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Budget caps for defense spending are not cut and dry, Center for Strategic and Budgetary Assessments analysis Todd Harrison told reporters during a Jan. 30 briefing, just days before the Fiscal 2016 budget submission. Portions of defense spending do not count towards Budget Control Act caps, such as overseas contingency operations funds and military personnel accounts. However, Harrison said the OCO budget is not exempt from cuts if a sequester penalty is invoked, which is what happened in Fiscal 2013. The OCO accounts have grown in size since the BCA was enacted, even as the US has drawn down its combat mission in Afghanistan, as it has again become a fund for both Congress and the Pentagon to get around spending limits. In addition to drawdown costs, the OCO fund became the place for the Defense Department to put money that supports other operations, such as the US presence in the Persian Gulf and operations in the Horn of Africa, and it appears DOD will use OCO to circumvent budget caps to pay for new non-combat spending. Last year’s European Reassurance Funds, to build NATO presence in Europe after Russia’s Crimea intervention, were in OCO and it appears they will be again, Harrison noted. That may be hard to swallow for some fiscal hawks in Congress who argue it should be in the base budget, added Harrison. (Watch the event video and slides).