Senators spar with Shanahan over $98 billion 'slush fund'

Senators from both parties took aim at a Trump administration plan to dramatically increase the  overseas contingency operations budget as a workaround to the caps in the Budget Control Act.

Sen. Jack Reed (D-R.I.), ranking member of the Senate Armed Services Committee, said at a March 14 hearing that the OCO budget request was "a gimmick" and that "overloading the OCO request at $97.9 billion worth of activity that truly belong in the base budget ... far exceeds any precedent, and it cannot be justified."

The administration's budget request of $750 billion in overall defense spending includes $174 billion in OCO funds -- about $100 billion more than was appropriated in 2019. OCO spending is carved out of the mandatory spending caps in the Budget Control Act and allows the military to ramp up spending in wartime.

The administration wants to use about $9.2 billion of the OCO funding for the border wall and disaster funding and about $98 billion -- the figure Reed referenced in his statement -- for base budgetary requirements. About $66 billion will go to "direct war and enduring requirements," acting Defense Secretary Patrick Shanahan said.

The fact that the funding for the border wall project is included in the request also presents political hurdles, which Reed alluded to in a question to DOD Comptroller David Norquist.

"You're asking us literally to authorize funding for the wall?" Reed asked.

"Yes," Norquist answered.

Sen. Elizabeth Warren (D-Mass.) called the OCO increase a "slush fund."

Warren said, "You're asking [for at least] $98 billion for things that have nothing to do with contingency operations, and I'm not quite sure why you can't say that," she said.

Shanahan confirmed that war activities had not increased, but he said that the request for the top-line $750 billion budget were justified. DOD, he said, "want[s] to work with this committee to get the appropriation and authorizations proper."

Sen. Tom Cotton (R-Ark.) said the request was "obviously is a big patch to try to get around the Budget Control Act" and was concerned it foretold a return to continuous resolutions.

Cotton asked Shanahan whether if Congress could come to a deal on budget caps, having the OCO increase in the base budget would be better for DOD.

"It would be much better off," Shanahan said.