Office of Management and Budget Director Jim Nussle spoke with National Review’s Kevin Williamson Tuesday about the mystifying and sometimes maddening process of trying to fund military operations in Iraq and Afghanistan without pouring cash into every congressman’s pet project. The sobering bottom line: The Defense Department starts running out of money in June.
NRO: Looking over the reports on the supplemental war-funding bill, I see unemployment benefits, Medicaid, Planned Parenthood, the Mississippi coastline — what does this have to do with fighting two wars?
Nussle: That’s our question! The president was very clear, from the very beginning. That’s the reason why the president came out right away when this process kicked off about a month ago in the Congress, and when we first submitted our supplemental 15 months ago, and he said “This needs to be about the troops. We don’t want to tie the hands of commanders in the field. Remember that you’ve lost those votes in the past. And we don’t want to hold troops hostage to excess domestic spending.” He was very clear. At least in the House they understood that the president is serious. The Democrats came in with discretionary spending at the president’s number. The Senate is starting at plus-10 billion dollars, and who knows how far it will go up from? Further spending likely will come in the form of all sorts of amendments on the floor in the next 48 hours. There was some of that in the committee process that started this ball rolling, but now that all 100 senators have a chance, you’ll see more amendments.
NRO: What happens if the bill doesn’t get done by Memorial Day?
Nussle: That’s the challenge. As Secretary Gates testified this morning, it makes the Department of Defense go through a shell game. They move around money. They’re already using fourth-quarter dollars from the base budget — the basic Defense Department budget — and taking away from the muscle and bone of the military. Those funds will have to be replenished. Every minute that starts ticking off from a reprogramming like that is time wasted. It’s a shell game and a terrible way to manage, especially when Congress has known that this day of reckoning, for paying for our troops, was coming. It’s been on the calendar for a while.
NRO: And what happens if they is no bill, or a bill that the president vetoes?
Nussle: The first thing that happens is that they look at two accounts. The first one is the military personnel accounts, and that runs out in mid-June. The operations and maintenance accounts run dry after that. They start shifting money around. The well does not go completely dry until around the Fourth of July, heaven forbid we get to that point. The Defense Department already sent a letter up indicating that they’ll have to notify their civilian workforce of a furlough, maybe as early as mid-June or toward the end of June. Congress and the Defense Department have been down this road. Congress hasn’t learned that they can avoid this by passing it now and passing it clean.
NRO: How did tax increases end up in this mess?
Nussle: There were tax increases in the House version to offset mandatory increases in spending. The president has made it clear that he will veto tax increases. So that’s dead on arrival. The Senate knows that, and I understand that Senator Baucus is going to strip out tax increases as they go through. But the necessity for tax increases is from huge mandatory spending increases, which are not necessary as part of a war-supplemental bill.
NRO: Why are we still using supplemental appropriations? Why isn’t this part of the regular DoD budget?
Nussle: Two reasons: It’s important from a budgetary standpoint to recognize that this money is for a war, that this is a temporary policy, and that, as soon as we are able, based on our commanders’ input, this is going to be diminished. If you put it into the base budget, that money in the future is going to be hard to extricate in the future. We budget for this. It’s not as though this is not included in the deficit. This is tracked with the rest of the budget, and we’ve been doing that for past two budget cycles now. There’s no hiding the war costs.
This request has been out for 15 months. We’ve had five State Department hearings, three in Defense, and at least one OMB hearing, where members of Congress can have their questions answered and where cabinet members could testify. There’s no secret about what this all costs.
NRO: How did post-Katrina levee funding end up in the bill?
Nussle: The administration didn’t ask for that to be in this bill. In the ’09 budget we did request the levy funding. Congress is pulling out the two emergencies — the war funding for next year and Katrina — and doing it now. I think they’re doing it on the theory that they won’t have to deal with President Bush again. We don’t know exactly how they’re going to handle either one. We’re focused on the ’08 military supplemental, and we’ll watch how the ’09 money goes through the process. Now that they’re going to go past the recess, it may be a while. I keep saying we’re only in the fourth or fifth inning, but it’s going to be an extended inning, with rain delays, and maybe some pitching changes.
NRO: Is this just a case of bad management in Congress?
Nussle: We submitted this 15 months ago. No one has been kidding anybody that this has been needed, or about exactly when we said we were going to need it. I would have thought they would have learned from this process. I see no advantage, politically or from a tactical standpoint, in terms of Congress vs. the administration, why delaying this makes any sense. It’s very strange that it would take this long, when the lead time was so far out. There are hurricanes, tornados, those things come up, and you don’t know they’re coming. Everyone knew this was coming and could calculate exactly when this was going to occur.