WASHINGTON — The chief of the Army Reserve said he would be open to budget relief through the emergency war-time fund known as OCO, a controversial plan offered by Republicans in Congress to bypass federal budget caps imposed in 2011.
Lt. Gen. Jeffrey Talley is the latest senior Army official to profess openness to the measure, following the incoming Army chief of staff, Gen. Mark Milley, who told lawmakers at his confirmation hearing last month that he would accept dollars from the overseas contingency operations account if it was the only means available.
US President Barack Obama has threatened to veto the National Defense Authorization Act over a Republican effort to add $38 billion to the Overseas Contingency Operations (OCO) account as a way to bypass Budget Control Act caps and ensure the Pentagon gets the funding it has requested. Defense Secretary Ash Carter has criticized the plan as a slapdash way to fund national security and "a road to nowhere."
Other military leaders have voiced discomfort using OCO, including Gen. Ray Odierno, who retires as Army chief of staff this month, and Air Force chief Gen. Mark Welsh.
"With modernization as one of our major concerns, this presents some problems because it's hard to start a new program with OCO," Welsh told Federal News Radio. "When you're looking at a one-year budget cycle, it's not guaranteed over time. There are limits to what you can spend it on, so that is the big issue with us. Modernization is a huge deal for the Air Force at this point in time. But at some point, if it's green and it smells pretty and it's not your St. Patrick's Day tie, it's OK."
Senate Armed Services Chairman Sen. John McCain, R-Ariz., has called this funding mechanism "not the ideal way to fund our national defense," but said the NDAA, which is a policy bill and not a spending bill, "should not be treated as a hostage in a budget negotiation."
Chaos is looming in the absence of a bipartisan deal to avert the caps, and appropriations bills have stalled on Capitol Hill. The Pentagon is dreading the increasingly likely possibility Congress will pass a continuing resolution to fund the government at current levels when the budget runs out on Sept. 30, or worse, enter a government shutdown.
At Milley's July 21 confirmation hearing, Sen. Claire McCaskill asked him if he would accept OCO funding and "buy back force structure using this war fund." The Army had just announced it would cut 30,000 troops at posts around the country to shrink to 450,000 soldiers, as required under its budget.
"Senator, we would prefer, if possible, the budget be in the base," Milley said. "But as the recipient of the money, we will take the OCO if that is the only mechanism that we can in order to sustain readiness, end strength and modernization."
The Reserve plays a large and vital support role, representing most of the service's medical, logistics, transportation, engineering and legal capabilities. Talley, in his remarks, acknowledged the need to cut costs, but said the Pentagon had lost much needed flexibility due to the automatic budget cuts, known as sequestration, and that the Reserve's ability to mobilize troops is compromised.
"I can't generate a portion of that Reserve to be operational … unless I get a plus-up," Talley said. "We used to be able to tie that plus-up to OCO money, but the question is how do I get that money from the Army to do that. Well, the Army's got to squeeze that base budget down to here because of sequestration. But the requirements aren't going down, they're staying the same or going up here, so you have a problem."
Asked if he would support a plan to provide OCO funding, Talley said yes — but when asked to clarify whether he supports the Republican plan to provide $38 billion specifically, he said he was not endorsing a specific plan. Talley alluded the bipartisan budget deal in 2013, which raised budget caps for two years.
"Let me specify: If the Congress wants to provide a modification, and relief to the Budget Control Act, like they've done in the past — which some are calling OCO, some are calling it other things — we would certainly welcome that in the Army and the Department of Defense because it provides us, one, more money and, two, more flexibility," Talley said.
"I'm not endorsing one plan, I'm just saying if the Congress were to say we're going to give some relief to the DoD — how they execute the budget and plus them up with additional money tied to readiness and protecting the nation — obviously common sense says that would be great for the armed forces and we're hoping they're going to do that."
Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.