Status Quo for Obama’s Last Budget | Citizens Against Government Waste

Status Quo for Obama’s Last Budget

The WasteWatcher

The record-setting $4 trillion budget proposed by President Obama for fiscal year (FY) 2017, released on February 9, 2016 contains the usual suspect spending suggestions that he has made for the past seven years, along with a list of proposed cuts. 

In particular, in this time of new national security challenges as well as longstanding conflicts, the defense budget should address all of these needs in a manner that is comprehensive, balanced, effective, and efficient.  Unfortunately the budget for the Department of Defense (DOD) contains bad news on many levels.

First, the President’s budget continues the use of the Overseas Contingency Operations (OCO) account, requesting $59 billion in FY 2017.  Created in 2001 to fund the war in Afghanistan and other associated costs of the Global War on Terror, the OCO was intended to be a one-time emergency supplemental.  Over time, the account 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.  For the past several years, members of Congress have used the OCO in an even more insidious manner:  to bypass the sequestration restraints applied to the Pentagon under the Budget Control Act of 2011.

The permanent, annual use of the OCO by to funnel money to the DOD, in part to avoid sequestration, represents a remarkably poor example of governance.  Beyond the problems associated with using a loophole to fund the Pentagon and its operations, the ad-hoc nature of the OCO supplemental bill does not allow the DOD to factor the funding into its normal budgetary process, which involves planning for multiple years.

DOD Secretary Ashton 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.”  In a May 6, 2015 Senate Defense Appropriations Subcommittee hearing, Carter described the OCO as a “road to nowhere.”

With a funding level of $58 billion, the OCO is the equivalent of the fifth largest federal agency.  Nonetheless, many members of Congress consider the budget request to be too low.  On February 2, 2016, House Armed Services Chairman Mac Thornberry (R-Texas) called for an additional $23 billion for the OCO.

Second, the President’s budget keeps the status quo for the F-35 Joint Strike Fighter (JSF).  Currently, the program is approximately $170 billion over budget, and has encountered an abundance of persistent issues, including with its software design.  The document calls for $10 billion for 63 JSFs, including 43 for the Air Force, 16 for the Marine Corps, and four Navy jets.  The Pentagon intends to purchase 404 F-35s over the next five years.  The program is in such disarray that Under Secretary of Defense for Acquisition, Technology, and Logistics (ATL) Frank Kendall labeled it as “acquisition malpractice” in February 2014.

Even the Cuts, Consolidations, and Savings portion of the budget that highlights areas in the federal budget that should be downsized or eliminated elicits mixed reactions.  While the administration proposed 117 actions that would save $14 billion over the next year, this represents an infinitesimal 0.003 percent of the overall budget. 

While most of the proposals have merit, and the administration deserves credit for trying, the savings are overstated because many of the expenditures are regularly earmarked by members of Congress.  For instance, the past four versions of this document have called for the elimination of the Delta Regional Authority (DRA), saving $3 million each year.  However, in each instance, members of Congress added the funding back through an earmark, and are likely to do so again in FY 2017.  Since FY 2003, the DRA has received six earmarks totaling $17.8 million.

The budget also called for reducing Federal Emergency Management Agency Pre-Disaster Mitigation grants, saving $46 million.  Since FY 2008, this program has received 206 earmarks requested by more than 100 members of Congress, costing taxpayers $150.6 million, including a $25 million earmark in FY 2015.

Another proposal would slash funding for abstinence-only education programs, saving $10 million.  Since 1996, the United States has spent more than $1.8 billion for abstinence education programs. Congress has added 129 earmarks worth $23.2 million for such programs since FY 2001, including a $5 million earmark in FY 2015.

The administration would reduce funding for High Intensity Drug Trafficking Areas (HIDTA) at the Office of National Drug Control Policy, saving $54 million.  Originally intended for border states, members of Congress have used earmarks to expand HIDTA to non-border states, which of course increases the number of members with an interest in sustaining such spending.  Since FY 1997, 29 earmarks costing taxpayers $213.2 million have been provided for HIDTA programs; 16 of the earmarks were directed to programs in 10 states, only two of which, Arizona and New Mexico, are border states. The other eight states that received HIDTA earmarks were Alabama, Hawaii, Iowa, Louisiana, Missouri, New Jersey, Tennessee, and Wisconsin.  Members of Congress added a $51.6 million earmark for HIDTAs in FY 2015.

Finally, the budget also proposes to cut funding for the Army Corps of Engineers Operations and Maintenance account by $432 million.  This is annually one of the most heavily earmarked areas of the federal budget.  Since FY 1996, members of Congress have added 256 earmarks costing $374.5 million to this account.

By continuing to utilize budgetary gimmicks and fully funding underperforming programs, the budget failed to break with tradition.  Maybe this year, Congress will agree to salvage the budget and save the country from wasting tens of billions of dollars, but no one should count on that to happen.

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