Senate Appropriators Attempt to Avoid BCA Cap

Update: Over at "Off the Charts," CBPP argues that the President's proposed war spending cap -- regardless of how it is counted toward deficit reduction -- would be helpful in preventing the type of cheating we describe below.

War spending is once again being used to avoid hard choices in budgeting. While the President is using a gimmick to try to count a current policy war drawdown as new deficit reduction, Senate Appropriators are using the Overseas Contingency Operations (OCO) accounts -- the war spending accounts -- to avoid enacting mandated defense cuts.

According to the National Journal, the Senate Appropriations Committee is moving $10 billion of base discretionary spending into the OCO budget. This change will allow them to avoid a portion of the $26 billion in defense spending cuts called for because of the discretionary caps from the Budget Control Act. Because war spending is not subject to those caps, this effectively allows lawmakers to cheat the caps by falsely classifying spending, which is particularly worrying given calls from a few lawmakers to remove defense from a potential automatic sequester.

Russell Rumbaugh of the Stimson Center remarked that:

“The Senate appropriators have shown how tempting it will be to move base budget costs into war funding to avoid the Budget Control Act’s rules.  Although this time they found offsets within the war costs, the $10 billion move sets the precedent for doing so in the future, which could undermine the whole purpose of the Budget Control Act’s caps.”

Circumventing the budget caps in this manner is unacceptable, and it undermines the effectiveness of any caps regime. They also highlight the need for further reforms to the discretionary caps to make these kinds of budget games more difficult. One option would be to put OCO spending into its own cap as President Obama recommended recently (though it is a gimmick to count savings already in place, it is nonetheless useful to lock those savings in through procedural mechanisms). This could be accompanied by a stricter definition of OCO spending, as the Fiscal Commission recommended. And in order to avoid letting budget rules dictate military tactics, provisions could be put in place to allow for offsetting tax increases or spending cuts if these caps were exceeded.

Regardless of any procedural changes, though, lawmakers need to stop playing games with the deficit. The deficit and our long-term fiscal imbalance is real. Playing games, using gimmicks, using accounting tricks, or attempting to circumvent the caps only adds to the perception that Washington is not serious about the issue and further underlies the point that they are not ready to make the real choices that need to be made.