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How Pentagon war fund became a budget buster Washington can't resist

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The number of U.S. troops deployed in battle zones is at its lowest level since before the 2003 invasion of Iraq. Still, Congress has authorized a 38 percent increase in the war budget over last year.

The contradiction is the legacy of an emergency war fund, started in the aftermath of the Sept. 11, 2001 attacks, that has become a favorite Washington way to sidestep the impact of fiscal constraints on military spending.

The Overseas Contingency Operations account, or OCO, has been tapped to fund tens of billions of dollars in programs with questionable links, or none, to wars, according to current and former U.S. officials, analysts and budget documents.

The mutation of the fund's original purpose has long been tolerated by Republican and Democrats. But its central role in a looming U.S. government budget showdown has brought fresh focus to the war fund, which is little known outside Washington.

This spring, Congressional Republicans abandoned any pretense that OCO should be used for its stated purpose - the wars in Iraq and Afghanistan and related operations. In a maneuver to increase defense spending, they simply approved adding $38 billion in other, non-war Pentagon spending to the account, bringing the total to $89 billion.

In doing so, lawmakers tapped OCO's budget magic: as a contingency fund, it doesn't count against budget caps on defense and non-defense spending imposed in 2011.

Sen. John McCain acknowledged the move was "a contradiction of what OCO was supposed to be all about many years ago, when we started it as a result of Afghanistan and Iraq."

President Barack Obama has threatened to veto defense spending bills over what the White House calls the OCO "gimmick." The administration wants budget caps lifted for both defense and domestic spending. It's one of the major sticking points in a Washington budget struggle that could leave part or all of the U.S. government unfunded after Sept. 30.

More is at stake than an accountants' dispute over different pots of money, officials and analysts say.

"It's the worst thing that could happen to budget discipline," said Gordon Adams, a former White House Office of Management and Budget (OMB) official.


Edited by rbear
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