HASC Finds $5 Billion Fix For Sequester Damage, But It Won’t Matter

CAPITOL HILL: Like water rushing downhill, flowing over or around or through every obstacle in its path, money in Washington will find a way. Today’s example is the newly released House Armed Services Committee’s “mark up” of the 2014 national defense authorization act.

Striving to address shortfalls in military readiness created by this year’s hasty and inefficient sequestration cuts, which are undermining everything from buying fighter aircraft to stopping drug shipments, cunning congressional staffers found over $5 billion above and beyond what was in the Pentagon’s budget request. In a particularly nifty trick, that extra money would even count as supplemental spending, which is outside the sequester. (Specifically, it would be part of the sequester-exempt “overseas contingency operations” (OCO) fund that the House set at $85.5 billion for 2014. The base Defense Department budget is set at $552.1 billion, which sequester does affect.)

Even in the Pentagon, $5 billion would go a long way to undo this year’s damage to the Army, the Air Force, the Navy and Marines — except that all this money is pretty much fool’s gold. Just like the president’s budget request and the budget resolutions passed by both the House and Senate, the HASC mark effectively ignores the fact that the sequestration cuts will continue in 2014 (and for the next eight years) as well, taking away more money than the mark managed to add — unless Congress and the White House can finally agree on a “grand bargain” to change the law.

“He’s obligated to mark to the House budget,” said an aide to House Armed Services chairman Buck McKeon, briefing reporters this morning. As powerful as the chair of HASC can be — especially since it’s the last committee left in the House that actually passes its annual authorization bill — McKeon can’t set his own, more realistic funding levels that disagree with the budget written by the House leadership and passed by his colleagues, even though that budget ignores the $52 billion elephant in the room. The fact that everyone — House, Senate and the president — is using the same sequester-not-included numbers doesn’t make them any less fictional. (To congressional Republicans’ credit, the House budget does attempt to reflect sequester by setting total discretionary spending at $966 billion, but it protects defense spending at the expense of non-defense in a way Democrats will never accept).

“It’s not the defense hawks operating in fantasy land,” insisted another senior committee aide. “This is everyone’s serious attempt to be where we need to be, and sequester has to be dealt with when we get there.”

Wait a minute: Didn’t we already get there? Isn’t that what happened on March 1st when sequestration’s automatic cuts began to take effect?

“The debt ceiling will be the forcing function” to bring both sides to an agreement, the aide replied.

Of course, we’ve tried that already, too. It was congressional Republicans’ willingness to deny what had been routine increases to the debt ceiling — raising the risk of the US defaulting on its debts for the first time in history — that led the White House to propose sequestration, which became law in the compromise known as  2011 Budget Control Act and has bedeviled us ever since. The last debt ceiling deadline only managed to force a partial, stopgap compromise on New Year’s Day. The idea that the next deadline, expected sometime in September, will finally force both parties to fix this mess is more than a little optimistic — insanity is trying the same thing over and over and expecting different results — but it’s what at least some Republicans are thinking.

The other thin reed HASC Republicans are clutching is the idea that the American people will demand a sequestration solution once they realize how it’s hurting the troops. “Our military commanders need to be honest with the American public [by saying] we can’t train X number of people this year,” said another aide. “If the commanders would step forward and say, we’re not going to do this mission” — for example, flying fighter patrols over the US to prevent a repeat of the 9/11 attacks — “perhaps people will pay attention to that.”

So far, however, delays at airports have led to more voter outrage — and to congressional action exempting flight controllers from the sequester — than have reports of fighter pilots and foot soldiers unable to train for life-and-death situations.

The HASC mark’s attempt to remedy this readiness shortfall is ingenious and takes advantage of the very procedural dysfunctions it’s trying to make up for. Because of the uncertainty over sequestration, the administration submitted the president’s budget request for 2014 months late. Instead of waiting, the House went ahead and passed its own budget, which included an $85.8 billion placeholder for supplemental funding for the Afghan war and related activities, what’s called “overseas contingency operations” (OCO) funding. The administration budget, when it came out, had its own, slightly higher placeholder, $88.5 billion. But the actual OCO request from late May was only $79.4 billion. The request also asked for $1.3 billion in so-called “prior year rescissions” (in effect, using money authorized in past years but not yet spent) that HASC’s rules don’t let them count, but still the total bill came to only $80.7 billion instead of the $85.8 the House had set aside.

So HASC staff suddenly had over $5 billion to play with — the discrepancy between what the House budget had allowed them for OCO and what the administration asked for. Best of all, OCO money doesn’t count against the sequestration caps. (If you add $1 to the base budget, sequester simply takes another $1 away, netting you zero; if you add $1 billion to OCO, sequester lets you keep it). $4.5 billion of that money they put to fixing shortfalls in operations and maintenance accounts, another half-billion to procurement.

Of course, unless the law is changed, which looks unlikely, sequestration will bash the base budget down to lower levels than assumed by the HASC mark (and by the presidential, House, and Senate budgets). So the net effect is more money will be taken away than HASC managed to add, and readiness problems will just get worse — unless Congress votes to plus up OCO even further to compensate, which we haven’t heard anyone proposing. Yet.

 

Edited 4:25 pm for clarity.