Overseas Contingency Operations Funding: Background and Status

Contents

• Introduction
• Background
• Use of Supplemental Appropriations for Contingency Operations
• Designation of Funding as "Emergency" or for "OCO/GWOT"
• Designation of an "Emergency" Requirement
• Designation as an "OCO/GWOT" Requirement
• Congressional Procedure Related to "Emergency" or "OCO/GWOT" Designations
• Criteria Used by DOD in Determining "Emergency" or "OCO/GWOT" Requirements
• Criteria Used by State/USAID in Determining "Emergency" or "OCO/GWOT" Requirements
• Transfer Authorities and Other Special Purpose Accounts
• "Emergency" and "OCO/GWOT" Appropriations since 9/11
• DOD Base Funding vs. "Emergency" or "OCO/GWOT"
• Operations Conducted Primarily in Iraq
• Libya
• Enhanced U.S. Security
• Funding Obligations by Operation
• U.S. Uniformed Military and Contractor Personnel Levels in Iraq and Afghanistan
• Contingency Operations Funding in the DOD Base Budget
• DOS Operations Funded as "Emergency" or "OCO/GWOT"
• The Bipartisan Budget Act of 2015 and OCO Funding
• FY2017 OCO Budget Request
• FY2017 Department of Defense OCO Request
• Budget Highlights by Geographic Mission
• Budget Highlights by Activity
• Contingency Operations in Base Budget
• FY2017 Department of State/USAID OCO Request
• The BBA and the State/Foreign Operations Budget Request for FY2017
• Congressional Action on the FY2017 OCO Request
• DOD OCO Request and the FY2017 NDAA
• FY2017 Continuing Resolutions (CR)
• DOD OCO Funding and the CR
• SFOPS OCO Funding and the CR

Summary

The Department of Defense (DOD) estimates that through FY2016 Congress has appropriated $1.6 trillion for DOD war-related activities since the terror attacks of September 11, 2001. When combined with an estimated $123.2 billion in related State Department and Foreign Operations appropriations, the DOD, Department of State (DOS), and U.S. Agency for International Development (USAID) have received an estimated $1.7 trillion for activities and operations in support of the broad U.S. government response to the 9/11 attacks.

Funding for these activities has been largely provided through supplemental appropriation acts or has been designated as an "emergency" or "Overseas Contingency Operation/Global War on Terror" (OCO/GWOT) requirement in annual agency budget requests—or both. Funds designated as such are not subject to procedural limits on discretionary spending in congressional budget resolutions or to the statutory discretionary spending limits established by the Budget Control Act of 2011 (BCA). While there is no overall statutory limit on the amount of emergency or OCO/GWOT-designated spending, both Congress and the President have a fundamental role in determining how much OCO/GWOT and emergency spending is provided each fiscal year. Congress must designate any such funding as OCO/GWOT in statute on an account by account basis. The President is also required to designate it as such after it is appropriated in order for it to be available for expenditure.

Definitions of what constitutes emergency or OCO/GWOT activities and expenses have shifted over time, reflecting differing viewpoints about the extent, nature, and duration of the wars in Iraq and Afghanistan. Funding designated OCO/GWOT has also been recently used to fund base budget requirements of the DOD and DOS and to provide funding to prevent or respond to crises abroad, including armed conflict, as well as human-caused and natural disasters. The first use of an OCO/GWOT designation in budgetary law was in the 2011 BCA. Prior to the BCA, the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA) only allowed "emergency" requirements to be excluded from budget control limits. The BCA added the designation "Overseas Contingency Operation/Global War on Terror" to the BBEDCA exemption, thereby providing Congress and the President with an alternate way to exclude funding from the BCA limits without using the "emergency" designation.

The FY2017 OCO Request

The Bipartisan Budget Act of 2015 (BBA) raised the BCA discretionary spending limits for fiscal year (FY) 2016 and FY2017 for both the defense and nondefense categories, and also specified an expected level for OCO spending for those years. The President's February 2016 OCO budget request of $58.8 billion for defense activities and $14.9 billion for non-defense OCO matched BBA-directed levels for FY2017. However, the Administration submitted an amendment in November 2016, raising both the defense and non-defense requests by $5.8 billion each to $64.6 billion and $20.7 billion, respectively. The Administration stated that the additional resources are needed to maintain approximately 8,400 troops in Afghanistan and to fund additional troops and requirements in Iraq/Syria.

The DOD Comptroller indicated that the majority of the original $58.8 billion in FY2017 OCO request for DOD centers on supporting Operation Freedom's Sentinel in Afghanistan, Operation Inherent Resolve in Iraq and Syria, and increased efforts to support European allies and deter Russian aggression—all while supporting what is referred to as a "partnership-focused approach to counterterrorism." However, the President's FY2017 DOD OCO request also includes $5.1 billion for base budget activities—normal military operations and procurement that could not be funded in the DOD's base budget due to the BCA statutory limits.

The original FY2017 OCO request for the State Department included funding needed to "provide support to, respond to, recover from, or prevent crises abroad, including armed conflict, as well as human-caused and natural disasters." Specifically, the DOS request included funding to contribute to peacekeeping missions and special political missions, increase efforts to destroy the Islamic State, and sustain security programs and embassy construction at high risk posts. The November 2016 request seeks an additional $5.8 billion for State and USAID to "support the Administration's counter-ISIL and counterterrorism objectives ... and respond to relief and recovery needs, as well as provide additional humanitarian assistance for areas liberated from ISIL and other unforeseen needs."

FY2017 Congressional Action

The House-passed National Defense Authorization Act (NDAA) for FY2017 provided for an additional $18.0 billion in base budget requirements in the OCO authorization—funding that would be exempt from the spending caps set by the BCA. However, the House and Senate conference agreement on the FY2017 NDAA (P.L. 114-328) authorizes a total of $8.3 billion in OCO funding for base budget requirements ($5.1 billion requested by the Administration and $3.2 billion added by Congress) without an equivalent increase in spending for nondefense programs. The Obama Administration and the minority leadership in both congressional chambers objected to allowing an increase in defense spending by raising the defense cap—or adding OCO spending for defense—without providing a comparable increase for nondefense spending in the overall federal budget.

Having not reached agreement on most FY2017 annual appropriations bill before the start of the fiscal year, Congress enacted two continuing resolutions to provide temporary funding for federal programs. The first, the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriation Act, 2017, and Zika Response and Preparedness Act (H.R. 5325/P.L. 114-223), provided budget authority through December 9, 2016, for programs and activities for which regular appropriations bills for FY2017 had not been enacted. The second, the Further Continuing and Security Assistance Appropriations Act, 2017 (H.R. 2028/P.L. 114-254) was enacted December 12, 2016. Division A of H.R. 2028 extends H.R. 5323 through April 28, 2017, and provides DOD and State/USAID OCO budget authority at a rate of operations equivalent to the FY2016 appropriated level. Division B of H.R. 2028 is a supplemental security assistance appropriations bill, providing an additional $5.8 billion for DOD and $4.3 billion for DOS, available through September 30, 2017, unless otherwise specified.

For additional information on related FY2017 budget issues see CRS Report R44428, The Federal Budget: Overview and Issues for FY2017 and Beyond, by [author name scrubbed], CRS Report R44454, Defense: FY2017 Budget Request, Authorization, and Appropriations, by [author name scrubbed] and [author name scrubbed], CRS Report R44636, FY2017 Defense Spending Under an Interim Continuing Resolution (CR): In Brief, by [author name scrubbed] and [author name scrubbed], and CRS Report R44391, State, Foreign Operations and Related Programs: FY2017 Budget and Appropriations, by [author name scrubbed], [author name scrubbed], and [author name scrubbed].

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Overseas Contingency Operations Funding: Background and Status

Introduction

The Department of Defense (DOD) estimates that through FY2016 Congress has appropriated $1.6 trillion to DOD for war-related operational costs, support for deployed troops, and transportation of personnel and equipment since the terror attacks of September 11, 2001.¹ When combined with an estimated $123.2 billion in amounts appropriated for war-related activities of the State Department, Foreign Operations, and Related Programs (SFOPS), these agencies have received an estimated $1.7 trillion for activities and operations related to the broad U.S. response to the attacks, including extended operations in Afghanistan and Iraq (see Figure 1).²

Funding for war-related activities has been largely provided through supplemental appropriation acts or has been designated as an "emergency" or "overseas contingency operation/global war on terror" (OCO/GWOT) requirement—or both. Funds designated as "emergency" or "OCO/GWOT" are not subject to procedural limits on discretionary spending in congressional budget resolutions, or the statutory discretionary spending limits provided through the Budget Control Act of 2011 (BCA).³

Some DOD officials argue that this funding approach is essential to enable a timely military response to a dynamic enemy operating in a complex battlespace.⁴ Critics however, have described the DOD's continued use of the OCO/GWOT account as creating a "slush fund" for military spending.⁵ These critics have suggested that the emergency or OCO/GWOT exception has inappropriately provided a "safety valve" to preserve base budget programs, helping federal agencies comply with statutory discretionary spending limits established by the BCA through designating funding intended to support base budget activities as OCO/GWOT requirements.⁶ Others have asserted that the spending limits—sometimes colloquially referred to as "caps"—established by the BCA have intensified the impetus for agencies to use OCO funding for activities not directly related to contingency operations. They warn that what was once generally restricted to a fund for replacing combat losses of equipment, resupply of expended munitions, and transporting troops to and through war zones has "ballooned into an ambiguous part of the budget to which government financiers increasingly turn to pay for other, at times unrelated, costs."⁷

Exacerbating observers' concerns is the two-year impact of the Bipartisan Budget Act of 2015 (BBA).⁸ The 2015 Act raised the overall discretionary spending limits set by the BCA in 2011, and also set expected OCO funding levels for defense and nondefense for fiscal years FY2016 and FY2017. The enactment of the BBA resulted in the appropriation of an additional $7.7 billion for FY2016 defense OCO and $7.8 billion for SFOPS OCO. The Administration included $5.1 billion in base requirements in the FY2017 DOD OCO request using the BBA as justification.⁹ Similarly, with the BBA setting a $14.9 billion nondefense OCO minimum—more than double the Administration's FY2015 and FY2016 OCO requests―the Administration appears to have moved some base requirements into the OCO category for FY2017.

In marking-up the National Defense Authorization Act (NDAA) for Fiscal Year 2017 on April 27, 2016, the House Armed Services Committee (HASC) designated an additional $18.0 billion in requirements from the President's base budget request as OCO/GWOT. The House passed this measure on May 18, 2016, and the measure was reflected in the House-passed Defense Appropriations Act (H.R. 5293). Despite House efforts to greatly increase the use of OCO funding for base requirements the conference agreement on the NDAA (H.Rept. 114-840) provides a total of $8.3 billion in OCO funding for base budget requirements ($5.1 billion requested by the Administration and $3.2 billion added by Congress).

Having not reached agreement on most FY2017 annual appropriations bill before the start of the fiscal year, Congress enacted two continuing resolutions to provide temporary funding for federal programs. The first, the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriation Act, 2017, and Zika Response and Preparedness Act (H.R. 5325/P.L. 114-223) provided budget authority through December 9, 2016, for programs and activities for which regular appropriations bills for FY2017 had not been enacted. The second, the Further Continuing and Security Assistance Appropriations Act, 2017 (H.R. 2028/P.L. 114-254) was enacted December 12, 2016. Division A of H.R. 2028 extends H.R. 5323 through April 28, 2017, and provides budget authority DOD and State/USAID OCO budget authority at a rate of operations equivalent to the FY2016 appropriated level. Division B of H.R. 2028 is a supplemental security assistance appropriations bill, providing an additional $5.8 billion for DOD and $4.3 billion for DOS, available through September 30, 2017, unless otherwise specified.

Figure 1. Emergency and OCO/GWOT Funding for War-Related Activities FY2001-FY2016

Source: Department of Defense National Defense Budget Estimates for FY2017 (Table 2-1) and Department of State, Foreign Operations and Related Programs Congressional Budget Justifications, FY2001-FY2017. Note: Amounts are not adjusted for inflation. This figure does not include amounts provided by H.R. 5325(P.L. 114-223), the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, and Zika Response and Preparedness Act or H.R. 2028 (P.L. 114-254) Further Continuing and Security Assistance Appropriations Act, 2017.

Background

Supplemental appropriations were used to provide funds for defense and foreign affairs activities related to operations in Iraq and Afghanistan following the attacks of September 11, 2001, and each subsequent fiscal year through FY2010. Understood as reflecting needs unanticipated during the regular appropriations cycle, supplemental appropriations were generally enacted as requested, and almost always designated as emergency funding.

In the FY2011 appropriations cycle, the Obama administration moved away from submitting supplemental appropriations requests to Congress for war-related activities, and has since used the annual budget and appropriation process to fund operations. In concert with this change in budgetary approach, the Obama administration began formally using the term "Overseas Contingency Operations" in place of the Bush administration's "Global War on Terror."¹⁰ Despite this change in label, the Obama administration has continued to request that OCO funding be designated in a manner that would effectively exempt such funding from the BCA limits on defense spending. Currently, there is no overall procedural or statutory limit on the amount of emergency or OCO-designated spending that may be appropriated on an annual basis. However, both Congress and the President have a role in determining how much OCO or emergency spending is provided each fiscal year to federal agencies. Such spending must be so designated as Congress considers the President's Budget request. The President must separately designate such spending after it is enacted in order for it to be available for expenditure.

Use of Supplemental Appropriations for Contingency Operations

Congress may consider one or more supplemental appropriations measures (sometimes colloquially referred to as supplementals) for a fiscal year to provide funding for unforeseen needs (such as funds to recover from a natural disaster), or to increase appropriations for other activities that have already been funded.¹¹ Beginning in FY2004, DOD received some of its war-related funding in Title IX of its regular annual appropriation act, but these funds were designated as "emergency." When funding needs for war and non-war-related activities were higher than anticipated, the Administration submitted supplemental requests. Over the years, Congress has also provided appropriations in a lump sum to special accounts to meet unanticipated wartime needs.¹²

Supplemental appropriations can provide important and necessary flexibility for policymakers to address needs that arise after funding has been appropriated. However, that flexibility has caused some to question whether supplementals are only used to respond to unforeseen events, or whether they also provide funding for activities that could reasonably be covered in regular appropriations acts.

Designation of Funding as "Emergency" or for "OCO/GWOT"

Designation of an "Emergency" Requirement

Through definitions statutorily established by the BBEDCA, "emergency" spending is defined as spending that is for "unanticipated" purposes, such as those that are "sudden ... urgent ... unforeseen ... and temporary."¹³ The BBEDCA does not further specify the types of activities that are eligible for that designation. Thus, any discretionary funding designated by Congress and the President to be for an emergency requirement is effectively exempted from certain statutory and procedural budget enforcement mechanisms, such as the BCA limits on discretionary spending.

The designation of certain war-related activities and expenses as "emergency" requirements has shifted over time, reflecting differing viewpoints about the extent, nature, and duration of the wars in Iraq and Afghanistan. Over the years, both Congress and the President have at times adopted more, and at times less, expansive definitions to support such a designation to accommodate the needs and pressures of the moment.¹⁴

Designation as an "OCO/GWOT" Requirement

Prior to February 2009, U.S. operations in response to the 9/11 attacks were collectively referred to as the "Global War on Terror," or GWOT. Between September 2001 and February 2009, there was no separate budgetary designation for GWOT funds—instead, funding associated with those operations was designated as emergency.

The specific label "OCO" was not applied to the post-9/11 military operations in Iraq and Afghanistan until 2009. In February 2009, the Obama administration released "A New Era of Responsibility: Renewing America's Promise," a presidential fiscal policy document.¹⁵ That document did not mention or reference GWOT; instead it used the term OCO in discussing ongoing military operations in Iraq and Afghanistan. The first request for "emergency" funding for "OCO"—not "GWOT"—was delivered to Congress in April 2009."¹⁶

Congress likewise transitioned to the OCO label in the NDAA for FY2010, with Title XV of the annual bill now known as "Authorization of Additional Appropriations for Overseas Contingency Operations" instead of "Authorization of Additional Appropriations for Operation Iraqi Freedom and Operation Enduring Freedom." The first use of an "overseas contingency operation" designation in budgetary law was in the 2011 BCA, which created an "Overseas Contingency Operations/Global War on Terrorism" designation by amending the 1985 BBEDCA (2 U.S.C 902). This was in addition to a BBEDCA designation for "emergency requirements." Doing so provided Congress and the President with an alternate way to exempt funding from the BCA caps without using the "emergency" designation. These designations were first in effect for FY2012 appropriations.

The foreign affairs agencies began formally requesting OCO/GWOT funding in FY2012, distinguishing between what is referred to as enduring, ongoing or base costs versus any extraordinary, temporary costs of the State Department (DOS) and U.S. Agency for International Development (USAID) in supporting ongoing U.S. operations and policies in Iraq, Afghanistan, and Pakistan.¹⁷ Congress, having used OCO/GWOT exemption for DOD, adopted this approach for foreign affairs, although its uses for SFOPS activities have never been permanently defined in statute. For the first foreign affairs OCO/GWOT appropriation, funds were provided for a wide range of recipient countries, including Yemen, Somalia, Kenya, and the Philippines. In addition to country-specific uses, OCO/GWOT-designated funds were also appropriated for the Global Security Contingency Fund.¹⁸

Congressional Procedure Related to "Emergency" or "OCO/GWOT" Designations

All budgetary legislation is subject to a set of enforcement procedures associated with the Congressional Budget Act of 1974, as well as other rules, such as those imposed by the BCA.¹⁹ Those rules provide mechanisms to enforce both procedural and statutory limits on discretionary spending. The procedural limits associated with congressional budget resolutions are enforced through points of order that can be made while discretionary spending legislation is under consideration.²⁰ If discretionary spending is enacted in excess of the statutory limits during any given budget cycle, enforcement primarily occurs through "sequestration," which is the automatic cancellation of budget authority through largely across-the-board reductions of nonexempt programs and activities.²¹ Appropriations that have been designated as "emergency requirements" or in support of "OCO/GWOT," however, are effectively exempted from those limits under current law.²²

Recently, Congress and the President have designated as "OCO/GWOT" funds for a variety of activities that had previously been contained in the base budget. This relabeling of funds was done, in part, as a response to the discretionary spending limits enacted by the BCA. By designating ongoing activities not directly related to contingency operations as "OCO," Congress and the President can effectively continue to increase topline defense, foreign affairs, and other related discretionary spending, without triggering sequestration.

Criteria Used by DOD in Determining "Emergency" or "OCO/GWOT" Requirements

Section 101 of Title10, United States Code, defines a "contingency operation" as any Secretary of Defense-designated military operation "in which members of the armed forces are or may become involved in military actions, operations, or hostilities against an enemy of the United States or against an opposing military force." Since the 1990s NATO intervention in the Balkans, DOD financial management regulations (FMR) have defined contingency operations costs as those expenses necessary to cover incremental costs "that would not have been incurred had the contingency operation not been supported (emphasis added)."²³ Such costs would not include, for example, base pay for troops or planned equipment modernization, as those expenditures are normal peacetime needs of the DOD. The Office of Management and Budget (OMB) issued criteria to be used by the DOD in making war/overseas contingency operations funding requests in September 2010, and the DOD FMR was updated accordingly (see Appendix A).

The current DOD FMR states that only those costs in addition to DOD's normal peacetime activities, such as those incurred because troops are deployed in support of a contingency operation, are to be considered OCO.²⁴ To aid in the identification of such activities, the DOD regulation requires the military services to show how additional contingency operation deployments and operations affect peacetime assumptions about troop levels and operational tempo. Long-term equipment procurement or similar investment costs are only to be included if "necessary to support a contingency operation" and are "not to be used to procure durable and expendable items in excess of what is required."²⁵ Table 1 includes the general cost categories DOD uses in accounting for costs of contingency operations.

Criteria Used by State/USAID in Determining "Emergency" or "OCO/GWOT" Requirements

There is no detailed statutory or regulatory definition of "OCO" or "OCO/GWOT" in the nondefense context. The Obama administration's FY2012 International Affairs budget request was the first of its kind to include separate OCO funds for "extraordinary and temporary costs of operations in Iraq, Afghanistan, and Pakistan."²⁶ At the time, the Administration indicated that the use of this designation was intended to provide a transparent, whole-of-government approach to the exceptional war-related costs incurred in those three countries, thus better aligning the associated military and civilian costs. This first foreign affairs OCO request identified the significant resource demands placed on the State Department as a result of the transitions from a military-led to a civilian-led mission in Iraq and Afghanistan, as well as the importance of a stable Pakistan for the U.S. effort in Afghanistan. The FY2012 foreign affairs OCO request included

• For Iraq, funding for the U.S. Embassy in Baghdad, consulates throughout Iraq, a civilian-led Police Development and Criminal Justice Program as well as military and development assistance in Iraq; and oversight of U.S. foreign assistance through the Special Inspector General for Iraq Reconstruction;
• For Afghanistan, funding to strengthen the Afghan government and build institution capacity; support DOS/USAID and other U.S. government agency civilians deployed in the Afghan provinces; provide short-term economic assistance to address counterinsurgency and stabilization efforts, and provide oversight of U.S. foreign assistance programs in Afghanistan through the Office of the Special Inspector General for Afghanistan Reconstruction;
• For Pakistan, funding to support U.S. diplomatic presence and diplomatic security in Pakistan, as well as providing Pakistan Counterinsurgency Capability Funds (PCCF) to train and equip Pakistani forces to eliminate insurgent sanctuaries and promote stability and security in neighboring Afghanistan and the region.

In subsequent years, the Administration designated certain activities in Syria and other peacekeeping activities as OCO; in the FY2017 budget request, the Administration broadened its use of DOS OCO funds, including countering Russian aggression, counterterrorism, humanitarian assistance, and aid to Africa. In addition to OCO funds requested through the normal appropriations process, the Administration in FY2015 and FY2016 also requested emergency supplemental funding (designated as OCO) to support DOS/USAID efforts in countering the Islamic State, as well as responding to global health threats such as the Ebola and Zika viruses.

See Appendix A for more information on statutory authorities and regulatory guidance related to emergency requests and appropriations.

Transfer Authorities and Other Special Purpose Accounts

In addition to the supplemental appropriations and emergency or OCO/GWOT designation, DOD and DOS also have the authority to shift funds from one budget account to another in response to operational needs. For DOD, these transfers (sometimes colloquially called "reprogrammings"), are statutorily authorized by 10 U.S.C §2214 ("Transfer of funds: procedure and limitations"), which allows the Secretary of Defense to reallocate funds for higher priority items, based on unforeseen military requirements, after receiving written approval from the four congressional defense committees. DOD may also reprogram funds within an account from one activity to another, as long as the general purpose for the use of those funds remains unchanged.²⁷ Specific authorities, or limits to transfer or reprogramming authorities, have also been added to these general authorities through provisions in annual defense authorization and appropriation acts.²⁸

Annual caps on transfers between DOD accounts for both base budget funds and emergency or OCO-designated funds are generally established through provisions in annual appropriation or authorization bills. In FY2016, the base budget transfer cap was $4.5 billion, or less than 1% of the total enacted DOD base budget in that year.²⁹ In recent years, Congress has authorized the DOD, after meeting certain stipulations, to transfer base budget "funds made available…for military functions" to other base accounts, or to OCO-designated accounts, with military functions.³⁰ Recognizing the greater uncertainty in predicting overseas contingency operation spending, defense appropriations acts have typically set a higher transfer cap for such funds—in FY2016, the OCO budget transfer caps were $4.5 billion, or about 7.7% of the total enacted DOD OCO budget.³¹ In recent years, Congress has also authorized the DOD to transfer OCO-designated funds to other OCO-designated accounts.³²

The Department of State's OCO transfer authority has been provided in appropriations acts and has specifically authorized the Administration to transfer OCO funds only to other OCO funds within Title VIII SFOPS appropriations, not between OCO and base accounts. The transfer authority is capped, specified by account, and requires regular congressional notification procedures.

Overseas Contingency Operations Transfer Fund (OCOTF)

The OCOTF was established for DOD in FY1997 as a "no year" transfer account (meaning amounts are available until expended) in order to provide additional flexibility to meet operational requirements.³³ Transfers from the OCOTF are processed using existing reprogramming procedures. A quarterly report is submitted to the congressional oversight committees, documenting all transfers from the OCOTF to DOD components baseline accounts. Beginning in FY2002, funds to support Southwest Asia, Kosovo, and Bosnia contingency requirements were appropriated directly to DOD components' Operation and Maintenance (O&M) and Military Personnel accounts, rather than allocation to the OCOTF for later disbursement. FY2014 was the last year a request was made by the Administration for a direct appropriation to the OCOTF.³⁴

Congressionally-authorized Funds or Programs

Through the DOS and DOD OCO authorization and appropriation process, Congress has created numerous funds and programs that are designed to finance specific overseas contingency operations-related activities that do not fit into traditional budgetary accounts. Many of these funds and programs are supplied with amounts that are available until expended—however, authorization for the specified fund or program has an expiration date, thereby requiring further congressional action for reauthorization of affected funds or programs.³⁵ Congress has also provided increased transfer authority to provide greater flexibility for U.S. government activities in situations that are typically unpredictable.³⁶ For example, in order to facilitate assistance for multiple ongoing international migration and refugee crises, the FY2016 appropriations law authorized transfers between the International Disaster Assistance and Migration and Refugee Assistance accounts, subject to an annual limit of $600 million.³⁷ Examples of these types of congressionally-authorized OCO programs or funds include

• Afghan Security Forces Fund and Iraq Train and Equip Fund, which provide funding and support for the training, equipping, and expansion of selected military and security forces in support of U.S. objectives;³⁸
• Counterterrorism Partnership Fund, which provides funding and support to partner nations engaged in counterterrorism and crisis response activities;³⁹
• Commander's Emergency Response Program, which generally supports infrastructure improvements such as road repair and construction and, according to DOD, enables military commanders on the ground to respond to urgent humanitarian relief and reconstruction needs by undertaking activities that will immediately aid local populations and assist U.S. forces in maintaining security gains;⁴⁰
• Joint Improvised Explosive Device (IEDs) Defeat Fund, which was established to coordinate and focus all counter-IED efforts, including ongoing research and development, throughout DOD. Due to the enduring nature of the threat, DOD began moving associated funding to the base budget in FY2010;⁴¹
• Mine Resistant Ambush Protected Vehicle (MRAP) Fund, which was intended to expedite the procurement and deployment of MRAPs to Iraq and Afghanistan;⁴²
• European Reassurance Initiative, which provides funding and support to NATO allies and partners through a U.S. campaign to "reassure allies of the U.S. commitment to their security and territorial integrity as members of the NATO Alliance, provide near-term flexibility and responsiveness to the evolving concerns of our allies and partners in Europe, especially Central and Eastern Europe, and help increase the capability and readiness of U.S. allies and partners;"⁴³
• Global Security Contingency Fund, which provides funding for DOS and DOD "to pool money and expertise to address emergent challenges [as well as opportunities] to a partner country's security and…justice sectors;"⁴⁴
• Complex Crisis Fund, which provides funding through the State Department and USAID to "to help prevent crises and promote recovery in post-conflict situations during unforeseen political, social, or economic challenges that threaten regional security;"⁴⁵
• Migration and Refugee Assistance Fund, which provides funding to respond to refugee crises in Africa, the Near East, South and Central Asia, and Europe and Eurasia;⁴⁶ and
• Ukraine Security Assistance Initiative, which provides assistance, including training, equipment, lethal weapons of a defensive nature, logistics support, supplies and services, sustainment, and intelligence support to the military and national security forces of Ukraine.⁴⁷

"Emergency" and "OCO/GWOT" Appropriations since 9/11

CRS estimates a total of $1.7 trillion has been provided to the DOD and DOS through FY2016 for combat operations, certain diplomatic operations, and related foreign assistance since the attacks on September 11, 2001. DOD activities account for $1.6 trillion—or 93%―of the total enacted funding designated for these purposes. Diplomatic operations and foreign aid programs of the DOS account for another $123.2 billion, or 7.0% of the total.⁴⁸

For FY2017, the Administration initially requested $73.7 billion be designated as OCO/GWOT funding ($58.8 billion for DOD and $14.9 billion for DOS). In November 2016, the Administration amended its OCO request, increasing the total to $85.3 billion ($64.6 billion for DOD and $20.7 billion for State/USAID) (see Table 2).

DOD Base Funding vs. "Emergency" or "OCO/GWOT"⁴⁹

The majority of the $9.4 trillion in total DOD spending since the terrorist attacks of September 11, 2001 has been for base budget funding (82%), with approximately 18% of the budget allocated for war funding. Less than 1% of that cumulative total has been authorized for emergency relief (such as hurricane response) and a variety of unrelated programs detailed in Table 3.

War-related funding for DOD peaked at $187 billion during the FY2008 Iraq troop surge, and rose from a subsequent decline as cost reductions in Iraq were offset by a second surge in Afghanistan, beginning in FY2010 (see Figure 2). The Administration's FY2015 request began stabilization in OCO/GWOT funding following the drawndown in Iraq and Afghanistan, with FY2015-FY2017 levels averaging $61 billion.

Figure 2. OCO/GWOT Amounts as Percentage of Total DOD Budget Authority FY2001-FY2017 Amended Request

Source: DOD Defense Budget Overview, FY2017, Table 1-2 and DOD Overview: Overseas Contingency Operations Budget Amendment FY2017. Note: * Estimate based on the FY2017 President's budget request, as amended.

Since 9/11, the U.S. Armed Forces, under guidance from the DOD, have conducted the following named military operations:

Operations Conducted Primarily in Afghanistan

Operation Enduring Freedom (OEF) began immediately after the 9/11 attacks and included operations in Afghanistan and other small GWOT operations. OEF formally concluded in December 2014 and was succeeded by Operation Freedom's Sentinel (OFS). OEF was comprised of several related missions:

• OEF-Horn of Africa (continues under OFS);⁵⁰
• OEF-Trans Sahara (continues under OFS);⁵¹
• OEF-Philippines (concluded in the summer of 2014);⁵²
• Operation Spartan Shield (continues under OFS);⁵³ and
• Other classified worldwide counterterrorism missions.

Operation Freedom's Sentinel (OFS) began in January 2015 and continues today. It is the successor to OEF and is the U.S. contribution to the NATO-led Resolute Support mission in Afghanistan.⁵⁴ OFS also includes related missions previously covered under OEF:

• Combined Joint Task Force–Horn of Africa;
• Operation Spartan Shield;
• Other classified worldwide counterterrorism missions.

Operations Conducted Primarily in Iraq

Operation Iraqi Freedom (OIF) began in the fall of 2002 with the buildup of troops for the March 2003 invasion of Iraq and continued under counterinsurgency and stability operations in Iraq until September 2010.

Operation New Dawn (OND) began in September 2010 and concluded in December 2011. OND was the immediate successor to OIF; under OND U.S. troops conducted stability operations and focused on advising, assisting and training Iraqi Security Forces (ISF).

Operation Inherent Resolve (OIR) was authorized by the President on August 7, 2014 and was the beginning of U.S. air strikes in Iraq and Syria to "degrade and ultimately defeat" the Islamic State (IS) without deploying U.S. ground troops. OIR operations continue, including some OND-related activities, such as the Office of Security Cooperation–Iraq.⁵⁵

Libya

Operation Odyssey Lightning (OOL) began August 1, 2016, in support of the Libyan government's (Government of National Accord) counter-ISIL operations. The Administration's November 2016 amendment to the OCO budget includes $20 million in funding to support U.S. counter-ISIL efforts and to finance the incremental Navy and Air Force cost of operations, flying hours, and deployments in Libya.⁵⁶

Enhanced U.S. Security

Operation Noble Eagle (ONE) was initiated as an immediate response to defend the U.S. homeland in the wake of the attacks of 9/11 and it continues today. ONE provides enhanced security for U.S. military bases, and conducts other homeland defense activities.⁵⁷

Funding Obligations by Operation

Figure 3 depicts amounts obligated by DOD in Afghanistan and Iraq, and for ONE from FY2001-FY2016. As of July 2016, DOD had obligated a total of $1.4 trillion for emergency or OCO/GWOT requirements for these named operations.

Afghanistan

• OEF - $592.8 billion
• OFS - $60.9 billion

Iraq

• OIF/OND - $732.1 billion
• OIR - $10.7 billion

Enhanced U.S. Security/Noble Eagle

• ONE - $27.5 billion⁵⁸

Figure 3. DOD OCO/GWOT Obligations by Operation: FY2001-FY2016 dollars in billions

Source: Department of Defense Cost of War Report, July 2016.

Figure 4 depicts the allocation of GWOT/OCO funding by military service. Emergency appropriations were initially provided as general "defense-wide" appropriations. Beginning in FY2003, as operations evolved and planning improved, allocations increased and were provided more specifically. While heavily weighted toward ground forces through FY2013, the percent of total funding allocated for the Air Force and Navy has increased, reflecting the Administration's policies in Iraq and Afghanistan.

Figure 4. OCO/GWOT Budget Authority by Military Department dollars in billions

Source: DOD National Defense Budget Estimates for FY2017 (table 2-1) and DOD Overview: Overseas Contingency Operations Budget Amendment FY2017. Note: * Estimate based on the FY2017 President's budget request, as amended.

U.S. Uniformed Military and Contractor Personnel Levels in Iraq and Afghanistan⁵⁹

Although other significant variables affecting overall contingency operation costs, a major factor in determining OCO costs for DOD since September 11, 2001 has been the number of U.S. uniformed military personnel deployed to the Afghanistan and Iraq theaters of operation at different points in time. Between 2001 and 2016, uniformed military personnel levels in Iraq and in Afghanistan changed dramatically. See Figure 5 for more information on deployed uniformed military personnel levels over time.

Figure 5. Boots on the Ground In-Country, FY2001-FY2016 in thousands of U.S. uniformed military personnel

Source: DOD, Monthly Boots-on-the Ground reports provided to CRS and congressional defense committees, 2001-2016. Notes: Reflects all active and reserve component U.S. uniformed military personnel in-country; excludes uniformed military personnel and civilians providing in-theater support or conducting counter-terror operations outside the region. Following the conclusion of the U.S. combat mission in Iraq, the "Boots on the Ground" monthly reports ceased providing separate force levels for Iraq. However, a residual U.S. force remained in county to provide embassy security and security cooperation assistance. Beginning in June 2014, in response to the military operations of the Islamic State, additional U.S. military personnel were deployed to Iraq through Operation Inherent Resolve (OIR) to advise and train Iraqi forces, serve as observers, and secure U.S. personnel and facilities.

DOD, DOS, and USAID have also relied extensively on individual service contractors and subcontractors to support a wide range of activities in Iraq and Afghanistan. Recent contingency operations have highlighted the critical role that service contractors play in supporting U.S. uniformed military personnel—both in terms of the number of contractors and the type of work being performed. During recent U.S. military operations in Iraq and Afghanistan, contractors frequently averaged 50% or more of the total DOD presence in-country.⁶⁰ See Figure 6 and Figure 7 for more information on DOD-funded contractors and uniformed military personnel levels in Afghanistan and Iraq over time. Analysts and observers, including the U.S. Government Accountability Office (GAO), have raised questions about the reliability of data documenting contractors employed in support of contingency operations gathered by DOD, DOS, and USAID. They have also recently called attention to "systemic challenges" at the DOS and USAID that may continue to limit agency management and oversight of contracts in contingency environments.⁶¹

Figure 6. U.S. Uniformed Military and Contractor Personnel in Afghanistan Q4 FY2007-Q1 FY2016

Sources: Contractor levels drawn from U.S. Central Command (CENTCOM) Quarterly Contractor Census Reports; DOD, Monthly Boots-on-the Ground reports provided to CRS and congressional defense committees. Notes: DOD did not begin releasing data on contractors in CENTCOM until Q4 FY2007. U.S. uniformed military figures include all active and reserve component personnel.

Figure 7. U.S. Uniformed Military and Contractor Personnel in Iraq Q4 FY2007-Q4 FY2013

Source: Contractor levels drawn from CENTCOM Quarterly Contractor Census Reports; DOD, Monthly Boots-on-the Ground reports provided to CRS and congressional defense committees. Notes: U.S. uniformed military figures include all active and reserve component personnel. DOD did not begin releasing data on contractors in CENTCOM. Following the conclusion of the OIF/OND U.S. mission in Iraq in 2014, the "Boots on the Ground" monthly reports ceased providing separate force levels for Iraq.

Contingency Operations Funding in the DOD Base Budget⁶²

As discussed above, 10 U.S.C §101 defines a contingency operation as any Secretary of Defense-designated military operation "in which members of the armed forces are or may become involved in military actions, operations, or hostilities against an enemy of the United States or against an opposing military force." Most contingency operations are designated as "emergency" or "OCO/GWOT" per the BBEDCA exemption and many have historically been funded through supplemental appropriations. However, funding for certain DOD contingency operations has been moved to the base budget request, and is no longer designated as emergency or OCO/GWOT requirements. This movement of funding from the OCO request to the base budget request typically occurs as the operational activities of an enduring contingency operation evolve over time, and DOD determines that certain elements of the associated military operations have become stable enough to be planned, financed, and executed within the DOD's base budget. For example, funding for Operation Noble Eagle, which provides fighter aircraft on 24/7 alert at several U.S. military bases, was moved from the GWOT request to the base request in 2005.

As first mandated by section 8091 of P.L. 110-116, Congress has required DOD to provide separate annual budget justification documents detailing the costs of U.S. Armed Forces participation in all named contingency operations where the total cost of the operation exceeds $100 million, or is staffed by more than a thousand U.S. military personnel.⁶³

Funding requests in the base budget for overseas contingency operations are not designated as emergency or OCO/GWOT in accordance with the BCA exception and are therefore counted against the DOD's total discretionary spending limit. For information on contingency operations funded wholly or in part through the DOD's base budget funding request, and therefore subject to the BCA caps, see Appendix B.

DOS Operations Funded as "Emergency" or "OCO/GWOT"

The estimated $123.2 billion in emergency or OCO/GWOT appropriations enacted to date for the State Department/USAID funds diplomatic operations (e.g., paying staff, providing security, and building and maintaining embassies) and funds a variety of foreign aid programs in Afghanistan, Pakistan, and Iraq, which range from the Economic Support Fund to counter-narcotics activities.

With the exception of a one-time appropriation of $20.0 billion for Iraq reconstruction made in FY2004, supplemental annual foreign aid and diplomatic operations funding hovered between $4 billion and $5 billion each year until FY2011 with one exception in FY2010. When the State Department began to designate related spending as OCO, associated funding levels rose to $11 billion in FY2012 and $9 billion in FY2013, partly as a result of DOS leveraging the budgetary advantage of the OCO designation. Enacted State/USAID OCO funding fell to $6.5 billion in FY2014.

Figure 8 depicts the emergency or OCO appropriations for foreign affairs activities. Since 2012, more OCO funds have been appropriated than were requested each year, and those have also been authorized to be used in additional countries.

Figure 8. DOS OCO Budget Authority by Year Appropriated dollars in billions

Source: Department of State Congressional Budget Justifications and the Consolidated Appropriations Act, 2016 (P.L. 114-113). Note: Totals include rescissions.

The Bipartisan Budget Act of 2015 and OCO Funding

President Obama submitted his FY2016 federal budget request to Congress on February 2, 2015. The $4.1 trillion request exceeded the BCA discretionary budget caps by $74.0 billion, which left Congress with the option of triggering sequestration, or cutting the President's request to eliminate funds for agencies and programs they would otherwise support. In his letter to Congress accompanying the FY2016 budget request, the President justified his request for an increase in spending by saying:

With a growing economy, shrinking deficits, bustling industry, and booming energy production, we have risen from recession freer to write our own future than any other Nation on Earth ... . Fifteen years into this new century, and six years after the darkest days of the financial crisis, we have picked ourselves up, dusted ourselves off, and begun again the work of remaking America.⁶⁴

The national defense portion of the request was $611.9 billion, which exceeded the associated BCA caps by $37.9 billion. In an effort to avoid sequestration and still provide the requested funding for national defense, Congress moved $38.3 billion from the base defense budget to the OCO allocation in their bicameral agreement on the NDAA for FY2016 (H.R. 1735). Even though the authorization fully funded the President's request, he vetoed H.R. 1735 on October 22, 2015, stating:

This bill fails to authorize funding for our national defense in a fiscally responsible manner. It underfunds our military in the base budget, and instead relies on an irresponsible budget gimmick that has been criticized by members of both parties. Specifically, the bill's use of $38 billion in [OCO] funding—which was meant to fund wars and is not subject to budget caps—does not provide the stable, multi-year budget upon which sound defense planning depends. Because this bill authorizes base budget funding at sequestration levels, it threatens the readiness and capabilities of our military and fails to provide the support our men and women in uniform deserve. The decision reflected in this bill to circumvent rather than reverse sequestration further harms our national security by locking in unacceptable funding cuts for crucial national security activities carried out by non-defense agencies.⁶⁵

The veto of the FY2016 NDAA added pressure to ongoing negotiations related to the budget caps. By the end of October 2015, Congress and the President had negotiated a deal that raised both the defense and nondefense discretionary spending caps by $25 billion each in FY2016 and $15 billion each in FY2017. As a result, the Bipartisan Budget Act of 2015 (P.L. 114-74) was enacted November 2, 2015. In addition to raising the BCA caps, it also specified an expected level for defense OCO funding of $58.8 billion, and $14.9 billion for nondefense OCO, for both FY2016 and FY2017.⁶⁶

Immediately following passage of the BBA, Congress authorized and appropriated $58.6 billion for defense OCO in FY2016—$7.7 billion above the President's budget request for OCO—noting that the funds were provided "in support of base budget requirements as requested by the President for fiscal year 2016."⁶⁷

FY2017 OCO Budget Request

With the BBA of 2015 as a backdrop, President Obama submitted his FY2017 federal budget request to Congress on February 9, 2016. The $4.1 trillion request complied with the newly-adjusted BCA discretionary budget caps, and also met the OCO targets set forth in the BBA–$58.8 billion for DOD and $14.9 billion for SFOPS.

In November 2016, President Obama amended his FY2017 request, requesting an additional $11.8 billion in OCO funding – $5.8 billion for DOD and $5.8 billion for SFOPS. Between FY2012 and FY2016, overall OCO spending declined by approximately 42%. In conjunction with this decline, the DOS share as a percentage of total OCO spending has increased. From FY2001 to FY2016 the DOS share of total OCO spending was approximately 7%. The original FY2017 request would have raised the DOS share of total OCO spending to 20%, and the revised request for FY2017 would have increased it to 24%. This change generally reflects the Administration's policies and military drawdowns in Iraq and Afghanistan (see Figure 9), along with a desire by many congressional Democrats for parity between increases in defense and nondefense spending.⁶⁸

FY2017 Department of Defense OCO Request

The President's original FY2017 OCO budget request of $58.8 billion for defense activities matched the nonbinding level included in the BCA. The request included $5.1 billion for base budget activities that were not funded in the base budget due to the caps.⁶⁹ As amended in November 2016, the budget request exceeds the BCA level by $5.8 billion, but does not seek additional funding for base requirements.⁷⁰

According to the DOD Comptroller, the FY2017 OCO request focused on Operation Freedom's Sentinel in Afghanistan, Operation Inherent Resolve in Iraq and Syria, and increased efforts to support European allies and deter Russian aggression—all while supporting what is referred to as a "partnership-focused approach to counterterrorism."⁷¹ The FY2017 OCO request reflected the President's plan to extend the presence of U.S. forces in Afghanistan, intensify operations to counter the Islamic State, and expand the U.S. presence in Europe, while complying with the BBA funding caps.⁷²

Figure 9. DOD and DOS OCO Funding: FY2012-FY2017 dollars in billions

Source: Department of Defense National Defense Budget Estimates for FY2017 (Table 2-1); Department of State, Foreign Operations and Related Programs Congressional Budget Justifications, FY2001-FY2017 and DOD Overview: Overseas Contingency Operations Budget Amendment FY2017. Notes: * Includes FY2017 OCO Budget Amendment. This figure does not include amounts provided by H.R. 5325(P.L. 114-223), the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, and Zika Response and Preparedness Act or H.R. 2028 (P.L. 114-254) Further Continuing and Security Assistance Appropriations Act, 2017.

DOD estimates the extended U.S. presence in Afghanistan would consume the largest share of its amended FY2017 OCO request (70%), while intensifying operations in Syria and Iraq (Operation Inherent Resolve) represented roughly 15% of the request.⁷³ The November 2016 amendment to the FY2017 OCO request added $5.8 billion to the original DOD request. According to the Comptroller, these additional resources are needed to:

• maintain approximately 8,400 troops in Afghanistan to support OSF;
• fund additional troops and other requirements needed for OIR;
• address emerging force protection issues for U.S. and coalition personnel;
• support U.S. counter-ISIL efforts in Libya; and
• provide funds to " ... begin recapitalizing the air capability of the Afghan Air Force.... "⁷⁴

The Administration's February 2016 request also included $3.4 billion―roughly 5% of OCO spending―for the European Reassurance Initiative (ERI), a sharp increase in funding for the program designed to signal the U.S. commitment to the security of NATO allies and partners through an expanded U.S. presence. The November 2016 amendment to the OCO request did not increase the ERI request for FY2017.

The amended OCO request was based on the force level projections (average annual troop strength) in Table 5.

Budget Highlights by Geographic Mission

Operation Freedom's Sentinel and the Afghanistan Security Forces Fund (ASFF)

In his February 2013 State of the Union address, the President outlined a schedule for the withdrawal of U.S. troops from Afghanistan and announced that by the end of 2014, "our war in Afghanistan will be over."⁷⁵ OEF formally ended on December 31, 2014, signaling the end of the 13-year U.S. combat role in Afghanistan. On the following day, January 1, 2015, OEF was succeeded in Afghanistan by "Operation Freedom's Sentinel (OFS)," a new contingency operation with a narrower mission and more limited geographic scope. OFS authorizes

• continuing counterterrorism efforts against Al Qaeda and its affiliates, and
• support for "Resolute Support," the NATO-led, "Train, Advise and Assist" mission for the Afghan National Defense and Security Forces (ANDSF).⁷⁶

The President's FY2017 OCO budget request, as amended, included $45.1 billion associated with OFS and overall theater posture (activities supporting related contingency and counter-terrorism operations). DOD has obligated roughly $66.9 billion in OFS funds, according to data provided in ongoing DOD cost of war estimates.⁷⁷ Roughly three quarters of this amount has funded Army depot-level maintenance, service contracts, C4I (command, control communications, computers and intelligence), and the procurement of fuel.⁷⁸ The Army has obligated the greatest portion of OFS funds (62%), followed by the Air Force (17%) and the Navy (14%).⁷⁹

Afghanistan Security Forces Fund (ASFF)

The ASFF represents the third largest obligation account (14%) within Operation Freedom's Sentinel, following O&M for the U.S. Army and Air Force. The Fund was established as a means of sustaining and improving the professionalization of the Afghan security forces, which have relied on external funding for most security costs.⁸⁰ As part of Operation Freedom's Sentinel, the ASFF has obligated $9.4 billion. ⁸¹ See Table 6.

The President's FY2017 OCO request, as amended, would provide $4.3 billion to the ASFF for supporting the sustainment, operations, training, and equipping of 382,000 Afghan National Defense and Security Forces (ANDSF). This amount would comprise approximately 75% of the total required to fully fund the ANDSF for FY2017.⁸² DOD anticipates the remainder will be funded through contributions from the Afghan government ($544 million), and international donors ($915 million). According to the DOD budget justification materials, the request fully funds the ANDSF at the force structure levels established in the FY2015 manning and equipment document, or tashkil:

• Afghan National Army: 195,000 personnel
• Afghan National Police: 157,000 personnel
• Afghan Local Police: 30,000 personnel⁸³

Despite assertions by U.S. commanders that the ANDSF have performed well under difficult combat conditions, U.S. military concerns were raised in 2015, when the Taliban inflicted heavy casualties on Afghan forces and made important—though temporary—territorial gains in northern Helmand and Kunduz.⁸⁴ In written testimony before the Senate Armed Services Committee in October 2015, General John Campbell, Commander of U.S. Forces in Afghanistan, described persistent performance shortfalls among Afghan forces and a 70% noncombat personnel attrition rate.⁸⁵ In the same month, President Obama announced a revision to the planned withdrawal of American forces from Afghanistan, noting recent gains by the Taliban.

The Administration again revised the planned drawdown in July 2016, by raising the number of U.S. troops devoted to non-combatant and counter-terrorism missions in Afghanistan to 8,400, beginning January 1, 2017. Though the number represents a small percentage of the 40,000 troops in country when President Obama first took office, it represents a significant adjustment of the administration's prior plans, which called for 2,900 fewer troops by 2017.⁸⁶

U.S. commanders assert that, after 2014, their rules of engagement have allowed for operations against Al Qaeda and associated groups, and against the Taliban and other insurgent groups if they pose an imminent threat to U.S. forces or the ANDSF and the Afghan government. As of December 2015, U.S. commanders also have authority to engage members of the Islamic State affiliate in Afghanistan.⁸⁷

Operation Inherent Resolve (Operations in Iraq and Syria against the Islamic State)

DOD estimates that $10 billion has been spent in operations against the Islamic State since air strikes began in August 2014, amounting to an average of $12 million per day.⁸⁸ Initially, U.S. operations primarily used OCO funds previously appropriated for FY2014. DOD also used OCO-designated FY2015 Navy O&M and Air Force O&M funds to conduct air strikes in Iraq and Syria.⁸⁹ On November 10, 2014, DOD submitted to Congress an amendment to its FY2015 OCO request for an additional $5 billion to cover emerging requirements.⁹⁰ The FY2016 OIR operations funding level was also approximately $5 billion.

Iraq Train and Equip Program/Fund (ITEF)⁹¹

DOD's continuing efforts to respond to the evolving nature of the IS threat prompted a request for $919.5 million in FY2017. The request includes $630 million—slightly more than the amount requested in FY2016—for the ITEF to enhance the Iraqi Security Forces' ability to liberate and secure lost territory, secure borders, protect the Iraqi population, and improve the quality of provincial and national defenses.⁹² The Administration's November 2016 amendment to the FY2017 OCO budget request added $289.5 million to the ITEF for support to the Kurdish peshmerga.

Congress authorized and appropriated $715 million for the ITEF in FY2016. Section 1223 of the FY2016 NDAA required DOD and the DOS to report on Iraqi government efforts to engage with and support all national groups in the campaign against the Islamic State.⁹³ Section 1223 also granted the President new authorities to facilitate U.S. assistance to the peshmerga and certain Sunni and other local security forces with an Iraqi national security mission. The section authorizes the Secretary of Defense, in coordination with the Secretary of State and "in coordination to the extent practicable with the Government of Iraq," to provide support directly to these groups. Such support is contingent on the President determining—and notifying Congress—that the Government of Iraq has failed to

• take substantial action to increase political inclusiveness;
• address the grievances of ethnic and sectarian minorities; and
• enhance minority integration in the political and military structures in Iraq."

The authorities in Section 1223 would allow the President to waive provisions of U.S. law that require that certain types of U.S. security assistance be provided to central government authorities rather than to subnational entities. In March 2016, DOD and DOS reported to Congress that the Government of Iraq had taken meaningful steps toward integrating minorities into military and political structures and is governing more inclusively.

In April 2016, Secretary of Defense Ashton Carter announced the Administration's intent to provide more than $400 million in financial and in-kind assistance to the peshmerga in coordination with the Baghdad government. Iraqi Prime Minister Haider al Abadi, other leading Iraqi public figures, and some armed Iraqi Shia groups criticized other proposals considered in the first session of the 114^th Congress because they would have authorized more broadly the provision of U.S. assistance directly to security forces other than the ISF.

The FY2017 NDAA (S. 2943/P.L. 114-328) enacted in late 2016 extended the authorization to provide funding to peshmerga and other forces with a "national mission" through December 31, 2018. It also extended the authorization to use Foreign Military Financing (FMF)-Overseas Contingency Operations (OCO) funds for loans usable by Iraq for U.S. arms purchases, while adding the requirement that any loan notification submitted to Congress shall include "a detailed summary of the terms and conditions of such loan and an assessment of the extent to which use of the proposed loan proceeds would place special emphasis on the Kurdish Peshmerga, Sunni tribal security forces, or other local security forces, with a national security mission."

The 2017 NDAA conference report (H.Rept. 114-840) explicitly identified $50 million of the $969.5 million authorized for ITEF as allocated for peshmerga and Sunni tribal security forces in Iraq "for operations in Mosul." The Further Continuing and Security Assistance Appropriations Act, 2017 (H.R. 2028/P.L. 114-254), enacted in December 2016, appropriated $289.5 million to ITEF as part of OCO funding to "support counter-terrorism operations."⁹⁴ This appropriation followed a November 2016 Administration request for the same amount in ITEF/OCO funding for "conditions-based sustainment assistance to the Kurdish Peshmerga through the Government of Iraq, including stipends and other sustainment, training, and equipment."⁹⁵ According to the request:

This assistance is not only helping the Kurdish Peshmerga to continue the fight, but it is also responding to economic pressures faced by the Kurdistan Regional Government (KRG). Support to KRG and Peshmerga helps enable and assure their cooperation in, and contributions to, the continuing campaign against ISIL.⁹⁶

If used for the peshmerga, this $289.5 million would presumably supplement the more than $400 million subject to the July 2016 MOU mentioned above.

Syria Train and Equip (STE) Program/Fund⁹⁷

The STE program is also part of the U.S. Government's strategy to degrade, dismantle, and ultimately defeat IS. The Administration's request includes $250 million to train, equip, and/or sustain appropriately-vetted Syrian forces engaged in the counter-IS fight.⁹⁸

The Obama Administration's FY2017 request for $250 million in defense funding for the Syria Train and Equip Fund described training, equipping, and sustaining select vetted Syrian forces as "one of the keys to successfully countering" the Islamic State.⁹⁹ Of the amount requested, $210.8 million would support the procurement and provision of weapons, ammunition, and equipment; $18.6 million would support lift and transportation costs; and $20.6 million would support trainee stipends and operational sustainment. The Administration requested FY2016 funding for the program in a stand-alone account, but Congress did not appropriate specific funds to such an account and directed the department to submit reprogramming requests for FY2016 Counterterrorism Partnership Fund (CTPF) monies in order to continue the program.¹⁰⁰

In March 2016, the Obama Administration requested congressional approval to reprogram $300 million in FY2016 CTPF funding to support the continuation of the program. The congressional defense committees approved the reprogramming action after a period of review and debate.¹⁰¹ In total, Congress has reviewed and approved Defense Department requests to reprogram more than $1.03 billion in monies from other accounts for the program since 2014.

The FY2017 NDAA (S. 2943) extends the authorization for the program through December 31, 2018, and authorized the appropriation of funds for the program in a new $1.16 billion "Counter-ISIL" fund to support Iraq and Syria training activities. Funding transfers for the Syria train and equip program will remain subject to the prior approval of congressional defense and appropriations committees. These requests would need to be accompanied by certifications that the Administration had developed a plan to take and hold Raqqah, Syria and to deploy numbers and types of U.S. personnel necessary to enable trained and equipped Syrian forces to defend themselves against the Islamic State and the Syrian government.¹⁰²

European Reassurance Initiative¹⁰³

The Obama Administration first launched the ERI in June 2014, as part of a broader U.S. response to Russia's annexation of Ukrainian territory in March 2014.¹⁰⁴ As originally conceived, the ERI sought to "reassure" NATO allies and partners in Europe of the United States' commitment to their "security and territorial integrity" through funding activities along lines of effort that "increase the capability, readiness, and responsiveness of NATO forces to address any threat and that aid in deterring further destabilizing activities."¹⁰⁵ Congress provided the DOD with $985 million in ERI funding in FY2015 and $789.3 million in funding in FY2016.¹⁰⁶

The FY2017 OCO request included $3.4 billion—four times the amount provided for FY2016—for the ERI. The FY2017 ERI request divided its funding between two broad funding categories—"assurance" funding intended to provide ongoing support to NATO partners and allies, and "deterrence" funding intended to fund measures intended to dissuade regional "aggressive actors," such as Russia, from further regional destabilization or military activity.¹⁰⁷ About two-thirds of the FY2017 ERI request would be used to increase the presence in Europe of U.S. Army armored brigade combat teams (ABCTs), including

• $507.2 million to ensure that ABCT deployments to Europe would be made on a continuous rotation schedule that would have one ABCT in the Baltic States and Poland at all times;
• $1.8 billion to preposition in Europe the equipment of a second ABCT which could be manned by troops flown in from U.S. bases.¹⁰⁸

Other components of the FY2017 ERI request included $163.0 million for additional training exercises with NATO allies and $217 million for improvements to airfields and other facilities for U.S. forces deployed in Europe.

Budget Highlights by Activity

With the exception of noticeable increases in funding for the ERI and in-theater support activities, there is little change in the FY2017 budget request from the FY2016 enacted budget for OCO. See Table 7 for a breakdown of activities funded. For FY2017, the President's Budget requested no additional funding for the OCOTF.¹⁰⁹

Operations/Force Protection

The amended request for FY2017 included $11.4 billion in OCO for the incremental cost of U.S. operations and force protection associated with OFS and OIR. These funds would cover expenses such as

• subsistence and life support for deployed forces;
• pay for reserve and guard personnel who have been mobilized;
• deployment-related special payments to personnel, such as imminent danger pay;
• operating expenses, such as fuel and maintenance for equipment, vehicles and aircraft;
• pre-deployment training focused on an OCO-funded mission;
• transportation cost to sustain and support the forces, to include the return of U.S. equipment from Afghanistan; and
• additional personal protective equipment, such as body armor.

In-Theater Support

The amended request included $18.3 billion for In-Theater Support: the incremental cost of U.S. forces located outside Afghanistan and Iraq—including air and naval forces—that contribute to the missions of forces in those countries.¹¹⁰ It also included funding for some supporting activities operating from the United States (such as remotely piloted aircraft and reach-back intelligence, surveillance, and reconnaissance (ISR) capabilities).¹¹¹ In addition, the original In-Theater Support request included $5.0 million for Commander's Emergency Response Program.

This category includes $85.0 million for the Office of Security Cooperation-Iraq (OSC-I) whose long-term goal is to build partnership capacity in the Iraqi Security Forces. OSC-I conducts traditional security cooperation activities such as joint exercise planning and combined arms training. It also conducts counterterrorism training, logistic capacity building, and intelligence integration in support of the Iraqi Security Forces.¹¹²

Counterterrorism Partnerships Fund

The FY2017 request of $1.0 billion for the Counterterrorism Partnership Fund would continue the President's initiative to support counterterrorism efforts by other governments in Africa and the Middle East. Of that total, $450 million would go to U.S. Africa Command and $550 million would to U.S. Central Command.¹¹³

Military Construction¹¹⁴

Over the past decade, the Administration has submitted appropriations requests for OCO military construction funding ranging from a high of more than $2.4 billion for FY2008 to under $200 million in the past few years. The FY2017 OCO request included $172.4 million for military construction, of which $38.4 million was for the planning and design of a medical/dental clinic in Camp Lemmonier, Djbouti. This funding was identified as a base requirement that was moved to OCO by the Department (for more information, see "Contingency Operations Funding in the DOD Base Budget").¹¹⁵

Over the past six years, the emphasis in OCO military construction has swung from the U.S. Central Command (CENTCOM) area of responsibility (primarily Afghanistan, Iraq, and the Persian Gulf region) to Africa Command (AFRICOM, Djibouti and nearby states) and European Command (EUCOM, principally eastern Europe and the Baltic States). This shift reflects the end of ground combat in CENTCOM's area of responsibility and tensions have risen along Russia's western border. While construction early in the shift to EUCOM was devoted to the creation of missile defense facilities in Romania and Poland, construction since 2015 and funding for FY2016 and FY2017 have been devoted to the European Reassurance Initiative. Table 8 illustrates this shift in emphasis.

Classified Activities¹¹⁶

The $8.5 billion amended request for "Classified Programs," included a number of defense-related activities such as the research and development of weapons systems, special operations, and intelligence. Those appropriated for intelligence-related activities may be related to either the National Intelligence Program (NIP), which covers the programs, projects, and activities of the Intelligence Community (IC) oriented towards the strategic needs of decision makers, or the (2) the Military Intelligence Program (MIP), which funds defense intelligence activities intended to support tactical military operations and priorities.

The NIP is an aggregation of 14 capabilities-based programs that span the entire IC, such as cryptology, reconnaissance, and signals collection that include several IC components. The NIP funds the Central Intelligence Agency and the strategic-level intelligence activities associated with the National Security Agency, Defense Intelligence Agency and National Geospatial-Intelligence Agency. It also funds Secure Compartmented Intelligence Communications throughout the IC.

MIP spending is confined to those IC components that fall within the DOD. A program is primarily MIP if it funds an activity that addresses a unique DOD requirement. Additionally, MIP funds may be used to "sustain, enhance, or increase capacity/capability of NIP systems." The Director of National Intelligence (DNI) and the Under Secretary of Defense for Intelligence [USD(I)] work to facilitate the "seamless integration" of NIP and MIP intelligence efforts. Mutually beneficial programs may receive both NIP and MIP resources.

Only the NIP and MIP aggregate (or "topline") figures are disclosed annually. For FY2017, the DNI's NIP request was $53.5 billion and the USD(I)'s MIP request was $16.8 billion. These aggregate numbers are reported to include OCO dollars; however, the base and OCO distribution percentage of NIP and MIP funds is classified.¹¹⁷

Bipartisan Budget Act of 2015 Compliance

The FY2017 DOD OCO request includes $5.1 billion in funding labeled as "Bipartisan Budget Act of 2015 Compliance." According to the DOD Comptroller, the amount specified for FY2017 OCO in the BBA was $5.1 billion more than anticipated for operations.¹¹⁸ DOD would use the additional funding to cover requirements that are not directly related to on-going contingency operations such as:

• O&M for training, depot maintenance, base operating support, and drug interdiction/counter-drug activities;
• Procurement of
• Munitions such as Hellfire air-to-surface missiles, Small Diameter Bombs, Joint Direct Attack Munitions, and Maverick air-to-ground tactical missiles;
• Explosive ordnance disposal equipment;
• Aircraft modifications/upgrades for SH-60 and H-1 helicopters, as well as remanufacture of AH-64 helicopters; and
• Planning and design of a medical/dental facility at Camp Lemmonier, Djbouti.

Contingency Operations in Base Budget

The President's FY2107 budget request included $1.6 billion for contingency operations funded in the base budget.¹¹⁹ These activities are not designated as emergency or OCO/GWOT and are subject to the BCA limits.

FY2017 Department of State/USAID OCO Request

The FY2017 SFOPs appropriations request was significantly higher ($14.9 billion) than SFOPs OCO spending in prior years. The Administration request and House and Senate SFOPs bills all called for $14.9 billion in OCO funds for FY2017, which was level with the FY2016 OCO funding but represented an increase of 59% from the FY2015 funding.

In addition to the $14.89 billion, on November 10, 2016, the Administration submitted to Congress an amended request that included an additional $5.8 billion for the DOS OCO accounts, primarily to counter IS and fund various related expenses. They included additional funds for diplomatic engagement to support the strategy to counter ISIS, security assistance, and emergency humanitarian needs.

The BBA and the State/Foreign Operations Budget Request for FY2017

When comparing the FY2015 SFOPS request with the FY2017 amended request, the foreign affairs base budget decreased by 11%, and the foreign affairs OCO budget increased by 165%—thereby meeting the budgetary caps without reducing overall foreign affairs funding.¹²⁰ Because of the two-year budget agreement in the BBA, a shifting of foreign affairs appropriations from regular to OCO accounts seems to be occurring again in FY2017.

With the BBA setting a $14.9 billion nondefense OCO minimum—more than double the Administration's FY2015 and FY2016 OCO requests―the Administration appears to have labelled some previously considered "enduring" requirements in the FY2015 and FY2016 requests as OCO for FY2017 (see Figure 10). For example, the FY2017 request for State Department Operations and Related Accounts enduring funds declined by $3-4 billion compared to the FY2015 and FY2016 requests, while the FY2017 OCO request increased by a comparable amount.

Figure 10. Funding for Department of State, Foreign Operations, and Related Programs: Enduring vs. OCO dollars in billions

Source: Congressional Budget Justification, Foreign Operations Summary Tables, FY2015-FY2017. Note: Includes November 2016 amendment to FY2017 OCO budget request.

Funding requests for International Organizations showed a similar transfer of funds in the FY2017 request, as did Foreign Operations funding overall, and more specifically Bilateral Economic Assistance and International Security Assistance. See Table 10 below.

The $20.7 billion in the amended FY2017 OCO request are to "provide support to, respond to, recover from, or prevent crises abroad, including armed conflict, as well as human-caused and natural disasters."¹²¹ Specifically, the Department of State (DOS) request included funding to

• contribute to peacekeeping and special political missions;
• shield allies and partners from potential threats;
• aid Afghanistan and Pakistan;
• increase efforts to destroy the Islamic State and confront and recover from other crises in the Middle East and Africa;
• support the U.S. strategy to counter ISIS;
• provide aid for populations affected by ISIS and for refugees; and
• sustain security programs and embassy construction at high risk posts.¹²²

In its FY2017 budget justification documents, DOS included a request that the BCA caps be further increased:

While the Department welcomes the revised budget levels set by the Bipartisan Budget Act, shifts in funding for FY2016 and FY2017 result in OCO funding covering greater than 50 percent of select ongoing programs. The FY2017 President's Budget assumes that further adjustments to the Budget Control Act's discretionary spending limits will be needed to sustain these activities in FY2018. To mitigate perceptions that some of our core programs, including ongoing assistance to key partners such as Iraq and Afghanistan, our UN treaty commitments, and security and humanitarian responsibilities, are 'temporary' contingencies, the Department's enduring funding for ongoing operations must remain at a sustainable level as we move into FY2018.¹²³

As Congress considered the FY2017 federal budget, the authorization and appropriation of OCO funding for FY2017 was central to the policy debate. Matters considered by Congress included

• the potential risk to national security if the full funding requirements to adequately support and sustain the force are masked by the use of OCO funding for such purposes;
• the effectiveness of deficit reduction measures if the increased use of OCO funding for a widening variety of purposes is allowed to continue;
• the budget instability for essential programs across all federal agencies caused by the potential for a precipitous reduction or elimination of OCO appropriations.

Congressional Action on the FY2017 OCO Request

On March 23, 2016, the House Budget Committee reported the 2017 House Budget Resolution (H.Con.Res. 125), which assumes $551.1 billion in discretionary authority in compliance with the BBA and designates $73.7 billion for OCO, with the stated assumption that $23.0 billion in OCO funding would be dedicated to base defense requirements (H.Rept. 114-470). If the House Budget Committee's proposals were to be adopted without further amendment by Congress, the resolution would provide a discretionary base budget at the level of the $574.0 billion marker set by the 2015 negotiations.

DOD OCO Request and the FY2017 NDAA

On April 27, 2016, the HASC favorably reported H.R. 4909, the NDAA for FY2017.The measure designated $18.0 billion in funding requested by the President Obama for DOD base budget requirements as OCO (see Figure 11). Such designation effectively exempts funding from being counted against the BCA spending caps. Section 1501 of H.R. 4909, as agreed to in the House, designated these amounts for OCO and also directed apportionment of the funds without application of existing OCO criteria. This addition of base requirements to the OCO authorization was offset by a corresponding reduction of authorized funding for contingency operations, and provided no increase to the total amount of OCO. Furthermore, the amounts authorized for certain accounts – such as operation and maintenance (O&M) and military personnel – would only be available through April 30, 2017, under the provisions of the House bill.

The House adopted the NDAA (H.R. 4909) by a vote of 277-147 on May 18, 2016, without amendment to the HASC OCO recommendations. The House appropriators generally followed the HASC in H.R. 5293, which was agreed to by the House on June 16, 2016, by a vote of 282-138. The Senate, however, held closely to the President's budget request for OCO and did not increase the amount of OCO funding designated for base budget requirements in either the Senate-passed NDAA (S. 2943) or the Senate committee-passed defense appropriations bill (S. 3000).

Figure 11. H.R.4909: FY2017 National Defense Authorization Act as agreed to in the House, May 18, 2016; dollars in billions

Source: P.L. 114-74, H.R. 1735, National Defense Budget Estimates for FY2016, "Green Book", Table 1-9, National Defense Budget Estimates for FY2017, "Green Book", Table 1-9, and H.R. 4909, as agreed to by the House, May 18, 2016, and the FY2017 Overseas Contingency Operations Budget Amendment.

On November 10, 2016, the Administration provided Congress an amendment to the FY2017 OCO budget request, increasing the request by $11.6 billion ($5.8 billion for DOD and $5.8 billion for DOS/USAID). This boosted the total FY2017 OCO request from an original request of $73.7 billion to an amended request of $85.3 billion. The budget amendment did not make any changes to the base budget request, nor did it request any additional funding in the OCO accounts for base budget purposes.

The House and Senate NDAA conference committee concluded its work on S. 2943 in early December 2016. The enacted FY2017 NDAA (P.L. 114-328) includes funding requested in the November 2016 amendment to the FY2017 OCO budget request, authorizing a total of $67.8 billion in OCO funding for DOD. However, the House position regarding the use of OCO for base budget purposes was largely rejected. Instead of providing $23.1 billion in OCO for base budget purposes, S. 2943 allocates $8.3 billion in OCO-designated funding for base requirements—$5.2 billion stemming from the Administration's request and $3.2 billion added by Congress during the conference negotiations on S. 2943.¹²⁴

b. Includes funding associated with accounts such as the Defense Health Program; the Joint IED Defeat Fund; and the Defense Working Capital Fund.

FY2017 Continuing Resolutions (CR)

Congress passed and the President signed H.R. 5325 (P.L. 114-223), the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, and Zika Response and Preparedness Act, in absence of an agreement on most FY2017 appropriations measures before the start of the fiscal year. Division C of H.R. 5325 is termed continuing resolution (CR) which provided funding through December 9, 2016, for programs and activities typically covered by regular appropriations bills—including the Department of Defense (DOD). H.R. 5325 provided for OCO funding at the rate at which it was funded in FY2016.

On December 12, 2016, the Further Continuing and Security Assistance Appropriations Act, 2017 (H.R. 2028/P.L. 114-254) was enacted, extending the CR to April 28, 2017. Division B of H.R. 2028 also provided supplemental appropriations for DOD and DOS/USAID security assistance activities. Title I of Division B of H.R. 2028 provides $5.8 billion in additional OCO budget authority for DOD and Title II provides $4.3 billion for State, Foreign Operations and Related programs

DOD OCO Funding and the CR

The $5.8 billion provided for DOD OCO generally aligns with the President's November 2016 budget amendment. However, H.R. 2028 (P.L. 114-254) provides $652.3 million for activities related to the European Reassurance Initiative (approximately one-half of the amounts requested for O&M and military personnel) and a similar portion – approximately one-half – of procurement funding requested for certain missiles and ammunition. See Table 12.

SFOPS OCO Funding and the CR

Title II of Division B of the second CR (H.R. 2028/P.L. 114-254) provides $4.3 billion in additional OCO funds for State, Foreign Operations and Related programs. A comparison of the additional amounts requested by the Administration in its amendment of November 10, 2016, and those provided by Congress are shown in Table 13. Note that some amounts are available until the end of FY2017, while others are available until expended.

Appendix A. Designation of Funds as Emergency or for Overseas Contingency Operations

The designation of funds as "emergency" or for "overseas contingency operations" is governed by several statutes as well as Office of Management and Budget (OMB) guidance and the DOD Financial Management Regulation. For more information on the federal budget process see CRS Report 98-721, Introduction to the Federal Budget Process, coordinated by [author name scrubbed].

The Balanced Budget and Emergency Deficit Control Act (BBEDCA) of 1985

BBEDCA, as amended, includes the statutory definitions of "emergency" and "unanticipated" requirements as they related to budget enforcement through sequestration. The act also allows for appropriations to be designated by Congress and the President as "emergency" or "for Overseas Contingency Operations." Such appropriations are effectively exempt from the statutory discretionary spending limits.

Title 10, United States Code—Armed Forces

10 U.S.C. §101—Definitions

Section 101 provides definitions of terms applicable to Title 10. While it does not define "overseas contingency operations", it does include a definition of a "contingency operations."

10 U.S.C. §127a—Operations for which funds are not provided in advance: funding mechanisms

Section 127 provides the Secretary of Defense with authority to transfer funds appropriated for certain operations to established DOD accounts in order to reimburse those accounts for the incremental expenses incurred in the conduct of such an operation. This section specifies the criteria for covered operations and establishes thresholds for applicability of the authority based on the expected incremental costs of the operation.

Title 22, United States Code—Foreign Relations and Intercourse

22 U.S.C. §2421f—Sustainability requirements for certain capital projects in connection with overseas contingency operations

Subsection (e) includes the definition of an "overseas contingency operation" as it relates to this section. The subsection cross-references the term "contingency operation" defined in 10 U.S.C. 101(a)(13) but adds a qualifier that it be "a military operation outside the United States and its territories and possessions.... "

Title 41, United States Code—Public Contracts

41 U.S.C. §1702—Chief Acquisition Officers and senior procurement executives

Subsection (d) includes the definition of an "overseas contingency operation" pertaining to this section providing for the appointment of a Chief Acquisition Officer of a federal agency. As in 22 U.S.C. §2421f (described above), the subsection cross-references the term "contingency operation" defined in 10 U.S.C. 101(a)(13) but adds a qualifier that it be "a military operation outside the United States and its territories and possessions.... "

Administration and Internal Guidance

In addition to statutory requirements, DOD and DOS are subject to guidance on OCO spending from the Administration. In October 2006^, under the Bush Presidency, Deputy Secretary of Defense Gordon England directed the services to break with long-standing DOD regulatory policies and expand their request for supplemental funding to reflect incremental costs related to the "longer war on terror." There was no specific definition for the "longer war on terror," now one of the core missions of the Department of Defense.

In February 2009, at the beginning of the Obama administration, OMB issued updated budget guidance that required DOD to move some OCO costs back into the base budget. However, within six months of issuing the new criteria, officials waived restrictions related to pay and that would have prohibited end strength growth.¹²⁵ In a letter from OMB to the Under Secretary of Defense (Comptroller) Robert Hale, the agency characterized its 2009 criteria as "very successful" for delineating base and OCO spending, but stated, "This update clarifies language, eliminates areas of confusion and provides guidance for areas previously unanticipated."¹²⁶ GAO subsequently reported that the revised guidance significantly changed the criteria used to build the fiscal year 2010 OCO funding request by

• specifying stricter definitions for repair and procurement of equipment;
• limiting applicability of OCO funds for RDT&E;
• excluding pay and allowances for end strength above the level requested in the budget;
• excluding enduring family support initiatives; and
• excluding base realignment and closures amounts.¹²⁷

OMB again revised its guidance in September 2010 following a number of Government Accountability Office (GAO) reports that had concluded DOD reporting on OCO costs was of 'questionable reliability,' due in part to imprecisely defined financial management regulations related to OCO spending.¹²⁸

DOD Financial Management Regulations

DOD incorporated the September 2010 OMB criteria for war costs into the Financial Management Regulation. Table A-2depicts the general breakdown of cost categories DOD uses in its budget processes.

Appendix B. DOD Contingency Operations Funded in the Base Budget

In FY2017, contingency operations funded wholly or in part through the DOD's base budget funding request, and therefore subject to the BCA caps, include the following:

• Support to the North Atlantic Treaty Organization (NATO) as a part of NATO-led operations in the Balkans region.
• Joint Task Force Bravo, which supports joint, combined, and interagency exercises and operations in Central America to counter the influence of transnational organized crime; carry out humanitarian assistance and disaster relief; and build military capacity with regional partners and allied nations, in order to promote regional cooperation and security.
• Operation Enduring Freedom-Trans Sahara, which supports the DOS-led Trans-Sahara Counter Terrorism Program, which in turn supports U.S. Africa Command in executing its strategy for U.S. military operations within certain regions of its area of responsibility.
• Operation Enduring Freedom–Horn of Africa, also known as the Combined Joint Task Force-Horn of Africa, supports efforts to defeat violent extremist organizations in East Africa. This operation also provides military-to-military engagement with partner African countries, as well as readiness for crisis response and evacuation of U.S. military, diplomatic, and civilian personnel throughout East Africa.
• Operation Noble Eagle, which funds the continuing efforts to defend the United States from airborne attacks, maintain the sovereignty of the United States airspace, and defend critical U.S. facilities from potentially hostile threats or unconventional attacks.
• Operation Observant Compass, which supports the deployment of approximately 100 U.S. military personnel currently assisting the Ugandan People's Defense Force and neighboring partner African countries in countering the Lord's Resistance Army operations.¹²⁹

Beginning in FY2016, Operation Spartan Shield, which supports ongoing U.S. Central Command missions and the building of Middle East partner military capacity, was budgeted and requested in U.S. Army and U.S. Navy OCO budget justification documents under Operation Freedom's Sentinel. In FY2017, funding for Operation Enduring Freedom-Caribbean and Central America, was previously funded in part through the base DOD budget, was requested in the U.S. Special Operations Command OCO O&M budget justification documents.¹³⁰