Foreign Affairs Overseas Contingency Operations (OCO) Funding: Background and Current Status

Foreign Affairs Overseas Contingency Operations (OCO) Funding: Background and Current Status

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Updated August 13, 2021
Foreign Affairs Overseas Contingency Operations (OCO)
Funding: Background and Current Status
For the past decade, Members of Congress have debated
For FY2014 (P.L. 113-76, Div. K, Title VIII), Congress
Overseas Contingency Operations (OCO) funding levels in
provided four accounts with no-year (available until
the context of annual foreign affairs and defense budgets.
expended) OCO funds, but made most foreign affairs OCO
First used by the foreign affairs agencies in FY2012, a key
funds available for two years—or until September 30, 2015.
feature of OCO funds was their effective exemption, like
Congress also expanded the terms of transfer authority,
emergency funds, from the discretionary spending limits
providing greater flexibility across certain accounts.
established by the Budget Control Act of 2011 (BCA, P.L.
FY2014 OCO-funded activities were implemented in Iraq,
112-25). Some Members viewed OCO funding as a tool for
Afghanistan, Pakistan, Jordan, Lebanon, the Central
preventing contingency needs from encroaching on funding
African Republic, and Somalia.
for core agency activities. Others criticized the OCO
designation, labeling it as a “slush fund” that provided
Figure 1. Foreign Affairs Overseas Contingency
funds for programs unrelated to contingency operations.
Operations Funding, FY2012-FY2022
(in billions of U.S. dollars)
The BCA’s spending caps ended in FY2021. Under the
Trump Administration, the foreign affairs agencies ceased
requesting OCO funds after FY2018. However, Congress
appropriated $8.0 billion designated as OCO every year
between FY2019 and FY2021 in State-Foreign Operations
(SFOPS) appropriations bills . FY2022 may be a turning
point, as the House recently approved an FY2022 SFOPS
appropriations measure (H.R. 4373) that did not include
OCO funding.
Background on Foreign Affairs OCO
The foreign affairs agencies began requesting OCO funding
in FY2012, distinguishing between enduring (ongoing
costs) versus extraordinary, temporary costs of the

Department of State and the U.S. Agency for International
Sources: Annual Department of State Congressional Budget
Development (USAID) in the frontline states of Iraq,
Justifications, annual SFOPS appropriations measures. The totals
Afghanistan, and Pakistan. OCO-designated funds largely
enacted include net rescissions.
replaced annual emergency supplemental appropriations to
For FY2015 (P.L. 113-235, Div. J, Title VIII), although
support the Global War on Terrorism (GWOT) in the
Congress did not provide specific OCO funds for
frontline states that became the norm during the George W.
countering the Islamic State (IS), as was requested by the
Bush Administration. Congress, already using the OCO
Obama Administration, it did provide an increase in OCO
designation within the Department of Defense (DOD)
funds in many accounts with language that allowed it to be
budget, adopted this approach for foreign affairs, although
used for counterterrorism. The Obama Administration
it never permanently defined its uses in statute. Since
requested an expanded use of OCO funds for Syria and
FY2012, Congress has appropriated OCO-designated
peacekeeping in FY2016 and FY2017. Congress granted
foreign affairs funds at higher levels and for broader
these requests in FY2016 (P.L. 114-113, Div. K, Title VIII)
purposes than were requested each year (see Figure 1).
and FY2017 (P.L. 115-31, Div. J, Title VIII) and also
provided OCO funding in both years to respond to the
For the first foreign affairs OCO appropriation in FY2012
Ebola and Zika viruses, support counterterrorism, and
(P.L. 112-74, Div. I, Title VIII), Congress provided funds
counter Russian aggression.
for a wide range of activities beyond the three frontline
states, including in Yemen, Somalia, Kenya, and the
The FY2018 (P.L. 115-141, Div. K, Title VIII) and FY2019
Philippines. In addition to country-specific uses, Congress
(P.L. 116-6, Div. F, Title VIII) foreign affairs OCO-
also used the OCO designation for funds appropriated for
designated appropriations included funds to address global
the Global Security Contingency Fund. In the FY2013 full-
refugee responses and to support assessed peacekeeping
year continuing appropriations (P.L. 113-6, Div. F, Title
contributions for operations in Somalia, among other
VII, §§1707-1708), Congress specified only Jordan as an
activities.
additional OCO-recipient country.
In FY2020 (P.L. 116-94, Div. G) and FY2021 (P.L. 116-
260, Div. K), Congress did not designate OCO funding in a
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Foreign Affairs Overseas Contingency Operations (OCO) Funding: Background and Current Status
separate title of the bill; rather, OCO levels were embedded
repeatedly requested significant budget cuts for
in select appropriations accounts throughout the legislation.
international affairs activities and did not seek OCO funds
OCO-designated funds in both years were distributed
for the majority of its tenure; however, Congress continued
similarly, with Diplomatic and Consular Programs and
to appropriate OCO funds and did not enact large cuts to
humanitarian accounts receiving the majority share.
the international affairs budget overall. OCO-designated
funds as a share of the international affairs budget declined
In the decade that Congress provided OCO for foreign
in recent years, from a peak of 36% in FY2017 to 11% in
affairs purposes, the highest proportion of funds was
FY2021. Further, the use of emergency funding in FY2020
appropriated for global humanitarian accounts (28% for
and FY2021 to address the Coronavirus Disease 2019
MRA, IDA, and Emergency Refugee and Migration
(COVID-19) pandemic, specific assistance for Sudan, and
Assistance combined), followed by Diplomatic and
humanitarian assistance for Afghanistan and Afghan
Consular Programs (24%), and Economic Support Fund
refugees may indicate a return to the practice of using non-
(17%). (For all funding accounts that received OCO funds
OCO emergency funding to support extraordinary needs
between FY2012 and FY2021, see Figure 2.)
(see Figure 3).
Figure 2. FY2012-FY2021 Foreign Affairs OCO
Figure 3. OCO Funding as a Share of Total
Funding by Appropriations Account
International Affairs Budget
(in millions of U.S. dollars)
(in billions of current U.S. dollars and percentages of total)

Source: Annual Department of State Congressional Budget
Justifications, annual SFOPS appropriations measures. The totals
enacted include net rescissions.
Notes: “Emergency” designates funding that was appropriated as
emergency funds (meaning they also fal outside of the BCA spending
caps) but not designated as OCO.
Congress may choose to discontinue the use of OCO as a
foreign affairs funding mechanism with the expiration of
the BCA discretionary spending caps. The Biden
Administration did not include OCO in its budget request
for FY2022, instead incorporating activities previously
Source: Annual SFOPS Appropriations measures.
funded by OCO into base budgets, and the House did not
Notes: Totals do not include rescissions, including those from
include OCO in its approved FY2022 SFOPS
sequestration, and may not match totals provided in Figure 1. ESCM
appropriations measure (H.R. 4373). Ceasing the use of
= Embassy Security, Construction and Maintenance; NADR =
OCO may affect executive agencies’ budget planning and
Nonproliferation, Anti-Terrorism, Demining and Related Programs;
presentation (including the annual Congressional Budget
AEECA = Assistance for Europe, Eurasia, and Central Asia.
Justification), financial regulations, reporting requirements,
and certain other aspects of congressional oversight.
Outlook for Foreign Affairs OCO
More Information
OCO had consistently been described by Congress as
For more information on OCO and the foreign affairs
supporting extraordinary budget needs, even as the use of
budget, see CRS Report R44519, Overseas Contingency
the designation expanded over the years to apply to an
Operations Funding: Background and Status.
increasing range of activities, many of which were not
directly related to active conflicts. During the Obama
Administration, the OCO designation arguably devolved
Emily M. Morgenstern, Analyst in Foreign Assistance and
into a mechanism that enabled Congress to increase
Foreign Policy
spending on regular operations while technically complying
IF10143
with BCA budget caps. The Trump Administration
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Foreign Affairs Overseas Contingency Operations (OCO) Funding: Background and Current Status

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https://crsreports.congress.gov | IF10143 · VERSION 14 · UPDATED