	Balancing Flexibility with Oversight

Administrations have frequently asked Congress to give the Department of Defense flexibilityin allocating funds to cover costs of military operations. Most recently, on May 12, 2004, the WhiteHouse requested $25 billion in a "contingent emergency reserve fund" for FY2005 to cover costs ofoperations in Iraq and Afghanistan during part of the fiscal year. The issue for Congress is to determine howmuch flexibility the Defense Department may need to carry out operations Congress intends tosupport, while also ensuring that funds are used in amounts and for purposes that Congress hasapproved. Faced with the challenge of balancing DOD's need for flexibility to respond to the uncertainties of military operations with congressional oversight responsibilities, Congress has responded tosimilar requests for DOD in different ways in recent years. This report 
(1) briefly reviews the Administration's request for flexibility in the $25 billion contingent emergency reserve fund that it has requested forFY2005;
(2) discusses options Congress has to provide flexible funding for military operations based on precedents discussed in more detail later in thereport;
(3) reviews standard peacetime procedures governing reprogramming of defense funds as a benchmark against which to assess flexibility Congress hasoften provided for wartime or contingency operations;
(4) reviews congressional responses to Administration requests for funding flexibility from the first Persian Gulf War in 1990 through post-9/11 wartimeappropriations to date; and
(5) analyzes congressional action and current issues. Appendix A includes tables comparing the amounts that Congress has provided for military operations since 9/11 in flexible spending accounts and in regular appropriations accounts. Congress is likely to vote on the conference version of the FY2005 DOD Appropriations bill, H.R. 4613 , before going on recess on July 26, 2004 but is not likely to address theFY2005 DOD Authorization until after the recess. (3)

		Language of the Request

The specific language of the request is as follows: 
For additional expenses, not otherwise provided for, necessary to support operations in Iraq or Afghanistan, $25,000,000,000, available October 1, 2004,and to remain available until expended: Provided , That the funds made available under this headingshall be available only to the extent that an official budget request for all or part of the funds istransmitted by the President to the Congress and includes designation of the amount of that requestas an emergency and essential to support activities and agencies in Iraq or Afghanistan: Providedfurther , That funds made available under this heading, may be available for transfer for the followingactivities:
Up to $14,000,000,000 for "Operation andMaintenance, Army"; 
Up to $1,000,000,000 for "Operation and Maintenance,Navy"; 
Up to $2,000,000,000 for "Operation and Maintenance,Marine Corps";
Up to $1,000,000,000 for "Operation and Maintenance,Air Force"; 
Up to $2,000,000,000 for "Operation and Maintenance,Defense-Wide;
Up to $5,000,000,000 may be used to reimburse otherappropriations or funds of the Department of Defense and classifiedprograms:
Provided further , That in addition to the transfersauthorized in the previous proviso, after consultation with the Director of the Office of Managementand Budget, the Secretary of Defense may transfer the funds provided herein to any appropriationor fund of the Department of Defense or classified programs, to be merged with and available forthe same purposes and for the same time period as the appropriation to which transferred: Providedfurther, the Secretary of Defense shall notify the Committees on Appropriations and the AuthorizingCommittees five days prior to the transfer of funds made available under the previous proviso: Provided further , That upon a determination that all or part of the funds transferred from thisappropriation are not necessary for the purposes provided herein, such amounts may be transferredback to this appropriation: Provided further , That the transfer authority provided under this headingis in addition to any other transfer authority available to the Department ofDefense. Congressional Action

Both the House and Senate provide the $25 billion requested by the Administration for operations in Iraq and Afghanistan in the FY2005 DOD authorization bill ( H.R. 4200 and S. 2400 ) and the FY2005 DOD appropriation bills ( H.R. Reporting Requirements and Funding Limits. Standard Statutory Restrictions on Moving Funds After Enactment

Congress provides most of DOD's annual funding in regular appropriation accounts, which cover fairly broad categories of expenses. Congress rejected bothAdministration requests. On September 12,2001, the Administration formally requested that Congress immediately appropriate$20 billion to respond to the previous day's terrorist attacks. Congress was also to be notified in advance -- nospecified number of days -- if DOD planned to spend the funds in ways that differedfrom allocations in conference report language. Reporting Requirements.
Administrations have periodically asked Congress to give the Department of Defense flexibility in allocating funds to cover the costs of military operations. Most recently, on May 12, 2004, theWhite House requested $25 billion as a "contingent emergency reserve fund" for FY2005 to coverthe costs of operations in Iraq and Afghanistan for part of the fiscal year. If enacted in its currentform, DOD could transfer funds, in any amounts, to individual accounts as long as the Office ofManagement and Budget agreed and Congress received a five-day advance notification. The issuefor Congress is a perennial one: to determine how much flexibility the Defense Department mayneed to carry out military operations Congress intends to support while also ensuring that funds areused for purposes and in amounts that Congress endorses.
Faced with the challenge of balancing DOD's need for some funding flexibility for operations with congressional oversight responsibilities, Congress has responded in various ways to DODrequests. In general, Congress has rejected Administration requests to provide broad authority tofinance military operations in advance. In the run-up to the first Persian Gulf War in 1990, forexample, Congress rejected an Administration request for blanket authority to spend moneycontributed by allies.
Congress has, however, periodically appropriated money for ongoing or anticipated military operations into flexible "transfer accounts," where DOD can then move funds into regular accountsto meet evolving requirements. At the same time, Congress has generally imposed variousrestrictions and reporting requirements.
The least restrictive requirements Congress has imposed in recent years applied to $20 billion that Congress appropriated in the immediate aftermath of the terrorist attacks of September 11,2001. Although the Administration requested similar flexibility in later supplementals, Congressgradually reverted to normal practices by limiting the amount of funding in flexible accounts andby requiring advance notification if DOD decides to spend monies in ways that differ from thosespecified in statutory or report language.
By the standards of earlier congressional action, the Administration's current request for a contingency reserve would allow the Defense Department broad flexibility comparable to thatgranted by Congress immediately after September 11. In congressional action on the FY2005 DODauthorization ( H.R. 4200 and S. 2400 ), and appropriations bills( H.R. 4613 ), both houses limited DOD's flexibility by allocating most of the $25 billionto regular appropriation accounts, and setting various reporting requirements. This report reviewsrecent precedents for funding military operations, outlines options for monitoring that spending, andanalyzes congressional action on the Administration's $25 billion request for FY2005. Congress isexpected to vote on the conference version of the FY2005 DOD Appropriations bill, H.R.4613, which includes the $25 billion, before going on recess on July 26, 2004.