The Pentagon's budget for next year includes $58.8 billion for overseas contingency operations (OCO), which will finance war efforts from Iraq to Afghanistan and quadruple funding for activities to reassure European allies.
Most of the OCO budget funds the support and counterterrorism operation in Afghanistan, where 9,800 U.S. troops will remain in place through most of 2016 before dropping to about 5,500 in early 2017. The amount is slightly less than the allotment in the fiscal year 2016 budget, dropping from $42.9 billion to $41.7 billion.
The biggest increases in the OCO budget focus on the growing threat of Islamic State fighters in Iraq and Syria and the looming threat of Russian aggression in eastern Europe.
Funding for Operation Inherent Resolve (OIR), the operation against Islamic State forces in Iraq and Syria, has been increased from $5 billion to $7.5 billion. A large amount of the OIR budget will be used to buy more than 45,000 additional GPS-guided smart bombs and laser-guided rockets, which have become the weapons of choice in the anti-IS air campaign.
Some $200 million of the OIR budget will be used to confront the "newly formed ISIL province in Libya," Vice Chairman of the Joint Chiefs of Staff, Gen. Paul Selva told reporters Tuesday, using an acronym for Islamic State. The northern coastal city of Sirte has attracted thousands of Islamic State fighters, and a defense official confirmed last week that the number of Islamic State fighters in Libya has risen to about 5,000.
The OCO budget increases funding from $0.8 billion to $3.4 billion for the president's European Reassurance Initiative. Initially proposed in Warsaw in June 2014, the initiative includes three continuous brigade-sized rotations in Europe, improvements to key infrastructure in the European combatant command and enhanced training and exercises with European allies.
An additional $1 billion has been set aside to fund a partnership-focused approach to counterterrorism in U.S. Africa Command and U.S. Central Command areas of responsibility.
The OCO budget represents about 10 percent of the overall defense budget for fiscal year 2017.