OCO Must Go

This article appeared on Defense One on July 22, 2020.
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The Overseas Contingency Operations account would meet its long‐​deserved demise next year if House appropriators get their way.

The OCO account replaced the “emergency supplemental” accounts used to fund the early years of the Global War on Terror. Exempt from the defense budget caps set by the Budget Control Act of 2011, it continued to grow even as spending on the wars in Iraq and Afghanistan shrank. Today, Defense Department officials use the account largely to circumvent those budget caps.

Now this practice, long decried by many defense budget experts as obfuscating the true costs of U.S. military operations around the world, may soon come to an end. A recent report from the House Appropriations Committee’s subcommittee on defense revealed this promising change in attitude. The subcommittee finds that “the OCO experiment has been an abject failure and has given the Department [of Defense] a budgetary relief valve that has allowed it to avoid making difficult decisions.” We have argued elsewhere that using OCO funds suggests that the military cannot prioritize its long‐​term strategic direction, and instead relying on complicated budgetary maneuvers to fund never‐​ending wars.

The HAC-D are not the first to consider limiting or eliminating OCO. Though the account has received consistent criticism, OCO continues to float on each year with no intervention. No one wants to make the tough choice to rein in the Pentagon and force it to comply with normal budgetary processes.

In their 2021 budget request, Pentagon officials divide proposed OCO funds into three categories:

  • Direct War Requirements ($20.5 billion): combat support, the Afghanistan Security Forces Fund, etc.
  • Enduring Requirements ($32.5 billion): in‐​theater costs that will remain after combat operations cease.
  • OCO for Base Requirements ($16 billion): “funding for base budget requirements, which support the NDS in accordance with the budgetary caps established in the Bipartisan Budget Act of 2019.”

Only 30 percent of the 2021 OCO request, therefore, goes to direct war requirements, while nearly one‐​quarter is openly stated to go to things that should be in the base budget.

If OCO were a government agency, it would have the fourth‐​largest discretionary spending budget, and among the most opaque. Appropriators in the House appear aware that laying out the distinct categories within OCO does not create real transparency, nor does it equate to an inextinguishable green light for poor planning. Funding enduring costs through the base budget allows Congress to fulfill its oversight role and provides the opportunity to signal national security priorities.

As the United States seeks a drawdown from its war in Afghanistan, the OCO fund should correspondingly decrease. Even as troop deployment levels have decreased since 2009, the OCO budget has remained steady, which DoD attributes to “fixed, and often inelastic, costs of infrastructure, support requirements, and in‐​theater presence to support contingency operations.” Troop levels in Afghanistan and Iraq will likely decrease further, yet continuing to fund these operations through OCO ignores the critical role of long‐​term strategy.

The legislators of HAC-D agree. According to their report, they want to end funding through OCO in the next appropriations cycle and move back to funding contingencies through supplemental appropriation legislation.

If they are successful, they must be prepared to push back on a Pentagon request to simply increase the base budget. Congress must press defense leaders to prioritize funding based on geopolitical realities and national security priorities.

To meet the challenge of extraordinary budgetary requests in an era of domestic turbulence and economic uncertainty over the continuing devastation of COVID-19, Congress must end the OCO funding category and force the Pentagon to prioritize its spending within means. It is fiscally irresponsible to do otherwise. Congress must assert its power of the purse to control deviant funding priorities.

Lauren Sander, Brandon Valeriano, and Eric Gomez

Lauren Sander is external relations manager for defense and foreign policy studies at the Cato Institute. Brandon Valeriano is a senior fellow at the Cato Institute and the Bren Chair of Military Innovation at the Marine Corps University. Eric Gomez is director of defense policy studies at the Cato Institute.