The essay is an excerpt from the book and was reprinted with permission from Routledge.
US policy makers on both sides of the political aisle emphasize the importance of employing a wide range of domestic and international tools—including defense, diplomacy and public diplomacy, foreign assistance, intelligence, and homeland security—to make the country secure and advance its international interests and policies. During the past decade, the United States has increased funding in all of those areas. Including the cost of operations in Iraq and Afghanistan, combined spending for national security, including national defense, international affairs, and homeland security, was more than three-quarters of a trillion dollars in fiscal year (FY) 2009, about 80 percent more in real terms than in FY 2001.
Spending for national security constitutes nearly 20 percent of total federal outlays and more than five percent of US gross domestic product. The Department of Defense (DOD), Department of State, Department of Homeland Security (DHS), and the US Agency for International Development (USAID) account for most of the total. Homeland security activities are widely dispersed across the federal government, however, so nearly every department and independent agency has some share of the national security total.
MONEY IS POLICY
National security budgets are the most dependable reflection of US security policy. Seeing things through the lens of the budget can help decision-makers and ordinary citizens discern the genuine priorities of national leaders from the oftentimes illusory ones portrayed in rhetoric. For example, in speeches and strategy documents, Republican and Democratic leaders often say that the proliferation of nuclear, biological, and chemical weapons and the prospect of such weapons falling into the hands of terrorists are among the greatest threats facing the United States. Yet only two-tenths of one percent of national security spending goes toward helping other governments prevent the dispersal or theft of nuclear materials or weapons, and an even smaller share goes toward inspecting US-bound shipping containers for nuclear materials. The Department of Energy spends nearly twice as much annually on new earth penetrating and low-yield nuclear weapons as on securing Russian fissile material.
In another example, policymakers sometimes argue that the United States is committed to development assistance that funds development for its own sake, not because such assistance is connected to vital national interests. At the same time, the budget reveals that the fastest growing bilateral assistance program is one that links assistance to the success of combat missions executed by forward-deployed US troops. The disjunction between rhetoric and budgets often reflects an underlying contradiction between the talk and the real priorities.
As with any area of the federal budget, decisions about how much money to spend on security and foreign affairs as a whole or on any single activity of national security result from a complex mix of public and elite perceptions of security interests, domestic politics, and institutional forces. The choices of priorities to emphasize, programs to pursue, and levels of spending can depend strongly on the preferences and abilities of individual leaders in federal departments and agencies, in the White House, and in Congress. They also depend on the machinery each of those institutions has created to bring information to those leaders and help them make choices about which programs and activities to pursue and how to divide resources among them. This book focuses on that machinery.
That machinery is in flux. Arrangements for strategic planning, resource allocation, and budgeting within federal departments, in the White House, and in Congress have undergone substantial changes during the past decade. Scholars, think tanks, and multiple committees and commissions have tabled numerous proposals for additional reforms. In this book, we concentrate on how things stand today and offer only a glimpse into how things may change in the coming years.
The book focuses on the breadth of the US government’s structures and processes for national security planning and resource allocation. While there are some excellent studies of the topic for national defense, there are none for international affairs or homeland security. Nor is there a literature on the treatment of budgets in the interagency process, or one that links the executive branch to the Congress across the range of national security resource planning. This study is rooted in the proposition that all the tools of national security policymaking ought to be considered together, if policymakers are right that we need to use them in synergy.
PLANNING AND BUDGETING FOR INTERNATIONAL AFFAIRS
Until recently, there was no central coordination of strategic planning or budgeting for the International Affairs category. The State Department, USAID, the Department of the Treasury, the Export-Import Bank, and the many other international agencies each prepared its own budget plan and submitted it directly to the White House. Even within the State Department, budget planning between foreign assistance programs and operations was uncoordinated. Moreover, the International Affairs agencies generally lacked formal mechanisms for long-term strategic planning or goal setting.
That has begun to change during the past decade and a half. State has established a strategic planning process for foreign assistance and has begun to connect these programs to its operational budgeting. The department increasingly asserts control over budgets for economic and humanitarian assistance and public diplomacy.
At the same time, however, the International Affairs arena has grown even more dispersed. With the creation of the new Millennium Challenge Corporation in 2002, there are now at least five distinct foreign assistance programs in the executive branch: Economic Support Funds (State), Development Assistance (USAID), Millennium Challenge Corporation, international development bank funds (Treasury), and Foreign Military Financing (State and Defense). Coordination of strategy and budgets among these programs or with the foreign policy goals articulated by the State Department or the White House almost never happens.
THE DEPARTMENT OF DEFENSE AND THE INTELLIGENCE COMMUNITY
The most widely studied and arguably the most coherent strategic planning and resource system within the executive branch is that of the DOD. Even in that department, the Planning, Programming, Budgeting, and Execution (PPBE) process is in flux. Initially designed during the 1960s to strengthen centralized control of the department by the Secretary of Defense, the process as practiced today emphasizes and encourages collaboration among the services and other stakeholders. Rather than helping a Secretary to set and enforce priorities, critics charge that instead it now helps the department’s components reinforce the status quo. Big decisions, such as those made during the military drawdown of the 1990s about what forces to cut and which systems to cancel, are often made outside of the formal process. Nobody seems happy with the system, and the Obama administration appears poised to undo some of the most recent changes.
The lion’s share of the intelligence budget, including that of the Central Intelligence Agency (CIA), is funded through the DOD, and the DOD plays a dominant role in planning and resource allocation for intelligence programs and activities. Nevertheless, 16 separate agencies and offices within the intelligence community collect, analyze, and disseminate intelligence. The missions and responsibilities of these organizations frequently overlap, leading to complex management, planning, and budgetary challenges.
Beginning with the creation of the CIA in 1947, national leaders have worked to organize the intelligence institutions and their budgeting in a more centralized and coordinated way. Those efforts culminated in the creation of the Office of the Director of National Intelligence (ODNI) in 2004. Turf struggles among the agencies continue, however, and it remains unclear whether the new ODNI architecture will succeed in improving the coherence of planning and budgeting across the intelligence community.
PLANNING AND RESOURCE ALLOCATION FOR HOMELAND SECURITY
In January 2003, the Bush administration drew 22 disparate agencies and some 170,000 employees into the new DHS. Even so, DHS in FY 2009 spends only about half of the federal homeland security budget. Another one-quarter of the homeland security budget goes to the DOD, and the remainder is spread among nearly all of the other departments and independent agencies of government.
Proponents of establishing the DHS believed that a single department under a single cabinet secretary would be able to achieve what the White House Office of Homeland Security could not: unity of effort across the bulk of federal activities related to domestic security. The most important engine of such unity would be the control of the budget that the new Secretary of Homeland Security would enjoy.
To establish control, the department’s early leaders created a PPBE modeled loosely on the one in operation within DOD. Other departments with large roles in homeland security also took steps to consolidate or at least coordinate their internal planning and budgeting for the prevention of terrorist attacks, protection of people and infrastructure within the United States, and preparations to handle domestic emergencies should they arise.
The effectiveness of the new systems in forging unity of effort is not yet obvious. Within DHS, the components generally continue to set their own agendas. Their shares of the DHS budget are not significantly different from what they were before the department was created, suggesting that strategic priorities have not been set or enforced. Coordination of planning and budgets across departments also appears weak, even in important areas like biological defense.
RESOURCE PLANNING IN THE WHITE HOUSE
With so many executive branch agencies involved in national security, the coordination of planning and budgeting falls to the White House. Two organizations within the Executive Office of the President bear most of the responsibility: the National Security Council (NSC) (which now includes the Homeland Security Council) and the Office of Management and Budget (OMB). The NSC coordinates national security strategy, advises the President on national security issues, oversees policy implementation through the interagency process, and integrates the White House response to national security crises. The NSC does not have a formal role in the federal budget process, but nearly every policy decision made in the NSC framework has resource implications.
OMB is the manager of executive branch budget processes. The organization sets requirements for the preparation and submission of budgets by all federal departments and agencies. Each year, it provides each agency with fiscal guidance that determines the size of the annual budget under consideration and constrains the agency’s plans for future years. It works with the agencies to ensure that programs are linked to and consistent with the president’s priorities. Increasingly in recent years, OMB also helps agencies to measure progress toward concrete outcomes, in an effort to improve the integration between budgets and performance. Arrangements in both organizations are in flux, and interagency processes aimed at bringing coherence to the planning and resource allocation of the agencies involved in national security are still relatively immature.
RESOURCE ALLOCATION AND BUDGETING IN CONGRESS
Congress was instrumental in the security-related reorganizations and process reforms of the executive branch after 9/11. Yet one of the most striking features of federal resource allocation and budgeting for security and foreign engagement is the continued absence of a unified approach within the legislative body itself. In recent years, the House established a Homeland Security Committee. The Senate renamed its Governmental Affairs Committee as the Homeland Security and Governmental Affairs Committee and widened its jurisdiction to include some elements of homeland security. The Appropriations Committees in each chamber also established new subcommittees for homeland security and consolidated the subcommittees and appropriations within the International Affairs function.
Nevertheless, the responsibility for resource allocation and budgeting for national security remains divided among numerous committees and subcommittees. Several authorizing committees share jurisdiction for various elements of DHS, and even more get involved in the programs and budgets of other departments with roles in homeland security. Getting to a unified approach is probably not in the cards. But understanding how the system works in Congress can help one see how budgets for national security are ultimately made.
THE POLITICS OF NATIONAL SECURITY BUDGETING
This book focuses on the machinery of planning, resource allocation, and budgeting in the executive branch and Congress. In reality, budgets are shaped by a variety of forces. These include party politics, the tug of war between Congress and the executive branch, the bureaucratic interests and power of individual departments and agencies, and the abilities and preferences of individual leaders.
No simple formula can tell leaders how much the United States should spend on national security or how that spending should be allocated among departments and programs. The United States wants and needs a strong military and intelligence apparatus, vigorous civilian international engagement, and prudent homeland security. Achieving US objectives on the world stage and providing for security in the future will require continued substantial investment in all of those areas. Nevertheless, US resources are finite. The nation’s current financial and economic woes will likely spark a tightening of the belt in every area of federal spending. Fiscal problems related to rising health care costs and the eligibility for retirement of large numbers of baby boomers make continued growth of national security budgets unlikely.
Setting priorities between guns and butter, and among the competing demands of national security, will be critically important to the nation’s future. Federal arrangements for strategic planning and resource allocation for national security, across all the instruments of American security and statecraft, will be an important determinant of how well that is done.