Can Trump end Washington's biggest budget gimmick?

On paper, the budget gimmick serves a real purpose. The Overseas Contingency Operations fund, or OCO, was established in 1997 and is typically referred to as an emergency fund; Congress appropriates money into the OCO account for the Pentagon to fund unplanned needs, like a war. During the George W. Bush administration, OCO defense spending increased dramatically as the U.S. tapped the account to pay for its wars in Afghanistan and Iraq. It peaked in fiscal 2008, at $187 billion, accounting for 28 percent of total Pentagon spending.

Since then, it has slowly declined as Obama has adopted a lighter-touch military strategy, pulling out troops in Iraq and Afghanistan. OCO defense spending in fiscal 2016 was $59 billion, 10 percent of total Pentagon spending.

Mulvaney calls this a “slush fund,” and few budget experts disagree. Its real role, they say, is to allow the Pentagon to keep spending money on overseas wars without violating the spending caps imposed by the 2011 budget deal. Todd Harrison, an expert on the defense budget at the Center for Strategic and International Studies, said that starting in 2014, the Pentagon began shifting its base defense spending into the OCO account, which — unlike the main budget — doesn’t have a limit. That gave defense hawks in Congress and the Pentagon an easy way to boost defense spending without looking like they were violating the budget cap: Simply put the money in the OCO, and pretend that the defense spending caps aren’t violated.