The Enduring Dilemma of Overseas Contingency Operations Funding

The practice of using Overseas Contingency Operations (OCO) funding for base budget activities may become a significant issue in the new administration. Because OCO funding is intended for war-related activities that cannot be forecasted well in advance, it is not restricted by the Budget Control Act (BCA) budget caps. However, in recent years both Congress and the Obama administration have moved items from the base budget to the OCO budget as a way of circumventing the BCA budget caps. Roughly half of the OCO budget ($30 billion) is now being used for programs and activities that were previously funded in the base budget. In May, Representative Mick Mulvaney co-sponsored an amendment to the National Defense Authorization Act (NDAA) that would have restricted the use of OCO funding for base budget activities, effectively ending this loophole.[1] While this amendment did not pass, the issue is not likely to go away now that Rep. Mulvaney has been nominated by President-elect Trump to be the Director of the Office of Management and Budget (OMB).

Roughly half of the OCO budget ($30 billion) is now being used for programs and activities that were previously funded in the base budget.

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