WASHINGTON — Though Pentagon leaders and hawkish lawmakers have complained for years that statutory budget caps have hobbled the Pentagon in the face of global threats, defense budgeting experts Monday said the caps should stay in place to maintain spending discipline.
"I would keep the caps, whether it's part of the Budget Control Act," Pentagon Comptroller Bob Hale said Monday at a Brookings Institution event. "You need that budget disciplining process."
Hale, who presided over sequestration budget cuts at the Pentagon in 2013, said the federal government needs a broad, multi-year budget deal that addresses mandatory entitlement spending, revenues and the deficit — with caps in place, but eased to match the the Obama administration's proposed defense spending plan. That means about $30 billion more for defense in 2018 than set by the BCA.
"In that deal, I would keep the Budget Control Act, or at least budget caps, because I think the process needs discipline, but I would raise them for defense and probably non-defense also," said Hale, now a senior fellow with Booz Allen, speaking at a Brookings Institution event on Monday.
The wartime Overseas Contingency Operations (OCO) account, which is exempt from budget caps has been used as an overflow receptacle for the Pentagon's base budget expenses. OCO should remain, Hale said, but its use should be restrained to wartime needs. "It's got a bad name because it's misused, but it has served the [Defense] Department well," he said.
Absent a long-term deal under the next president and Congress, it "makes sense" to revise budget caps to allow more discretionary spending for defense and non-defense, said Committee for a Responsible Federal Budget's president, Maya MacGuineas.
Congress's partisan gridlock has prevented long-terms deals in favor of annual deals that ease budget caps. While MacGuineas decried the disruptive nature of such deals in favor of long-term planning, she said, "I think the disciplining notion of a cap is useful. I think it should be paralleled on the revenue side."
"Think about how easy it is for a policymaker to come in and say all we have to do is put in spending caps and live by them. They haven't actually told you a single thing they're going to cut," MacGuineas said. "They made it sound simple and basically free. We're just going to put a cap in and the budget will fix itself.
"Budgeting is about priorities, it's about trade-offs," MacGuineas said. "I think it's important when you put in caps to say what kind of policy changes you would be able to make to live within those caps and then you want to keep them as a disciplining process in emergencies to figure out wha's less important spending ... I think an arbitrary cap does more damage than not having one at all."
Standing apart from Hale and MacGuineas, Alice Rivlin, director of the Office Management and Budget under President Bill Clinton, told the audience, "revising the Budget Control Act is a mistake because the act is a mistake." Rather than focus on the caps, which target discretionary spending alone, a better deal would tackle entitlement programs, mandatory spending and tax code revisions.
"I wouldn't revise the BCA, I would repeal it and replace it with a broader budget process that forces the Congress to think ahead, and several decades ahead," said Rivlin, who is now with Brookings.