Spending Focus

The National Commission on Fiscal Responsibility and Reform, whose final report was released this morning, has some interesting defense-related recommendations. One of them deals with requiring the president "to propose annual limits for war spending." Specifically, the administration should:

Create a separate category for Overseas Contingency Operations (OCO).

Discretionary spending constraints must not ignore spending for the conflicts in Iraq and Afghanistan and other future conflicts. At the same time, budget rules should not determine war policy. In order to balance these competing goals, the Commission chose as a starting point the more gradual of CBO’s troop drawdown scenario, while providing the President and Congress with an opportunity to adjust the path to more accurately track with actual projections of OCO spending needs.

Spending for OCO would not count against the general security spending cap, but would constitute a separate category subject to a dollar limit of its own. The Commission proposes establishing limits on OCO spending based on CBO’s projection for a reduction of troop levels to 60,000 by 2015. In his FY 2012 budget, the President may propose adjustments to the limits on OCO spending to reflect the administration’s projections for the costs of current war policy. Any spending above the OCO limit must be either offset or subject to a 60-vote point of order (and all other requirements established for regular emergency spending).

OCO funds would be limited to spending that meets the OMB criteria for OCO designation. Under these criteria funding for OCO could only be used in geographic areas in which combat or direct combat support operations occur, and would generally be limited to: 1) Operations and maintenance for the transport of personnel, equipment, and supplies to, from and within the theater of operations; deployment-specific training and preparation for units and personnel to assume their directed mission; and the incremental costs above the funding programmed in the base budget to build and maintain temporary facilities; provide food, fuel, supplies, contracted services and other support; and cover the operational costs of coalition partners supporting US military missions; 2) Military personnel spending for incremental special pays and allowances for Service members and civilians deployed to a combat zone; and incremental pay, special pays and allowances for Reserve Component personnel mobilized to support war missions; 3) Procurement costs to replace losses that have occurred, but only for items not already programmed for replacement in the Future Years Defense Plan; 4) Military construction spending for facilities and infrastructure in the theater of operations in direct support of combat operations; and 5) Research and development projects required for combat operations in these specific theaters that can be delivered in 12 months.

Another recommendation calls for the White House to "unleash agencies to begin identifying savings." Specifically:

Every federal agency will need to do its part to live within tough spending caps. The Commission recommends that as part of their annual budget submissions and Congressional Budget Justifications, all agency heads should be required to identify a share of their budget recommended for cancellation and to identify ways to shift from inefficient, unproductive spending to productive, results-based investment. As a tool to improve productivity, agencies should be given a two-year window to conduct employee buyouts, and expanded latitude for personnel realignment. Congress should also consider a "BRAC commission" for terminating major weapons systems, appointed and headed by the Secretary of Defense, for trimming redundant or ineffective weapons from the Defense Department’s inventory.