Panel readies more than two dozen ideas to fix DoD budget process

The expert commission Congress charged with reforming DoD’s decades-old budgeting system will make 28 separate recommendations in its final report next month, largely centered on making the system more agile, the panel’s chairman said Thursday.

After over a year of study and more than 400 interviews with experts and budget practitioners, one of the commission’s central conclusions is that while DoD’s Planning, Programming, Budgeting and Execution (PPBE) system may have made sense when it was created in the early 1960s, it’s inadequate for the rapidly-changing national security and technology environment the U.S. now faces, said Bob Hale, a former DoD comptroller who now leads the commission.

In an interim report published last August, the commission made several recommendations it said DoD could start implementing internally right away. But the final version, scheduled for release on Mar. 6, will also ask Congress to make changes, including in how it apportions Defense funding.

“We’re likely to recommend less of a focus on appropriation titles like procurement, and more of a focus on major capability areas like maneuver vehicles or surface ships, which gets you closer to being able to relate the budget to strategy,” Hale said during an event the RAND Corporation hosted on Thursday.

The focus on broader capability areas would go hand-in-hand with another recommendation that would consolidate the total number of individual line items that make up the Defense budget each year— in theory, giving the military services and their program managers more flexibility to make changes to their spending in the year of execution.

Hale said the commission believes it’s found ways to add that type of flexibility while also making congressional appropriators comfortable that they’re maintaining the level of oversight they need. He said similar safeguards would need to be built into another commission proposal that would begin allowing DoD to start new programs while it’s operating under a continuing resolution — something that’s currently prohibited.

“We would have strict limits designed to preserve congressional oversight, because if we lose sight of that, we’re not going to get anything out of this commission,” he said.

Hale said a surprising amount of the commission’s attention was spent on the need to overhaul and consolidate the thousands of IT systems the department uses to plan and build its budget each year. The complexity of those systems made it difficult for the commission itself to get basic answers about DoD’s budget process.

Eric Fanning, a former Army secretary who also serves on the commission, said those business systems are a major source of frustration for Congress as well, and for similar reasons.

“It has to be easier for Congress than it is now, and that’s part of why you have to get away from these systems that currently power things,” he said. “They’re antiquated, they’re too diffuse, and makes it hard for the department itself to know what’s going on, let alone communicate it.”

Fanning said the commission was also likely to make recommendations to deal with Congress’s perennial habit of funding the government via continuing resolutions — DoD has only had one appropriation passed on time in the last decade.

“In fact, we seem to have settled into thinking that a CR is a is a good place to be compared to the alternatives,” he said “But it’s a really disruptive and expensive place, as we all know. And that was part of the debate: Do we do things to mitigate the effects of CRs, or does that just make it easier for Congress to pass CRs? In the end, I don’t think Congress is thinking about these things when they pass a CR, so we decided it’s better to try to help the department.”

And despite the need for PPBE reform, the unpredictability that comes along with perennial delays in enacting annual funding measures are currently a much larger problem than the general slowness of the PPBE process, said Frank Kendall, the secretary of the Air Force.

“We ended up with about $30 billion over the five year plan to address the Air Force’s operational imperatives — the first $5 billion installment of that is in the ‘24 budget. I’ve been waiting for a year now since we submitted that budget for the Congress to appropriate it. There is a chance that Congress will never appropriate the ‘24 budget, and I will have been in office for three-and-a-half years, and never seen a dime of the money I need to be competitive with China. That’s a crime, and it needs to be addressed,” he said. “We need to do our job in this country and fund the military to the level that it needs to be funded to be competitive, and all the tweaks in the world we do to the process are not going to solve that problem.”

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