As we look back at an inexplicable and difficult year, the time is right for a fresh start. One such start should involve continued aggressive and unafraid changes to how the U.S. Department of Defense is resourced.
It is time for a responsive and resilient approach to the budget that will help restore military competitiveness, respond to domestic and international partner futures, and generate new ideas with Congress.
Observations on the following four intertwining topics should help target such changes in 2021: budget predictability; clarity on federal spending; lessons learned from past budget reductions; and modernization of budget structures.
First, consistent enactment of annual appropriations on time over the next four years could halt the lost time, money and capability that resulted from more than a decade of budget uncertainty, continuing resolutions and government shutdowns.
DoD personnel are wonderfully creative and adaptive. They have applied this adaptability to adjust contract periods of performance and acquisition strategies to third- and fourth-quarter availability of funds. Despite the versatility of defense managers, we can’t buy back the time — and competitiveness — lost under continuing resolutions that prohibit the pursuit of new capabilities and inhibit smart buying decisions.
The new administration and Congress — all of Congress, not just those on defense committees or in leadership positions — should embrace a new start in 2021 and commit to enacting full-year funding bills by Oct. 1.
Second, the Budget Control Act caps will no longer loom as the framework for budget agreements during review of the fiscal 2022 and future federal budgets. Administration, Defense Department and congressional leaders should carefully consider opportunities to examine the entire federal budget and prioritize reform for all spending.
Defense is only about 16 percent of total federal spending and includes billions in activities and programs unrelated to national security. Before rushing toward any across-the-board reductions, policymakers should have a clear picture of such efforts and should not be limited to simplistic choices between defense and domestic spending.
From 2011 to 2017, even after accounting for successive two-year Bipartisan Budget Act deals that lifted Budget Control Act caps, the DoD lost $400 billion in capability and readiness. The department is recovering from this loss now, but readiness is perishable and pursuit of capability requires continued momentum.
Third, we should learn and leverage the lessons of previous budget reductions. Lack of budget-agreement frameworks resulted in abbreviated budget-reduction planning horizons and contributed to simplistic trade-offs between the readiness of the current force and readiness of the future force. Looking ahead, a purposeful budget-agreement framework should leverage the lessons of the past and open up more choices beyond either/or decisions.
For example, the new leadership should guard against mischaracterizing risk as a way to justify decisions that reduce the readiness of the current force. We should not accept simplistic choices between capacity and capability when there is no change in the threat environment. We know the consequences of such narrow options — readiness disasters, a hollow force and lost military competitiveness.
Fourth, it is time to modernize the way the DoD is resourced with simpler, responsive and flexible appropriations that meet congressional oversight requirements. The DoD currently operates in the worst of both worlds, producing reams of detailed budget justification documents and meeting numerous notification and reporting requirements, yet repeatedly falling short of the transparency Congress is seeking.
For example, the FY21 defense authorization and appropriations bills and reports contain numerous provisions expressing dissatisfaction with the budget justification documentation that was designed to meet congressional needs. Time and money are being spent to provide information that is not useful.
The department’s ongoing financial statement audit efforts — and the resulting incremental integration of financial, contracting and other data sources to support data analytics tools throughout the enterprise — could now facilitate the development of options for updating appropriations structures and budget justification materials.
The objective of such options would be to improve transparency and trust between the DoD and Congress, save money, enhance DoD responsiveness to evolving opportunities and challenges, and increase management and oversight tools available to both DoD leadership and Congress.
Pursuing positive change in the above four areas could result in a future Defense Department that fully harnesses the power of its data and funding, becomes a smarter customer and partner, and sustains the readiness and modernization momentum necessary to carry out the country’s national security priorities.
Elaine McCusker is a resident fellow at the American Enterprise Institute. She previously served as the Pentagon’s deputy and then acting undersecretary of defense (comptroller), as well as a staff member on the Senate Armed Services Committee.