When the global war on terror began less than a month after Sept. 11, 2001, Congress created the overseas contingency operations account as a one-time supplemental appropriation to the budget for the Department of Defense. But like many other emergency or temporary federal expenditures, the OCO was greatly expanded and used for unrelated purposes.
As the United States marked 19 years of conflict in Afghanistan on Oct. 7, 2020, the DoD is still receiving a significant portion of its funding through the OCO. It is long past time to unwind this account, which has transitioned into a slush fund designed to inflate spending at the DoD far above the baseline budget and for purposes unrelated to the wars in Afghanistan and Iraq, and military operations in other countries, like Syria.
The fiscal abuse became particularly acute following the passage of the Budget Control Act of 2011, when members of Congress started to use the OCO to bypass the spending restraints applied to the Pentagon.
The DoD has received approximately $2 trillion from the OCO since 2001. Were it considered to be a federal agency, the $70.7 billion provided for the OCO in fiscal 2020 would make it the fourth largest, dwarfing spending at all other agencies except the DoD as well as the Department of Health and Human Services and the Department of Veterans Affairs.
OCO spending has long outpaced the military’s presence in combat zones. In FY08, the U.S. was actively fighting wars in Afghanistan and Iraq, and deployed an average of 187,000 troops in these countries. OCO spending topped $187 million in that year, equating to $1,000 per service member.
In 2020, the U.S. has approximately 14,300 troops stationed in Afghanistan, Iraq and Syria, meaning the $70.7 billion for the OCO in FY20 equates to $4.9 million in funding per service member, nearly 5,000 times the amount in FY08. With President Donald Trump planning to further reduce the military’s footprint in Afghanistan, the trend of outsized OCO spending relative to troops abroad is likely to continue in FY21.
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The level of OCO spending has remained higher than needed for its underlying purposes for many years because much its spending belongs in the Pentagon’s base budget. In FY15, approximately 50 percent of OCO funding was for nonemergency items. An October 2018 Congressional Budget Office report found that, on average, the OCO provided $50 billion toward enduring activities (like regular maintenance activities supporting foreign operations that will continue regardless of force) between 2006 and 2018. This trend is set to continue into the future. An August 2019 CBO report noted that approximately 85 percent of funding for the OCO in FY20 and FY21 “is designated for base-budget and ‘enduring’ activities.”
Compared to historical emergency spending, the use of the OCO for that purpose is unprecedented. Emergency funding outside of the base budget made up around 2 percent of DoD spending between 1970 and 2000. Between 2001 and 2018, the OCO has constituted on average of approximately 20 percent of the Pentagon’s annual budget.
Beyond the problems associated with using a loophole to fund the DoD, as a supplemental appropriation the OCO does not allow the Pentagon to factor its funding into the normal budgetary process, which involves planning for multiple years. For this reason, top DoD officials have expressed their disappointment in the system and have argued for the incorporation of OCO funding back into the DoD baseline budget.
Then-Defense Secretary Ash Carter stated in a March 18, 2015, House Armed Services Committee hearing that the OCO “doesn’t work because to have the defense we need and the strategy that we have laid out, we need the budget that we have laid out not just in one year, but in the years to come … and so, budgeting one year at a time, and this proposal is a one-year-at-a-time thing, doesn’t work for national defense. It’s not going to permit us to carry out the strategy as we’ve planned.”
After 19 years of conflict in Afghanistan, the notion that funding for war fighting cannot be planned for in the regular budget is laughable. Congress should restore order and rationality in the Pentagon’s budget by eliminating the OCO.
Sean Kennedy is the director of research at Citizens Against Government Waste.
