Boosting the defense budget through the back door.

Military analysis.
Feb. 20 2008 5:02 PM

This Is Not an Emergency

Supplemental war funds are a backdoor way to boost the defense budget.

A U.S. soldier in Baghdad. Click image to expand.
A U.S. soldier in Baghdad

Over the past six years, the Pentagon has requested $778.6 billion in "emergency war funds," in addition (as a "supplemental") to its ever-growing annual budget. Congress tends to approve this request, with almost no scrutiny, for fear of holding up the urgent needs of our troops.

However, a close look at the fiscal year 2008 supplemental—totaling $189.3 billion, by far the largest to date—reveals that a large part of it (how much is unclear but certainly tens of billions of dollars) has little to do with the wars in Iraq and Afghanistan. Or, in some cases, it is related to the wars, but the equipment being requested won't be delivered for years. It is, in other words, not an "emergency"; it could just as suitably be requested in the normal budget process.

This is not a trivial matter. The annual budget resolution is subject to ceilings, imposed both by the White House's Office of Management and Budget and by the Congress. The ceilings aren't as strict as they once were, nor is the oversight of individual programs as fastidious. Still, there are limits. The supplemental requests fall outside the scope of these limits. So if huge chunks of these supplementals have nothing to do with the war or aren't needed right away, this means the defense budget is being expanded through the back door—not just for this year, but as a base line for many years to come.

The emergency war fund has risen sharply over the last two years—from $124 billion for fiscal year 2006 to $171.3 billion for FY07 to $189.3 billion for FY08. (Along with the FY09 budget, which was submitted earlier this month, the Pentagon attached an additional $70 billion supplemental as a "place holder"—no details as yet.) Some sources of this spike are clear: the troop surge, rising fuel prices, the growing need for "force protection" gear in the face of more sophisticated roadside bombs.

But, according to a report by Amy Belasco, a defense budget analyst at the nonpartisan Congressional Research Service, "the single largest factor" in this increase is a change in the way the Pentagon defines "war-related expenses."

Supplementals are necessary in wartime. When the Pentagon puts together a budget request for the next fiscal year, its managers can't predict how much the war will require by the time the budget goes into effect. The point of a supplemental is to fill the gap—the unforeseen expenses—that emerge in the meantime.

From the start of the wars in Afghanistan and Iraq, the Bush administration did something that previous war presidents had not done: It declared that all war costs would be funded through supplementals. That was unusual enough, but no official or lawmaker dissented.

However, in the fall of 2006, the Bush administration went a step further. Before then, contingencies—such as those requiring supplementals—were defined as incremental costs "that would not have been incurred had the contingency operation [in this case, the wars in Iraq and Afghanistan] not been supported." The regulation stated explicitly that a supplemental could contain funds to research, develop, or purchase weapons systems only if they were necessary to support a war "in that fiscal year."

On Oct. 25, 2006, Deputy Defense Secretary Gordon England issued a new rule, stating that a supplemental could include "incremental costs related to the longer war against terror (not just OEF/OIF)"—the initials standing for Operation Enduring Freedom (the war in Afghanistan) and Operation Iraqi Freedom (the war in Iraq). The phrase "the longer war against terror" was not defined. Theoretically, it could cover anything.

Under the old regulations, a supplemental could request funds to replace equipment and weapons systems that were destroyed or worn out during battle. However, England's new rule also allowed the military services to request money to "restore and enhance combat capability." They could restore and enhance not merely to prior combat capability, but to "desired combat capability," and this new standard could be applied not just to the ongoing war, but also to a unit's "future mission." (Italics added.) (For more details on this change, see these reports.)

This helps explain some mysterious items in the supplemental request for FY 2008. For instance:

  • $2.9 billion for research and development (by definition, not an urgent requirement since whatever's being researched and developed will not be produced, much less deployed, for years)
  • $1.96 billion for the military services' revolving and management funds and $1.1 billion for pre-positioned war reserve stocks (these items, as their names suggest, are reserve funds—backups, not front-line items needed right away)
  • $16.8 billion for MRAP mine-resistant troop-carrying vehicles (very much needed in Iraq and Afghanistan—and kudos to Defense Secretary Robert Gates for pushing them through, over some Army resistance—but it will take a few years of production to spend all this money; it's a new program with little oversight as yet; does it all need to go into an emergency war supplemental now?)
  • $389 million for a new F-35 stealth fighter jet (more advanced and expensive than the F-16 it's replacing and impossible to deliver for another three years)
  • $3.9 billion for Navy aircraft procurement, including $768 million for 13 F/A-18 fighter-attack planes (are these planes really needed for Iraq and Afghanistan?)

The Congressional Budget Office estimates that, to date, $14 billion of the Army's supplemental requests have been allocated not to repairing or replacing weapons systems but to upgrading them or to buying new equipment to fill long-standing shortfalls or to replace stocks for long-term storage. *

Another curious item is $5.44 billion for basic military pay. (This is in addition to several billion for "special pay," "incentive programs," and other categories related to combat compensation.) When Donald Rumsfeld was defense secretary, this item was justified on the grounds that more troops were recruited to fight the war in Iraq; their basic pay—along with other monetary inducements—was regarded as appropriate for a supplemental because it was a temporary expense related to the war. However, Secretary Gates has now called for the recruitment of 65,000 more soldiers and 27,000 Marines as a permanent part of the U.S. military. The expense is not temporary. It should be a part of the regular budget. And its placement in this year's supplemental only means that the following years' budgets are going to be still bigger, in order to support these extra troops after—or perhaps a better term is if—the war is over.

Does any of this matter? None of this money has been shuffled surreptitiously. The budget documents are, for the most part, unclassified. The relevant congressional committees have examined them. Even Deputy Secretary England's memo, changing the definition of "war-related items," was circulated widely and openly (even if it was barely reported in the press). And, one could argue, putting nonurgent items in the supplemental doesn't constitute an evasion of congressional oversight since Congress these days barely exercises oversight of the regular defense budget.

But the practice does have a corrosive impact. It allows the military services to elude even minimal standards of discipline. Rather than set priorities and make choices between one program and another, or between short-term needs and long-term wishes, as all other federal agencies must do, the backdoor supplemental lets them have it all—including billions of dollars' worth that has nothing to do with an emergency, in some cases little to do with any wars.

Correction: Feb. 21, 2008: This story originally attributed a budget estimate to the Congressional Research Service's Amy Belasco. In fact, it is from a Congressional Budget Office report that Belasco quoted from. (Return to the corrected sentence.)