropriators then stick back into the base budget things the administration did not ask for, but the members want.

To wit: the appropriators cut Army Operations and Maintenance by $1.3 billion below the administration’s FY 2015 budget request. Then they restored at least $850 million of that over in their version of the OCO budget. Navy O&M was cut the same — $1.3 billion with another $850 million reappearing in OCO. For the Marines, $800 million gone, but $350 million restored in OCO. And for the Air Force, $800 million was cut, and $850 million magically reappearing in OCO.

What was the newly minted base budget piggy bank then used to buy? Well, spending on military hardware procurement, went up more than $3 billion over what the administration requested, all funded in the base budget, thanks to the shell game. For the Army, more funding for the Apache and Blackhawk helicopter programs, modifications of the Patriot missile, Stryker vehicles, the Family of Medium Tactical Vehicles, and the continuing effort to keep the Abrams tank line alive (even the Army doesn’t want to do that because it doesn’t need more tanks or more modifications on the current generation).

The appropriators also gave the Navy a present of additional 15 F-18 Growler aircraft, Tomahawk missiles, the overhaul of the George Washington aircraft carrier the Navy did not ask for, and an additional LPD-17 amphibious ship (Sen. Cochran of Mississippi might have helped with that – he is the incoming chair of the Appropriations Committee and the ships are made in Mississippi). The Air Force got two more F-35s, another C-130 J transport plane, 12 more Reaper drones, and funding to keep the A-10 close airplane alive, although the Air Force wants to kill it.

There’s more, lots more, but those are some of the big-ticket items. Congress has clearly discovered how to have its budget discipline and eat its OCO, too. And the services are not unhappy; after all some of these things — F-35s, F-18s — are things they asked for but were not funded in the base budget.

In the end, the loser here is really the taxpayer who is paying more for defense than the DOD asked for or needs. This kind of budgeting puts the lie to the myth that defense is underfunded and badly needs more, given the “threats” we now face. By now everyone in the game has discovered the joys of marching into the OCO breach – the services to fund things that can’t make it into a disciplined base budget; the Congress, who see an opportunity for a shell game, and even the White House — the OCO budget now funds U.S. President Barack Obama’s campaign against the Islamic State, Ebola operations, and the counterterrorism fund he announced in June.

My sources tell me it is going to be very hard to put a lid on this escape hatch. We may be looking at the shell game for years to come.

Kelly M. Agee/U.S. Navy via Getty Images

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