Former Secretary of Defense Jim Mattis listed business reforms at the Department of Defense as one of his top three priorities. Acting Secretary Pat Shanahan has supported this focus on reform, including financial reform. Yet, recent business changes threaten to create a serious financial problem at the DoD.
The issue is reprogramming. Reprogramming is a set of informal rules agreed to by Congress and the DoD that permits the department to move funds to different programs during the year when those funds are being spent. The moves must be “zero sum” — that is, any reprogramming increases must be offset by cuts. There are also restrictions on the size and nature of the moves. But under the existing informal rules, the funding shifts do not require enactment of a law, which would usually require too much time to be effective as a management tool. The shifts only require the approval of defense committees, particularly the chair and ranking minority members of those committees.
The reprogramming rules remain informal because if they were codified in law, they would permit one chamber of Congress to prohibit the shift in funds. That would violate the constitutional prohibition against a single-chamber veto of legislation.
A few weeks ago, the DoD ignored these informal rules and transferred funding of about $1 billion of Army military personnel funding for fiscal 2019 to the Corps of Engineers for use in building a portion of the southern border wall. (That funding is no longer needed because Army end strengths are lower than expected.)
The move was specifically denied by at least two congressional defense committees. However, because the informal rules are not legally binding, the DoD proceeded with the transfer.
Unless the courts intervene, Congress will probably react to this violation of the rules by restricting or even eliminating the DoD’s reprogramming authority. If Congress does not react, it will give up much of its constitutional authority to control the appropriation of funds.
Republicans should worry as much as Democrats about the DoD moving money without approval. Today, the moves are intended to finance a border wall. In the future, a Democratic president may use DoD funds to pay for programs that he or she regards as a national crisis.
Restriction or elimination of reprogramming would significantly harm the DoD’s ability to manage its money to meet national security needs effectively. To meet congressional timelines, the DoD must formulate its budgets two or more years before all funds are obligated.
Inevitably, needs change, creating higher priorities for some projects and lowering them for others. In these cases, reprogramming permits effective management. In different circumstances, reprogramming can avert crises.
While serving as undersecretary of defense (comptroller), I presided over DoD financial management during the dark days of 2013 when sequestration slashed funding for military readiness. We used reprogramming to mitigate sequestration’s adverse effects on the DoD’s ability to fight and win wars. I know from personal experience that reprogramming is an arcane and tedious process. I also know that the DoD must have reprogramming authority to meet national security needs effectively.
During the past two years, the DoD has placed emphasis on financial reform issues such as audits of financial statements, and the department is to be commended for those and other efforts. But if this violation of the informal rules leads to severe restriction or elimination of reprogramming authority, the resulting problems could overshadow their reform efforts.
Robert Hale served as undersecretary of defense (comptroller) at the U.S. Defense Department from 2009-2014.