WASHINGTON — Patrick Shanahan, in his first congressional testimony since taking over as the interim Pentagon chief, fielded combative questions from senators Thursday about a Defense Department budget maneuver that Democrats said amounts to a political gimmick.
The target of the their criticism was the Trump administration's decision to put $98 billion into a war account outside of the Pentagon's base budget, in order to stay within congressional caps on defense spending.
Calling it a "slush fund" and a shell game, members of the Senate Armed Services Committee also slammed the department's request for more than $7 billion in emergency funds to help pay for the wall that President Donald Trump wants to build along the U.S.-Mexico border.
"You're asking at least for $98 billion for things that have nothing to do with contingency operations," said Sen. Elizabeth Warren, D-Mass. "What we're really talking about here is the establishment of a slush fund to hide what is happening with defense spending."
Shanahan acknowledge that a large chunk of the money included in the war account should be in the regular budget, but he said the Pentagon was trying to be transparent with Congress.
"There is no slush fund," he said.
The senators also complained that the department has not answered their repeated requests for details on what military projects could be cut or delayed in order to pay for the border wall. They said shifting that money to the wall would essentially put an indefinite spigot on the department’s military construction account.
The cuts look to make "minimal impact" but are likely to target funds that were set to improve buildings in poor condition.
After persistent questioning, Shanahan and David Norquist, the department's budget chief, said no projects contracted for this year will be touched, but those without contracts could be vulnerable. Shanahan eventually promised that he would deliver the list of at-risk projects to Congress later Thursday. They said that in any case, money for family housing projects would not be touched.
“I feel completely sandbagged,” said Sen. Tim Kaine, D-Va., noting that the list of potentially at-risk projects would be delivered after the expected Senate vote on a resolution to block Trump from using emergency powers to pay for the wall.
Kaine said senators have asked for that list for weeks, but military service leaders told them they needed Shanahan's permission. "So, were they only available in the last half hour?"
"There has not been a deliberate attempt to withhold information to this committee," said Shanahan.
On another topic, Shanahan said the Pentagon has no plans to force allies to pay a financial premium for hosting American forces in their countries and that reports of a plan to seek a steep increase are wrong.
Shanahan said allies need to pay their fair share, but compensation comes in many forms, including providing support for war in places such as Afghanistan.
U.S. officials said earlier this month that the administration was eyeing a plan to make allies pay significantly more. Some reports suggested it could be the full cost of the troops' presence plus an additional 50 percent.
Sen. Dan Sullivan, R-Alaska, asked Shanahan about the reports, adding, "Are we driving our allies away from us?"
"Senator, we won't do cost plus 50 percent," Shanahan replied. "We're not going to run a business. We're not going to run a charity." He added that "not everyone can contribute. But it is not about cost plus 50 percent."
A potential major shift in how the U.S. deals with allies is not going to happen, according to the acting defense secretary.
Defense officials have acknowledged that the Pentagon has been asked to gather data on the costs of keeping troops in other countries and how much those nations contribute to the expenses.
Shanahan also said the U.S. and its partners in Syria have liberated virtually all the territory the Islamic State group once held. But he did not declare victory. No one on the committee asked about Syria during the nearly three-hour hearing.
Shanahan is a former Boeing executive who's been the interim Pentagon chief since Jan. 1, when Defense Secretary Jim Mattis left. Trump hasn't said whether he'll nominate Shanahan for the Cabinet post.
Shanahan's former employer came up during the hearing.
Sen. Richard Blumenthal, D-Conn., noted that a Washington, D.C., watchdog group has filed an ethics complaint with the Pentagon’s inspector general alleging that Shanahan has used his official position to promote Boeing’s interests. He asked if Shanahan supported such an investigation; Shanahan said he did.
Citizens for Responsibility and Ethics in Washington filed the complaint Wednesday, but it's not known whether the inspector general will investigate.
Shanahan was also asked if he had spoken to anyone in the administration about the Federal Aviation Administration order to ground 737 Max aircraft as a result of two recent crashes.
“I’ve not spoken to anyone regarding the 737 Max,” he said, or been briefed on it. Asked whether he favored an investigation into the matter, Shanahan said it was for regulators to investigate, and he added his condolences to the families affected by the two 737 Max crashes.