Taxpayers for Common Sense,
The Pentagon’s latest sob story about having to borrow from its main budget in order to pay for the Iraq war may sound dramatic. But this Chicken Little approach to war budgeting is less about congressional gridlock than it is about an archaic Pentagon accounting system in dire need of reform.
The Defense Department (DOD) wants Congress to approve $10 billion in transfers from the Navy, Air Force, and other accounts, to the Army, or else, officials claim, the Army won’t be able to run war operations past mid-June. The extra money will allow operations to continue until July, by which time Congress should have passed the next $165 billion installment to pay for our presence in Iraq and Afghanistan. That bill is currently awaiting action by the House of Representatives, but has been tied up in a fight over unemployment benefits and other domestic spending add-ons.
These budgetary maneuvers further obscure how much of DOD’s budget goes toward war spending. Rather than including war expenses in the base DOD budget, the administration and Congress have been funding the war on terror largely through off-budget emergency spending bills. However, under DOD’s accounting system, money appropriated through emergency spending and annual appropriations bills are combined in the same budget accounts. This means that the $17 billion in the current bill for Army war-related operations and maintenance (also known as the O&M budget, which funds day-to-day needs such as transportation and equipment) will just be added to the $140 billion pot of regular O&M funding the Army received in this year’s defense spending bill.
The commingling of funds makes it virtually impossible to track war spending. When the Army writes a check for a vehicle maintenance contract out of the O&M account, there’s no way to know whether the money comes out of funds appropriated for war or regular domestic activities. Congress demanded that DOD report how much money is truly spent on the “Global War on Terror,” but the Pentagon’s famously decrepit accounting system gets them off the hook. One senior official from the DOD accounting service told a reporter that the figures provided Congress are just guesswork.
The Congressional Research Service (CRS), an independent research agency for Congress, has recommended that the Pentagon establish separate appropriation accounts for war funding to increase transparency and accuracy. The likelihood of that happening is slim to none as the Pentagon believes it would limit its “flexibility.” But the Pentagon already has significant latitude in how it spends money in war-related accounts like military personnel and O&M. Plus, Congress has helped DOD set up several special accounts to fund the war, such as the Defense Emergency Response Fund, and raised the amount of transfer authority in the annual spending bills.
Using emergency spending bills to dribble out money over the course of a five-year-long conflict only helps obscure the true cost of war. But the larger and more troubling issue is DOD’s funhouse mirror accounting: The Pentagon has shown neither the ability nor incentive to clean its fiscal house, and the agency has yet to pass an audit, 18 years after Congress demanded it. The stresses of war just remind us how this chronic disease constantly undermines our fiscal and national security.
