2.7 The Execution of Appropriated Funds
2.7.1 Transfer Authorities
The defense appropriations bill establishes a limit on the amount of appropriated funds the DoD can transfer between accounts within a fiscal year. This applies to the service- specific and defense-wide accounts discussed earlier: MILPERS, O&M, procurement, and RDT&E.49 GTA refers to funds within the base budget. STA refers to funding for overseas contingency operations (OCO). Throughout the year, DoD must comply with the law as set in the appropriations bill, track the amount of funding it transfers between accounts, and report it to Congress. Both GTA and STA provisions establish a cap, which DoD cannot exceed, and include specific restrictions on use of the authority.
The following is an example of the provisions for GTA included in the fiscal year 2019 defense appropriations bill:
SEC. 8005. Upon determination by the Secretary of Defense that such ac- tion is necessary in the national interest, he may, with the approval of the Office of Management and Budget, transfer not to exceed $4,000,000,000 of working capital funds of the Department of Defense or funds made avail- able in this Act to the Department of Defense for military functions (except military construction) between such appropriations or funds or any subdivi- sion thereof, to be merged with and to be available for the same purposes,
49Funding for the MILCON accounts is appropriated through the MILCON/VA bill by the Military
and for the same time period, as the appropriation or fund to which trans- ferred: Provided, That such authority to transfer may not be used unless for higher priority items, based on unforeseen military requirements, than those for which originally appropriated and in no case where the item for which funds are requested has been denied by the Congress: Provided further, That the Secretary of Defense shall notify the Congress promptly of all transfers made pursuant to this authority or any other authority in this Act: Provided further, That no part of the funds in this Act shall be available to prepare or present a request to the Committees on Appropriations for reprogram- ming of funds, unless for higher priority items, based on unforeseen military requirements, than those for which originally appropriated and in no case where the item for which reprogramming is requested has been denied by the Congress: Provided further, That a request for multiple reprogrammings of funds using authority provided in this section shall be made prior to June 30, 2019: Provided further, That transfers among military personnel appro- priations shall not be taken into account for purposes of the limitation on the amount of funds that may be transferred under this section. (Pub L. No.
115-245 (2018))
There are several significant directives that result from this language. First, the cap for GTA is set at $4 billion and requires the approval of the OMB. While the cap may seem high, it is a little more than 0.6% of the appropriated funds. As one DoD official commented, this authority make it possible to have programmatic changes at the margins during the fiscal year. Considering that many of the programs funded cost millions of dollars, this does not provide a lot of room for widespread change. A second significant directive is the requirement that "the Secretary of Defense shall notify
transfers, it does not require their approval, nor does it specify a timeline for notification to occur.50 Finally, the language contained in the bill specifies that "a request for multiple reprogrammings of funds using the authority provided in this section shall be made prior to June 30, 2019." This establishes a deadline for what DoD calls the "omnibus reprogramming request" used to make adjustments across DoD to account for changes in program progress and department priorities.51
The law providing for GTA gives a significant amount of discretion for DoD in regard to transfers within the base budget. DoD also receives one-year funding for overseas contingency operations, and the appropriations bill provides guidance for the transfer of those funds as well. Below is an example of STA provisions included in the fiscal year 2019 defense appropriations bill:
SEC. 9002. Upon the determination of the Secretary of Defense that such action is necessary in the national interest, the Secretary may, with the ap- proval of the Office of Management and Budget, transfer up to $2,000,000,000 between the appropriations or funds made available to the Department of Defense in this title: Provided, That the Secretary shall notify the Congress promptly of each transfer made pursuant to the authority in this section:
Provided further, That the authority provided in this section is in addition to any other transfer authority available to the Department of Defense and is subject to the same terms and conditions as the authority provided in section 8005 of this Act. (Pub L. No. 115-245 (2018))
50This was a point of contention between the Trump administration and Congress when OMB di- rected DoD to transfer funding to support the building of the border wall. The secretary of defense notified Congress of the transfer, per that directive, but this notification violated the norms set through administrative agreements regarding reprogramming of funds. As discussed later, these agreements are found in the report language and not the actual law.
51More on the omnibus reprogramming later in the section.
Again, there are several important provisions included in this language. First, the cap for STA is set at $2 billion. Given that the OCO budget for fiscal year 2019 is roughly
$68 billion, the amount DoD is allowed to transfer is a little less than 3% of the funds appropriated for OCO.52 As with GTA, DoD is required to notify Congress "promptly"
of each transfer. The transfer of funds within the OCO accounts is also subject to all the same restrictions imposed on GTA, including the approval of OMB.
Having described the transfer authorities, general and special, codified in law through the appropriations bill, it is important to note that individual accounts also include re- strictions on whether and when transfers from that account can occur. The appropria- tions bill contains language limiting the amount of funding that can be transferred from a specific account or between specific programs within an account. Further, specific lan- guage is included annually preventing DoD from using its transfer authority to begin new programs that were not authorized in the NDAA. The bill, however, does not establish requirements for DoD to ask Congress for approval prior to transferring funds provided the transfer falls within the GTA or STA guidelines established in law. This provides the president a significant amount of discretion as commander and chief.
This discretion is significant in that the president can legally direct DoD to transfer funds provided the amount does not exceed the caps set in the bill. This was the case in 2019 when President Trump directed DoD to transfer funds to build a physical barrier on the border with Mexico. Each DoD official and congressional staffer I met with conceded that the transfer of funds was legal but strongly believed that the use of this discretion harms the relationship between DoD and Congress. This harm results from violating long-standing norms established through the reprogramming process that DoD
52It is important to note that OCO funding is only available for the current fiscal year and is designed to address contingency operations, which are largely unpredictable. In this light, 3% flexibility seems very small. In recent years, however, the OCO account has been used to fund sustained operations overseas as a result of the wars in Iraq and Afghanistan.
uses to receive approval from both OMB and Congress. The following section discusses reprogramming in more detail.