Making Defense Reform Sane Again: Planning, Programming, Budgeting, and Execution
Defense Secretary Ashton Carter has repeatedly called for reforms to the Pentagon’s ineffective acquisition system, and rightly so. Yet the troubled acquisition process is only one aspect of a larger departmental failure to align strategy with resources. To truly reform the Pentagon, Secretary Carter should take steps to narrow the gap between the theory and practice of the process designed to develop the future force: the Planning, Programming, Budgeting, and Execution (PPBE) system. At stake is more than efficient budgeting — the future of national security depends on a fundamental change to PPBE.
The PPBE process suffers from three discrepancies between how it functions in theory and in practice: an unrealistic timeline, a stove-piped analytic system, and a reliance on Overseas Contingency Operations (OCO) funding.
On paper, PPBE is presented as four distinct stages that progress sequentially: planning outlines the future security environment, programming proposes programs for investment, budgeting develops a detailed budget according to fiscal guidance, and execution ensures compliance throughout the process. Yet, in practice, all of these ostensibly distinct stages overlap. For example, guidance provided by civilian policymakers to the military services, linking the planning and programming phases, is often delayed. These delays stem primarily from uncertainty about budget levels, a particularly acute problem in recent years. The result, therefore, is largely irrelevant guidance. Without sufficient time to align the service programming documents with planning guidance, each service is left to prioritize its own programs in the absence of overarching direction. This undermines civilian control of the military — not through malign intent, but by simple bureaucratic inefficiency.
To map out the future security environment and determine which roles and missions should be prioritized, the Pentagon requires scenarios and modeling. Yet instead of maintaining a common baseline and robust joint analytic community, the relevant actors within the Pentagon lack a shared grasp of necessary assumptions, constraints, and objectives. At present, each actor defines a future security environment that suits its particular interests. The military services are particularly guilty of this myopia, maintaining independent analysis centers that are much larger and better equipped than those of the Joint Staff. This bureaucratic arrangement undermines the central oversight necessary for scenario development.
Overseas Contingency Operations
Instead of reserving OCO funds for unforeseen crises, the services rely on supplementary appropriations for programs far beyond those stipulated by Congress in support of the wars in Afghanistan and Iraq. For example, the Army and Marine Corps recently financed pay and benefits to non-deployed troops through OCO funds instead of the base budget. Similarly, OCO now funds programs such as the European Reassurance Initiative, designed to fortify American force posture in Europe. Recent years have also seen an uptick in Army and Air Force operations and maintenance funding migrating to the OCO account from its traditional place in the base budget.
Five steps can fix these problems and bring resources back in line with strategy. First, to reduce the workload demanded by the current annual PPBE timeline, the department should receive appropriations and authorizations for two-year periods instead of the current annual arrangement. Two-year budgets could undergo a second round of amendments after the first year to assuage congressional concerns about allocating an additional year of funding. Congress could thereby maintain a reassuring level of control over the process while enabling the flexibility the Pentagon requires.
Second, to encourage prioritization of the planning guidance, the secretary of defense should label roles and missions for the military as critical, high-risk, low-risk, or optional. In a time of fiscal austerity, prioritizing is a particularly important initiative in making the best use of scarce time and resources.
Third, to address the lack of analytical centralization and coordination, the next administration should appoint and empower a director of Cost Assessment and Program Evaluation (CAPE) with a strong vision of the organization’s role. This would ensure that CAPE maintains the resources and staff necessary to help the services integrate their activities. Moreover, the director of CAPE should work more closely with the Joint Staff’s Force Structure, Resource, and Assessment directorate to prioritize joint scenario development.
Fourth, the Pentagon must lessen its reliance on OCO funding. Current incentives preclude the services from doing so because programs and operations can all too easily be labeled as “war-time funding,” bypassing the closer scrutiny of normal budgetary channels. Likewise, this reliance on OCO allows the services to offset some budget cuts from sequestration. Without a stable topline in the long run, however, OCO denies the services the budgetary stability needed for effective operations and procurement. The secretary of defense should thus take steps now to prevent this future problem by limiting the amount of OCO funding each service may request as a percentage of its total budget. To avoid setting an arbitrary number, senior civilian defense officials should review each service budget carefully and tailor a particular figure that aligns with the future security environment outlined in the planning guidance. Placing such limits on OCO can not only prompt the services to prioritize programs, but also ensure congressional leaders are held accountable in fulfilling their responsibilities to pass substantive and timely budgets.
Fifth, to promote a greater understanding of the process, defense leaders across the Pentagon should increase educational opportunities related to PPBE at the working level. To help defense personnel think more strategically and serve as better stewards of taxpayer dollars, the secretary of defense should make a PPBE familiarization course mandatory for all headquarters personnel. Doing so would help to introduce more individuals to this critical discussion and spur a new conversation regarding the disconnect between defense priorities and resources.
These significant discrepancies between the theory and practice of PPBE affect not just our governmental finances, but our national security. Unless the Pentagon invests time and attention to reform PPBE, the greatest threats to the American military will stem from within.
Michelle Shevin-Coetzee is a Joseph S. Nye, Jr. Research Intern with the Center for a New American Security (CNAS). Prior to joining CNAS, she served as a policy intern in the Office of the Secretary of Defense for four years.
Photo credit: Secretary of Defense