Will America be able to defend itself and support its allies in the next decade? Only if the Pentagon changes the processes it uses to allocate its funding.
The war in Ukraine, the threat of war with China in the Taiwan Strait, and continuing attacks on the American presence in the Middle East all raise questions about whether the United States can meet its defense obligations in one of the most complex geopolitical environments our nation has ever faced.
At the same time, global technological change continues to surge in areas like artificial intelligence, unmanned vehicles, hypersonics, cyber and space. How quickly the Pentagon adjusts to these changes and allocates its $800 billion budget is crucial to addressing national security challenges.
To this end, Congress created the Commission on Planning, Programming, Budgeting, and Execution Reform in the fiscal 2022 National Defense Authorization Act. Congress directed the 14-member bipartisan commission to recommend reforms to the way the Department of Defense sets priorities and allocates resources, using what’s known as the PPBE system.
After two years of research and after hearing from more than 1,100 expert witnesses ranging from congressional members and staff to senior defense officials and industry experts, our final report is now available to the public.
The report lays out five major areas for reform designed to improve the alignment of budgets to strategy, foster innovation and adaptability, strengthen relationships between the DOD and Congress, modernize business systems and data analytics, and strengthen the capability of the resourcing workforce — with 28 actionable recommendations that will better enable our military to achieve its missions today and in the future. A few examples illustrate the scope and nature of our recommended changes:
- Replace the PPBE process with a new Defense Resourcing System
Established in the 1960s, the PBBE process is no longer able to keep up with the pace of innovation and the complexity of growing national defense threats. Therefore, our commissioners reached consensus on a recommendation to create a new and streamlined approach called the Defense Resourcing System, dubbed DRS.
DRS consolidates the existing four-stage process into three interlocking stages: strategy, resource allocation and execution — to better align allocation of the DOD’s resources with strategic goals and to bring about more efficient resource allocation. The DRS provides key strategic and resource-informed direction to drive resource allocation in a more rigorous and analytically informed way. It also provides the agility needed to keep pace with advances in technology, as well as the changing threat environment — and increases transparency and accountability to Congress.
- Transform the budget structure
This recommendation involves changing how appropriations and budgets are presented to Congress and the public and how Congress authorizes and appropriates funding.
The transformed structure focuses less on spending categories (such as procurement and operating costs) and more on major capability areas (examples might include ground maneuver units and tactical aviation).
The new structure creates a smooth, top-down flow from service/component and major capability activity area, to individual systems and programs throughout their life cycle. The transformed budget structure will improve linkages between strategy and budgets and provide a clearer picture to Congress and the public of how DOD money is spent and why.
- Update thresholds for smaller reprogrammings
These smaller reprogrammings (known as below-threshold reprogrammings) are important because they allow the DOD to move money more quickly to meet changing requirements.
However, while the DOD budget has grown significantly over the last two decades, the thresholds for use of these smaller reprogramming actions are, in some cases, lower today than they were back then. The commission recommends revising these thresholds to account for the growth in each of the appropriations.
- Encourage improved in-person communication with Congress
Ensuring Congress has the necessary information to perform its oversight role constitutes a key enabler to successful execution of the DOD mission, as well as implementation of these recommendations.
The Commission recommends a more regularly recurring series of conversations between Pentagon officials and Congress on a range of topics to include challenges and successes with programs or authorities, current financial and programmatic execution, and changes that affect the president’s budget request.
Other recommendations in our final report include standardizing and modernizing DOD business and financial systems, providing the necessary agility to respond to changing threats at speed, improving training and focusing on recruiting and retention of the resourcing workforce.
Taken together, our 28 recommendations will create a better balance between the agility and oversight in meeting our nation’s defense challenges. These changes are significant, and implementation will require time and a strong partnership between the department and Congress.
As we note in our report, “Today, the United States is confronted with the potential for armed conflict in every domain, in every corner of the world and at any given time.”
Now more than ever, our Department of Defense needs a new Defense Resourcing System that provides the processes, authority, and tools to enable our men and women in uniform to meet the threats of today and far into the future.
Robert Hale, chair of the PPBE Reform Commission, was comptroller and chief financial officer at the Department of Defense from 2009 to 2014. Ellen Lord, vice chair, was undersecretary of defense for acquisition and sustainment from 2017 to 2021.
