BBA 2019 also establishes funding levels for the Overseas Emergency Operations (OCO) account for fiscal year 2020 and fiscal year 2021. The initial objective of OCO was to finance the additional costs of operations in Iraq and Afghanistan; However, due to its exemption from the BCA`s budget caps, the account was used as a loophole to supplement funding for normal defense activities in the core budget and, to a lesser extent, non-defense activities of the State Department. The bill provides $71.5 billion in OCO for fiscal year 2020 and $69 billion for fiscal year 2021, bringing total discretionary spending on national defence (050) to $738 billion and $740.5 billion, respectively. WASHINGTON —President Donald Trump on Friday signed a bipartisan debt increase and new spending limits that would help secure spending increases for the Pentagon and elsewhere in the budget. What this agreement does not do is balance the budget on the backs of millions of seniors. Instead of cutting benefits detrimental to Medicare and Social Security recipients, as many Republicans have called for, this agreement actually protects and strengthens these programs in tangible ways. For example, the agreement protects millions of seniors from paying more for their health care by preventing a Premium increase in Medicare Part B of about 50% in 2016. The timing of the 2019 BBA agreement also means that Congress can theoretically pass defense policy funds before the start of the fiscal year on Oct. 1. This would be the first time since fiscal year 2004-2005 that defences would be adopted for two consecutive years prior to the start of the fiscal year. And since this is a two-year budget deal, that means Congress might also be able to pass the funds in time for fiscal year 2021, which would be the first time in at least 50 years that defenses will receive one-time funding three years in a row.
However, the mere fact that there is a budgetary agreement does not guarantee the smooth running of the allocation procedure. For example, while a budget agreement for fiscal year 2019 was already in place months in advance, some parts of the federal government did not have funds on time and experienced a prolonged decline in funds (i.e., a partial government shutdown) for part of the year. Under the current law, there is no cap on defense and non-defense spending for fiscal year 2022 and beyond. Although this means that there is no longer a legal spending cap, the BCA`s budget caps have not served as a cap in practice. Rather, the budget ceilings were a lower limit for the budget and the baseline from which the agreements were negotiated. Each year that the budget ceilings have entered into force, the budget ceilings have been raised above their initial level and the budget has never fallen below the initial level of the budget ceilings. And the dichotomy between separate defense and non-defense caps has created leverage points for both sides of the debate to reach a bipartisan compromise. The de facto practice that emerged after the adoption of the BCA was a two-year budgeting process that manifested itself, albeit slowly and with great anxiety, in the BBA 2013, BBA 2015, BBA 2018 and BBA 2019 budget agreements. While each of the budget agreements has increased both defense and non-defense caps since 2011, BBA 2019 is again the most similar to the 2018 BBA, as it increases defense caps more than non-defense caps. As shown in Figure 1 above, BBA 2013 and BBA 2015 – negotiated under a Democratic White House and Congress divided in 2013 and fully controlled by Republicans in 2015 – allowed for almost equal increases in budget caps for defense and non-defense.
BBA 2018 — passed when Republicans controlled both houses of Congress and the White House — raised defense caps by about $35 billion more than non-defense caps in fiscal years 2018 and 2019. BBA 2019 increases defense caps by $22 billion more than two-year non-defensive caps. In addition, each of the last four budget agreements relied on the OCO to further increase defence spending (and to a much lesser extent non-defence levels) beyond the ceilings, although only BBA 2015 and BBA 2019 explicitly prescribed OCO levels in the legislation. If no deal is reached, it would mean significant budget cuts known as sequestration. By easing sequestration, the two-year deal will result in an additional 340,000 jobs in the U.S. in 2016 alone. As shown in Figure 1 below, BBA 2019 is most similar to BBA 2018 in terms of the scope of the agreement. BBA 2019 increased defense budget caps by about $172 billion for fiscal year 2020-2021, while BBA increased defense caps for fiscal year 2018-2019 by $165 billion. In comparison, BBA in 2013 and BBA in 2015 increased defense caps by $32 billion and $40 billion for their respective two-year periods. After the 2021 fiscal year, there will be no cap on the defense budget and no land.
The structure and timing of negotiations that the BCA has created since 2011 will no longer exist, and Congress will have to return to normal order in the budget process. However, regular order is something with which the current Congress and the White House have little practice or experience. .