The Pentagon has every reason to be happy. The deal does not provide budget growth, but it gives the Pentagon something it has been seeking for the last three years: budget stability. It is a flat budget for FY 2014 and 2015, which is a dose of reality, but it could have been worse. At least the numbers for the next two years are now clear.
The little deal gives the Pentagon something else. That little change from a looming sequester to an agreed budget number puts DoD planners back in a zone they would rather be in, where they can balance program A and readiness requirement B and actually do some trade-offs related to real choices, not arbitrary slices in the procurement and research budgets.
And when the Pentagon wants to scratch that readiness itch (it is overstated, but they love to scratch it), they will find a welcome tool in their holiday stocking. Although none of the media coverage of the budget agreement has mentioned it, the Pentagon asked for, and is likely to get, an additional $90 billion, give or take, in funding for what they call Overseas Contingency Operations (OCO) -- the war budget.
That $90 billion — on top of the roughly $495 billion they can expect from the “little” deal — isn’t chicken feed, that’s real dollars. It has been the Pentagon’s secret fiscal escape hatch for more than a decade, even as we left Iraq and drew down in Afghanistan. For the last few years, the OCO budget has routinely had more funds in it than the military needs in the war zones.
And that $90 billion doesn’t really go to a separate budget. It is money appropriated to the same accounts as the regular (they like to call it the “base”) budget. Most of it is in the “operations and maintenance” accounts, where the Pentagon’s readiness, and its “back office” live. Funds put there are very flexible — they can move from activity to activity with little or no notification to the Congress or anybody else.