Budget Caps? What Budget Caps? | Cato @ Liberty


This special post was written by Travis Evans, research associate in Cato’s Defense and Foreign Policy Studies Department.


House Republicans have found a way to circumvent those bothersome Budget Control Act (BCA) spending caps. On MSNBC’s Morning Joe this morning, Rep. Mac Thornberry (R-TX), chairman of the House Armed Services Committee, brazenly stated that the $611.9 billion defense authorization bill, which was passed by the House today, adheres to the BCA cap on discretionary defense spending. How, you may be asking, is it possible to authorize $89 billion more than the caps and still adhere to them? Simple: funnel the money through a slush fund that is not beholden to the spending caps, in this case the Overseas Contingency Operations (OCO) account.


Using the OCO account to supplement discretionary defense spending is so common nowadays that Chairman Thornberry explains the Republicans’ actions as if we should applaud him and his colleagues for saving the defense budget.


The caps are a concern, but we found a way to add to the Overseas Contingency account, so that we in the House budget and the defense bill on the floor right now meet exactly the amount the president has ask for.

You see what he did there? He is able to say that the Republicans are honoring the caps (the ones they agreed to in 2011) while giving the president the defense spending he requested. Clever. But maybe too clever. Congressional Democrats don’t seem to be persuaded. Even the president is opposed to the bill (albeit because of some particulars of the bill, not the topline spending amount).


House Minority Leader Nancy Pelosi (D-CA) called the bill “disingenuous” and “dangerous,” stating that the “Republicans are trying to use war funding as a virtual slush fund for one part of the budget while letting the ax fall on everything else.” While I’m not in the habit of agreeing with Rep. Pelosi, she is right in this case.



When Sam Stein on Morning Joe asked Thornberry why it was okay to circumvent defense caps, but seen as “sacrilege” by many on the right to increase spending for domestic programs like the National Institute of Health, Thornberry said he would be open to more spending on domestic priorities, just not now.


There are lots of Republicans, and I would be included, who would increase money for NIH and want to have something that is more rational than the Budget Control Act and its arbitrary caps and sequestration. But the point is you can’t do that on a defense authorization bill… That’s not the place or time to have that debate.

But by ignoring the caps on defense spending, Republicans have rendered the BCA meaningless. The BCA was never meant to manage the federal budget; it was specifically designed to force the two parties to negotiate by using their respective spending priorities as leverage. But now that the defense caps are off the table, that leverage is gone.


Congressional Democrats are right to be up-in-arms over the Republican’s latest tactic. President Obama could veto the bill, if for no other reason than to preserve the BCA caps and the leverage they provide. While it was never the wisest way to keep spending in check, the BCA caps are better than the alternative passed by the Republican-controlled House today.

Budget Caps? What Budget Caps? | Cato @ Liberty.