Examines the perspectives of major stakeholder groups, outlines key areas that merit greater attention, and provides near-term recommendations that Congress and the Department of Defense can implement to modernize defense budgeting.
Five First Steps to a Modern Defense Budgeting System
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The current defense budgeting system requires bold reforms to strengthen U.S. national security going forward. Effectively reforming a sixty-year-old process with many competing interests and priorities will take time, but the U.S. national security environment has demonstrated that the nation does not have the luxury of time. The following five steps are provided for DoD and Congress to consider implementing immediately.
These actions will enable DoD to focus more of its collective investments on increasing mission impact and meeting high-priority objectives of the national defense strategy. The outcomes of these reforms will be a more responsive and adaptive resource allocation system that promotes better alignment to national goals, faster adoption of innovation, improved optionality for end users, and a more prepared military.
1. Strengthen Defense Planning Guidance and Assert SECDEF Authority. Reinforce the Secretary of Defense’s (SECDEF’s) ability to provide clear direction and prioritization to the Services as they shape their budget decisions. Reinstate comprehensive strategic analysis and guide the difficult decisions to ensure future budgets deliver the capabilities that will successfully deter and, if necessary, defeat an adversary.
2. Institutionalize Budget Planning Collaboration. Promote greater alignment among the Services, the Office of the Secretary of Defense (OSD), and Congress at the strategic and tactical levels. Require collaborative development of a joint vision and the conduct of regular reviews with key stakeholders.
3. Characterize and Monitor Special Funds. Clarify the purpose and continuation criteria for each special fund. For example, articulate what outcomes must be demonstrated for the European and Pacific Defense Initiative accounts to no longer be required to meet near-term Combatant Command (CCMD) priorities.
4. Enable Execution Year Flexibilities. Consolidate smaller accounts, raise reprogramming thresholds, and address new start constraints. DoD and Congress can undertake a series of efforts to balance speed with rigor, thereby offering greater flexibility with proper oversight.
5. Modify Oversight Mechanisms. Current oversight reports, reviews, and engagements do not provide sufficient insight, measures, or accountability to achieve desired results. Revising reporting structures, aligning incentives, and promoting greater transparency would enable a common focus on desired outcomes.