Channeling Bush’s Budget Tricks

The war budget is late and that could mean trouble. One of the less-discussed elements of the administration’s defense budget request is the delay in submitting a request for the so-called Overseas Contingency Operations (OCO) account, which funds the military’s effort in Afghanistan and counterterrorism operations globally. Instead of submitting the war budget with the regular "base" budget, the administration simply provided a "plug" of $88 billion for next year and said the real war budget would come later.

In delaying the war budget, President Obama has violated a pledge he made before taking office: that he would submit an OCO budget request simultaneously with the overall defense budget submission. During the presidential transition, moreover, the Obama administration negotiated an agreement with DOD that only direct war costs would be included in the war budget.

The simultaneous submission of the war budget, and the restrictions on its use, were supposed to end the Bush administration’s repeated delays on war funding that allowed DOD to avoid the normal budget planning process — what is known as the Programming, Planning, Budgeting and Execution System. It also allowed the Pentagon to lard up the war budget with items that were not directly linked to the war, like the costs of modifying ground forces into Brigade Combat Teams, or buying ground equipment that was part of the Army’s long-term plan while not replacing equipment damaged in the war.

Obama’s decision was good budget practice. It was never entirely clear why the war budget was sent to Congress separately, in any case. In past wars — Korea, Vietnam — war costs were generally folded back into the basic DOD budget after one or two years, once the costs of operations became relatively clear, as this Congressional Research Service report makes clear.

And it was certainly important to tighten the definition of what went into a war budget. Letting other spending slip into the war budget deeply eroded the integrity and discipline of the Pentagon’s normal budget process. For the services, the war budget became a kind of "safety valve" for spending that was otherwise hard to justify. And the definition of what was a "war cost" was expanded in 2006 to cover almost anything the services wanted. The result, as another CRS report made clear, was that war budgets were significantly abused.

Despite Obama’s promises, this year the budgetary dogs of war have slipped loose again. At least one military leader, Air Force Chief of Staff Gen. Mark Welsh, has made it clear that this process may allow the services to escape the discipline of budget planning, combined with the restraints imposed by the sequester. In testimony to the House Armed Services Committee last week, he noted, "In the past, we’ve relied on Overseas Contingency Operations funding to partially fund…flying-hour programs and to maintain our current and substandard readiness levels," and went on to say the Air Force would continue this process through FY 2015.

This kinda suggests the discipline negotiated in 2008 has not been as tight as promised, and that’s worth a question or two in the budget hearings. The $88 billion plug makes it even worse. Eight-eight billion dollars is what the war is supposed to cost this year. The FY 2014 plug put in the FY 2013 budget request last year was $44 billion, so the plug itself has doubled in size.

That leaves room for budgetary skullduggery. Now we don’t have anything close to a realistic "suggested" amount for war costs. The Pentagon has let it be known that it has already underestimated this year’s war costs by close to $10 billion, most of it in the Army. According to Foreign Policy‘s Kevin Baron, Comptroller Bob Hale said in testimony: "Here there’s a simple story about fiscal ’14 OCO budget: We don’t have one yet."

That’s a shame. Thirteen years of war and the Pentagon still can’t tell you what the war costs? Not plausible. Watch out for the OCO budget when it comes. With sequestration underway and ineptitude showing up in the planning, it could be a doozy.