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Vote on (Un)Balanced Budget today

Today, the House of Representatives will vote on the House-Senate Budget Conference Report.  The Congressional leadership claims it is a "fiscally responsible" budget that stays within the budget caps, but that is only because the budget hides $39 billion increase in "defense" spending in the Overseas Contingency Operations (OCO) slush fund.

Campaign for Liberty joined a collation letter sent to every Representative and Senator asking they oppose the budget conference report because of the OCO funding. Text of letter here and below:

 Dear Representative:

On behalf of the undersigned organizations and our combined memberships, we urge you to oppose the Fiscal Year 2016 Budget Resolution conference report scheduled for votes this week. The conference report makes a sham of sound budgeting by dumping money into the Pentagon’s budget for ill-defined needs.

The conferees agreed to add $39 billion to the Overseas Contingency Operations (OCO) account, an emergency account that has been used to pay for the wars in Iraq and Afghanistan. This brings the new total to $90 billion in addition to the $523 billion defense budget. An additional $6 billion has been added in the Overseas Contingency Operations accounts for the State Department.

As more and more base budget items are being funded through this “off budget” account, OCO has already gained a well-deserved reputation as a slush fund. We strongly object to the continued use of this “slush fund” that circumvents the spending caps that Congress itself legislated and avoids tough choices on Pentagon spending. From 2001-2014, the Pentagon spent $71 billion from  the OCO account on non-war programs, including funding for Israel’s Iron Dome system, repairing surplus gear from Iraq, and the majority of funding for US Central Command (CENTCOM). This year, $39.7 billion has been transferred from the operations-and-maintenance funds into OCO to fund base requirements.

Leaders at the Pentagon believe budgeting in this manner only exacerbates the problem. Assistant Secretary of Defense for Special Operations and Low Intensity Conflict Michael Lumpkin noted in a March 18th hearing before the House Armed Services strategic forces subcommittee, “It's not something I can sit here and plan on, so it actually increases my fiscal uncertainty.”

Instead of giving the Defense Department many more billions of dollars without sufficient accountability or adequate oversight, Congress should insist that the Pentagon institute the controls necessary to stop wasting taxpayer dollars.

We urge a “no” vote on the Budget Resolution conference report.

Sincerely,

Project on Government Oversight, “The Pentagon’s Wartime Slush Fund,” http://www.pogo.org/blog/2015/03/the-pentagons-wartime-slush-fund.html.

http://www.politico.com/morningdefense/

http://www.nationaldefensemagazine.org/archive/2015/May/Pages/DespiteWiderCuts,SpecialOperationsCommandBudgetOutlookRemainsRosy.aspx

American Friends Service Committee

Campaign for Liberty

Center for Arms Control and Nonproliferation
Center for Foreign and Defense Policy
Center for International Policy
Coali
tion to Reduce Spending
Council for a Livable World
DownsizeDC.org
Friends Committee on National Legislation
Just Foreign Policy
London Center for Policy Research
National Priorities Project
National Security Network
NETWORK, A National
Catholic Social Justice Lobby
Niskanen Center
Peace Action
Progressive Democrats of America
Project on Government Oversight
Taxpayers for Common Sense
United for Peace and Justice
USAction
U.S. Labor Against the War
Women’s Action for New Directions
Win Without War

Of course, OCO is far from the only reason to oppose this budget. Writing at National Review, John Gray of the Heritage Foundation has a must-read piece explaining why this budget is balanced in name only:

The trickery begins with the presence of nearly $2 trillion in bogus tax revenues (over ten years). Both the Senate and House budgets start by assuming two fundamental policy measures: first, that nearly 70 minor tax cuts known as “tax extenders” are renewed, and second, that Obamacare is repealed, including the taxes that fund it. So far, so good. Unfortunately, this story quickly turns into one part fiction, one part hyperbole. In the mythical land of Washington budgeteers, the $2 trillion in tax revenue that would be lost under these assumptions magically reappears in the budget as the result of what is known as “revenue-neutral tax reform.”

The phrase “revenue-neutral tax reform” suggests that even with a complete overhaul of the tax code, the new tax system will be designed to raise the same levels of revenue as was projected under the current tax code. Without details on how this would be accomplished, Republicans should at most assume revenues to be no more than the long-term average, as a percentage of the economy (GDP). However, without any details on what the new tax system will look like, there are problems with the current budget’s revenue assumptions, particularly when they’re being used to balance the budget.

...

On one hand, Republicans extol the importance of lowering taxes to help businesses and the economy. But on the other, their budgets depend on replenishing those tax cuts dollar-for-dollar with unspecified tax increases somewhere else. That’s either a confused economic theory or a blatant accounting gimmick.
Then there’s Obamacare.
When Obamacare was passed, it included huge amounts of new entitlement spending, to be funded by $1 trillion in new taxes. This didn’t sit well with the American public, and Republicans rode the “repeal Obamacare” slogan to majorities in Congress. Delivering on their promise, both Republican budgets assume that Obamacare is repealed, at least partially. But they retain the $1 trillion in Obamacare taxes to balance the budget.
That’s right: The Republican budgets scrap Obamacare’s spending, but keep its tax revenues to fund other government largess. In an attempt to explain themselves, the budget authors will again claim that the revenues that are repealed along with Obamacare will be replenished, dollar for dollar, from tax reform. This is disingenuous. Was any Republican politician ever heard pitching: “We will repeal Obamacare, but will have to increase your taxes elsewhere to make up those revenue losses”? In effect, that’s what these budgets envision, though they do their best to keep quiet about it. Obamacare taxes were enacted to pay for an expensive new entitlement program. When Obamacare is repealed, so too should be the revenues that pay for it. That $1 trillion in static revenues should not be included in the equation for revenue-neutral tax reform in the future. Period.

...
While a balanced budget is not synonymous with small government, balancing the budgets with legitimate revenues that account honestly for the repeal of Obamacare and the extension of the tax extenders would have been a step in the right direction. As Republicans gather to work out a single, final version of the budget resolution, they have the chance to fix this unfortunate accounting gimmick. They should use it to ensure an honest budget — one that actually balances.
Campaign for Liberty members who oppose the budget Conference report should call their Representatives and tell to oppose the House-Senate Budget Conference Report.

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