BUDGET BULLETIN: Defense Spending, BCA Caps and OCO Funding in FY 2016 Budget

WASHINGTON, DC – The Senate Budget Committee today released its June issue of the Budget Bulletin, focused on defense spending, the Budget Control Act and overseas contingency operations (OCO) funds. The Budget Bulletin provides regular expert articles by Senate Budget Committee analysts on the issues before Congress relating to the budget, deficits, debt, and the economy.

Read the full Senate Budget Bulletin here.

Excerpts follow:

The balanced budget resolution’s rationale for adhering to the BCA defense cap was simple and sound: A budget resolution cannot change the BCA. Only a law passed by Congress and signed by the president can modify the BCA caps. Furthermore, any resolution supporting spending in excess of statutory discretionary limits violates section 312(b) of the Congressional Budget Act of 1974, subjecting it to a 60-vote point of order in the Senate.

Instead, the budget resolution assumed defense-funding levels at BCA cap levels from 2016 through 2021. After 2016, the BCA caps allow discretionary defense spending to increase annually by an average of $13.4 billion, or 2.4 percent. Should Congress decide that this level of funding is insufficient, the resolution also provides deficit-neutral reserve funds (section 4302 in the Senate and section 4511 in the House) permitting increases in defense discretionary spending that are offset elsewhere in the budget. Applicable offsets vary by chamber.

Recognizing the need for increased defense spending during the remaining BCA years, the resolution assumes additional spending in the form of overseas contingency operations (OCO) funds. In 2016, OCO funding (including funding for international affairs programs) totals more than $96 billion, approximately $38 billion over the president’s request. When the resolution’s regular defense discretionary funding level ($523 billion) and defense-related OCO funding levels ($89 billion) are combined, they are in line with the administration’s request of $612 billion in total national security funding levels.

This OCO approach is fully compliant with the BCA and allowed under section 251(b)(2)(ii) of BBEDCA. Under the BBEDCA provision, Congress may designate any funding it sees fit for OCO purposes and adjust the spending caps accordingly. The president also must agree to the designation. Therefore, in past appropriations bills, funding with the OCO designation has become available after the president agrees to the designation.

In years past, these funds have been used for a wide variety of purposes. As the Congressional Research Service affirms, the president has signed defense spending bills with OCO provisions that do not spend only on “war-related” costs totaling billions of dollars each year.


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