Shell Games

The House has posted the conference report on FY12 appropriations—although the Senate hasn’t agreed to it yet, so maybe it’s not the final numbers.  But we’ll assume it is.  See update below.

Previously, we’d noted that the BCA encouraged appropriators to shift funding from base to OCO for both defense and international affairs.  And that international affairs was likely to be the payer for any increase in defense.  

Well both are true, but even more interestingly, the agreement has another level of shifting.    

• The State and Foreign Ops bill at $42.1B is basically halfway between the Senate and House marks of $44.6B and $39.6B respectively.  That’s a pretty even negotiation: split the difference.  However, the cut is eased a bit because an additional $2.5B (the amount taken from the Senate mark) was included in OCO: the administration asked for $8.7B, and international affairs is getting $11.2B.  Five extra accounts are getting OCO funds that weren’t in the Senate bill. International Affairs will be roughly $5B better than FY11. 

• But that extra OCO funding came from DoD.  Where the administration requested $117.8B in OCO funding for DoD, the agreement only provides $115B.  But DoD can’t complain too much, because the agreement gives base defense spending $5B more than the Senate bill.   Sort of.  The House bragged that it plussed up DoD by $5B, but the agreement plussed up the defense subcommittee by $5B over FY11 while cutting $3.5B from MILCON.  So the Department of Defense in total base funding comes out just a tad bit better than FY11, but not much.  Still, DoD got more base funding than it would have in the Senate bill while international affairs got less. 

In the end, the House gets to say it raised defense, but cut international affairs.  While the Senate gets to say it kept its international affairs number and didn’t give in to the House on defense.  And nobody gave the President more war funding than what he asked for. 

From an actual budget perspective, International Affairs looks to get cut by about 12% in base funding from FY11, but if you include war funding it goes up by 10%.  DoD's war funding is way down, but its no longer in Iraq either.  And its base stays flat, which although is a cut in real terms, is pretty good in these days of dire predictions of doomsday. Pretty nice work all around. 

Update on Friday, December 16, 2011 at 11:31AM by Russell Rumbaugh

UPDATE:  The two chambers have agreed to the conference report, and the House has posted new versions and the conference reports. The analysis laid out above still stands.