Undermining the Budget: The Supplemental Problem Posted by Gordon Adams

As military and diplomatic crises multiply overseas, the Congress has continued its merry way providing funding for the Administration’s national security policy. Given the policy chaos, it is not surprising that there would be budgetary chaos, as well, in the way Congress is supporting national security.

This week, the Senate will consider its version of the defense appropriations bill, which includes more than $453 b. for the Defense Department (defense funds are actually higher – nearly $550 b. - since this bill does not include military pay, quality of life and construction funds). Of that amount, $50 b. is included for what is called a “bridge fund.” for Afghanistan, and global military operations against terrorists.

This $50 b. has the status of “emergency funding,” meaning it does not count against the Congress’ self-imposed ceiling for discretionary spending. This $50 b. is the tip of the iceberg for funding, Afghanistan and the so-called Global War on Terror. According to the Congressional Research Service (CRS), through the current fiscal year ending in September, the nation will have spent another $437 b. on Iraq, Afghanistan, and the struggle with terrorism, nearly three quarters of it for operations in Iraq alone, and over 90% of it for the military.

All of this spending has been provided as “emergency” or “emergency supplemental” funding. And it is likely to continue. The Congressional Budget Office (CBO) estimates that the nation is likely to spend another $371 b. on these operations between now and 2016, even with the deployed forces shrinking.

Perhaps most significant, these emergency supplemental funds account for between 20 and 25% of all the funds the Defense Department has received since the 9-11 attacks. The result of getting nearly a quarter of its funds through the emergency route, and not the regular budget, is that the defense budget planning process has collapsed. Defense spending is now running out of control, and it is going to be hard to put this Humpty Dumpty together again.

Emergency supplementals are not like the regular budget. When the Pentagon puts them together, they do not go through the normal, detailed review the services and the Secretary’s office use as part of the normal budget process. The services cough up their emergency numbers outside the budget planning cycle and they are aggregated and passed very quickly through the Secretary’s budget office.

The White House Office of Management and Budget is a “whistle stop” for the request, which is sent to the Hill with few changes. The numbers that come to the Congress are usually aggregates, divided by service and by type of spending (military personnel, operations and maintenance, procurement, research and development). There is very little detail on exactly what these sums will be spent on, especially the operations and maintenance part, which tends to be the largest part – since it supports the operations of troops in the field. The current $50 b. is the first time DOD has provided detail on actual spending, detail which has not been made public beyond the Congress.

Once Congress receives the request, it goes straight to the Appropriations committees, by-passing review by the policy-related Armed Services committees. The appropriators don’t like the forces pace, but they usually only have time for one hearing, with DOD witnesses, before they are pressured to “mark up” the emergency bill.

Once the money has been provided, moreover, it is hard for the Congress to track the outcome of the spending in any detail. David Walker, the head of the Congress’ Government Accountability Office testified in July that “neither DOD nor Congress knows how much the war on terror [including Iraq] is costing or how appropriated funds are being used.” To make matters worse, the Defense Department has not provided Congress with any reporting or details on this spending, despite two successive pieces of statutory language requiring them to do so.

Needless to say, this process, if it is a process, opens opportunities for “gaming the system,” and both Congress and the DOD have done so. DOD has included in these emergency requests funds it needs for non-wartime requirements, like new pieces of military equipment and the costs of restructuring the Army from divisions into more autonomous brigades. They shuffle the funds and avoid close scrutiny.

For example, the justification for the current 2006 $50 b. “bridge fund” includes $1.2 b. to sustain the production base for the Bradley infantry fighting vehicle, $250 m. for two V-22 vertical lift cargo planes, and $307 m. for C-130J transport aircraft.  These requests for new hardware, which are certainly not an emergency and would not be available in any time-frame for emergency needs, should go through a normal budget scrub.

The Congress plays the game. They have a self-imposed cap on discretionary spending and domestic needs to fund, so they cut the regular defense budget. This week, for example, the defense appropriations bill in the Senate will look like it has cut defense $9 b. below the administration’s request. In past years, the committee has then added a new “title” to the bill, which adds the money back under emergency language. This year they have not done so, but observers expect the cuts will reemerge in the next emergency supplemental, likely this fall or winter. 

We haven’t always done this, even when we were at war. Other CRS research makes it clear that since Korea, within a year or two, the costs of our past wars became predictable and funds began to be requested as part of the normal budget. Even for Vietnam, only unexpected costs that went above what had been requested for the war in the regular budget were sought as supplemental funds.

The Senate thinks it is high time to tackle this problem. Senators John McCain, John Warner, and Judd Gregg introduced an amendment to their authorizing bill that would require DOD to bring these requests to the Congress through the normal budget process starting next year, and it passed the Senate 98-0. Even the appropriators voted for it.

Hopefully it is not too late to reign in this practice, but it seems to work well for the Pentagon. It has made a shambles of planning in the executive branch, however, and a tempting target for congressional spenders who have not shown much desire to slow the growth of federal spending over the past six years. The down-stream consequences for deficits and spending control are high-risk.

Comments

[Zathras]

I was wondering when someone would notice this problem.

In its scale and dimensions it is unique to this administration in our recent history, and it has been going on for years. There are very few defenders of Congressional prerogatives left on the Hill -- and oddly, the few who are left seem to be mostly Republicans like McCain, who has been denouncing abuses in the appropriations process since before Bush first took office.

What a sad place Congress has become. It has let itself be pushed around by the administration, pushed around by interest groups, bought by campaign contributors and interests willing to hire elected officials' relatives and even their staff. It does less major legislation now than it used to. It rarely passes more than a couple of appropriations bills on time. It has all but abandoned oversight of any agency that has not been on the television news programs in the last week; its members spend more and more of their time raising money, plotting campaign strategy and simply goofing off. Its best, most talented members are mostly old men, while the Presidential aspirants it produces are mostly freshmen Senators who have never accomplished much in public life and don't seem to think that's much of a problem.

Congress could, by itself, have greatly improved America's chances for a successful foreign policy simply by insisting on regular procedures for approving spending on the wars in Afghanistan and Iraq. Nearly five years after fighting in Afghanistan began, it is only just thinking about maybe doing that.

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Where do you get the idea that military pay is not part of the DOD budget? MCA is not; it is voted for separately. Nuke stuff is not; it is part of the DOE funding. GDIP is not; it is part of the intel bill. But military pay?

[Gordon Adams]

libertarian soldier is correct; pardon the error that let mil pay creep in there. And I agree with Zathras that Congress is simply not doing its duty; instead, they are exploiting the opening to resolve some of their own irresponsibility about the budget overall.

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