Coast Guard Budget Masks Problems

By Commander Chris Lucero, U.S. Coast Guard

The Bad Timing of Congressional Relief

The Budget Control Act established discretionary spending caps in two primary categories: security and non-security. Together, security and non-security spending could not exceed the BCA’s overall discretionary federal spending limit.

The BCA also established a second—lower—spending limit called the sequester level. This level was intended to motivate the Joint Select Committee on Deficit Reduction (established by the BCA) to reduce spending intentionally by $1.5 trillion from 2012 through 2021. But the motivation failed, and the Executive Branch has been submitting subsequent annual budgets to Congress based on the sequester level since 2013. Congressional appropriations, however, have never abided by the requests.

Since 2013, Congress has passed three bipartisan budget acts (BBAs) to raise spending above the sequester level. Each BBA provided increases for two years but was enacted well after the Coast Guard and other executive agencies formulated budgets based on the sequester level.1 This resulted in budget submissions in which undesirable cuts to people, operations, maintenance, training, and support were proposed and adopted, while at the same time, Congress added money for new priorities.

Congress also has been reluctant to use the BBAs to increase recurring annual costs; one-time larger expenditures, such as additional ships and aircraft beyond the Coast Guard’s budget request, typically have been the result. (These do impose maintenance and operating costs; however, they are minimal compared to acquisition costs. Moreover, the Coast Guard sorely needs to replace its aging ships and aircraft, so these costs would occur sooner or later.)

The cumulative and compounding results of the sequester-level cuts hurt readiness, but the Coast Guard has been unable to articulate tangible, measurable effects. The “Devotion to Duty” core value compels members of the Coast Guard to maintain all services to the public—often at the cost of excessive work hours and increased risk to health and safety. This makes it difficult to produce a list of unperformed (or underperformed) missions to justify additional funds. Real-world inflationary cost increases have caused the Coast Guard to cut itself from within, creating a hollowing effect that directly impacts its readiness, and its service ethos has hurt—ironically—its ability to demonstrate the problem.

For 2020 and beyond, the cycle of budgeting to the sequester level already has begun. The Coast Guard submitted its proposed FY2020 budget to the Department of Homeland Security (DHS) in April, and DHS will submit a consolidated departmental budget to the Office of Management and Budget (OMB) in September. After additional OMB adjustments, the DHS submission will become part of the President’s FY2020 budget submission to Congress in February 2019. Yet, Congress likely will not begin to consider a new BBA until well after February 2019. This is too late for the Coast Guard, DHS, or OMB to adjust the Coast Guard’s budget to include readiness restoration items for Congress to consider.

“Defense” versus “Security”

When the Joint Committee failed and sequestration began, the “security” and “non-security” categories automatically reverted to “defense” and “non-defense.” The impact of the transition was far more than semantic. It used the budget function classification number for the entire Department of Defense (DoD)—050 funding—to create the defense category. All other agencies and their budget function classification numbers, therefore, became “non-defense” funding. The Coast Guard derives only a small portion of its funding from the 050 category, and its annual $340 million non-overseas contingency operations appropriated funding has remained static since 2001.

Unfortunately, DHS—by definition an agency with a primary responsibility for national security and one that controls a military service—was left out. The U.S. Coast Guard—by law “a military service and branch of the armed forces of the Unites States at all times”—falls under DHS. In the defense/non-defense scheme, DHS (and therefore the Coast Guard) must compete against all other agencies with non-security missions for funding to complete its national security missions, a scenario that conflicts with the intent of the BCA.

Things have not improved for the Coast Guard even as the current presidential administration has made increased military funding a priority. The January 2017 “National Security Presidential Memorandum on Rebuilding the U.S. Armed Forces” names only the Department of Defense, and OMB to date has not extended its application to the Coast Guard. This has resulted in budget requests that do not include readiness restoration items for Congress to consider. (It should be noted, however, that the FY2019 request did not include cuts.)

The Military Option

So why not move the Coast Guard into DoD? Representative Duncan Hunter (R-California), recent past chair of the House Subcommittee on Coast Guard and Maritime Transportation, the Coast Guard’s primary authorizing committee in the House, advocated for this . Such a well-intended proposition, however, presents a solution that may have unintended consequences for the Coast Guard’s domestic functions.

As an agency with domestic law enforcement and regulatory authorities, the Coast Guard is appropriately placed in DHS. Moving the Coast Guard to DoD simply to fund it as a military service would lead to a number of difficulties. The Posse Comitatus Act greatly limits the use of the Army and Air Force in enforcing domestic laws within the United States. Title 10 of U.S. Code and DoD policy have extended the substantive provisions of the Posse Comitatus Act to all the DoD services. Significant modifications to U.S. law and DoD policy would be required to move the Coast Guard into the DoD or many of the services the Coast Guard provides on daily basis to the American public would be suspended.

Rather than make yet another change to the Coast Guard’s parent agency, a simpler solution to funding the Coast Guard “as a military service” would be to return to the BCA’s original security and non-security categorizations. This would result in both DHS and DoD receiving funding within the same spending category. Such a consolidation also would enable improved oversight and lead to a clear, cohesive spending plan for all national security expenditures.

Mostly Ready

The Coast Guard’s success during the unprecedented 2017 hurricane season was not a result of the service being properly funded. Instead, it is a testament to the unwavering commitment of Coast Guard men and women always to find a way meet the needs of the nation. But the motto “Semper paratus”—always ready—is in danger of being overcome by operational funding shortages.

Congress should not wait for the Coast Guard to fail before correcting the budget problems that endanger the service’s readiness. Congress should act now to restructure the BCA and save the Coast Guard.

1. BBA of 2013 increased spending limits from 2014-2015; BBA of 2016 increased spending limits from 2016-2017; BBA of 2018 increased spending limits from 2018-2019.


Commander Lucero served as the Coast Guard’s Fiscal Year 2018 Budget Coordinator. A career intelligence officer, he currently is assigned to the Coast Guard Intelligence Coordination Center in Washington, D.C., as the strategic intelligence operations officer.

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