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  • A Hidden Cost: Failure to Reflect the True Cost of Operations Would Damage Readiness

    Among the amendments cleared for action during House consideration the National Defense Authorization Act (NDAA) for fiscal year 2014 is an amendment sponsored by Representative Chris Van Hollen (D–MD). It would reducing the funding level for overseas contingency operations (OCO), primarily for ongoing operations in Afghanistan, to the level in the revised Administration defense budget request released last month.

    This revised request sets the level at $79.4 billion. The current level in the Armed Services Committee’s approved NDAA is $85.8 billion. Reducing the funding for OCO is ill-advised and will be a hidden “hit” on readiness.

    The higher level of funding for OCO in the current version of the NDAA is appropriate. This is because the level requested by the Administration may be failing to account for the true cost of the operations OCO funding is designed to cover. Specifically, the Administration is focused on the declining direct costs of the operations in accordance with the reduction in the engaged forces.

    The reality is that true cost of OCO includes funds needed to reset the force in the aftermath of deployment. This includes replacing weapons and equipment that have been damaged or destroyed. Further evidence of this narrow focus in the justification accompanying the Administration’s revised request is a reduction in procurement funding under the OCO account in fiscal year 2014 that is more than 40 percent below the enacted level for this year.

    Accordingly, the lower level of funding for OCO that Van Hollen is pressing for would impose a hidden cost on Department of Defense activities outside OCO, commonly referred to as the core defense program. The higher funding level for OCO in the current version of the NDAA, therefore, more accurately reflects the true cost of the operations. These costs should be included in the OCO funding line for as long as that separate line exists.

    At some point in the future it is all but certain that the overall defense budget will be consolidated into traditional single account. At that point, the overall defense budget will necessarily have to be higher than the current line for the core program in order to reflect the ongoing costs associated with the operations, because the costs imposed by the these operations will necessarily extend beyond the time when the last combat unit has left Afghanistan.

    In the end, these costs will continue to exist, and the bills have to be paid in one way or another.

    Posted in Security [slideshow_deploy]

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