98-823 F
Updated March 29, 1999
CRS Report for Congress
Received through the CRS Web
Military Contingency Funding for
Bosnia, Southwest Asia, and Other Operations:
Questions and Answers
(name redacted)
Specialist in International Security Affairs
Foreign Affairs, Defense, and Trade Division
Summary
For several years, Members of Congress have been concerned by the strains that
military contingency operations have placed on the U.S. armed services and the Department
of Defense budget. Because the costs of such missions rarely are funded in advance,
problems arise when funds must be shifted from training, maintenance, or weapons
modernization to cover their costs. The Administration has proposed mechanisms that
would ease the strain, but Congress has rejected them as an unacceptable curtailment of
Congress' influence over such operations. Congress' unprecedented funding in the annual
budget of one or both of the current large scale on-going operations -- the NATO
operation in Bosnia and the coalition operation in Southwest Asia -- since FY1996 has
not resolved the problem because changes in the plans for those operations have required
the Administration to draw on funds planned for other activities. Supplemental
appropriations, which require recission of previously-approved funding if they are not to
increase the budget, continue to play a large part in funding these operations, as can be
seen from the discussion on page 4 and the charts on page 5. Page 6 details the incremental
costs of U.S. military contingency operations from FY1991-FY1999 in a chart prepared
by (name redacted), Specialist in National Defense, Foreign Affairs a nd National Defense
Division. This report will be updated as needed.
Q. What costs do peacekeeping and other contingency operations entail, and how
are they funded?
A. Department of Defense (DOD) annual appropriations contain funding for normal
peacetime operating expenses; funds for other operations, i.e., "contingency" operations,
normally are not budgeted in advance. For the past several years, Congress has appropriated
some $40-$50 million per year in defense funds that the military can use for small disaster
relief efforts. However, large-scale natural disasters and other contingencies to which the
military responds with humanitarian assistance and peacekeeping operations can easily run
into hundreds of millions of dollars.
Congressional Research Service ˜
The Library of Congress
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Such contingency operations almost always entail extra costs for operations and
maintenance, for personnel, and for equipment. These are known as “incremental costs,”
i.e., costs over normal peacetime operating expenses. Incremental operations and
maintenance costs include fuel and supplies used in such operations beyond amounts normally
used in training and other regular deployments, and additional maintenance required because
of longer or more difficult operations. Incremental personnel costs include hazardous duty
pay, special pay for overseas deployments, or pay of reserve personnel called to active duty.
Incremental equipment costs include replacements for weapons losses beyond normal
peacetime losses and higher than usual consumption of ammunition or other materiel.
Incremental costs sometimes can be difficult to ascertain.
Because of U.S. budget laws, the Executive usually must find funds elsewhere in the
defense budget to cover, at least temporarily, these incremental costs or seek additional
funding from Congress. Incremental costs are normally financed in three ways:
(1) DOD can "absorb" the costs in its regular accounts, by transferring funds budgeted
for other purposes within the Personnel or the Operation and Maintenance (O&M) account
to cover the costs of contingencies;
(2) DOD can transfer money between accounts (e.g.: Personnel; Procurement; O&M;
and, Research, Development, Test and Evaluation), in an action known as "reprogramming"
with congressional approval as necessary.1
(3) Congress can approve supplemental appropriations; these can be new appropriations
or offset by rescissions in other DOD accounts.
Q. What problems ensue from funding contingency operations in this manner?
A. When incremental costs are low, funds can be transferred or reprogrammed without
unduly disturbing other spending plans. When these costs are high, however, the
Administration and Congress are faced with difficult choices. "Absorbing" funds within
O&M accounts can mean canceling previously planned training and maintenance activities,
and sometime disrupting the previously planned budget by cutting other accounts, or
increasing the deficit.
The problem of maintaining budget stability is exacerbated when incremental costs
start, or result in unanticipated costs, late in the fiscal year, particularly the fourth quarter.
Then, even moderate costs can be particularly disruptive. Two accounts — troop training,
and maintenance and repair — are the main sources of unobligated funds to cover such
costs late in the fiscal year. Thus, training activities and maintenance must be canceled rather
than just postponed until supplemental appropriations become available to cover costs in
order to provide funds for peacekeeping operations. This can create another problem: an
"Reprogrammings"
1
between accounts require the consent of the House and Senate armed services
committees and the Appropriations defense subcommittees; transfers of more than $10 million
within accounts require DOD notification to those committees.
Through the FY1996 DOD Authorization Act (P.L. 104-106 of February 1996), Congress
attempted to tighten control over contingency operations by specifying the amount of funds and the
accounts from which they could be transferred to cover contingency operations. Proponents viewed
this funding method as one means to protect training and maintenance accounts, and to enhance
congressional control over peacekeeping expenditures. The Administration, however, opposed it
as an "unwarranted" restriction of "the President's national security and foreign policy
prerogatives." This provision was not renewed in subsequent DOD legislation.
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immediate deterioration in military readiness, i.e., the military's ability to respond rapidly
to threats to the nation.
Covering the costs of contingency operations has also disrupted the procurement budget
in recent years. Many of the recissions made in the defense budget for recent supplemental
appropriations were taken from funds intended to modernize weapons systems. This has
led many defense analysts and policymakers to express concerns about future readiness.
Q. What mechanism has Congress adopted to cope with this problem?
A. The first session of the 104th Congress took an unusual step by providing funding in
advance for ongoing operations in Southwest Asia (SWA), i.e., in and around Iraq, in the
DOD FY1996 appropriations bill (P.L. 104-61). (These funds were to be made available
2
after costs were detailed in the FY1997 budget request.) Subsequent sessions of Congress
have followed this precedent. For SWA operations in FY1997-FY1999, and for FY1997-
FY1998 operations in and around ex-Yugoslavia, i.e., mainly the NATO operation in Bosnia,
Congress set aside funding in the annual appropriations measures in an “Overseas
Contingency Operations Transfer Fund” (OCOTF). The Administration must advise the
appropriate congressional committees of any overall redistribution of funds among
contingencies that differs from the original distribution plan.
Despite this mechanism, which Congress may chose to use, an Administration still
may have to seek additional funds if circumstances change. In FY1997 and FY1998, the
Clinton Administration had to request supplemental appropriations for both ongoing
operations. For Bosnia, where the annual appropriations had only covered part of the fiscal
year in FY1997 and FY1998, supplemental funds were needed to cover extensions in the
U.S. commitment of forces. In SWA, additional funds were needed for an unanticipated
troop build-up. (In FY1999, Congress was willing to set aside funds for SWA anticipated
costs through this mechanism, but decided to fund all anticipated Bosnia costs through an
emergency supplemental appropriation.)
Q. What mechanisms had the Clinton Administration proposed to fund contingency
operations such as peacekeeping?
A. Before Congress approved the creation of the OCOTF, the Administration had proposed
two alternatives for contingency funding. Congress rejected both. In 1993, the Clinton
Administration proposed setting up a "Global Cooperative Initiatives" (GCI) account to
be used to fund the costs of a variety of DOD missions which might arise during the year,
including peacekeeping, disaster relief, humanitarian assistance, and "promoting democracy."3
In 1995, the Administration proposed (FY1996 budget request), to address the so-called
“fourth-quarter problem” through the creation of a Readiness Preservation Authority. This
2The most recent precedent for funding an ongoing contingency operation through annual
appropriations was for the Vietnam War, when funding was provided through supplemental and
annual appropriations in the late 1960s, and through annual appropriations in the early 1970s.
The
3
Administration proposed that the first GCI account, for FY1994, contain $448 million, with
$300 million of that intended for peacekeeping. That amount was relatively small when compared
to the cost of contingency operations in FY1994 and subsequent years.
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would have enabled DOD to obligate, during the last half of a fiscal year, funds for essential
readiness activities without a prior appropriation, up to a certain limit.
Q. Why did Congress reject these proposals?
A. Congressional opposition to the GCI proposal centered on the checks and balances
of interagency and inter-branch prerogatives. Many Members were not willing to create
a “blank check” special fund enabling the President to deploy troops in as yet “unspecified
and undetermined” military operations, thus potentially depriving Congress of one means
of control over the timing and purposes of new peacekeeping operations. Also, State
Department and foreign affairs policymakers objected to establishing a special DOD account
that would in effect erode State Department powers. The 104 Congress rejected th
th
e
Readiness Preservation Act for similar reasons. Many judged that it would lessen what
leverage the Congress has over peacekeeping operations through the appropriations process.
Q. How are on-going operations in Bosnia and in Southwest Asia funded?
A. Charts below detail DOD incremental costs for operations in ( post-Desert Shield/Desert
Storm) Southwest Asia (SWA) and operations related to Bosnia, and the mechanisms
through which these costs were funded through FY1998. These operations incurred $12.9
billion in incremental costs through the end of FY1998. Through FY1998, supplemental
appropriations have covered about half of the combined incremental costs of both operations,
but have varied greatly. (These supplemental appropriations were parti
4
ally or largely offset
by recissions.) Since the Congress began to fund these operations through annual
appropriations, these laws have covered much of the incremental costs for SWA from
FY1996- FY1998 (97%, 74% , and 41%, respectively), and less for Bosnia ( FY1997, 30%;
FY1998, 76%). Transfers between DOD accounts covered nearly 25% of the ex-Yugoslavia
costs through FY1996, but have not been used there since then, and have never been used
for SWA. "Absorption" within DOD accounts was an important source of funding through
FY96, but has not been used since. For FY1999, Congress appropriated funds for SWA
costs in annual appropriations that will cover part of current estimated costs; for Bosnia,
it approved an emergency supplemental appropriation.
NOTE: The FY1999 emergency supplemental appropriations under consideration by the 106th Congress
do not contain Bosnia or SWA funding. The Clinton Administration requested $132.5 million for DOD
disaster assistance to Central America in the wake of Hurricane Mitch, and $56.0 million for a future "New
Horizons" DOD disaster relief program there. Senate (S. 544) and House action on this assistance is tracked
in CRS Report RL30083,
Supplemental Appropriations for FY1999: Central American Disaster Aid, Middle
East Peace, and Other Initiatives, by Larry Q. Nowels.
4The supplemental apppropriations measures were:
for FY1992: Dire Emergency Supplemental Appropriations Act, 1992, P.L. 102-368
for FY1993: Supplemental Appropriations Act of 1993, P.L. 103-50;
for FY1994: Emergency Supplemental Appropriations for FY1994, P.L. 103-211;
for FY1995: Emergency Supplemental Appropriations for FY1995, P.L. 104-6;
for FY1996: Omnibus Consolidated Recissions and Appropriations Act ,P.L. 104-134;
for FY1997: Emergency Supplemental Appropriations, P.L. 105-18;
for FY1998: Emergency Supplemental Appropriations Act for FY1998, P.L. 105-174; and
for FY1999: Omnibus Consolidated and Emergency Supplemental Appropriations Act for FY1999.
P.L. 105-277.
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Table 1. Ex-Yugoslavia DOD Incremental Costs and Funding Sources,
FY1992-FY2000 ($ millions, current dollars)
Fiscal
Incremental
Annual
Supplemental
Transfers
Costs "Absorbed"
Year
Costs
Appropriation
Appropriation
1
Between DOD Within DOD Accounts
1
Accounts
or Otherwise Covered
FY92
5.8
5.8
FY93
138.8
50.0
88.8
FY94
292.0
15.3
FY95
347.4
276.7
31.8
FY96
2,520.0
858.0
1,380.9
281.1
FY97
2,282.5
679.4
1,620.7
(Excess of 17.6 applied to
SW Asia)
FY98
1,962.7
1,496.1
493.8
Total
7,549.2
2,175.5
3,249.2
FY92 -98
FY99
1,760.9
1,858.6
(Carry-over of 342.5 from
(Estimated)
FY98 available in the OCOTF
for use in this or other
contingency operations).
FY2000
1,824.4
(Estimated)
Source: All FY1992-1997 figures were provided or verified by the DOD Comptroller's Office, June 1998. FY98
incremental costs, and FY1999-FY2000 estimated costs, were provided March 23, 1999.
1 Figures for FY1996 through FY1998 in these columns are not cited separately in the appropriating legislation, as
they are part of either personnel accounts or the Overseas Contingency Operations Transfer Fund. The DOD
Comptroller's Office has provided the amounts that appropriators intended for Bosnia or Southwest Asia.
2 This figure is the sum of two reprogrammings for Bosnia, $875.6 million and $483.9 million, and $21.4 million
included for Bosnia in an omnibus reprogramming request.
Table 2. Southwest Asia Incremental Costs and Funding Sources,
FY1992-FY2000 ($ millions, current dollars)
1
Fiscal Year
Incremental
Annual
Supplemental
Costs "Absorbed" Within DOD
Costs2
Appropriation
Appropriation
1
Accounts or Otherwise Covered
2
FY92
106.4
92.6
13.8
FY93
838.5
651.3
187.2
FY94
424.8
449.7
(Excess of 24.9 applied to other contingency
operations)
FY95
864.3
970.4
(Excess of 106.1 applied to other contingency
operations)
FY96
665.2
647.1
18.1
FY97
793.1
587.2
143.4
44.9 (Outstanding after 17.6 of 62.5
shortfall covered by transfer from Bosnia
funds)
FY98
1,638.8
679.0
1,296.6
Total
5,331.1
1,913.3
3,604.0
264.0
FY91-FY98
FY99
1,014.4
439.4
(Carry-over of 342.5 from FY98 available in
(Estimated)
the OCOTF for use in this or other
contingency operations.
FY2000
1,824.4
(Estimated)
Source: FY1992-1997 figures were provided or verified by the DOD Comptroller's Office, June 1998. FY98
incremental costs, and FY1999 and FY2000 estimated costs were provided March 23, 1999.
1 Does not include costs of Desert Shield/Desert Storm in FY1991-FY1993.
2 Figures for FY1996 through FY1998 in these columns are not cited separately in the appropriating legislation,
as they are part of either personnel accounts or the Overseas Contingency Operations Transfer Fund. The DOD
Comptroller's office has provided the amounts that appropriators intended for Bosnia or Southwest Asia.
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Table 3. Incremental Costs of DOD Humanitarian/Contingency Operations
FY1991-1998* (budget authority in millions of current year dollars)
FY91-98
Operation
1991
1992
1993
1994
1995
1996
1997
1998
Total
Southwest Asia
Provide Comfort/Northern
325.0
101.5
116.6
91.8
138.2
88.9
93.1
136.0
1,091.1
Watch
Southern Watch/
Air Expeditionary Force
715.9
333.0
468.4
576.3
597.3
1,497.2
4,188.1
Vigilant Warrior
257.7
257.7
Desert Strike/Intrinsic Action
102.7
5.6
108.3
UNIKOM (UN/Iraq Observer Group)
21.5
4.9
6.0
32.4
Total Southwest Asia
346.5
106.4
838.5
424.8
864.3
665.2
793.1
1,638.8
5,677.6
Former Yugoslavia (Bosnia)
IFOR/SFOR/DFOR/FFOR
2,231.7
2,087.5
1,792.9
6,112.1
Other Former Yugoslavia
Operations*
5.8
138.8
292.0
347.4
288.3
195.0
169.9
1,447.1
Total
5.8
138.8
292.0
347.4
2,520.0
2,282.5
1,962.7
7,549.2
Haiti
Safe Harbor
9.3
9.3
Embargo/Interdiction/Sanctions
2.8
65.8
68.6
Migrant Processing
108.1
63.7
171.8
Uphold Democracy
198.2
448.8
647.0
UNMIH
56.5
86.9
143.4
Total Haiti
9.3
2.8
372.1
569.0
86.9
1,040.1
Somalia
1.6
943.1
528.0
49.4
1,522.1
Cuba
106.8
265.6
24.9
397.3
Rwanda
1.0
106.7
36.5
144.2
Korea
69.7
90.9
160.6
Resolute Response (Kenya &
1.2
Tanzania)
Bangladesh (Sea Angel)
7.1
6.4
13.5
Mt. Pinatubo (Philippine
Evacuation)
339.4
84.5
7.9
431.8
Project Hope (Soviet Union)
0.6
0.1
0.7
HurricaneAndrew/ Iniki/Omar
621.2
137.7
758.9
LA Riots
14.3
14.3
Guam Earthquake
94.1
94.1
Turkey Earthquake Relief
0.2
0.2
Midwest Floods
0.1
0.1
Angola
0.5
0.1
2.6
3.2
Cambodia
0.5
0.5
5.0
6.0
Western Sahara
0.9
0.3
0.1
1.3
Total
693.0
852.2
2,165.0
1,907.8
2,223.0
3,297.0
3,075.6
3,602.6
17,816.2
Source: Under Secretary of Defense (Comptroller) -- data current as of March 23, 1999.
*Notes: Totals may not add due to rounding. Other Former Yugoslavia operations include Able Sentry (Macedonia), Deny Flight/Decisive Edge/Deliberate
Guard, UNCRO (Zagreb), Sharp Guard (Adriatic), and Provide Promise (Humanitarian Assistance).
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