The predictability the Department of Defense planning system requires has been a topic of conversation here lately. The Pentagon’s Planning, Programming, Budgeting, and Execution (PPBE) system requires stable budgets over multiple years to function correctly because it runs on a multiyear cycle. But because budgets are a product of a political process that is rarely stable, the system runs counter to reality.
On May 1st, the White House Office of Management of Budget (OMB) issued a memo to the heads of all government departments and agencies, directed them to adjust their budget plans for fiscal year (FY) 2017 to five percent below the amount presented in the president’s FY2016 budget request. In addition to the five percent reduction, OMB also asked various agencies to “identify additional investments in programs that support their missions… These additional investments should be separately identified in your budget submission and ranked in priority order.” The five percent decrease in planned spending would reduce Pentagon’s FY2017 budget from $547 to $519 billion, still $7 billion above the Budget Control Act spending cap on the Department of Defense for that year. While the reduction in planned spending is relatively small, the timing of it has an outsized affect because of how the Pentagon plans.
PPBE has three phases: planning, programming, and budgeting—with the latter two running concurrently. The system runs on a two-year cycle, but the planning phase really begins almost three years before the budget year in question. That means planning for FY2017 began in 2014, and the Pentagon was well into the programming and budgeting phases when OMB issued its directive. The formal planning that the Department of Defense uses has a status quo bias. As political scientist Ionut Popescu explains, rather than seeking innovative means to meet the new budgetary conditions, the various bureaucracies will seek to protect favored programs. Over the long term, the status quo bias leads to arguments for ever-increasing defense budgets to meet those bureaucratic prerogatives but disconnected from actual strategic purposes.
When Robert McNamara brought his original Planning, Programming, and Budgeting System to the Pentagon in 1961, the purpose was to rationalize planning to achieve savings. Today, the predictability the system requires is instead used as an excuse to maintain unnecessarily high levels of defense spending. The rational design model it was based on was justifiable during a time of relative political consensus and in light of a single overarching threat. Even during McNamara’s time though, neither domestic, nor international politics promised stability. Relying on budget stability for defense planning, when political consensus is lacking and absent a single agreed upon threat against which plans can be made, is a fool’s errand.