Facts About Supplemental Spending for Non-Emergency Pentagon Programs
Press Release
Washington D.C. – The Administration’s $81 billion request for supplemental funding for the wars in Iraq and Afghanistan is poor budgetary practice that obscures the Pentagon’s true fiscal picture and erodes Congress’s oversight capabilities, according to the Center for Arms Control and Non-Proliferation, a Pentagon watch-dog group.
“The Pentagon has padded this budget with tens of billions of dollars not related to combat operations in Iraq and Afghanistan,” said Christopher Hellman, military policy analyst at the Center. “It is a fiscal slight-of-hand that Congress ought to reject.”
Traditionally, supplemental spending requests have funded unanticipated emergency needs that the normal annual federal budget process cannot accommodate. But the Administration’s request today includes billions for Army modernization programs, day-to-day Pentagon operations, weapons purchases and additional troops that should be funded through its annual budget.
Supplemental spending requests also lack the usual detail used to justify the federal government’s annual budget request, making accounting more difficult. Moreover, supplemental funding is left out of the deficit projections that accompany the annual budget.
“This method of budgeting hides the true size of the deficit, and it makes it extremely difficult for Congress to track how these funds are being allocated,” said Hellman. “Members of Congress should insist on better Pentagon budgeting practices and not simply sign a blank check.”
“When asked recently if the Pentagon was using the supplemental to fund non-combat requirements, Defense Secretary Rumsfeld said, ‘that would be wrong, and we wouldn’t do that.’ Well, it is wrong, and they are doing it,” concluded Hellman.
Fact Sheet
Numbers Don’t Lie: The “Smoking Gun” – The Pentagon’s costs for military operations in Iraq and Afghanistan have been relatively stable for the last two fiscal years — $64 billion in FY’03 and $66 billion in FY’04. Further, the Pentagon estimates that it is currently spending roughly $5.6 billion monthly to fund operations in Iraq and Afghanistan, or about $67 billion annually. Yet including the $25 billion in supplemental funding already appropriated for FY’05, the total request for FY’05 is over $100 billion, or roughly $35 billion above previous levels, for a force that’s basically the same size. While some additional spending is to be expected due to such factors as higher personnel costs for greater numbers of guard and reserve units and higher operations and maintenance costs for aging equipment, such increases can’t account for all $35 billion.
The Military Admits It – The military admits that it is funding non-emergency programs through the supplemental. For example, in his recent testimony before the Senate Armed Services Committee, Chief of Staff of the Army General Peter Schoomaker, when asked why the Army was funding its 30,000 in additional troops outside the annual budget, replied that given their choice they would prefer to fund it through supplemental appropriations. According to Gen. Schoomaker, if the Army opted to fund the additional manpower through the annual budget, it “would have to displace other things that are too important to us as we transform — equipment and other readiness issues. So the department has elected to do it with supplemental funding since we have the options to do so.”
A Pentagon “Blank Check…” – Unlike the annual budget request, supplemental spending requests arrive with little detail about how the money will actually be allocated. The services argue that emergency funding requests are by necessity vague because they need maximum flexibility to meet as-yet undefined requirements. Yet there is a fine line between “flexibility” and “carte blanche.” One example of the traditional lack of detail in supplemental spending requests is the Administration’s May 12, 2004 submission for $25 billion in initial supplemental funding for FY’05. The request consists of four pages, three of which are cover sheets. The Navy’s $1 billion request for Operations and Maintenance funding consists of a single line of text. The Navy’s $28.9 billion O&M request included in the Pentagon’s FY’05 annual submission is accompanied by budget justification documents totaling 798 pages.
…Leads to Lack of Congressional Oversight – As Senator John McCain (R-AZ) pointed out during the Senate Armed Services committee’s hearings on the budget request last week, this practice of funding non-emergency initiatives though supplemental spending legislation erodes Congress’s oversight ability. According to Sen. McCain, this practice “removes from our oversight responsibilities the scrutiny that these programs deserve.”
Hides the True Size of the Deficit — As part of the Administration’s budget request for FY’06, the Office of Management and Budget’s (OMB) most recent deficit estimate for FY’05 is $427 billion. Yet this figure does not include the costs of the full FY’05 supplemental request. A Defense News editorial speculated whether “the White House using the supplemental as a thinly veiled political attempt to keep the public from lapsing into sticker shock, and so, losing support for the war.” [“Budget Tricks,” Defense News, February 14, 2005]
Unfunded Initiatives
The following non-emergency programs are not funded in the FY’06 annual Pentagon request, and instead will be paid for via supplemental spending:
The Army’s “Top-Line” Budget – The Army is requesting $100 billion in total spending for FY’06, $300 million below the FY’05 anticipated levels. Not only does this request not keep place with inflation, it represents an actually reduction in spending. Meanwhile, the FY’06 requests for the other services are above current expected levels. The Navy/Marine Corps are requesting a 5.4 percent increase, while the Air Force is requesting an 8.2 percent increase.
The Army’s Operations & Maintenance Account – Based on previous years, the Army’s O&M request for FY’06 is woefully underfunded, and its clear that this funding is moving into the annual supplemental request. According to the Pentagon, the Army spent $62.4 billion on O&M in FY’04, is estimating O&M spending of $45.4 billion in FY’05, and is requesting only $31.8 billion in FY’06. If these figures are accurate, then Army O&M spending has declined by roughly 50 percent in the space of two years for a military that’s the same size and actively engaged in combat operations in Iraq, Afghanistan, and other regions of the world.
Army Modularity – As part of its efforts to increase the number and deployability of the Army’s combat brigades, the Pentagon has begun the Army’s Modularity Program. In late December 2004, the Pentagon previewed its budget request by leaking to the media its “Program Budget Directive No. 753,” (PBD 753). PBD 753 funds the Army’s Modularity Program through the annual defense bill starting in FY’07, and includes $5 billion for the program each year in FY’07-FY’11. The FY’06 request contains no funding for the program, and PDB specifies that the Army is to “submit its Modularity requirements for FY 2005 and FY 2006 in supplemental requests.”
Troop Increases – The Army’s FY’06 budget request does not include funding for its 30,000- troop increase, nor does the Marine Corps request include funding for a 3,000-troop increase. Total estimated cost for the additional forces is $3.5 billion.
Predator UAVs – According to Air Force Chief of Staff General John Jumper, in his recent testimony before the Senate Armed Services Committee, the Air Force will purchase 22 Predator Unmanned Aerial Vehicles in FY’05, and “we’re going to tell [the Predator’s manufacturer] General Atomic to build every Predator they can possibly build.” Gen. Jumper expects the Air Force to buy “at least that number” in FY’06, yet their budget request funds only nine Predator UAVs.