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It Depends on What the Meaning of “Overseas Contingency” Is

by Nan Swift / /

Once a Pentagon emergency fund for unanticipated situations abroad or overseas contingencies, the Overseas Contingency Operations (OCO) account is seemingly no longer restricted by conventional definitions.

Unlike the vast majority of the discretionary spending side of the federal ledger, OCO wasn’t made subject to the Budget Control Act’s spending caps. This was due to a general understanding that some war-related costs were hard to anticipate and soldiers in the field shouldn’t be funded via repeated “emergency supplementals” that made spending unpredictable. According to a 2010 memo from the Office of Management and Budget, OCO funds were to be used only in areas where combat or combat support activities occurred (theater of operations) for combat-related related activities, such as equipment losses, military construction, ammunition, and combat personnel costs.

Now, Congress has stretched the definition of “overseas contingency” to the breaking point and grown increasingly reliant on the account to avoid imposing spending restraint at the Pentagon. This reliance on OCO has increased, despite two budget deals that increased the caps.

The House-passed Fiscal Year 2017 National Defense Authorization Act (NDAA) used $18 billion in OCO funds to pay for “unfunded priorities,” which is a euphemism for the Pentagon’s annual wish list and items that belong in the base budget. Senator McCain, Chairman of the Senate Armed Services Committee where the Senate’s NDAA originates, claimed to oppose the gimmick, but his amendment to the Senate NDAA, #4229, commits the same accounting sleight of hand.

Granted, the McCain OCO amendment is $1 billion less than the House’s version. It also avoids the House bill’s budgetary gimmick that arbitrarily cuts off funding on April 30, 2017 — creating yet another budget crisis only four months into the next administration. Still, the items delineated in the amendment, to be paid for with overseas contingency funds, beggars belief. The list includes:

  • Six F-35s over the Pentagon’s request (not that we should be buying them)
  • One additional Littoral Combat Ship (again, not that we should be buying them)
  • $23 million for a vehicle maintenance shop at Fort Belvoir, VA (see map to confirm not overseas)
  • $6.9 million for a fire station at Fort Leonard Wood, MO (again, see map)
  • $14.4 million for family housing in Natick, MA (map)
  • $34.7 million for communications complex and infrastructure upgrades in Miramar, CA (map)

Perhaps justifiable and necessary from a strategic standpoint, these acquisitions and projects cannot even remotely be considered a proper use of OCO funding, further underscoring OCO’s “slush fund” status. The ability to shift funding to an off-budget account, where there is little transparency or oversight, is far too hard for legislators to resist, especially when the alternative is reexamining our priorities and making perhaps politically unpopular choices.

One way to help Congress help themselves, short of putting OCO back in the base-budget where it belongs, is to impose common sense limits on what constitutes proper use of the account. To that end, Representatives Mulvaney (R-SC) and Van Hollen (D-MD) offered an amendment, that was adopted, to the House NDAA that would codify the OMB’s guidelines, limiting how OCO dollars are spent. Senators should consider offering a similar amendment when they take up their NDAA bill in the coming week to help ensure the provision makes it into the final conference product and ultimately into law.

Until OCO is taken off the table as a convenient budget cap workaround, it’s clear that legislators won’t be able to constrain their worst impulses when it comes to spending and the fund will continue to be the spark that ignites the all-too-predictable chain reaction culminating in yet another budget-busting deal.