Specifically, there is bipartisan support in Congress to use emergency supplemental funding to circumvent the budget deal’s already extravagant “caps” on defense spending. Lawmakers in both parties say that these emergency supplements will be used to “counter” Russia and China via military aid to Ukraine, Taiwan, and on related issues. This would create a walled-off slush fund for Washington to move defense spending closer to and possibly over $1 trillion without much political debate or strategic discipline.
Emergency supplemental funding would function similarly to the Overseas Contingency Operations fund, commonly known as OCO. During the Global War on Terror, the OCO fund was a malleable, seemingly bottomless supply of cash used to support U.S. military operations in Iraq, Afghanistan, and elsewhere, with minimal oversight. Between 2001 and 2019, Congress appropriated $2 trillion in OCO funding. In fiscal year 2020, the year before the U.S. military withdrew from Afghanistan, Washington spent $70.7 billion via OCO, making the fund larger than all but three federal agencies.
Critically, OCO money was considered separate from the Pentagon’s base budget and therefore not subject to spending limits. The 2011 Budget Control Act (BCA) and the 2013 sequestration created spending limits on many federal programs—but not OCO funds. For that reason, the OCO came to be used as a slush fund under the BCA’s spending caps. Policymakers discovered that they could escape the spending limits by moving defense budget items into the OCO account.