Bob Work's Quest To Fix The Pentagon's Budget

Deputy Defense Secretary Robert Work passionately laid out the impact federal budget caps will have on the Pentagon should Congress not remove or increase them.

Like his predecessors, Work meticulously articulated how congressional gridlock has damaged the military’s ability to fight a war down the road, his message was the same: DOD needs budget certainty and it’s up to Congress to make it happen.

Instead, Work is focusing on something he can change: Improving the way the Pentagon makes its budget. At the Center for Strategic and International Studies’ Global Security Forum in Washington, D.C., on Wednesday he gave a glimpse into how he plans to change the way DOD actually makes its budget, a tedious 18-month process that in Work’s eyes has “kind of blended together.”

“We need to try to get back to more regular order in the process,” Work said.

That is why Work is trying to bring his part of the process – inside the Pentagon – back under control. So why is this important? The process guides Pentagon planners who decide how to spend hundreds of billions of taxpayer dollars.

In recent years, the budget development process has been turned on its head. Morale, Pentagon sources say, is at an all-time low among these employees. And Work wants to change that.

“Constructing a coherent defense budget in this type of budget uncertainty is beyond the capability of the most capable of men and women,” Work said. “And the chaos is becoming more difficult for the department to adjust to.”

For budget planners in the Pentagon, life has been hellacious. DOD planners have built multiple budgets for different spending scenarios over the past three years. At one point last year, DOD had built four different budgets, each with a different set of tradeoffs to meet potential budget caps.

Work has been exploring ways to make this process more stable and predictable through bureaucratic changes to the budget building process. 

Preparing a Pentagon’s budget is a tedious, 18-month task even when Congress passes a budget on time. Pentagon leaders lay out their priorities to the military services and they build a budget.

But the real chaos is on the back end of the process, experts say. In the final six months of the process before the budget proposal is finalized and sent to Congress in February, there are a series of back-and-forth reviews between the services and the Office of the Secretary of Defense. Then, OSD has a series of back-and-forths with the White House National Security Council.

Right now, the budget building and review processes are overlapping, according to a Pentagon memo on the project. Better separating them would allow the Pentagon to improve the “consistency and cohesion” in the budget it sends to Congress, Work wrote in the memo.

Pentagon officials are considering three ways to change what is known as the Planning, Programming, Budgeting and Execution process and will make a decision in the coming months. All of the options include moving up when Pentagon leaders give the military services spending guidance.

So how did the process get this way?

Since 2010, Congress has passed the Pentagon’s budget an average of 128 days after the start of the fiscal year on Oct. 1, according to data compiled by Todd Harrison, a budget analyst at the Center for Strategic and Budgetary Assessments think tank in Washington.

Lawmakers did not pass a 2011 DOD budget until April 11, 2011 -- 193 days after the start of the fiscal year. The 2013 budget was passed 177 days late and the 2014 budget 109.

Partisan gridlock has been the prime cause of these delays since President Barack Obama took office in January 2009. Lawmakers have squabbled time after time over where to make spending cuts in order to lower U.S. debt. 

If Congress does not pass a budget, also know as an appropriations bill, it often passes a continuing resolution, which freezes spending at the prior year’s level. But this places a multitude of restrictions on many Pentagon projects.

So what does that mean? Say the Navy wants to buy five new cruisers this year, but it only bought two in the prior year. If there is a continuing resolution, it cannot buy the other three unless Congress gives it special permission. A continuing resolution also causes trouble if a DOD wants to start a new project or even end a project.

Complicating matters even further are congressionally mandated spending caps that were put in place in 2011. These caps, also called sequestration, started in 2013 and there is a sharp divide over how to repeal them. Many lawmakers say the Pentagon should be exempt from these caps, or at least have them raised. The only problem is they cannot agree on how to offset Pentagon increases with cuts elsewhere in the federal budget.

Lawmakers stuck a deal last year to raise the caps in 2014 and 2015, but they are set to return in 2016.

Right now, the Pentagon is preparing that 2016 budget, which should go to Capitol Hill in February. But Congress has not passed a 2015 Pentagon budget, which, as of today, is 42 days late. That means spending is frozen at the 2014 level.

“This is the fifth time in five years that Congress has been unable to do their basic business passing a budget on time so that we can plan,” Work said.

Oh, and there was a 16-day government shutdown last year too.

“Stop the madness! OK?” Work said. “We have to really stop the madness."