It’s Time to Phase Out the Pentagon’s Slush Fund

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In recent years the Pentagon has repeatedly claimed that its budget has been decimated by the caps imposed by the Budget Control Act of 2011.  Nothing could be further from the truth.

It is an open secret that the Pentagon has routinely evaded the budget caps by pouring tens of billions of dollars in non-war spending into the war budget, formally known as the Overseas Contingency Operations account, or OCO.  Because the OCO account is not subject to caps like the Pentagon’s regular budget is, it has become a slush fund that is used to pay for projects that could not be funded through the regular budget process.

If rumors about the size and composition of the President’s forthcoming Fiscal Year 2020 budget are true, the practice of using the OCO account as a slush fund is about to reach unprecedented levels.  There are reports that the administration’s request for the war budget will be an astonishing $174 billion, nearing the levels reached at the peak of the Iraq and Afghan wars.  This is happening at a time when U.S. troop commitments to Afghanistan and Iraq are roughly 10 percent of the peak of 200,000 troops what were deployed to those two countries at the height of the conflicts there.  

Defenders of this fiscal malpractice, including acting White House budget chief Russ Vought, claim that this maneuver is a way to give the Pentagon what it needs without having to raise the caps on domestic spending through a comprehensive budget deal. 

Vought’s proposition is wrong on two counts. 

First, Vought’s proposed solution allows Congress to abdicate its responsibility to make choices among programs, defense and domestic, based on a real debate about the most urgent challenges facing the country. Just assuming that domestic spending should be capped while the Pentagon budget is given special treatment ignores the fact that domestic programs are valuable in their own right. Domestic outlays can also make us safer by supporting programs that make the country healthier, better educated, and more financially secure – all of which are pillars of our strength and political cohesion as a nation.  

There can be honest differences of opinion about the right balance of defense and domestic spending, but those differences should be aired openly and decided on the merits, not through a rigged process that favors the Pentagon whether or not it needs the additional funds.

This brings us to the second, and perhaps the most critical point.  The Pentagon and related nuclear weapons programs at the Department of Energy do not need the up to $750 billion in funding that the abuse of the OCO account will permit.  The U.S. wars in Syria and Afghanistan are – or should be – winding down, and the U.S. presence in Iraq is a small fraction of what it once was.

In addition, the Pentagon budget as currently crafted is rife with tens of billions of dollars of misguided expenditures.

The Defense Business Board has determined that the Pentagon wastes up to $25 billion per year on excess overhead.  And the department’s profligate use of private contractors – who now number well over 600,000 and counting – costs inordinate sums of money, much of it used to perform tasks that could be done by civilian government personnel or may not need to be done at all.  Cutting the contractor labor force by 15% would save $24 billion per year.

Then there is the practice of buying weapons we don’t need at prices we can’t afford.  

The F-35 combat aircraft – slated to be the most expensive single program ever undertaken by the Pentagon – is an overpriced, underperforming system that the Project on Government Oversight has pointed out may never be ready for combat.  According to an analysis by the Congressional Budget Office, terminating the program and replacing planned F-35s with F-16s and F-18s would save $2.4 billion next year alone, and billions more over the next decade. 

The most dangerous and unnecessary set of proposed expenditures is the Pentagon’s plan to buy a new generation of nuclear-armed submarines, missiles, and bombers over the next three decades, at a projected cost of $1.2 trillion.  Scaling back our current level of nuclear overkill and maintaining a force sufficient to deter any country from attacking the United States or its allies with a nuclear weapon could save tens, if not hundreds, of billions of dollars in the decades to come.

Rather than signing off on the budget gimmick of the century, Congress should carefully scrutinize the Pentagon budget and bring it into line with our actual defense needs.  And the OCO slush fund should be phased out, the sooner, the better.

William D. Hartung is the director of the Arms and Security Project at the Center for International Policy. 

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