Building the Defense Budget
Tired of binge-watching Netflix? Exhausted by trying to find the progressive symbolism in “The Handmaid’s Tale”? Welcome to the intriguing, action-packed world of the Department of Defense budget. Be amazed as the Army, Navy, Marines, Air Force, and newcomer U.S. Space Force lock in mortal combat.
Okay, maybe mortal combat is a stretch. But the fight is over your taxpayer dime – dimes, that is, and a lot of them. This is the first of a two-part article on how the Defense Department’s annual budget goes from wishes to dollars.
Pitching for Dollars
To put it in simple, real-life terms, imagine you are Dad, and your daughter comes to you on a Monday and asks if she can discuss her allowance, which is expected on Friday. She explains that the $10 she received last week was not enough; she wants to buy a dress. You explain your willingness to raise the allowance to $12. When Mom comes home and reviews the request, she says you can increase it only $1 more, to $11, because of limits on the household budget. On Friday, it’s clear that $11 won’t buy even a dress on sale, so your daughter makes a trade-off and decides to buy a blouse. Analogies are always tricky, but you get the idea.
This explains in part how President Donald Trump approached fulfilling his 2016 campaign promise to restore the U.S. military to peak strength and readiness. He did that by, like Dad, increasing the “weekly allowance” through his Defense Budget Request (PB). Trump’s first PB raised the topline for defense from $606 billion FY2017, which was the amount in the last Obama budget, to $713 billion in FY2020. That is an increase of 18%. The vast majority of the money went to ensure equipment in the current inventory was maintained and ready. Training and exercises were funded generously.
As an American taxpayer, you might be pleased to know that the Defense Department, like Mom, has a disciplined and structured process — though not always collegial — to allocate its budget. After all, this year’s Defense budget is $713 billion, not a trivial sum. Building the President’s Defense Budget Request has a lot of moving parts, but the process is not, as often claimed in the media, shrouded in mystery.
Reeling from Requests
There are two phases: the Defense budget build-up and the congressional budget review. First, the Department of Defense creates a comprehensive request after a rigorous three-year process of study and examination. Second, Congress begins its work when the president sends that request for the next fiscal year, which begins Oct. 1 and runs through Sept. 30 of the following calendar year. By law, the president presents the whole budget to Congress on the first Monday in February. This hasn’t happened lately because the proposed budget was not ready.
The Defense Department budget request begins with some foundational documents:
- National Security Strategy describes, in broad terms, national priorities such as “Protect the Homeland, Promote American Property, Preserve Peace through Strength, and Advance American Influence.”
- National Defense Strategy (NDS) identifies specific global competitors and the threats each represents, such as Russia and China wanting to “shape the world consistent with their authoritarian model … ” and rogue regimes such as North Korea and Iran that are “destabilizing regions through their pursuit of nuclear weapons or sponsorship of terrorism.”
- National Military Strategy is provided by the Chairman of the Joint Chiefs of Staff to the Secretary of Defense. As then-Chairman Joseph Dunford described it in 2018, “TheNational Military Strategy is best thought of as the operational version of the National Defense Strategy, outlining how the military will execute the goals laid out in the NDS.”
- Finally, the classified Defense Planning Guidance (DPG) consolidates into one document the planning priorities of the previous three to guide the development of budgets of the Military Departments and Defense Agencies.
The accompanying graphic shows the general timeline over which this process takes place. The Military Departments’ budget offices begin constructing the Service budgets roughly two years out from the current budget year, or year of execution as it’s called. So, the Army, Navy (including the U.S. Marine Corps), Air Force, and now the U.S. Space Force are putting together the budget request for Fiscal Year 2022, while Congress is reviewing the FY2021 budget request.
Right now, the Military Services are deciding what they will present as their funding needs: how many tanks, planes, ships, space equipment, and fully equipped soldiers. This document, called a Program Objective Memorandum or POM, reflects what the Services believe they need this year and in the next five years. The Defense Planning Guidance informs the POM. Once each Service presents its POM, all are reconciled with the Defense Department’s topline ceiling. The Office of Management and Budget (OMB) provides that estimate in March. The combined ask from the Services always exceeds the estimated ceiling, so DoD leadership, in a series of meetings, sets priorities, and makes trade-offs. The Army wants more tanks and helicopters. The Navy wants its shipbuilding program fully funded. The Air Force wants more fighters, bombers, and drones. The new U.S. Space Force doesn’t quite know what it wants, but it will be expensive. This is Defense Horse Trading 101.
At the macro level, the trade-offs attempt to create a balance “among three factors: preparing to be ready today (readiness), preparing to be ready tomorrow (investment), and sizing the force (structure).”
At numerous points in the process, the Services and OSD plead their cases for specific programs. All are given a fair shot at demonstrating what they consider a vital need.
The result of the negotiations is a Resource Management Document (RMD), which the Secretary of Defense approves or adjusts and sends to the budget office for inclusion in the whole-of-government budget. When major budget issues are resolved, the budget is submitted to Congress.
NEXT: The conclusion of this two-part article will look at the rock’em, sock’em Congressional Budget Process. You might be surprised at how that works.
The views expressed are those of the author and not of any other affiliation.
Read more from Dave Patterson.
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