December 15, 2020
Bad Idea: The “Use-It-Or-Lose-It” Law for DoD Spending
Year-end spending sprees. Increased violations of federal financial laws. Bad press for the Department of Defense (DoD). All these unfortunate events stem in part from a law requiring that DoD’s operating funds be spent in the year they are appropriated. Congress can significantly improve the effectiveness of defense spending by changing this “use it or lose it” law.
Congress can significantly improve the effectiveness of defense spending by changing this “use it or lose it” law.
Specifically, funding for operation and maintenance (O&M) and military personnel (MILPERS) accounts must be spent in the year they are appropriated, or, with rare exceptions, they are no longer available to pay bills and instead revert to the Treasury. (To be technically correct, by “spending,” I am referring to obligating the funds by entering into a contract or by other means.) Accordingly, at the end of each year, most defense organizations take extraordinary steps to spend all funds in these appropriations, resulting in sharp year-end spending spikes. A 2010 study by researchers from Harvard and Stanford showed that, in fiscal years from 2004 to 2009, DoD spending in the final week of the fiscal year soared to more than four times the average weekly level during the rest of the year. The same result occurred in most other federal agencies.
Read the full article from the Center for Strategic and International Studies.
More from CNAS
-
How the War on Iran Threatens the Global Economy
Commentary
This article was originally published in TIME. Around two weeks into the American and Israeli war with Iran, the economic, political, and military costs of the conflict for th...
By Becca Wasser
-
Congressional Testimony
Defense / Middle East Security
Iran War Could Hinge On Who Runs Low On Munitions FirstIn just days of attacks, the US has used weapons stores that could take years to rebuild. On today’s Big Take podcast, Sarah Holder sits down with global defense editor Gerry ...
By Becca Wasser
-
Commentary
Defense / Middle East Security
Iran’s Cheap, Plentiful Weaponry Puts U.S. Military Under Unprecedented StrainThis article was originally published in Bloomberg. When the first cruise missiles began detonating inside Iran, the strikes had all the hallmarks of previous successful U.S. ...
By Becca Wasser
-
Video
Defense / Middle East Security
Trump Threatens Iran over Strait of HormuzCenter for a New American Security program director Stacie Pettyjohn joined BBC News to discuss the war in Iran, Iranian attempts to mine the Strait of Hormuz, and the challen...
By Stacie Pettyjohn
