DoD vs. Congressional Budgeting
Both do not work, for similar reasons. Matt Vallone explains.
It has been a while since the last instalment in the Price of Budgetary Uncertainty series, so I thought I’d offer an update. Part III will expound on the strategic cost that the current process brings. A large part of that involves the Pentagon, its own (broken) budget process, and its link to Congressional hijinks. Let’s throw that dynamic out there, as an appetizer.
Pentagon budget expert Matt Vallone wrote in 2022 for War on the Rocks about how - as has been well-documented - the Pentagon’s PPBE process fails in many respects. Moreover, a significant chunk of its failure is due to Congress’ inability to formulate consistent, timely, and rational spending bills. At the time of writing, a commission had been created to reform PPBE (as well as Congress’ role in it), the final report of which was published this year. More on that when I finish Part III (sigh).
Vallone emphasizes that incremental reform is needed, not a complete overhaul, as satisfactory as that would be to the managerial types among us. Political inertia restrains reform, as always.
Much like how the 1974 Congressional Budget Act created the current framework for Congressional budgeting, Robert McNamara’s Planning/Programming/Budgeting/Execution (PPBE) process of 1961 did the same for DoD’s internal budgeting. Similarly again, McNamara’s process has long since become stale and ineffective. There are a lot of parallels between the problems inherent in the DoD process and that of the Hill, and these problems make each other worse.
[The PPBE] process, which has evolved over its 60-plus years of execution but remains largely an exercise in top-down planning, is not appropriate to the current technology and business environment.
The above quote is analogous to many problems with Congress’ own budget process, but the “current technology and business environment” part is even more relevant for the Pentagon. They need to consistently keep on top of the latest developments and respond accordingly. That means shifting funding, preferred contractors, high-profile projects etc. In short, everything is too slow.
That’s bad enough, but it’s compounded by Congressional dysfunction. The PPBE process should take 3 years on paper. Does it ever follow what’s on paper?
Vallone explains the key Hill-Pentagon linkage here:
There are several ways in which Congress is a major impediment to an improved defense investment process. First, congressional committees are loath to shed their ability to direct spending at a fairly granular level in the investment accounts (procurement and research, development, testing, and evaluation). Second, for better or worse, Congress does not always trust the Department of Defense to make good decisions and frequently rolls back attempts by the Pentagon to lean forward with new technologies and new procurement processes. Lastly, Congress continues to fail to execute its basic responsibility of funding the government on time (see below chart)1, leading to increasingly lengthy continuing resolutions that create major obstacles for the effective distribution of funds.
There is an inherent tension between Congressional oversight and DoD flexibility. It’s really a matter of trust. If budget items were less granular, that would give the Pentagon a free hand in all sorts of silly money-pits. It would also allow them more agility to reallocate resources in the face of a dynamic threat environment and rapidly changing technology. Vallone suggests that there must be a compromise here, one that preserves oversight while allowing in-house flexibility.
As Vallone puts it:
While many [expensive and questionable projects] have eventually delivered useful platforms to the warfighter, it’s not hard to understand why Congress is hesitant to give the Department of Defense carte blanche to pursue major investments in cutting-edge technology without significant oversight.
The third problem is Congress’ cross to bear, though. As we have explained over and over, they have repeatedly passed continuing resolutions or messy omnibus bills to avoid shutdowns or defaults, making things that much harder for Pentagon planners. If you’re a DoD exec trying to allocate funds with several years on your planning horizon, getting unpredictable and frustrating continuing resolutions throws a huge wrench in the works. Things are dynamic - money needs to be reallocated expeditiously and efficiently if we are to compete with near-peer adversaries.
I will, again (sorry), explain this more in-depth quite soon, but the point is that our strategic adversaries, for all their systemic flaws, do not have to deal with this problem in defense budgeting. Part of that is baked in to democratic governance, but a heck of a lot of it is baked into our institutional procedures, both bureaucratic and legislative.
