Slow Pace Of Transition Away From OCO Budget Leaves Questions For DOD | Inside Defense.com

By Gabe Starosta

Air Force officials, like their brethren in the other military services, continue to struggle with transitioning items from their wartime budgets into the base budget, especially in the absence of a formal overseas contingency operations funding request for fiscal year 2015.

In essence, the Army, Navy, Air Force and Marine Corps have not yet had to face a looming and predictable budget crisis: the fact that OCO dollars, which represent about a 20 percent funding boost on top of the Pentagon’s normal budget, are going to be reduced in the absence of a future war. As that funding stream shrinks or goes away entirely, the services will have to stop performing certain tasks because the OCO money that supported them no longer exists, and move some activities into the base budget — at the expense of currently funded work.

But little appears to have been done to move those two processes forward, at least in the Air Force. At a media roundtable this week about the declining amount of available OCO funding, a service official was unable to cite any war-specific tasks the Air Force will give up or transition into base-budget expenses. The official, Assistant Deputy Chief of Staff for Operations, Plans and Requirements Maj. Gen. James Jones, cited the uncertainty surrounding the future OCO funding level as an impediment to planning, and the Defense Department has put in place a $79 billion FY-15 placeholder figure as it waits for a formal Obama administration decision on future troop levels in Afghanistan. Yet he said the Air Force is considering the possibility of a future supplemental funding source — a new OCO — as a possible solution to the present budget dilemma.

“It’s not just the Air Force. It’s all of the services that are trying to figure out how to take the things we have relied on OCO funding for and put it back into our base budgets,” Jones said. “And so as we get more fidelity on what the future of that might be, supplemental funding in some other form, [those] are the things that we’ll have to continue to work through. So we’ve got some placeholders out there for OCO, as you referred to, but once we get fidelity on what is actually there, then we’ll have to work our way into what the specifics into the budget would be.”

The creation of a new supplemental budget in the future would occur in the case of a new war, or perhaps if Congress agrees to remove some very costly activities, like ballistic missile submarine recapitalization, out of DOD’s base budget. Jones admitted as much, saying, “Our base budget is for us to organize, train and equip. So if there are other events that have to happen, that the military is asked to do, then there would be some discussion about supplemental funding.” In such a situation, the Air Force and its sister services might never have to make the difficult decisions associated with billions of dollars of budget cuts, but neither would the Pentagon have the opportunity to recover from more than a decade of war.

The Army and Marine Corps face probably the most complicated OCO decision-making calculus because of the huge inventories of Mine Resistant Ambush Protected vehicles they have accumulated in recent years. If sustained in war-ready condition, those MRAPs would place an unbearable strain on the budgets of the two ground services. For the Air Force, the most relevant mission area will likely be intelligence, surveillance and reconnaissance, as Jones said the service has largely funded remotely piloted aircraft fielded in theater through OCO money.

“We’ve talked about the things that we’re divesting right now, but our challenge is there are a number of weapon systems out there that we fielded for the fight that we’ve been in that was largely reliant on OCO to be able to sustain,” he said. “That has fed into some of the decisions that we can do as to what goes back into our base budget. RPAs is a key example.”

Jones mentioned the option of reducing aircraft capacity to generate savings, freeing up money for other purposes in the base budget. Trading capacity for quality has been a favored Air Force strategy, albeit often opposed by Congress, to deal with budget pressures over the last several years.

In some ways, Congress has aided the military’s dependence on OCO by using that wartime budget as a sort of unfunded priorities funding stream, instead of as a strict way to reimburse the Pentagon for expenses incurred in Iraq and Afghanistan. Just last week, as InsideDefense.com reported, the Air Force spent more than $70 million in OCO money to buy a new CV-22 Osprey tiltrotor helicopter. That purchase replaced another Osprey destroyed in training — not in combat.

Lawmakers do appear to be recognizing this approaching budget clash, though. The House Armed Services Committee will hold a hearing on March 27 titled, “Operations and Maintenance Without OCO Funds: What Now?” featuring three-star general officers from each of the military services.

via Slow Pace Of Transition Away From OCO Budget Leaves Questions For DOD | Inside Defense.com.