At some point during the presidential election cycle, the issue of U.S. defense spending will rise (however briefly) to the top of the national security debate. Fleeting though the debate may be, the issue will certainly be on the front burner for the next secretary of defense, who will inherit a military somewhere between “eviscerated or destroyed” and the “best-led, best-trained, best-equipped military in human history.”
Our (somewhat flippant) response: The “right” answer to that question doesn’t much matter. A new administration might realistically work with Congress to raise or do away with Budget Control Act caps. But the standoff between budget hawks and defense hawks and pressures from other parts of the federal budget may limit the feasibility of serious increases to the defense topline. Don’t misunderstand us: Defense spending, and a stable defense spending plan, are important. But we predict that regardless of which party wins in November, adjustments to current budget trend lines may be impactful, but not substantial enough to eliminate the necessity of making tough choices and taking additional risk across elements of the defense portfolio.
The next secretary of defense can be more impactful by focusing more on how we spend — and how we decide what we spend — than on what we spend. In practice, this means coming into office with a grasp of the three major drivers of this process: the time available; the governance structure a new secretary establishes at the outset of his or her tenure; and the level of discipline established that can enable or hinder effective decision-making. On the surface, the importance of these factors seems painfully obvious; in practice, they can receive short shrift.
The next SecDef will be confirmed at an odd moment in the defense budget process: executing the FY17 budget, preparing to submit the FY18 proposal to Congress, and launching the development of the FY19 budget and the Defense Strategy Review.
With the FY18 submission likely to be delayed by a few months to allow the next administration time to modify it, the new secretary will have only a brief period to put his or her stamp on this proposal. Secretary Robert Gates details his own intensive FY10 redux budget process in Duty, where he describes hosting 40 meetings with defense senior leaders, many brand new, over the course of several weeks in early 2009 to form what would be a landmark proposal (significantly increasing investment the needs of today’s warfighter and ending programs like the F-22). He ruefully acknowledges that the FY10 draft budget proposal developed prior to his own decision to remain in office did not set the new administration up well (the pre-Obama administration draft was substantially higher than prior FY10 projections, creating an initial narrative among the services of significant cuts as it was revised).
The current team can (and likely will) learn from this lesson and be prepared to tee up a series of significant issues for the incoming administration (e.g., the Littoral Combat Ship buy, strategic modernization programs like the Ohio-class submarine, the pace of F-35 acquisition, and broader questions of balancing capacity, capability, and readiness) to close out the FY18 budget. The next secretary should be ready to drill into these key questions from day one. Not only will doing so create the opportunity to shift the administration’s first defense budget according to his or her priorities, but will set the precedent of personal involvement by the secretary in strategic budget choices (which hasn’t always been the case). It will also highlight the key opportunities, risks, and analytic gaps to drive the Defense Strategy Review and FY19 PPBE process.
Critical Department of Defense processes don’t generally wait for the secretary. The overall budget cycle is on the congressional clock. It is therefore critical to set expectations about the secretary’s role, priorities, and anticipated level of involvement in decision-making early. Equally important for the new secretary will be forming and norming relationships with and among key players — those who will execute his or her agenda — in the process.
Some might argue that the significant attention of SecDef to the end-to-end budget process is duplicative of traditional role of deputy defense secretary, never mind the Cost and Performance Evaluation (CAPE) director or comptroller. We disagree. The budget is the primary lever by which the Pentagon moves. A secretary that over-delegates or intervenes late will struggle to find his or her priorities in the budget. In practice, this means leading, not waiting for, the effort to develop a terms of reference and parameters for the Defense Strategy Review. It also means setting clear guidance (via Defense Planning Guidance or otherwise) on how the military services should develop their Program Objective Memorandums (POM) in tandem with the DSR process such that they are well aligned, not hastily patched together. Most importantly, it means establishing clearly the tradeoffs and priorities he or she needs to personally weigh in on during program review.
At heart, all of this is about relationships and the process by which key players will carry out the secretary’s guidance by managing the PPBE process from day to day. This clearly starts with a transparent and actively managed division of labor with the deputy secretary, who leads the Defense Management Action Group (DMAG) through which key program review decisions funnel. But it goes beyond that. Setting expectations and building trust among primary components (Policy, CAPE, Comptroller, Joint Staff, etc.) in terms of their roles, responsibilities, decision rights, and accountabilities is critical early in the next administration. We have both experienced the unnecessary tension and bad results that come with poor role clarity in the PPBE process.
Finally, the secretary needs to give careful attention to those stakeholders who he or she needs to support and, later, go to bat for more controversial decisions. Learning from his predecessors who “failed to get Congress to go along” with their reforms, Gates put significant weight into the need to get the services on board with his proposals (while much of his FY10 deliberations were in a “small group” setting, Gates devoted many sessions to the “large group/large group plus,” convened in part to keep the services “intimately involved in the process … and give [them] all the time [they] wanted to explain [their views]”). The Office of Management and Budget (OMB) is another key partner. A perfectly executed PPBE process can be stopped cold by a last minute, OMB decision to decrease your topline (or, as in 2011, to give the secretary of defense 24 hours’ notice that President Obama intended to announce significant cuts to defense spending). Keeping both OMB and the National Security Council (NSC) informed and appropriately integrated into PPBE is worthwhile. Lastly, the Department of Defense needs to move beyond its often-myopic budget relationship with the Hill. Efforts to get members on board with key initiatives and reforms are often too little, too late, and too narrowly focused. The next secretary of defense would do well to set an example of strong and continuous consultative relationships with congressional leaders, and set an expectation for the same by his senior staff with other key members and professional committee staff. This might start with the secretary seeking closed sessions with key committees prior to FY18 budget submission.
Everyone the new secretary of defense meets will have views on what to prioritize in the budget (and the SecDef will likely need to implement several campaign commitments by the new president dealing with elements of the defense budget and program). But if, as we suggest, the likelihood for significant budget increases is not high, the secretary will also be confronted with the need to make difficult choices on what to stop doing in order to enable spending elsewhere. Developing and enforcing SecDef’s views toward both these ends, and establishing a clear, organization-wide understanding of how tradeoffs are reflected in the budget, will take significant discipline.
Senior defense leaders often use a well-loved line: “All the easy cuts have been made.” To balance where the Department of Defense should invest more, sustain its efforts, or take risk, a new secretary will need a sophisticated understanding of issues like the anticipated “bow waves” of modernization spending, critical readiness shortfalls and how readiness is or should be measured, key overseas posture and presence priorities, and the active/reserve force balance. Likewise, he or she will need to regularly question how difficult choices are to be implemented in specific terms ¾ the second-order or long-term effects, and the impact on the individual service member or contracting officer (all too easily brushed off in the rush to conclude major budget decisions). A new secretary should insist on a budget process that is responsive to the key strategic drivers for the U.S. military in the current and projected operating environment.
It is easy to become consumed by the numbers debate in DoD budgeting: the 2011 Budget Control Act, budget caps, and the “mindless and cowardly mechanism” of sequester; the effects of operating under a continuing resolution for a third of the first six years of the administration; the threat of multiple government shutdowns; the continuously changing rules of Overseas Contingency Operations spending; the firm sense of defense hawks that we don’t spend enough (and of budget hawks that we overspend). The composite of these issues would suggest that the next secretary should focus on achieving the “right” topline, after years of roller-coaster budgeting. That is important, to be sure, but regardless of the topline, the secretary must come prepared with a sense of urgency stemming from the limited time available in those first few months; well-developed ideas about the governance process he or she will demand to enable decision-making; and a commitment to staying disciplined to ensure the Pentagon tackles the strategic issues right from day one.
Shawn Brimley is the Executive Vice President and Director of Studies at the Center for a New American Security. Mr. Brimley served in the Pentagon as Special Advisor to the Under Secretary of Defense for Policy and at the White House as Director for Strategic Planning on the National Security Council staff.
Loren DeJonge Schulman is the Deputy Director of Studies and Leon E. Panetta Senior Fellow at the Center for a New American Security. Ms. Schulman left the White House in 2014 after serving as Senior Advisor to National Security Advisor Susan Rice. She has also worked as Chief of Staff to the Assistant Secretary of Defense for International Security Affairs, Director for Defense Policy and Strategy on the National Security Council Staff, and as a special assistant to Secretary of Defense Robert Gates.
Photo credit: Senior Master Sgt. Adrian Cadiz