Contents

• Introduction
• Background
• Increase in War-Related Appropriations after 9/11
• Shift from Emergency Supplementals to Contingency Funding
• OCO and the Budget Control Act (BCA)
• OCO/GWOT Appropriations by Agency, FY2001-FY2019
• Department of Defense
• Department of State/U.S. Agency for International Development
• Department of Homeland Security/U.S. Coast Guard
• FY2020 OCO Funding
• President's FY2020 OCO Request
• Selected Legislation in the 116^th Congress
• Issues for Congress
• Will Congress Continue to Use OCO?
• How Much OCO Funding Could Shift to Base Budget?
• How Does OCO Funding Affect Defense Planning?

Summary

Congressional interest in Overseas Contingency Operation (OCO) funding has continued as Members debate ways of funding priorities without breaching discretionary spending limits set in law.

Since the terrorist attacks of September 11, 2001, Congress has appropriated $2 trillion in discretionary budget authority designated as emergency requirements or for Overseas Contingency Operations/Global War on Terrorism (OCO/GWOT) in support of the broad U.S. government response to the 9/11 attacks and for other related international affairs activities. This figure amounts to 9.5% of total discretionary spending during this period.

Congress has used supplemental appropriation acts or designated funding for emergency requirements or OCO/GWOT—or both. These funds are not subject to limits on discretionary spending set forth in congressional budget resolutions or to the statutory discretionary spending limits established by the Budget Control Act of 2011 (BCA; P.L. 112-125). The Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177) allows emergency funding to be excluded from budget control limits. The BCA added the OCO/GWOT designation to the BBEDCA exemption, thereby providing Congress and the President with an alternate way to exclude funding from the BCA spending limits.

While there is no overall statutory limit on the amount of emergency or OCO/GWOT spending, both Congress and the President have fundamental roles in determining how much of the spending to provide each fiscal year. Congress must designate any such funding in statute on an account-by-account basis. The President is also required to designate it as such after it is appropriated to be available for expenditure. Debate over what should constitute OCO/GWOT or emergency activities and expenses has shifted over time, reflecting differing viewpoints about the extent, nature, and duration of U.S. military operations in Afghanistan, Iraq, Syria, and elsewhere. Funding designated for OCO/GWOT has also been used to fund base-budget requirements of the Departments of Defense and State, and the U.S. Agency for International Development (USAID), and to prevent or respond to crises abroad, including armed conflict, as well as human-caused and natural disasters.

Some defense officials and policymakers argue OCO funding allows for flexible response to contingencies, and provides a "safety valve" to the spending caps and threat of sequestration—the automatic cancellation of budget authority largely through across-the-board reductions of nonexempt programs and activities—under the BCA. Critics, on the other hand, have described OCO/GWOT as a loophole or "gimmick"—morphing from an account for replacing combat losses of equipment, resupplying expended munitions, and transporting troops through war zones, to a "slush fund" for activities unrelated to contingency operations.

Congress appropriated $77 billion for OCO in FY2019, amounting to 5.6% of all discretionary appropriations.

In the 116^th Congress, the Bipartisan Budget Act of 2019 (BBA 2019; P.L. 116-37) raised discretionary budget caps for defense and foreign affairs agencies in FY2020 and FY2021. BBA 2019 also specified OCO/GWOT funding targets for the next two fiscal years. Defense OCO/GWOT targets were set at $71.5 billion for FY2020 and $69 billion for FY2021. Nondefense OCO/GWOT targets were set at $8 billion for both FY2020 and FY2021. Congress's decisions on OCO/GWOT designations will affect how much agency funding is available for military operations and foreign affairs activities overseas, how much is subject to the BCA caps, and how much is incorporated into regular budgets and long-term budget projections.

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Introduction

This report provides background information and potential oversight issues for Congress on war-related and other international emergency or contingency-designated funding since FY2001.

Since the terrorist attacks of September 11, 2001, Congress has appropriated $2 trillion in discretionary budget authority designated for emergencies or Overseas Contingency Operations/Global War on Terrorism (OCO/GWOT) in support of the broad U.S. government response to the 9/11 attacks and for other related international affairs activities.¹ This figure includes $1.8 trillion for the Department of Defense (DOD), $162 billion for the Department of State and U.S. Agency for International Development (USAID), and $3 billion for the Department of Homeland Security (DHS) and Coast Guard (see Figure 1).²

This CRS report is meant to serve as a reference on certain funding designated as emergency requirements or for OCO/GWOT, as well as related budgetary and policy issues. It does not provide an estimate of war costs within the OCO/GWOT account (all of which may not be for activities associated with war or defense) or such costs in the DOD base budget or other agency funding (which may be related to war activities, such as the cost of health care for combat veterans).

For additional information on the FY2019 budget and related issues, see CRS Report R45202, The Federal Budget: Overview and Issues for FY2019 and Beyond, by Grant A. Driessen; CRS Report R45816, FY2019 National Defense Authorization Act (H.R. 5515), by Brendan W. McGarry and Pat Towell; and CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations, by Susan B. Epstein, Marian L. Lawson, and Cory R. Gill.

For additional information on the Budget Control Act as amended, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions, by Grant A. Driessen and Megan S. Lynch, and CRS Report R44039, The Defense Budget and the Budget Control Act: Frequently Asked Questions, by Brendan W. McGarry.

For additional information on U.S. policy in Afghanistan and the Middle East, see CRS Report R45122, Afghanistan: Background and U.S. Policy In Brief, by Clayton Thomas; CRS Report R45096, Iraq: Issues in the 115th Congress, by Christopher M. Blanchard; and CRS Report RL33487, Armed Conflict in Syria: Overview and U.S. Response, coordinated by Carla E. Humud.

Figure 1. Emergency and OCO/GWOT Discretionary Budget Authority, FY2001-FY2019, by Agency (in billions of dollars)

Source: CRS analysis of Department of Defense, Office of the Under Secretary of Defense (Comptroller), National Defense Budget Estimates for FY2020, Table 2-1: Base Budget, War Funding and Supplementals by Military Department, by P.L. Title (FY2001-FY2019), May 2019; Department of State, Foreign Operations and Related Programs Congressional Budget Justifications, FY2001-FY2019; Department of Homeland Security, Budget in Brief documents, FY2001-FY2019; P.L. 115-244, P.L. 115-245, and P.L. 116-6. Notes: Figures in nominal, or current, dollars (not adjusted for inflation). Totals may not sum due to rounding. DHS/USCG figures do not include funding redirected from P.L. 107-38. Figures do not include funding for domestic programs, or other agency funding identified for OCO/GWOT or related purposes amounting to less than 1% of the total.

Background

Increase in War-Related Appropriations after 9/11

Congress may consider one or more supplemental appropriations bills (sometimes called supplementals) for a fiscal year to provide funding for unforeseen needs (such as a response to a national security threat or a natural disaster), or to increase appropriations for other activities that have already been funded.³ Supplemental appropriations measures generally provide additional funding for selected activities over and above the amount provided through annual or continuing appropriations.⁴

Throughout the 20^th century, Congress relied on supplemental appropriations to fund war-related activities, particularly in the period immediately following the start of hostilities. For example, in 1951, a year after the start of the Korean War, Congress approved DOD supplemental appropriations totaling $32.8 billion ($271 billion in constant FY2019 dollars). In 1952, DOD supplemental appropriations totaled just $1.4 billion ($11 billion in constant FY2019 dollars), as the base budget incorporated costs related to the war effort. A similar pattern occurred, to varying degrees, during the Vietnam War and 1990-1991 Gulf War.⁵

During the post-9/11 conflicts, primarily conducted in Afghanistan and Iraq but also in other countries, Congress has, for an extended period and to a much greater degree than in previous conflicts in the 20^th century, appropriated supplemental and specially designated funding over and above the base DOD budget—that is, funding for planned or regularly occurring costs to man, train, and equip the military force. Since FY2001, DOD funding designated for OCO/GWOT has averaged 17% of the department's total budget authority (see Figure 2). By comparison, during the conflict in Vietnam—the only other to last more than a decade—DOD funding designated for non-base activities averaged 6% of the department's total budget authority.⁶

Supplemental appropriations can provide flexibility for policymakers to address demands that arise after funding has been appropriated. However, that flexibility has caused some to question whether supplementals should only be used to respond to unforeseen events, or whether they should also provide funding for activities that could reasonably be covered in regular appropriations acts.⁷

Shift from Emergency Supplementals to Contingency Funding

Congress used supplemental appropriations to provide funds for defense and foreign affairs activities related to operations in Afghanistan and Iraq following 9/11, and each subsequent fiscal year through FY2010. Initially understood as reflecting needs that were not anticipated during the regular appropriations cycle, supplemental appropriations were generally enacted as requested, and almost always designated as emergency requirements.

Figure 2. DOD Budget Authority: A Historical Perspective (in billions of constant FY2019 dollars)

Sources: CRS analysis of Department of Defense, Office of the Under Secretary of Defense (Comptroller), National Defense Budget Estimates for FY2020, Table 6-8: DOD Budget Authority by Public Law Title (FY1948-FY2024), Table 2-1: Base Budget, War Funding and Supplementals by Military Department, by P.L. Title (FY2001-FY2020), May 2019; Department of Defense, FAD-809 table, January 1978; Congressional Budget Office, Supplemental appropriations reports from the 1970s-2000s; Office of Management and Budget, Historical Tables, Table 10.1-Gross Domestic Product and Deflators Used in the Historical Tables: 1940–2024. Notes: 1950-2019 nominal DOD funding from DOD Table 6-8; 1950-1977 nominal DOD non-base funding from DOD FAD-809 table; 1978-2000 nominal DOD non-base funding from CRS research; 2001-2019 nominal DOD non-base funding from DOD Table 2-1; nominal figures adjusted to constant FY2019 dollars using calculations based deflators in OMB Table 10.1. In addition to OCO/GWOT funding, non-base figures since FY2001 include appropriations for hurricane relief, avian flu and Ebola assistance, Iron Dome, missile defeat, and other purposes.

Beginning in FY2004, DOD received some of its war-related funding in its regular annual appropriations; these funds were designated as emergency. When funding needs for war and non-war-related activities were higher than anticipated, the Bush Administration submitted supplemental requests.⁸

In the FY2011 appropriations cycle, the Obama Administration moved away from submitting supplemental appropriations requests to Congress for war-related activities and used the regular budget and appropriation process to fund operations. This approach implied that while the funds might be war-related, they largely supported predictable ongoing activities rather than unanticipated needs. In concert with this change in budgetary approach, the Obama Administration began formally using the term Overseas Contingency Operations in place of the Bush Administration's term Global War on Terror.⁹ Both the Obama and Trump Administrations requested that OCO funding be designated in a manner that would effectively exempt such funding from the BCA limits on discretionary defense spending.

Currently, there is no overall procedural or statutory limit on the amount of emergency or OCO/GWOT-designated spending that may be appropriated on an annual basis. Both Congress and the President have roles in determining how much emergency or OCO/GWOT spending is provided to federal agencies each fiscal year. Such spending must be designated as such within the President's budget request for congressional consideration. The President must separately designate the spending after Congress enacts appropriations for it to be available for expenditure.¹⁰

Designation of Funding as Emergency or OCO/GWOT

The emergency funding designation predated the OCO/GWOT designation. Through definitions statutorily established by the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177), spending designated as emergency requirements is for "unanticipated" purposes, such as those that are "sudden ... urgent ... unforeseen ... and temporary."¹¹ The BBEDCA does not further specify the types of activities that are eligible for that designation. Thus, any discretionary funding designated by Congress and the President for an emergency is effectively exempted from certain statutory and procedural budget enforcement mechanisms, such as the BCA limits on discretionary spending.¹²

Debate of what should constitute OCO/GWOT or emergency activities and expenses has shifted over time, reflecting differing viewpoints about the extent, nature, and duration of U.S. military operations in Afghanistan, Iraq, Syria, and elsewhere. Over the years, both Congress and the President have at times adopted more, and at times less, expansive definitions of such designations to accommodate the strategic, budgetary, and political needs of the moment.

Prior to February 2009, U.S. operations in response to the 9/11 attacks were collectively referred to as the Global War on Terror, or GWOT. Between September 2001 and February 2009, there was no separate budgetary designation for GWOT funds—instead, funding associated with those operations was designated as an emergency requirement.

The term OCO was not applied to the post-9/11 military operations in Iraq and Afghanistan until 2009. In February 2009, the Obama Administration released a presidential fiscal policy document.¹³ That document did not mention or reference GWOT; instead, it used the term OCO in reference to ongoing military operations in Iraq and Afghanistan. The first request for emergency funding for OCO—not GWOT—was delivered to Congress in April 2009.¹⁴ Since the FY2010 budget cycle, DOD has requested both base budget and OCO funding as part of its annual budget submission to Congress.¹⁵

Beginning with the National Defense Authorization Act for Fiscal Year 2010 (NDAA; P.L. 111-84), the annual defense authorization bills have referenced the authorization of additional appropriations for OCO rather than the names of U.S. military operations conducted primarily in Afghanistan and Iraq.¹⁶ In 2011, the BCA (P.L. 112-125) amended the BBEDCA to create the Overseas Contingency Operations/Global War on Terrorism designation, which provided Congress and the President with an alternate way to exempt funding from the BCA caps without using the emergency designation.¹⁷ Beginning with the Consolidated Appropriations Act, 2012 (P.L. 112-74), annual appropriations bills have referenced the OCO/GWOT designation.¹⁸

The foreign affairs agencies began formally requesting OCO/GWOT funding in FY2012, distinguishing between what is referred to as enduring, ongoing or base costs versus any extraordinary, temporary costs of the State Department and USAID in supporting ongoing U.S. operations and policies in Iraq, Afghanistan, and Pakistan.¹⁹ Congress, having used OCO/GWOT exemption for DOD, adopted this approach for foreign affairs, though its uses for State, Foreign Operations, and Related Programs (SFOPS) activities have never been permanently defined in statute. For the first foreign affairs OCO/GWOT appropriation, in FY2012, funds were provided for a wide range of recipient countries beyond the countries in the President's request, including Yemen, Somalia, Kenya, and the Philippines. In addition to country-specific uses, OCO/GWOT-designated funds were also appropriated for the Global Security Contingency Fund.²⁰

OCO and the Budget Control Act (BCA)

All budgetary legislation is subject to a set of enforcement procedures associated with the Congressional Budget Act of 1974 (CBA; P.L. 93-344), as well as other rules, such as those imposed by the Budget Control Act of 2011 (BCA; P.L. 112-125), as amended. Those rules provide mechanisms to enforce both procedural and statutory limits on discretionary spending.²¹

The Budget Control Act of 2011²²

Enacted on August 2, 2011, the BCA as amended sets limits on defense and nondefense spending. As part of an agreement to increase the statutory limit on public debt, the BCA aimed to reduce annual federal budget deficits by a total of at least $2.1 trillion from FY2012 through FY2021, with approximately half of the savings to come from defense.²³

The spending limits (or caps) apply separately to defense and nondefense discretionary budget authority.²⁴ The caps are enforced by a mechanism called sequestration. Sequestration automatically cancels previously enacted appropriations (a form of budget authority) by an amount necessary to reach prespecified levels.²⁵ The BCA effectively exempted certain types of discretionary spending from the statutory limits, including funding designated for OCO/GWOT.²⁶

As a result, Congress and the President have designated funding for OCO to support activities that, in previous times, had been funded within the base budget. This was done, in part, as a response to the discretionary spending limits enacted by the BCA. By designating funding for OCO for certain activities not directly related to contingency operations, Congress and the President can effectively continue to increase topline defense, foreign affairs, and other related discretionary spending without triggering sequestration.

Congress has repeatedly amended the legislation to raise the spending limits (thus lowering its deficit-reduction effect by corresponding amounts). Congress has passed several bills that revised the automatic spending caps initially established by the BCA, including the following:

• American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240);
• Bipartisan Budget Act of 2013 (BBA 2013; P.L. 113-67);
• Bipartisan Budget Act of 2015 (BBA 2015; P.L. 114-74);
• Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123); and
• Bipartisan Budget Act of 2019 (BBA 2019; P.L. 116-37). (See "The Bipartisan Budget Act of 2019" section under "Selected Legislation in the 116th Congress".)

OCO Funds for Non-War Activities

DOD documents indicate the department has used OCO funding for activities viewed as unrelated to war in recent years.

For example, the department's FY2019 budget request estimates $358 billion in OCO funding from FY2015 through FY2019. Of that amount, DOD categorizes $68 billion (19%) for activities separate from operations in Afghanistan, Iraq, and Syria. These activities are described as "EDI/Non-War," referring in part to the European Deterrence Initiative, and "Base-to-OCO," referring to OCO funding used for base-budget requirements.²⁷

Similarly, a DOD Cost of War report from June 2019 shows $1.8 trillion in war-related appropriations from FY2001 through FY2019 for operations primarily conducted in Afghanistan, Iraq, and Syria. Of that total, DOD categorizes $235 billion (13%) as other than "war funds." These funds are described as "Classified," "Modularity," "Fuel (non-war)," "Noble Eagle (Base)," and "Non-War."²⁸

International affairs agencies also began increasing the share of their budgets designated for OCO, and applying the designation to an increasing range of activities apparently unrelated to conflicts. OCO as a share of the international affairs budget grew from about 21% in FY2012 to a peak of nearly 36% in FY2017. Since FY2017, OCO as a share of the international affairs budget fell to 15% in FY2019. Unlike DOD, the State Department and USAID have not specified whether any OCO-designated funds are considered part of the agencies' base budgets. However, there is an understanding among lawmakers that OCO supports base budget activities. In a prepared statement after the House Appropriations Committee passed its FY2020 SFOPS appropriations bill, House Appropriations Committee Chairwoman Nita Lowey stated, "The bill provides $8 billion in Overseas Contingency Operations/Global War on Terrorism (OCO/GWOT) funding for base requirements that would otherwise go unfunded in the President's Budget Request."²⁹

Previous Proposals to Move OCO Funding to Base Budget

According to a DOD budget document from FY2016, the Obama Administration planned to "transition all enduring costs currently funded in the OCO budget to the base budget beginning in 2017 and ending by 2020."³⁰ The plan was to describe "which OCO costs should endure as the United States shifts from major combat operations, how the Administration will budget for the uncertainty surrounding unforeseen future crises, and the implications for the base budgets of DOD, the Intelligence Community, and State/OIP. This transition will not be possible if the sequester-level discretionary spending caps remain in place."³¹ The BCA remained in effect and agencies continued to use OCO funding for base-budget requirements.

In an addendum to its FY2019 budget request, the Trump Administration also made an effort to shift some OCO funds back into the base budget after enactment of the 2018 Bipartisan Budget Agreement (BBA 2018; P.L. 115-123). In its initial budget request, the Administration had included $89 billion for defense OCO and $12 billion in foreign affairs OCO. Upon passage of BBA 2018, the President issued an addendum requesting that $20 billion of the defense OCO and all foreign affairs OCO be shifted to base funding.³²

OCO: Safety Valve, Slush Fund, or Practical Solution?

Some defense officials and policymakers say OCO funding enables a flexible and timely response to an emergency or contingency and provides a political and fiscal safety valve to the BCA caps and threat of sequestration.³³ They say if OCO funding was not used in such a manner and discretionary spending limits remained in place, DOD and other federal agencies would be forced to cut base budgets and revise strategic priorities. For example, former Defense Secretary Jim Mattis said if Congress had allowed the previous FY2020 and FY2021 defense spending caps to take effect, the 2018 National Defense Strategy, which calls for the United States to bolster its military advantage against potential competitors such as Russia and China, would not be sustainable.³⁴

Critics, including Acting White House Chief of Staff Mick Mulvaney, have described the OCO account as a "slush fund" for military and foreign affairs spending unrelated to contingency operations.³⁵ Mulvaney, who also serves as director of the White House Office of Management and Budget (OMB), has described the use of OCO funding for base budget requirements as "budget gimmicks."³⁶ Critics argue what was once generally restricted to a fund for replacing combat losses of equipment, resupplying expended munitions, transporting troops to and through war zones, and distributing foreign aid to frontline states has "ballooned into an ambiguous part of the budget to which government financiers increasingly turn to pay for other, at times unrelated, costs."³⁷

OMB criteria for OCO funding include the combat losses of ground vehicles, aircraft, and other equipment; replenishment of munitions expended in combat operations; facilities and infrastructure in the theater of operations; transport of personnel, equipment, and supplies to and from the theater; among other items and activities.³⁸

Determining which activities are directly related, tangentially related, or unrelated to war operations is often a point of debate. Some have questioned the use of OCO funding to purchase F-35 fighter jets: "It is jumping the shark.... There's no pretense that it has anything to do with the region."³⁹ Others have argued it makes sense for the military to use OCO funding to purchase new aircraft to replace planes used in current conflicts and no longer in production: "What are the conditions that are making the combatant commanders and those with train/equip authority to say, 'We need more of this?'"⁴⁰

OCO/GWOT Appropriations by Agency, FY2001-FY2019

Congress has appropriated $2 trillion in discretionary budget authority for war-related and other international emergency or contingency-designated activities since 9/11. This figure is a CRS estimate of funding designated for emergencies or OCO/GWOT in support of the broad U.S. government response to the 9/11 attacks, as well as other foreign affairs activities, from FY2001 through FY2019. This includes $1.8 trillion for DOD, $162 billion for the Department of State and USAID, and $3 billion for DHS and the Coast Guard (see Table 1). These figures do not include emergency-designated funding appropriated in this period for domestic programs, such as disaster response.

Department of Defense

OCO/GWOT Funding as a Share of the DOD Budget

From FY2001 through FY2019, DOD received $1.8 trillion in appropriations for OCO/GWOT, or approximately 17% of the department's total discretionary budget authority of $10.8 trillion during the period.⁴¹

The department's OCO/GWOT funding peaked in FY2008 both in terms of nominal dollars, at $186.9 billion, and as a share of its discretionary budget, at 28% (see Figure 3), after the Bush Administration surged additional U.S. military personnel to Iraq. The department's OCO funding also increased as a share of its discretionary spending from FY2009 to FY2010 following the Obama Administration's deployment of more U.S. military personnel to Afghanistan, and again in FY2017 following enactment of legislation in response to the Trump Administration's request for additional appropriations.⁴²

In FY2019, the department's OCO/GWOT funding totaled $68.8 billion, or 10% of its discretionary spending.⁴³

Figure 3. OCO/GWOT Funding as a Share of DOD Discretionary Budget Authority, FY2001-FY2019 (in billions of dollars and as a percentage of the total)

Source: Department of Defense, Office of the Under Secretary of Defense (Comptroller), National Defense Budget Estimates for FY2020, Table 2-1: Base Budget, War Funding and Supplementals by Military Department, by P.L. Title (FY2001-FY2020), May 2019. Notes: Figures in nominal dollars (not adjusted for inflation). OCO/GWOT figures do not include appropriations for hurricane relief, avian flu and Ebola assistance, Iron Dome, missile defeat, and other purposes.

OCO, Base Budget Comparisons by Appropriations Title, Military Service

In terms of appropriations titles, more than two-thirds of OCO/GWOT funding since FY2001 has been for Operation and Maintenance (O&M)—nearly double the percentage of base budget funding for O&M over the same period (see Figure 4). O&M funds pay for the operating costs of the military such as fuel, maintenance to repair facilities and equipment, and the mobilization of forces. DOD describes "war-related operational costs" as operations, training, overseas facilities and base support, equipment maintenance, communications, and replacement of combat losses and enhancements.⁴⁴

Figure 4. Share of Base and OCO/GWOT Funding by Selected Appropriation Title, FY2001-FY2019 (in percentages of discretionary budget authority)

Source: Department of Defense, Office of the Under Secretary of Defense (Comptroller), National Defense Budget Estimates for FY2020, Table 2-1: Base Budget, War Funding and Supplementals by Military Department, by Public Law Title, May 2019. Note: OCO/GWOT figures do not include appropriations for hurricane relief, avian flu and Ebola assistance, Iron Dome, missile defeat, and other purposes.

In terms of the military services, more than half (55%) of OCO/GWOT funding since FY2001 has gone to the Army—more than double the percentage of base budget funding for the service during this period (see Figure 5). Emergency appropriations were initially provided as general "defense-wide" appropriations. Beginning in FY2003, as operations evolved and planning developed, allocations increased and were specifically provided for the services.

Figure 5. Share of Base and OCO/GWOT Funding by Military Service, FY2001-FY2019 (in percentages of discretionary budget authority)

Source: Department of Defense, Office of the Under Secretary of Defense (Comptroller), National Defense Budget Estimates for FY2020, Table 2-1: Base Budget, War Funding and Supplementals by Military Department, by Public Law Title, May 2019. Note: OCO/GWOT figures do not include appropriations for hurricane relief, avian flu and Ebola assistance, Iron Dome, missile defeat, and other purposes.

Trends in OCO Funding and Troop Levels

OCO funding for DOD has not decreased at the same rate as the number of U.S. troops in Afghanistan, Iraq, and Syria has decreased.⁴⁵ For example, the number of U.S. military personnel in Afghanistan, Iraq, and Syria decreased from a peak of 187,000 personnel in FY2008 (including 148,000 in Iraq and 39,000 in Afghanistan) to an assumed level of nearly 18,000 personnel in FY2019 (including 11,958 personnel in Afghanistan and 5,765 personnel in Iraq and Syria)—a decline of approximately 169,000 personnel (90%).⁴⁶ Meanwhile, OCO funding decreased from a peak of $187 billion in FY2008 to $69 billion in FY2019—a decline of approximately $118 billion (63%).

While the number of U.S. forces in Afghanistan, Iraq, and Syria has decreased since FY2009, the number of U.S. troops deployed or stationed elsewhere to support those personnel has fallen by a lesser degree and, in recent years, remained relatively steady. For example, the number of support forces—that is, personnel from units and forces operating outside of Afghanistan, Iraq, Syria, and other countries (including those stationed in the continental United States or otherwise mobilized) decreased from 112,000 personnel in FY2009 to an assumed level of 76,073 personnel in FY2019—a decline of 35,927 personnel (32%). In addition, when these support forces are combined with in-country force levels, the total force level decreases by a percentage more similar to the OCO budget, from 297,000 personnel in FY2009 to an assumed level of 93,796 personnel in FY2019—a decline of 203,204 personnel (68%) (see Figure 6).

Figure 6. Number of Operational and Support Forces for Afghanistan, Iraq, and Syria, and DOD OCO Appropriations, FY2009-FY2019 (left scale: average annual troop strength; right scale: billions of dollars)

Source: Department of Defense, Office of the Under Secretary of Defense (Comptroller), Defense Budget Overview documents, FY2011-FY2019. Notes: Support forces include personnel from units and forces operating outside of Afghanistan, Iraq, Syria, and other countries (including those stationed in the continental United States or otherwise mobilized). DOD began detailing the number of in-theater support forces in the FY2009 budget request.

Some of these support forces serve in U.S. Central Command's area of responsibility, which includes 20 countries in West Asia, North Africa, and Central Asia, and whose forward headquarters is based in Al Udeid Air Base in Qatar.⁴⁷

According to DOD, the reason OCO funding has not fallen in proportion to the number of U.S. troops in Afghanistan, Iraq, and Syria is "due to the fixed, and often inelastic, costs of infrastructure, support requirements, and in-theater presence to support contingency operations."⁴⁸ For example, for FY2020, the department requested $20 billion in OCO funding for "in-theater support"—more than any other functional category (excluding OCO for base funding).⁴⁹

However, some analysts have noted the U.S. military's fixed costs in Afghanistan remained relatively stable at roughly $7 billion a year from FY2005 through FY2013—and have since increased to roughly $32 billion a year, suggesting "that roughly $25 billion in 'enduring' or base budget costs migrated into the Afghanistan budget, effectively circumventing the budget caps. The actual funding needed for operations in Afghanistan is roughly $20 billion in FY2019."⁵⁰

DOD Criteria for Contingency Operations

Title 10, Section 101, of the United States Code, defines a contingency operation as any Secretary of Defense-designated military operation "in which members of the armed forces are or may become involved in military actions, operations, or hostilities against an enemy of the United States or against an opposing military force." Since the 1990s NATO intervention in the Balkans, DOD Financial Management Regulation (FMR) have defined contingency operations costs as those expenses necessary to cover incremental costs "that would not have been incurred had the contingency operation not been supported."⁵¹ Such incremental costs would not include, for example, base pay for troops or planned equipment modernization, as those expenditures are normal peacetime needs of the DOD.⁵²

In September 2010, OMB, in collaboration with DOD, issued criteria for the department to use in making war/overseas contingency operations funding requests (see Appendix A).

In January 2017, the Government Accountability Office (GAO) concluded the criteria for deciding whether items belong in the base budget or OCO funding "are outdated and do not address the full scope of activities" in the budget request.⁵³ "For example, they do not address geographic areas such as Syria and Libya, where DOD has begun military operations; DOD's deterrence and counterterrorism initiatives; or requests for OCO funding to support requirements not related to ongoing contingency operations" the report states.⁵⁴

Section 1524 of the National Defense Authorization Act for Fiscal Year 2018 (P.L. 115-91), directed the Secretary of Defense to "update the guidelines regarding the budget items that may be covered by overseas contingency operations accounts."

Costs of Major DOD Contingency Operations

Congress has enacted legislation directing DOD to compile reports on the costs of certain contingency operations.

Section 1266 of the National Defense Authorization Act for Fiscal Year 2018 (P.L. 115-91) directs the Secretary of Defense to submit the Department of Defense Supplemental and Cost of War Execution report, known as the Cost of War report, on a quarterly basis to the congressional defense committees and the GAO: "Not later than 45 days after the end of each fiscal year quarter, the Secretary of Defense shall submit to the congressional defense committees and the Comptroller General of the United States the Department of Defense Supplemental and Cost of War Execution report for such fiscal year quarter."⁵⁵

The conference report accompanying the Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019 (P.L. 115-245) requires DOD to report incremental costs for operations in Afghanistan, Iraq, and other countries in the U.S. Central Command area of responsibility and directs:

the Secretary of Defense to continue to report incremental costs for all named operations in the Central Command Area of Responsibility on a quarterly basis and to submit, also on a quarterly basis, commitment, obligation, and expenditure data for the Afghanistan Security Forces Fund, the Counter-Islamic State of Iraq and Syria Train and Equip Fund, and for all security cooperation programs funded under the Defense Security Cooperation Agency in the Operation and Maintenance, Defense-Wide Account.⁵⁶

DOD's June 2019 Cost of War report to Congress details $1.6 trillion in obligations associated with certain contingency operations from FY2001 through FY2019.⁵⁷ That figure includes $769 billion for those conducted primarily in Iraq—Operation Iraqi Freedom (OIF), Operation New Dawn (OND), and Operation Inherent Resolve (OIR); $765 billion for those conducted primarily in Afghanistan—Operation Enduring Freedom (OEF) and Operation Freedom's Sentinel (OFS); and $27.9 billion for those conducted primarily in the United States (see Table 2 and Figure 7).⁵⁸

Figure 7. DOD OCO/GWOT Obligations, FY2001-FY2019 (in billions of dollars)

Source: Department of Defense, Cost of War report, June 2019, p. 12. Note: ONE obligations have totaled less than $1 billion since FY2008. Figures for 2019 reflect obligations through June 30, 2019.

Limitations to Cost of War Data

DOD's quarterly Cost of War reports are intended to provide Congress, GAO, and other stakeholders insight into the how the department obligates war-related funding. The reports include base and OCO obligations related to war activities, as well as obligation data broken down by certain major operations, service, component, agency, and appropriation.

However, as GAO has noted, "the proportion of OCO appropriations not associated with specific operations identified in the statutory Cost of War reporting requirement has trended upward" in part because the criteria DOD uses for making OCO funding requests is outdated and not always used.⁵⁹

More recent Cost of War reports do not appear to reference three recently classified overseas contingency operations targeting militants affiliated with al-Qaeda and the Islamic State of Iraq and Syria (ISIS): Operation Yukon Journey in the Middle East, Northwest Africa Counterterrorism, and East Africa Counterterrorism.⁶⁰

Some observers have noted other limitations to Cost of War reports, such as incomplete accounting of costs, limited distribution of the documents and underlying data, and formatting that makes it difficult to reconcile the data with information contained in budget justification documents.

Department of State/U.S. Agency for International Development

Between FY2001 and FY2019, Congress appropriated a total of $162 billion in OCO funds for the State Department and USAID. For FY2019, OCO funding amounted to 15% of the total State Department, Foreign Operations and Related Programs (SFOPS) appropriation.

The Obama Administration's FY2012 International Affairs budget request was the first to include a request for OCO funds for "extraordinary and temporary costs of operations in Iraq, Afghanistan, and Pakistan."⁶¹ At the time, the Administration indicated that the use of this designation was intended to provide a transparent, whole-of-government approach to the exceptional war-related costs incurred in those three countries, thus better aligning the associated military and civilian costs. This first foreign affairs OCO request identified the significant resource demands placed on the State Department as a result of the transitions from military-led to civilian-led missions in Iraq and Afghanistan, as well as the importance of a stable Pakistan for the U.S. effort in Afghanistan.

The FY2012 foreign affairs OCO request included:

• for Iraq, funding for the U.S. Embassy in Baghdad, consulates throughout Iraq, security costs in light of the then-planned U.S. military withdrawal, a then-planned civilian-led Police Development and Criminal Justice Program, military and development assistance in Iraq, and oversight of U.S. foreign assistance through the Special Inspector General for Iraq Reconstruction;
• for Afghanistan, funding to strengthen the Afghan government and build institutional capacity, support State/USAID and other U.S. government agency civilians deployed in Afghanistan, provide short-term economic assistance to address counterinsurgency and stabilization efforts, and provide oversight of U.S. foreign assistance programs in Afghanistan through the Office of the Special Inspector General for Afghanistan Reconstruction; and
• for Pakistan, funding to support U.S. diplomatic presence and diplomatic security in Pakistan, provide Pakistan Counterinsurgency Capability Funds (PCCF) to train and equip Pakistani forces to eliminate insurgent sanctuaries and promote stability and security in neighboring Afghanistan and the region.

In subsequent years, the Administration designated certain State Department activities in Syria and other peacekeeping activities as OCO, and Congress accepted and broadened this expanded use of OCO in annual appropriations. In the FY2017 budget request, the Administration further broadened its use of State OCO funds, applying the designation to funds for countering Russian aggression, counterterrorism, humanitarian assistance, and aid to Africa. In addition to OCO funds requested through the normal appropriations process, the Administration in recent years requested emergency supplemental funding (designated as OCO) to support State/USAID efforts in countering the Islamic State and to respond to global health threats such as the Ebola and Zika viruses.

For FY2020, the Trump Administration did not request OCO funding for the Department of State and USAID. However, BBA 2019 provides spending targets of $8 billion in nondefense OCO in both FY2020 and FY2021.

The estimated $162 billion in emergency and OCO appropriations enacted to date for State/USAID includes major non-war-related programs, such as aid for the 2004 tsunami along Indian Ocean coasts, 2010 earthquake in Haiti, 2013 Ebola outbreak in West Africa, and 2015 worldwide outbreak of the Zika virus; as well as diplomatic operations (e.g., paying staff, providing security, and building and maintaining embassies). OCO has also funded a variety of foreign aid programs, ranging from the Economic Support Fund to counter-narcotics in Afghanistan, Pakistan, and Iraq, among other activities in other countries.

Figure 8 depicts the emergency or OCO appropriations for foreign affairs activities. Since 2012, when the OCO designation was first used for foreign affairs, more OCO funds have been appropriated than were requested each year, and those have also been authorized to be used in additional countries.

Figure 8. State/USAID OCO Funding, FY2012-FY2019 (in billions of dollars)

Sources: Department of State Congressional Budget Justifications, FY2014, FY2015, FY2016, FY2017, and FY2018, and FY2019; P.L. 116-6. Notes: Totals include net rescissions.

Department of Homeland Security/U.S. Coast Guard⁶²

Since January 2002, approximately $3.4 billion of post-9/11 emergency and OCO-designated funding has been provided to the U.S. Coast Guard (USCG), part of the Department of Homeland Security (DHS), for its traditional homeland security missions and for operations in support of U.S. Navy activities.⁶³ This funding has been provided at various times as either an appropriation to the Coast Guard's operating expenses accounts, or as a transfer from Navy accounts to the Coast Guard.

Open-source information on the use of those funds has varied. One FY2009 supplemental appropriations request included funding as a transfer, with the intent of funding "Coast Guard operations in support of OIF and OEF, as well as other classified activities."⁶⁴ More recently, the Navy's FY2019 budget request included $165 million in OCO funding for Coast Guard operational support for the deployment of Island-class patrol boats operating in U.S. Central Command and a port security unit to Guantanamo Bay.⁶⁵

FY2020 OCO Funding

President's FY2020 OCO Request

Proposed Increase in Defense OCO Tied to Spending Caps

The FY2020 President's budget request proposed more than doubling OCO defense funding to fund national defense at a higher level than the Budget Control Act (BCA) allowed: "In order to fully resource national defense requirements, funding above the current law caps will also be necessary. The Budget therefore increases OCO amounts in [FY]2020 and [FY]2021 to nearly $165 billion and $156 billion, respectively. These amounts fund direct war costs, enduring in theater support, and certain base budget requirements."⁶⁶ The request marked a departure from a previous DOD plan to shift more OCO funding into the regular budget, as projected in the FY2019 request.⁶⁷ Consistent with the previous year's request, the Administration did not request funding for foreign affairs OCO for FY2020.

The FY2020 request includes $165 billion for OCO defense funding—$96 billion (139%) more than the amount appropriated for FY2019. OMB projected more than doubling OCO funding from $69 billion in FY2019 to $165 billion in FY2020 and to $156 billion in FY2021—the final two years of BCA caps—then reducing OCO funding to $20 billion in FY2022 and FY2023 and to $10 billion beginning in FY2024 (see Figure 9).⁶⁸

Figure 9. Proposed Defense Discretionary Funding Levels in 2020 Budget (in billions of nominal dollars)

Source: Office of Management and Budget, Fiscal Year 2020 Budget of the U.S. Government, Table S-7, Proposed Discretionary Funding Levels in 2020 Budget; growth adjusted for inflation using GDP (Chained) Price Index from Historical Tables, Table 10.1, Gross Domestic Product and Deflators Used in the Historical Tables: 1940–2024.

Russ Vought, acting director of OMB, described the Administration's approach as part of an effort to increase defense spending while decreasing overall discretionary spending: "Fiscal conservatives may feel uncomfortable using OCO in this way. Yet, as long as Congressional Democrats insist on demanding more social spending in exchange for continuing to fund defense spending, expanding the use of OCO funds remains the administration's only fiscally responsible option in meeting national security needs while avoiding yet another increase to the spending caps."⁶⁹ Representative Adam Smith, chairman of the House Armed Services Committee (HASC), criticized the proposal as "FOCO—fake OCO" and Representative Mac Thornberry, ranking member of HASC, said of the request, "Congress will never agree to this giant OCO increase on its own."⁷⁰

The National Defense Strategy Commission, a bipartisan panel created by Congress to study the Secretary of Defense's 2018 National Defense Strategy, issued several recommendations related to resourcing, including that "Congress should gradually integrate OCO spending back into the base Pentagon budget," as well as increase defense spending by 3% to 5% a year in real terms (adjusting for inflation) "or DOD should alter the expectations of the strategy and America's global strategic objectives."⁷¹

The FY2020 President's budget for national defense totaled $761.8 billion, including $750 billion in discretionary budget authority and $11.8 billion in mandatory budget authority. The request represents an increase of $35.6 billion (4.9%), in nominal dollars, from the FY2019 amount of $726.2 billion. Adjusting for inflation, the overall request amounts to $746.6 billion in constant FY2019 dollars, representing a real increase of $20.4 billion (2.8%) from the FY2019 amount, according to a CRS analysis of OMB data.⁷²

The emergence of any new contingencies or conflicts—or any drawdown of U.S. troops from existing ones—would likely change DOD assumptions about OCO needs.

Requirements Categories

DOD budget documentation divides the $164.6 billion OCO request into the following requirements categories:

• Direct War Requirements. $25.4 billion (15% of the OCO request): Combat or combat support costs that are not likely to continue once contingency operations end such as support for Operation Freedom's Sentinel (OFS) in Afghanistan and Operation Inherent Resolve (OIR) in Iraq and Syria, as well as partnership programs such as the Afghanistan Security Forces Fund (ASFF), Counter-ISIS Train and Equip Fund (CTEF), Coalition Support Fund (CSF), and Middle East border security;
• OCO for Enduring Requirements. $41.3 billion (25%): Enduring in-theater and CONUS [continental United States] costs that will remain after combat operations end, such as those for overseas basing, depot maintenance, ship operations, weapons system sustainment, European Deterrence Initiative (EDI), Ukraine Security Assistance Initiative, security cooperation; and
• OCO for Base Requirements. $97.9 billion (59%): Base budget requirements in support of the National Defense Strategy and financed in the OCO budget, such as those for readiness and munitions, "to comply with the base budget defense caps included in current law."⁷³

OCO Funding by Operation/Activity

DOD budget documentation breaks down the OCO request into the following operations and activities:

• $18.6 billion (11%) for Operation Freedom's Sentinel (OFS) in Afghanistan and related missions;
• $6.9 billion (4%) for Operation Inherent Resolve (OIR) in Iraq and Syria and related missions;
• $35.3 billion (21%) for enduring theater requirements and related missions;
• $5.9 billion (4%) for the European Deterrence Initiative (EDI) to boost the U.S. military presence in eastern Europe to deter Russian military aggression; and
• $97.9 billion (59%) for OCO for base requirements (see Figure 10).⁷⁴

Figure 10. OCO Funding by Operation/Activity in FY2020 DOD Budget Request (in billions of dollars and percentages of the total)

Source: Department of Defense, Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, March 2019, Defense Budget Overview, United States Department of Defense Fiscal Year 2020 Budget Request, p. 6-1. Notes: OFS: Operation Freedom's Sentinel; OIR: Operation Inherent Resolve, Percentages may not sum to 100% due to rounding. Amounts exclude $9.2 billion for emergency requirements.

The OCO request assumes a total force level (average annual troop strength) of 87,822 personnel for FY2020.⁷⁵ That figure includes the following:

• 15,000 primarily in Afghanistan (OFS);
• 7,200 primarily in Iraq and Syria (OIR);
• 46,473 for in-theater support; and
• 19,149 primarily in the continental United States (CONUS) or otherwise mobilized (see Figure 11).

The number of personnel actually in-country or in-theater at any given time may exceed or fall below those assumed levels. The FY2020 budget request reflects a change in accounting methodology to capture additional forces in various stages of deployment and supporting roles.⁷⁶ (For analysis of troop level and budget trends, see the section, "Trends in OCO Funding and Troop Levels," earlier in this report.)

Figure 11. U.S. Force Level Assumptions in FY2020 DOD OCO Budget Request (average annual troop strength in thousands and percentages of the total)

Source: Department of Defense, Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, March 2019, Defense Budget Overview, United States Department of Defense Fiscal Year 2020 Budget Request, p. 6-3. Note: The FY2020 budget request reflects a change in accounting methodology to capture additional forces in various stages of deployment and supporting roles. Totals may not sum due to rounding.

DOD has acknowledged "OCO funding has not declined at the same rate as the in-country troop strength … due to the fixed, and often inelastic, costs of infrastructure, support requirements, and in-theater presence to support contingency operations."⁷⁷ The department lists the following as OCO cost drivers:

• in-theater support, including infrastructure costs like command, control, communications, computers, and intelligence (C4I) and base operations for U.S. Central Command (CENTCOM) locations;
• persistent demand for combat support such as intelligence, surveillance, and reconnaissance (ISR) assets used to enhance force protection;
• equipment reset, which lags troop level changes and procurement of contingency-focused assets like munitions, unmanned aerial vehicles and force protection capabilities that may not be linked directly to in-country operations; and
• international programs and deterrence activities, which are linked to U.S. engagement in contingency operations and support U.S. interests but are not directly proportional to U.S. troop presence.⁷⁸

OCO Funding by Functional Category

DOD also breaks down the FY2020 OCO budget request by functional category (see Table 3). By this measure, excluding the OCO for base requirements category, the largest portion of OCO funding is $20 billion for in-theater support, followed by operations and force protection (including the incremental cost of military operations in Afghanistan, Iraq, Syria, and other countries), at $14.2 billion; and unspecified classified programs, at $10.5 billion.

According to the Congressional Budget Office (CBO), approximately $47 billion (68%) of the FY2019 OCO budget request consisted of enduring activities—that is, "those that would probably continue in the absence of overseas conflicts"—that could be funded in the DOD base budget.⁷⁹ CBO associated enduring activities with the following DOD functional categories: in-theater support, classified programs, equipment reset and readiness, European Deterrence Initiative, security cooperation, and joint improvised-threat defeat.

Selected Legislation in the 116^th Congress

The Bipartisan Budget Act of 2019

On August 2, 2019, President Trump signed the Bipartisan Budget Act of 2019 (BBA 2019; P.L. 116-37), which raised discretionary spending limits set by the BCA for FY2020 and FY2021—the final two years the caps are in effect. The act also extended mandatory spending reductions through FY2029 and suspended the statutory debt limit until August 1, 2021.⁸⁰

BBA 2019 raised the discretionary spending limits set by the BCA from $1.119 trillion for FY2020 and $1.145 trillion for FY2021 to $1.288 trillion for FY2020 and to $1.298 trillion for FY2021. The act increased FY2020 discretionary defense funding levels (excluding OCO) by the largest amount to date—$90.3 billion in FY2020, from $576.2 billion to $666.5 billion—and nondefense funding (including SFOPS) by $78.3 billion, from $543.2 billion to $621.5 billion. The FY2021 adjustments are slightly lower, with an increase of $81.3 billion in discretionary defense funding, from $590.2 billion to $671.5 billion, and an increase of $71.6 billion for nondefense funding, from $554.9 billion to $626.5 billion.

Like the Bipartisan Budget Act of 2015 (BBA 2015; P.L. 114-74), BBA 2019 also established targets for OCO/GWOT funding for the next two fiscal years.⁸¹ BBA 2019 set the security, or defense, OCO/GWOT target at $71.5 billion for FY2020 and to $69 billion for FY2021; and the non-security, or nondefense, OCO/GWOT target at $8 billion for both FY2020 and FY2021. ⁸² (See Table 4.)

FY2020 NDAA

Congressional activity on the National Defense Authorization Act for FY2020 is not complete. On July 12, 2019, the House passed its version of the bill (H.R. 2500) to authorize $69 billion in OCO funding. On June 27, 2019, the Senate passed its version (S. 1790) to authorize $75.9 billion in OCO funding. The appropriation title with the biggest difference in OCO amounts between the House and Senate versions of the bill was military construction. The House did not support the Administration's request for any of the $9.2 billion in emergency funding in the Military Construction, Army appropriation account. The Administration's request includes $3.6 billion for unspecified military construction to build barriers on the Southwest border, another $3.6 billion to backfill funding reallocated for such activity in FY2019, and $2 billion to rebuild facilities damaged by Hurricanes Florence and Michael. While the Senate measure would not support the Administration's full request for $9.2 billion in emergency funding in the Military Construction, Army appropriation account, the measure would authorize $3.6 billion in OCO funding in the Military Construction, Defense-Wide appropriation account for a "2808 Replenishment Fund" to backfill any funding for military construction projects that may be redirected under 10 U.S.C. 2808.⁸³ The Senate bill also would authorize OCO funding to repair hurricane-damaged facilities at Camp Lejeune in North Carolina and Tyndall Air Force Base in Florida.

FY2020 Appropriations

Congressional activity on FY2020 appropriations is not complete. As of September 6, 2019, the House had passed three bills to appropriate a total of $77 billion in OCO/GWOT funding (see Table 5). On June 19, 2019, the House passed the Labor, Health and Human Services, Education, Defense, State, Foreign Operations, and Energy and Water Development Appropriations Act, 2020 (H.R. 2740). The consolidated appropriations bill would provide a total of $76.1 billion in OCO funding, including $68.1 billion in the Department of Defense Appropriations Act, 2020 (Division C) and $8 billion in the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2020 (Division D).⁸⁴ On June 25, 2019, the House passed Commerce, Justice, Science, Agriculture, Rural Development, Food and Drug Administration, Interior, Environment, Military Construction, Veterans Affairs, Transportation, and Housing and Urban Development Appropriations Act, 2020 (H.R. 3055) to provide $921 million in OCO funding, mostly for projects associated with the European Deterrence Initiative.⁸⁵ As of September 6, 2019, the House Appropriations Committee had reported Department of Homeland Security Appropriations Act, 2020 (H.R. 3931) but the House had not acted on the measure. Previous Homeland Security appropriations acts have included OCO funding for the Coast Guard. As of September 6, 2019, the Senate Appropriations Committee had not reported and the Senate had not acted on any appropriations bills.

Issues for Congress

Will Congress Continue to Use OCO?

The BCA discretionary spending caps are scheduled to expire after FY2021, leaving Congress to consider OCO use in FY2022 and beyond. While Congress may continue to use OCO as it has in the past, it may also consider alternatives, some of which are listed below.

Integrate OCO Funding into Base Budget

As the OCO designation has been used to exceed the spending caps in an effort to meet executive agency spending needs, Congress may determine that it could sufficiently fund its priorities without requiring the OCO designation. As previously discussed, the National Defense Strategy Commission recommended that Congress gradually integrate OCO spending into the base budget.⁸⁶ OMB and CBO publish budget authority projections that may be used to gauge whether executive agency needs could be met using regular discretionary funding. For FY2022, OMB has projected requirements of $760 billion in defense discretionary budget authority and $527 billion in nondefense discretionary budget authority.⁸⁷ CBO has projected an overall $764 billion in defense budget authority and $689 billion in nondefense budget authority in the same year (see Figure 12).⁸⁸ In subsequent years, the CBO topline budget authority projection remains higher than the OMB needs projection, indicating that if assumptions hold, the budget authority may be sufficient to meet the executive agency needs projected by OMB without requiring any extra-budgetary measure.

Figure 12. Defense and nondefense Discretionary Spending Projections, FY2022-FY2026 (in millions of dollars of budget authority)

Sources: Office of Management and Budget, Analytical Perspectives, Table 29-1 Policy, Net Budget Authority By Function, Category, and Program, and Table and Fiscal Year 2020 Budget of the U.S. Government, Table S-7; Congressional Budget Office, 10-Year Budget Projections, Table 1-5, Baseline Projections of Discretionary Spending, August 2019. Note: OCO placeholder amounts from OMB Table S-7.

If Congress were to move OCO funding into the base budget, it could renew debate over the size of the defense budget relative to nondefense spending, as well as the impact of federal spending on annual deficits and the national debt. Senator James Inhofe, chairman of the Senate Armed Services Committee (SASC), and Representative Mac Thornberry, ranking member of the House Armed Services Committee (HASC), have said, "Any cut in the defense budget would be a senseless step backward."⁸⁹ Thornberry has also said transferring recurring OCO costs into the regular budget "makes sense … it makes for more predictable budgeting, but it's all about what happens on the topline."⁹⁰ Senator Jack Reed, ranking member of SASC, has said, "If our nation's fiscal strategy does not take into consideration the need for revenue, deficit-driven measures like these likely will make it exceedingly difficult to follow through with a long-term strategy with regard to any serious national security or domestic challenges."⁹¹ Representative Adam Smith, chairman of HASC, has said of the defense budget: "I think the number is too high, and it's certainly not going to be there in the future.… We've got a debt, we've got a deficit, we've got infrastructure problems, we've got healthcare, education—there's a whole lot that is necessary to make our country safe, secure, and prosperous."⁹²

Use OCO for War-Related Costs

Congress may decide to continue to use OCO as an extra-budgetary mechanism but reduce or eliminate the level of base operations that are currently funded through OCO. This would return OCO to a solely contingency account—used for war-related costs—and likely shrink the overall OCO funding level. As previously discussed, in the FY2020 budget request, DOD identified $25.4 billion in OCO funding for "direct war requirements." The department defined such requirements as combat or combat support costs not likely to continue once contingency operations end, such as support for Operation Freedom's Sentinel (OFS) in Afghanistan and Operation Inherent Resolve (OIR) in Iraq and Syria, as well as partnership programs such as the Afghanistan Security Forces Fund (ASFF), Counter-ISIS Train and Equip Fund (CTEF), Coalition Support Fund (CSF), and Middle East border security.

Return to Emergency Supplementals for Unanticipated Needs

Rather than relying on OCO for extra-budgetary costs, Congress may consider returning to emergency supplemental appropriations to address unanticipated needs. Congress has turned to supplemental measures to fund out-of-cycle emergency operations. In foreign affairs, for example, recent supplementals included funding for efforts to address the West Africa Ebola and Zika virus crises.

Congress may also choose to employ some combination of the above, as it has done in the past. Congress has passed bipartisan budget acts to raise the BCA spending caps but has never raised the topline to fully accommodate all of its priorities; instead Congress has used both OCO and supplementals as extra-budgetary measures to meet its stated objectives overseas.

Policymakers have requested possible alternatives to OCO to fund war-related activities. In response to a congressional request, GAO in January 2019 identified possible alternative approaches to fund war-related activities: move costs that will endure beyond current war operations to the regular budget, use language in the appropriations acts to specify the purpose of funds for war-related activities, create separate appropriations accounts, or fund everything from the regular budget and reimburse for war-related activities from a transfer account.⁹³

How Much OCO Funding Could Shift to Base Budget?

In January 2017, GAO concluded, "Without a reliable estimate of DOD's enduring OCO costs, decision makers will not have a complete picture of the department's future funding needs or be able to make informed choices and trade-offs in budget formulation and decision making."⁹⁴ DOD has since estimated these costs. As previously discussed, in the FY2020 budget request, in addition to the $97.9 billion in OCO funding "for base requirements," DOD identified $41.3 billion in OCO funding "for enduring requirements." The department defined such requirements as "enduring in-theater and CONUS [continental United States] costs that will remain after combat operations end, such as those for overseas basing, depot maintenance, ship operations, weapons system sustainment, European Deterrence Initiative (EDI), Ukraine Security Assistance Initiative, security cooperation."

In October 2018, the Congressional Budget Office estimated OCO funding for DOD enduring activities—that is, those that would probably continue in the absence of overseas conflicts—totaled more than $50 billion a year (in 2019 dollars) from 2006 to 2018—and are projected to total about $47 billion a year starting in FY2020.⁹⁵

If Congress were to move foreign affairs OCO into the base budget, it would be consistent with the recent trend of decreasing OCO as a share of the foreign affairs budget over the past few fiscal years, as well as the Administration's effort to eliminate OCO for the foreign affairs agencies. As policymakers have stated that foreign affairs OCO is funding base programming, moving all foreign affairs OCO into the base would align the budgetary mechanism with the funding use.

How Does OCO Funding Affect Defense Planning?

Some analysts have recommended that Congress question DOD budget planners on the future of OCO. ⁹⁶ Others, have argued that relying on OCO contributes to larger deficits, generates insecurity in defense acquisition, and creates uncertainty in defense planning.⁹⁷

For example, a potential enduring activity in the OCO budget is the European Deterrence Initiative (EDI). Previously known as the European Reassurance Initiative (ERI), the effort began in June 2014 to increase the number of U.S. military personnel and prepositioned equipment in Central and Eastern Europe to reassure NATO allies after Russia's military seized Crimea.⁹⁸ As some analysts have noted, "Because it is in the OCO part of the budget request, EDI funding does not include a projection for how much funding will be allocated in future years, which can create uncertainty in the minds of allies and adversaries alike about the U.S. military's commitment to the program."⁹⁹ On the other hand, some contend that it is precisely EDI's flexibility that allows the commander of European Command to quickly respond to changing security and posture needs in Europe, and ensure that monies intended for European deterrence will not be redirected to other DOD priorities.¹⁰⁰

The National Defense Strategy Commission quoted the late military strategist Bernard Brodie, who wrote "strategy wears a dollar sign."¹⁰¹ The panel concluded that relying on OCO funding to increase the defense budget "is not the way to provide adequate and stable resources" for the type of great power competition outlined in the National Defense Strategy, which calls for the United States to bolster its competitive military advantage relative to threats posed by China and Russia.¹⁰²

Appendix A. Statutes, Guidance, and Regulations

The designation of funding as emergency requirements or for Overseas Contingency Operations/Global War on Terrorism (OCO/GWOT) is governed by several statues as well as Office of Management and Budget (OMB) guidance and the Department of Defense (DOD) Financial Management Regulation (FMR).

The Balanced Budget and Emergency Deficit Control Act (BBEDCA) of 1985

BBEDCA, as amended, includes the statutory definitions of emergency and unanticipated as they relate to budget enforcement through sequestration. The act also allows for appropriations to be designated by Congress and the President as emergency requirements or for Overseas Contingency Operations/Global War on Terrorism. Such appropriations are effectively exempt from the statutory discretionary spending limits.¹⁰³

Title 10, United States Code—Armed Forces

10 U.S.C. 101—Definitions

Section 101 provides definitions of terms applicable to Title 10. While it does not define overseas contingency operations, it does include a definition of a contingency operations.

Administration and Internal Guidance

In addition to statutory requirements, the DOD and the Department of State are subject to guidance on OCO spending from the Administration. In October 2006^, under the Bush Administration, then-Deputy Secretary of Defense Gordon England directed the services to break with long-standing DOD regulatory policies and expand their request for supplemental funding to reflect incremental costs related to the "longer war on terror." There was no specific definition for the "longer war on terror," now one of the core missions of the DOD.

In February 2009, at the beginning of the Obama Administration, the Office of Management and Budget (OMB) issued updated budget guidance that required DOD to move some OCO costs back into the base budget. However, within six months of issuing the new criteria, officials waived restrictions related to pay and that would have prohibited end-strength growth.¹⁰⁴ In a letter from OMB to the then-Under Secretary of Defense (Comptroller) Robert Hale, the agency characterized its 2009 criteria as "very successful" for delineating base and OCO spending but stated, "This update clarifies language, eliminates areas of confusion and provides guidance for areas previously unanticipated."¹⁰⁵ GAO subsequently reported that the revised guidance significantly changed the criteria used to build the fiscal year 2010 OCO funding request by

• specifying stricter definitions for repair and procurement of equipment;
• limiting applicability of OCO funds for RDT&E;
• excluding pay and allowances for end-strength above the level requested in the budget;
• excluding enduring family support initiatives; and
• excluding base realignment and closures (BRAC) amounts.¹⁰⁶

OMB again revised its guidance in September 2010 following a number of GAO reports that had concluded DOD reporting on OCO costs was of "questionable reliability," due in part to imprecisely defined financial management regulations related to OCO spending.¹⁰⁷

Appendix B. Transfer Authorities, Special Purpose Accounts

In addition to the supplemental appropriations and emergency or OCO/GWOT designation, the Department of Defense and the Department of State also have the authority to shift funds from one budget account to another in response to operational needs.

For DOD, these transfers (sometimes called reprogramings) are statutorily authorized by 10 U.S.C. 2214—Transfer of funds: procedures and limitations. This authority allows the Secretary of Defense to reallocate funds for higher priority items, based on unforeseen military requirements, after receiving written approval from the four congressional defense committees. DOD may also reprogram funds within an account from one activity to another, as long as the general purpose for the use of those funds remains unchanged.¹⁰⁸ Specific limits to transfer or reprogramming authorities have also been added to these general authorities through provisions in annual defense authorization and appropriation acts.¹⁰⁹ The FY2019 defense appropriations bill sets the base budget transfer cap at $4 billion and the OCO transfer cap at $2 billion.¹¹⁰

The Department of State's OCO transfer authority has been provided in appropriations acts and has specifically authorized the Administration to transfer OCO funds only to other OCO funds within Title VIII SFOPS appropriations, not between OCO and base accounts. The transfer authority is capped, specified by account, and requires regular congressional notification procedures.

Overseas Contingency Operations Transfer Fund (OCOTF)

The OCOTF was established for DOD in FY1997 as a no year transfer account (meaning amounts are available until expended) in order to provide additional flexibility to meet operational requirements.¹¹¹ Transfers from the OCOTF are processed using existing reprogramming procedures. A quarterly report is submitted to the congressional oversight committees, documenting all transfers from the OCOTF to DOD components base budget accounts. Beginning in FY2002, funds to support Southwest Asia, Kosovo, and Bosnia contingency requirements were appropriated directly to DOD components' Operation and Maintenance (O&M) and Military Personnel accounts rather than to the OCOTF for later disbursement. FY2014 was the last year the Administration requested a direct appropriation to the OCOTF.¹¹²

Contingency Operations Funded in the DOD Base Budget¹¹³

As first mandated by Section 8091 of the Department of Defense Appropriations Act, 2008 (P.L. 110-116), Congress has required DOD to provide separate annual budget justification documents detailing the costs of U.S. Armed Forces' participation in all named contingency operations where the total cost of the operation exceeds $100 million or is staffed by more than 1,000 U.S. military personnel.¹¹⁴

Funding for certain DOD contingency operations has been moved to the base budget request, and is no longer designated as emergency or OCO/GWOT requirements.¹¹⁵ This movement of funding from the OCO request to the base budget request typically occurs as the operational activities of an enduring contingency operation evolve over time and DOD determines that certain elements of the associated military operations have become stable enough to be planned, financed, and executed within the base budget. For example, funding for Operation Noble Eagle, which provides fighter aircraft on 24/7 alert at several U.S. military bases, was moved from the GWOT request to the base budget request in 2005.

Contingency operations and other activities funded wholly or in part through DOD's base budget have included the following:

• NATO Operations in the Balkans. The U.S. Army and U.S. Air Force provide support to the North Atlantic Treaty Organization-led operations in the Balkans region. Most U.S. forces are deployed to Kosovo in support of the NATO-led Kosovo Force (KFOR). A small number of U.S. personnel are deployed to the NATO headquarters in Sarajevo in Bosnia and Herzegovina;¹¹⁶
• Joint Task Force-Bravo. U.S. forces support this task force, which operates from Soto Cano Air Base in Honduras and supports joint, combined, and interagency exercises and operations in Central America to counter the influence of transnational organized crime; carry out humanitarian assistance and disaster relief; and build military capacity with regional partners and allied nations to promote regional cooperation and security;¹¹⁷
• Operation Juniper Shield. Previously known as Operation Enduring Freedom-Trans Sahara (OEF-TS), this operation supports efforts to defeat violent extremist organizations in East Africa. This operation also provides military-to-military engagement with partner African countries, as well as readiness for crisis response and evacuation of U.S. military, diplomatic, and civilian personnel;¹¹⁸
• Operation Noble Eagle. This operation funds the continuing efforts to defend the United States from airborne attacks, maintain the sovereignty of the United States airspace, and defend critical U.S. facilities from potentially hostile threats or unconventional attacks;¹¹⁹
• Operation Enduring Freedom-Horn of Africa. This operation was established to support efforts to defeat violent extremist organizations in East Africa; provide military-to-military engagement with partner African countries, as well as readiness for crisis response and evacuation of U.S. military, diplomatic, and civilian personnel throughout East Africa;¹²⁰
• Operation Enduring Freedom-Caribbean and Central America. A U.S. regional military operation initiated in 2008, under the operational control of Special Operations Command-South, this operation was established to focus on counterterrorism to support DOD's overall military objectives and the larger fight against terrorism;¹²¹
• Operation Observant Compass. This operation was established to support the deployment of approximately 100 U.S. military personnel assisting the Ugandan People's Defense Force and neighboring partner African countries in countering the Lord's Resistance Army operations;¹²² and
• Operation Spartan Shield. This operation was established to support ongoing U.S. Central Command missions.¹²³

Other Congressionally Authorized Funds or Programs

Through the OCO authorization and appropriation process, Congress has created numerous funds and programs that are designed to finance specific overseas contingency operations-related activities that do not fit into traditional budgetary accounts. Many of these funds and programs are supplied with amounts that are available until expended—however, authorization for the specified fund or program has an expiration date, thereby requiring further congressional action for reauthorization of affected funds or programs.¹²⁴ Congress has also provided increased transfer authority to provide greater flexibility for U.S. government activities in situations that are typically unpredictable.¹²⁵ Examples of these types of congressionally authorized OCO programs or funds have included the following:

• Afghanistan Security Forces Fund (ASFF) and Counter-ISIS Train and Equip Fund (CTEF). These funds were established to provide funding and support for the training, equipping, and expansion of selected military and security forces in support of U.S. objectives;¹²⁶
• Counterterrorism Partnerships Fund. This fund was established to provide funding and support to partner nations engaged in counterterrorism and crisis response activities;¹²⁷
• Commander's Emergency Response Program. This program was established to support infrastructure improvements, such as road repair and construction and enable military commanders on the ground to respond to urgent humanitarian relief and reconstruction needs by undertaking activities that will immediately aid local populations and assist U.S. forces in maintaining security gains;¹²⁸
• Joint Improvised Explosive Device (IEDs) Defeat Fund. This fund was established to coordinate and focus all counter-IED efforts, including ongoing research and development, throughout DOD. Due to the enduring nature of the threat, DOD began moving associated funding to the base budget in FY2010;¹²⁹
• Mine Resistant Ambush Protected Vehicle (MRAP) Fund. This fund was intended to expedite the procurement and deployment of MRAPs to Iraq and Afghanistan;¹³⁰
• European Deterrence Initiative (EDI). Initially the European Reassurance Initiative (ERI), this effort was established to provide funding and support to NATO allies and partners to "reassure allies of the U.S. commitment to their security and territorial integrity as members of the NATO Alliance, provide near-term flexibility and responsiveness to the evolving concerns of our allies and partners in Europe, especially Central and Eastern Europe, and help increase the capability and readiness of U.S. allies and partners;"¹³¹
• Global Security Contingency Fund. This fund was established to provide funding for the Department of State and the Department of Defense "to facilitate an interagency approach to confronting security challenges;"¹³²
• Complex Crises Fund. This fund was established to provide funding through the State Department and USAID "to help prevent crises and promote recovery in post-conflict situations during unforeseen political, social, or economic challenges that threaten regional security;"¹³³
• Migration and Refugee Assistance Fund. This fund was established to provide funding to respond to refugee crises in Africa, the Near East, South and Central Asia, and Europe and Eurasia;¹³⁴ and
• Ukraine Security Assistance Initiative. This initiative was established to provide assistance, including training, equipment, lethal weapons, of a defensive nature; logistics support; supplies and services; sustainment; and intelligence support to the military and national security forces of Ukraine.¹³⁵

Author Contact Information

Acknowledgments

This is an update to a report originally co-authored by Lynn M. Williams, former CRS Specialist in Defense Readiness and Infrastructure, and Susan B. Epstein, former CRS Specialist in Foreign Policy. It references research previously compiled by Amy Belasco, former CRS Specialist in U.S. Defense Policy and Budget; Christopher Mann, Analyst in Defense Policy and Trade; Heidi M. Peters, Analyst in U.S. Defense Acquisition Policy; Megan S. Lynch, CRS Specialist on Congress and the Legislative Process; and Grant A. Driessen, CRS Analyst in Public Finance. Jennifer M. Roscoe, Research Assistant, helped compile the graphics.

Footnotes

1.	The figures in this paragraph are in nominal, or current, dollars (not adjusted for inflation).
2.	CRS analysis of Department of Defense, Office of the Under Secretary of Defense (Comptroller), National Defense Budget Estimates for FY2020, Table 2-1: Base Budget, War Funding and Supplementals by Military Department, by P.L. Title (FY2001-FY2020), May 2019; Department of State, Foreign Operations and Related Programs Congressional Budget Justifications, FY2001-FY2019; Department of Homeland Security, Budget in Brief documents, FY2001-FY2019; P.L. 115-244, P.L. 115-245, and P.L. 116-6.
3.	For more information on the appropriations process, see CRS Report R42388, The Congressional Appropriations Process: An Introduction, coordinated by James V. Saturno.
4.	Some observers use the term supplemental to describe the OCO budget request. While the OCO budget request is in addition, or supplemental, to an agency's base budget requirements, OCO funding may be provided through any of the three types of appropriations measures: regular appropriations bill, continuing resolution, or supplemental appropriations. The reader should not confuse a reference to a "supplemental appropriation measure" with a request for funds to supplement an agency's base budget requirements.
5.	CRS analysis of Department of Defense, Office of the Under Secretary of Defense (Comptroller), National Defense Budget Estimates for FY2020, Table 6-8: DOD Budget Authority by Public Law Title (FY1948-FY2024), Table 2-1: Base Budget, War Funding and Supplementals by Military Department, by P.L. Title (FY2001-FY2020), May 2019; Department of Defense, FAD-809 table, January 1978; Congressional Budget Office, Supplemental appropriations reports from the 1970s-2000s; Office of Management and Budget, Historical Tables, Table 10.1-Gross Domestic Product and Deflators Used in the Historical Tables: 1940–2024.
6.	Ibid.
7.	For a recent example of the distinction between emergency and OCO/GWOT funding, as part of the third FY2018 Continuing Resolution (P.L. 115-96), Congress appropriated an additional $4.5 billion, designated as "emergency requirements" (and, thus, exempt from the BCA-originated cap on discretionary defense spending), to accelerate improvements in missile defenses and other activities oriented toward North Korea and to repair two Pacific Fleet destroyers damaged in collisions.
8.	These supplemental requests sometimes included appropriations to special accounts to meet unanticipated wartime needs. For example, the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 (P.L. 109-234) appropriated $2 billion for the Joint Improvised Explosive Device Defeat Fund to develop, buy, and field devices to counter improvised explosive devices. For more on these funds, see the "Other Congressionally Authorized Funds or Programs" section in Appendix B.
9.	Office of Management and Budget, A New Era of Responsibility: Renewing America's Promise, February 2009.
10.	2 U.S.C. 901(b)(2)(A). See "The Balanced Budget and Emergency Deficit Control Act (BBEDCA) of 1985" section in Appendix A.
11.	Ibid. These definitions are codified in 2 U.S.C. 900-922.
12.	For more information, see the "OCO and the Budget Control Act (BCA)" section later in this report.
13.	Office of Management and Budget, A New Era of Responsibility: Renewing America's Promise, February 2009.
14.	The Obama Administration's Department of Defense FY2009 Supplemental Request, April 2009, augmented the Bush Administration's Department of Defense Fiscal Year 2009 Global War on Terror Bridge Request, May 2008.
15.	Department of Defense, Office of the Under Secretary of Defense (Comptroller), Fiscal Year 2010 Budget Request, Summary Justification.
16.	Title XV of the FY2010 NDAA (P.L. 111-84) was entitled, Authorization of Additional Appropriations for Overseas Contingency Operations. Title XV of the FY2009 NDAA (P.L. 110-417) was entitled, Authorization of Additional Appropriations for Operation Iraqi Freedom and Operation Enduring Freedom, the previous names for U.S. military operations primarily conducted in Iraq and Afghanistan, respectively.
17.	Title I, Section 101, of the Budget Control Act of 2011 (BCA; P.L. 112-25) amended the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177).
18.	In appropriations bills, the description of additional funding designated for OCO/GWOT typically states: "Provided, That such amounts in this paragraph are designated by the Congress for Overseas Contingency Operations/Global War on Terrorism pursuant to section 251(b)(2)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985."
19.	Department of State, Executive Budget Summary, Function 150 & Other International Programs, Fiscal Year 2012; and Fact Sheet, FY2012 State and USAID - Overseas Contingency Operations, February 14, 2011.
20.	According to the State Department: the Global Security Contingency Fund (GSCF) is intended to improve the planning and execution of shared Department of State and Department of Defense security assistance challenges in partner countries. First authorized in the FY2012 National Defense Authorization Act (NDAA), the program is funded by both departments and has backed projects in 13 countries from the Lake Chad Basin to the Philippines to Eastern Europe. Congress renewed the GSCF authority in the FY2018 NDAA for two fiscal years, through FY2019. See https://www.state.gov/t/pm/gpi/gscf/index.htm.
21.	The enactment of funding designated as emergency requirements or for OCO/GWOT would result in an adjustment of the appropriate spending cap, as provided in Section 251(b) of the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177), so that such spending would not cause a breach of that spending limit, thus triggering a sequester. In the Senate, the use of an emergency designation may be subject to a point of order under Section 314(e) of the Congressional Budget Act of 1974 (CBA; P.L. 93-344). Similarly, the use of the OCO/GWOT designation for funds appropriated for FY2020 and FY2021 may be subject to a point of order under Section 208 of the Bipartisan Budget Act of 2019 (BBA 2019; P.L. 116-37). In either case, if the point of order were made, it would require a vote of three-fifths of all Senators to retain the designation. For more information, see CRS Report R42388, The Congressional Appropriations Process: An Introduction, coordinated by James V. Saturno.
22.	For more information on the BCA, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions, by Grant A. Driessen and Megan S. Lynch.
23.	Congressional Budget Office, Letter from then-Director Douglas W. Elmendorf to then-Speaker of the House John Boehner and then-Majority Leader of the Senate Harry Reid, "CBO Estimate of the Impact on the Deficit of the Budget Control Act of 2011," August 1, 2011.
24.	Budget authority is authority provided by law to a federal agency to obligate money for goods and services. The defense limits apply to discretionary base budget authority for national defense (budget function 050). For more on the national defense budget function, see CRS In Focus IF10618, Defense Primer: The National Defense Budget Function (050), by Christopher T. Mann.
25.	For more information on sequestration, see CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions, by Megan S. Lynch.
26.	Technically, the BCA allows an upward adjustment to the limits for certain types of funding. For more information on the defense budget and the BCA, see CRS Report R44039, The Defense Budget and the Budget Control Act: Frequently Asked Questions, by Brendan W. McGarry.
27.	Department of Defense, Office of the Under Secretary of Defense (Comptroller) Chief Financial Officer, February 2018, Defense Budget Overview, United States Department of Defense Fiscal Year 2019 Budget Request, Revised February 13, 2018, p. 4-3.
28.	Department of Defense, Cost of War report, June 2019, p. 9.
29.	House Appropriations Committee, "Appropriations Committee Approves Fiscal Year 2020 State and Foreign Operations Funding Bill," press release, May 16, 2019, at https://appropriations.house.gov/news/press-releases/appropriations-committee-approves-fiscal-year-2020-state-and-foreign-operations.
30.	Department of Defense, Office of the Under Secretary of Defense (Comptroller) Chief Financial Officer, United States Department of Defense Fiscal Year 2016 Budget Request, Overview, February 2015, p. 7-9.
31.	Ibid.
32.	Letter from Mick Mulvaney, Director of The Office of Management and Budget, to The Honorable Paul D. Ryan, Speaker of the House of Representatives, February 12, 2018, at https://www.whitehouse.gov/wp-content/uploads/2018/02/Addendum-to-the-FY-2019-Budget.pdf.
33.	Mark Cancian, "Two Cheers for OCO: Grease for Budget Wheels," Breaking Defense, October 20, 2016.
34.	Testimony of Defense Secretary James Mattis, in U.S. Congress, Senate Armed Services Committee, Fiscal 2019 Defense Department Posture, 115th Cong., 2nd sess., April 26, 2018. For more on the National Defense Strategy, see CRS Report R45349, The 2018 National Defense Strategy: Fact Sheet, by Kathleen J. McInnis.
35.	In 2016, then a congressman from South Carolina, Mick Mulvaney proposed legislation intended to "help prevent abuse of the Overseas Contingency Operations slush fund." See "Reps. Mulvaney, Van Hollen, Lee, Sanford Amendment Helps Prevent Abuse of OCO Slush Fund," press release, Targeted News Service, May 19, 2016.
36.	Office of Management and Budget, President's Budget, "Addendum to the FY2019 Budget," February 12, 2018.
37.	Paul D. Shinkman, "Inside the Pentagon's 'Slush Fund'," US News and World Report, February 12, 2016.
38.	For the full list of criteria for OCO funding, see Table A-1 in Appendix A.
39.	Steven Kosiak, Adjunct Senior Fellow, Center for a New American Security, remarks made at American Enterprise Institute event, "The defense budget and emergency war spending: Does it help more than it hurts?" moderated by Mackenzie Eaglen, Resident Fellow, AEI, March 15, 2017. For more on the F-35 program, see CRS Report RL30563, F-35 Joint Strike Fighter (JSF) Program, by Jeremiah Gertler.
40.	Roger I. Zakheim, Visiting Fellow, American Enterprise Institute, remarks made at American Enterprise Institute event, "The defense budget and emergency war spending: Does it help more than it hurts?" moderated by Mackenzie Eaglen, Resident Fellow, AEI, March 15, 2017.
41.	Department of Defense, Office of the Under Secretary of Defense (Comptroller), National Defense Budget Estimates for FY2020, Table 2-1: Base Budget, War Funding and Supplementals by Military Department, by Public Law Title, May 2019.
42.	Ibid. For more information on U.S. policy response to the Islamic State see CRS Report R43612, The Islamic State and U.S. Policy, by Christopher M. Blanchard and Carla E. Humud.
43.	This figure does not include the $165 million requested in the FY2019 DOD budget for the Navy intended for Coast Guard operations in support of OCO.
44.	DOD, Cost of War report, June 2019, p. 1.
45.	For more information about U.S. policy in these countries, see the following: CRS Report R45122, Afghanistan: Background and U.S. Policy In Brief, by Clayton Thomas, CRS Report R45096, Iraq: Issues in the 115th Congress, by Christopher M. Blanchard, and CRS Report RL33487, Armed Conflict in Syria: Overview and U.S. Response, coordinated by Carla E. Humud.
46.	In FY2019 budget documents, the Department of Defense includes a force level assumption of 11,958 personnel in Afghanistan for budgeting purposes (average annual troop strength), but acknowledged a "current" force level of 14,000 personnel in the country following an increase of 3,500 personnel and a change in accounting methodology. See Department of Defense, Office of the Under Secretary of Defense (Comptroller) Chief Financial Officer, February 2018, Defense Budget Overview, United States Department of Defense Fiscal Year 2019 Budget Request, Revised February 13, 2018, p. 4-2. FY2009 is the earliest year for which DOD reported the number of support personnel.
47.	According to the Department of Defense, U.S. Central Command's area of responsibility (AOR) includes 20 countries: Egypt, Israel, Lebanon, Jordan, Saudi Arabia, Yemen, Oman, United Arab Emirates, Qatar, Kuwait, Iraq, Syria, Iran, Afghanistan, Pakistan, Turkmenistan, Uzbekistan, Kazakhstan, Kyrgyzstan, and Tajikistan.
48.	Department of Defense, Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, March 2019, Defense Budget Overview, United States Department of Defense Fiscal Year 2020 Budget Request, p. 6-5.
49.	For more information on the FY2020 OCO budget request, see the section "FY2020 OCO Funding" section later in this report.
50.	Todd Harrison and Seamus P. Daniels, "Analysis of the FY2019 Defense Budget," Center for Strategic and International Studies, September 2018, p. 6. Note the Department of Defense breaks down OCO funding by operation, such as Operation Freedom's Sentinel (OFS) that is primarily conducted in Afghanistan. For more information, see the "OCO Funding by Operation" section later in this report.
51.	Department of Defense, Financial Management Regulation, Contingency Operations, vol. 12, ch. 23, December 2017, p. 23-6.
52.	DOD Financial Management Regulation states that only those costs in addition to the department's normal peacetime activities, such as those incurred because troops are deployed in support of a contingency operation are to be considered OCO. To aid in the identification of such activities, the DOD regulation requires the military services to show how additional contingency operation deployments and operations affect peacetime assumptions about troop levels and operational tempo. Long-term equipment procurement or similar investment costs are only to be included if "necessary to support a contingency operation" and are "not to be used to procure durable and expendable items in excess of what is required."
53.	Government Accountability Office, OVERSEAS CONTINGENCY OPERATIONS: OMB and DOD Should Revise the Criteria for Determining Eligible Costs and Identify the Costs Likely to Endure Long Term, GAO-17-68, January 18, 2017.
54.	Ibid.
55.	Section 1266 of P.L. 115-91 amended Subsection (c) of Section 1221 of the National Defense Authorization Act for Fiscal Year 2016 (P.L. 109-163), which directed the Secretary of Defense to submit such reports to the Comptroller General "not later than 45 days after the end of each reporting month" and the Comptroller General to provide Congress with quarterly updates on the costs of Operation Iraqi Freedom and Operation Enduring Freedom. 10 U.S.C. 101 defines congressional defense committees as the House and Senate Committees on Armed Services and Appropriations. DOD details reporting requirements in Volume 12, Chapter 23, of 7000.14-R Financial Management Regulation (FMR). The Comptroller General of the United States is the director of the GAO.
56.	See Reporting Requirements under Title IX, Overseas Contingency Operations/Global War on Terrorism, in H.Rept. 115-952, Department of Defense for the Fiscal Year Ending September 30, 2019, and for Other Purposes. Note this language was revised in 2017 to eliminate the monthly Cost of War reporting requirement; see the same section in the explanatory text to Department of Defense Appropriations Act, 2017 (Division C of H.R. 244), which states, "The agreement eliminates the Cost of War reporting requirement for detailed monthly obligation and expenditure data by appropriation account," available at https://www.congress.gov/crec/2017/05/03/CREC-2017-05-03-bk2.pdf#page=320.
57.	Department of Defense, Cost of War report, June 2019. Note this total reflects DOD obligations for selected Overseas Contingency Operations and differs from the total OCO/GWOT figure cited earlier in this report, which reflects OCO/GWOT budget authority. Budget authority is provided by law to incur financial obligations; obligations are binding agreements that will result in outlays.
58.	Ibid.
59.	Government Accountability Office, OVERSEAS CONTINGENCY OPERATIONS: OMB and DOD Should Revise the Criteria for Determining Eligible Costs and Identify the Costs Likely to Endure Long Term, GAO-17-68, January 18, 2017.
60.	Department of Defense, Lead Inspector General Report to the United States Congress, Operation Inherent Resolve and Other Contingency Operations, July 1, 2018-September 30, 2018. This report states, "On February 9, 2018, the Secretary of Defense designated three new named contingency operations: Operation Yukon Journey, and operations in Northwest Africa and East Africa. These operations, which are classified, seek to degrade al Qaeda and ISIS-affiliated terrorists in the Middle East and specific regions of Africa."
61.	Department of State, Executive Budget Summary, Function 150 and Other International Programs, FY2012.
62.	William L. Painter, CRS Specialist in Homeland Security and Appropriations, contributed this section.
63.	Based in part on Department of Homeland Security email to CRS, October 17, 2018.
64.	Letter from then-President Barack Obama to House Speaker Nancy Pelosi, requesting supplemental appropriations, April 9, 2009.
65.	Department of the Navy, Fiscal Year (FY) 2019 Budget Estimates, Justification of Estimates, February 2018, Overseas Contingency Operations (OCO) Request.
66.	Office of Management and Budget, Fiscal Year 2020 Budget of the U.S. Government, Table S-7, p. 134. The term "current law caps" refers to Budget Control Act limits as amended by the Bipartisan Budget Act of 2018.
67.	Department of Defense, National Defense Budget Estimates for FY2019, Office of the Under Secretary of Defense (Comptroller), April 2018, Table 1-11: Discretionary Budget Authority for Selected Programs.
68.	Office of Management and Budget, Fiscal Year 2020 Budget of the U.S. Government, Table S-7, p. 133.
69.	Russ Vought, "Congress Must Join the President in Cutting Spending," Real Clear Politics, February 25, 2019, at https://www.realclearpolitics.com/articles/2019/02/25/congress_must_join_the_president_in_cutting_spending_139568.html.
70.	Paul McLeary, "Dems Lash Out At Trump 'Fake OCO' Budget Gambit; Hint At Budget Deal," Breaking Defense, March 13, 2019, at https://breakingdefense.com/2019/03/dems-lash-out-at-trump-fake-oco-budget-gambit-hint-at-budget-deal/.
71.	Eric Edelman, Gary Roughead, et al., "Providing for the Common Defense: The Assessment and Recommendations of the National Defense Strategy Commission," United States Institute of Peace, November 14, 2018, pp. 70-71.
72.	Office of Management and Budget, Analytical Perspectives, Table 29-1. Budget Authority and Outlays by Function, Category, and Program, at https://www.whitehouse.gov/omb/analytical-perspectives/.
73.	Department of Defense, Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, March 2019, Defense Budget Overview, United States Department of Defense Fiscal Year 2020 Budget Request, p. 6-2.
74.	Department of Defense, Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, March 2019, Defense Budget Overview, United States Department of Defense Fiscal Year 2020 Budget Request, p. 6-1.
75.	Department of Defense, Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, March 2019, Defense Budget Overview, United States Department of Defense Fiscal Year 2020 Budget Request, p. 6-3.
76.	Department of Defense, Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, March 2019, Defense Budget Overview, United States Department of Defense Fiscal Year 2020 Budget Request, p. 6-3.
77.	Ibid., p. 6-5.
78.	Department of Defense, Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, March 2019, Defense Budget Overview, United States Department of Defense Fiscal Year 2020 Budget Request, p. 6-5.
79.	Congressional Budget Office, Funding for Overseas Contingency Operations and Its Impact on Defense Spending, October 23, 2018.
80.	For more information on the BBA 2019, see CRS Insight IN11148, The Bipartisan Budget Act of 2019: Changes to the BCA and Debt Limit, by Grant A. Driessen and Megan S. Lynch.
81.	In FY2017, OCO funding for defense and nondefense exceeded the targets set in BBA 2015. See P.L. 114-74 and Office of Management and Budget, OMB Sequestration Update Report to the President and Congress for Fiscal Year 2020, August 20, 2019.
82.	For spending limits in FY2012 and FY2013, the BCA originally specified separate "security" and "nonsecurity" categories. After the Joint Select Committee on Deficit Reduction did not reach a deficit-reduction deal and triggered backup budgetary enforcement measures of steeper reductions to the initial BCA caps beginning in FY2013, the "security" category was revised to the narrower "defense" category, which included only discretionary programs in the national defense budget function (050). For more information, see CRS Report R44039, The Defense Budget and the Budget Control Act: Frequently Asked Questions, by Brendan W. McGarry.
83.	10 U.S.C. 2808, "Construction authority in the event of a declaration of war or national emergency," depends upon a declaration of war or the declaration by the President of a national emergency in accordance with the National Emergencies Act [NEA] (50 U.S.C. 1601 et seq.) that requires use of the Armed Forces. For more information, see CRS Insight IN11017, Military Construction Funding in the Event of a National Emergency, by Michael J. Vassalotti and Brendan W. McGarry.
84.	Defense OCO amount from H.Rept. 116-84, the report accompanying the House Appropriations Committee-reported version of the Department of Defense Appropriations Act, 2020 (H.R. 2968); State OCO amount from H.Rept. 116-78, the report accompanying the House Appropriations Committee-reported version of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2020 (H.R. 2839).
85.	Military construction OCO amount from H.Rept. 116-63, the report accompanying the House Appropriations Committee-reported version of Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2020 (H.R. 2745).
86.	Eric Edelman, Gary Roughhead, et al., "Providing for the Common Defense: The Assessment and Recommendations of the National Defense Strategy Commission," United States Institute of Peace, November 14, 2018, p. 71.
87.	Office of Management and Budget, Analytical Perspectives, Table 29-1 Policy, Net Budget Authority By Function, Category, and Program, and Table.
88.	Congressional Budget Office, 10-Year Budget Projections, Table 1-5, CBO's Baseline Projections of Discretionary Spending, Adjusted to Exclude the Effects of Timing Shifts, August 2019.
89.	James Inhofe and Mac Thornberry, "Don't Cut Military Spending, Mr. President," Wall Street Journal, November 29, 2018.
90.	Roxana Tiron and Tony Capaccio, "Trump Space Force, Pentagon Plan Set to Collide With Budget Caps," Bloomberg Government, October 10, 2018.
91.	Jack Reed, "Opening Statement by Ranking Member Reed at SASC Hearing on Defense Budget Request for FY 2019," press release, April 26, 2018.
92.	Tony Bertuca, "Smith: U.S. should cut defense spending and not 'cling' to notions of post-WWII dominance," Inside Defense, September 5, 2018.
93.	Government Accountability Office, OVERSEAS CONTINGENCY OPERATIONS: Alternatives Identified to the Approach to Fund War-Related Activities, January 28, 2019, at https://www.gao.gov/products/GAO-19-211.
94.	Government Accountability Office, OVERSEAS CONTINGENCY OPERATIONS: OMB and DOD Should Revise the Criteria for Determining Eligible Costs and Identify the Costs Likely to Endure Long Term, GAO-17-68, January 18, 2017.
95.	Congressional Budget Office, Funding for Overseas Contingency Operations and Its Impact on Defense Spending, October 23, 2018, p. 2.
96.	Frederico Bartels, Thomas Spoehr, et al., "Backgrounder: How Congress Can Improve the 2019 President's Budget Request for Defense," The Heritage Foundation, March 30, 2018.
97.	Laicie Heeley and Anna Wheeler, "Defense Divided: Overcoming the Challenges of Overseas Contingency Operations," Stimson Center, 2016.
98.	For more information, see CRS In Focus IF10946, The European Deterrence Initiative: A Budgetary Overview, by Pat Towell and Aras D. Kazlauskas.
99.	Todd Harrison and Seamus P. Daniels, "Analysis of the FY2019 Defense Budget," Center for Strategic and International Studies, September 2018, pp. 6-7.
100.	These arguments may also apply to other OCO-funded activities, such as the Afghanistan Security Forces Fund (ASFF) and the Counter-ISIS Train and Equip Fund (CTEF).
101.	Eric Edelman, Gary Roughead, et al., "Providing for the Common Defense: The Assessment and Recommendations of the National Defense Strategy Commission," United States Institute of Peace, November 14, 2018, p. 49.
102.	Ibid., p. 59. For more on the NDS, see CRS Report R45349, The 2018 National Defense Strategy: Fact Sheet, by Kathleen J. McInnis.
103.	Other related sections of United States Code include 10 U.S.C. §127a—Operations for which funds are not provided in advance: funding mechanisms; 22 U.S.C. §2421f—Sustainability requirements for certain capital projects in connection with overseas contingency operations; and 22 U.S.C. §1702—Chief Acquisition Officers and senior procurement executives.
104.	Government Accountability Office, OVERSEAS CONTINGENCY OPERATIONS: Funding and Cost Reporting for the Department of Defense, GAO-10-288R, December 18, 2009.
105.	Letter from Steven M. Kosiak, then-Associate Director for Defense and Foreign Affairs, OMB, to Robert Hale, then-Under Secretary of Defense, Comptroller, "Revised War Funding Criteria," September 9, 2010.
106.	Government Accountability Office, OVERSEAS CONTINGENCY OPERATIONS: Funding and Cost Reporting for the Department of Defense, GAO-10-288R, December 18, 2009.
107.	Government Accountability Office, Opportunities to Improve Controls over Department of Defense's Overseas Contingency Operations Cost Reporting, GAO-10-562R, May 27, 2010.
108.	10 U.S.C. 2214 and Department of Defense Financial Management Regulation 7000.14-R Volume 3: "Budget Execution-Availability and Use of Budgetary Resources," September 2015—see Chapter 6, "Reprogramming of DOD Appropriated Funds." This section focuses on the reprogramming of funds appropriated through unclassified DOD base and OCO accounts, as well as State/USAID appropriations—separate reprogramming authorities and processes are used for military construction and family housing appropriations; and for National Intelligence Program and Military Intelligence Program appropriations.
109.	See Sections 1001, "General transfer authority," and 1512, "Special transfer authority," of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (P.L. 115-232) and Sections 8005 and 9002 of the Department of Defense Appropriations Act, 2019 (Division A of P.L. 115-245).
110.	Section 8005 of P.L. 115-245 states the Secretary of Defense may transfer up to $4 billion of working capital funds to the Department of Defense "for military functions (except military construction)," and that military personnel appropriations do not count toward the limit; Section 9002 states the Secretary of Defense may transfer up to $2 billion between the appropriations or funds made available to DOD in the OCO title.
111.	Department of Defense, Office of the Under Secretary of Defense (Comptroller), Justification for Component Contingency Operations and the Overseas Contingency Operations Transfer Fund (OCOTF), June 2008. The term no year appropriation is defined in the U.S. Congress, House, Statement of Disbursements, Glossary of Terms, 114th Cong., 2nd sess.
112.	Department of Defense, Office of the Under Secretary of Defense (Comptroller), Justification for Component Contingency Operations and the Overseas Contingency Operations Transfer Fund (OCOTF), FY2014 budget request, May 2013.
113.	Contributed by Heidi Peters, Analyst in U.S. Defense Acquisition Policy.
114.	U.S. Congress, House Committee on Appropriations, Making Appropriations for the Department of Defense for the Fiscal Year Ending September 30, 2008, and for Other Purposes, Conference report to accompany H.R. 3222, 110th Cong., 2nd sess., November 6, 2007, H.Rept. 110-434 (Washington: GPO, 2007), Joint Explanatory Statement, p. 87.
115.	Funding requests in the base budget for overseas contingency operations are not designated as emergency or OCO/GWOT in accordance with the BCA exception and are therefore counted against the DOD's total discretionary spending limit.
116.	Department of Defense, Office of the Under Secretary of Defense (Comptroller), Justification for Component Contingency Operations and the Overseas Contingency Operations Transfer Fund (OCOTF), FY2009 Budget Request, June 2008.
117.	Ibid.
118.	Ibid.
119.	Ibid.
120.	Department of Defense, Office of the Under Secretary of Defense (Comptroller), Justification for Component Contingency Operations and the Overseas Contingency Operations Transfer Fund (OCOTF), FY2017 Budget Request, February 2016.
121.	Ibid. In FY2017, funding for OEF-CCA was requested in the U.S. Special Operations Command OCO O&M budget justification documents.
122.	Ibid.
123.	Ibid. Beginning in FY2016, funding for OSS was requested in U.S. Army and U.S. Navy budget justification documents under Operation Freedom's Sentinel.
124.	See Title VIII of Division K and Title IX of Division C in the Consolidated Appropriations Act, 2016 (P.L. 114-13); and Title XII of the National Defense Authorization Act for Fiscal Year 2016 (P.L. 114-92).
125.	These functions include bilateral economic assistance ("Transition Initiatives," "Complex Crises Fund," "Economic Support Fund," and "Assistance for Europe, Eurasia and Central Asia") and international security assistance ("International Narcotics Control and Law Enforcement," "Nonproliferation, Anti-terrorism, Demining and Related Programs," "Peacekeeping Operations," and "Foreign Military Financing Program").
126.	Department of Defense, Office of the Under Secretary of Defense (Comptroller) Chief Financial Officer, Defense Budget Overview, United States Department of Defense Fiscal Year 2019 Budget Request, Revised February 13, 2018, p. 4-2.
127.	Department of Defense, Office of the Under Secretary of Defense (Comptroller) Chief Financial Officer, February 2016, Defense Budget Overview, United States Department of Defense Fiscal Year 2017 Budget Request, February 2016, p. 7-1.
128.	Department of Defense, Office of the Under Secretary of Defense (Comptroller) Chief Financial Officer, February 2016, Defense Budget Overview, United States Department of Defense Fiscal Year 2017 Budget Request, February 2016, p. 7-4.
129.	Department of Defense, Office of the Under Secretary of Defense (Comptroller), Joint Improvised Explosive Device Defeat Organization, Joint Improvised Explosive Defense Defeat Fund Budget Justification Document for FY2010.
130.	For more information on the MRAP program, see CRS Report RS22707, Mine-Resistant, Ambush-Protected (MRAP) Vehicles: Background and Issues for Congress, by Andrew Feickert.
131.	Department of Defense, Office of the Under Secretary of Defense (Comptroller), European Reassurance Initiative, FY2016 budget request, February 2015, p. 1. For more information, see CRS In Focus IF10946, The European Deterrence Initiative: A Budgetary Overview, by Pat Towell and Aras D. Kazlauskas.
132.	Department of State, "The Global Security Contingency Fund," available at https://pa-web1.state.gov/t/pm/gpi/sfcb/index.htm.
133.	USAID, Office of Program, Policy, and Management, Complex Crises Fund, at https://www.usaid.gov/who-we-are/organization/bureaus/bureau-democracy-conflict-and-humanitarian-assistance/office-program.
134.	Department of State, Congressional Budget Justification, Department of State, Foreign Operations, and Related Programs, Fiscal Year 2019, p. 99 and p. 145.
135.	Department of Defense, Office of the Under Secretary of Defense (Comptroller), Security Cooperation Consolidated Budget Display, FY2019 Budget Request, February 2018, p. 29.