The Bush administration's emergency supplemental spending requests for the wars in Afghanistan and Iraq have lacked the transparency that normally accompanies the appropriations process, according to a new report from the Congressional Budget Office (CBO). In addition, the CBO war spending report, however constrained by available data, revealed the composition of the war funding requests has been evolving into broader Defense Department spending initiatives, such as acquiring next-generation aircraft and replacing aging aircraft.

If Congress fully funds the Bush administration's FY 2008 emergency war spending request, supplemental Defense Department spending on the wars in Iraq and Afghanistan since 2001 will exceed $750 billion. The CBO report examined requests submitted before 2007 — requests totaling some $384 billion — and found they "contained little detailed information on war expenses," which made "a detailed analysis of the changing patterns of spending impossible." The report also found that a rapidly growing portion of this funding has expanded from ongoing war costs to long-term military expenditures unrelated to the war effort. This has caused a shift in the way supplemental funds are being spent from replacing equipment damaged or destroyed in combat toward acquiring new weapon systems, replacing aging aircraft, and facilitating longer-term military projects.

The overuse of the supplemental funding mechanism has obscured important details about how war funding is spent. During the regular appropriations process, agencies submit detailed documents, known as "budget justification materials," and budget committees openly debate the appropriateness of the requests. While budget justification materials provide Congress with substantial details explaining how a given agency plans to spend its appropriation request, CBO found that:

The Administration's requests for supplemental appropriations have generally lacked the detail and consistent format necessary to undertake a comprehensive analysis of the changes in [Operations and Maintenance] costs. In addition, significant portions of the funding provided to pay for the operating support costs associated with the war have been provided as emergency appropriations in the regular defense appropriation bills, with little detailed information documenting the intended use of such funds.

For its analysis, CBO disaggregated supplemental defense spending into several categories, with the vast majority of spending falling into three main ones: Operations and Maintenance (O&M), Procurement, and Military Personnel.

O&M: This category includes, among other items, spending on operating, maintaining, and repairing military equipment; running and maintaining base infrastructure; and health care for military members and their dependents. These expenses have increased from $46 billion in 2004 to $92 billion in 2007 and account for over half of all war funding since 2001. Yet, because of the lack of transparency in how these funds were spent prior to 2007, CBO could not explain how large portions of this account were expended. An excerpt from the CBO report:

About 75 percent of the Army O&M request is identified as "operating forces, additional activities," a classification lacking enough explanation to be helpful in this analysis. Also, certain detailed documents that accompany the regular budget request — which would contain information on fuel costs, travel expenses, and civilian personnel costs, for example — are not provided with the request for war-related appropriations.

Procurement: Procurement expenditures are those used to acquire equipment and weapon systems. Since 2003, procurement funding levels have increased from $10 billion to a requested $72 billion for 2008. The CBO report found that this five-fold growth has been the result of "loosened ... criteria for the type of programs whose funding could be requested in supplemental budget submissions."

After 2005, supplemental requests included not only replacing equipment damaged or destroyed in combat and acquiring equipment that would be immediately deployed to combat theaters, but also increasing equipment inventories that were lacking prior to the wars, upgrading weapon systems to newer versions, and accelerating the retirement of older equipment. In FY 2008, the Bush administration has requested funding for 45 aircraft and over 80 helicopters, only half of which are to replace equipment damaged or destroyed during the war. CBO found the remaining funds would be used to speed up the acquisition of new equipment to replace systems that were obsolete even before the war began.

In addition to replacing aging aircraft, the military is also expending emergency funds to reorganize and increase its size. As part of an effort to "improve their capabilities and to make [Army and Marine Corps units] easier to deploy," the Defense Department included $5 billion its FY 2005 and FY 2006 emergency supplemental requests. Of this $10 billion, about $8 billion was used to acquire new equipment. In 2007, the Army and Marine Corps requested $7 billion to increase the size of their forces by 65,000 and 27,000, respectively.

In fact, emergency funding is now a significant source of military procurement. According to the CBO report, about 40 percent of Defense Department procurement budgeting in 2007 was through emergency appropriations. Additionally, the FY 2007 emergency supplemental funds:

• More than 50 percent of the Army's total procurement budget;
• About 75 of the Army's ground equipment purchases; and
• Almost 90 percent of the Marine Corps' ground equipment procurement

Under the regular annual appropriations process, Congress not only holds spending to pre-determined limits — limits established with much input and debate — but it demands a thorough justification from the requesting agencies. Emergency supplemental funding, on the other hand, dispenses with these transparency and accountability safeguards. When Congress is pliant and generous with its spending authority, one would expect any administration to seize as much budgetary authority for its priorities as it desires — priorities that will not receive a proper vetting before the public.

This is exactly what CBO's report found — unjustified and extraneous appropriations for the Department of Defense that have escaped congressional and public scrutiny until after the funds have been spent. Continued funding of the wars in Afghanistan and Iraq through emergency appropriations will only push a larger proportion of federal appropriations into a budgetary no-man's land in which spending decisions are opaque and consequences are ignored.