ABSTRACT
Of all the departments and agencies involved in national security, the Department of Defense (DOD) arguably has the strongest, most mature, and most forward-looking processes for planning and resource allocation.1 The DOD’s procedures may also be the most complex of those processes in federal government today. The complexity is no surprise. With some 1.4 million active-duty personnel, 850,000 paid members of the Guard and Reserve, and 700,000 civilian employees, DOD is by far the largest employer in the United States and the biggest department in the US federal government. The department spends roughly one-half of all of the funds appropriated by Congress from year to year and one-sixth of the total federal budget.2 Important features of DOD’s current planning and resource allocation system were put in place as the Planning, Programming, and Budgeting System (PPBS) by Secretary of Defense Robert McNamara during the early 1960s. The PPBS was DOD’s first formal process for integrating the long-term plans, programs, and budgets of all the armed services into a unified whole.3 At the time, PPBS was a revolutionary innovation. The new system modernized DOD’s resource allocation arrangements consistent with the best industrial practices of the time. In addition, it put teeth into the authority for cross-service integration granted to the Secretary of Defense under the National Security Act of 1947, which consolidated the nation’s armed services into a single department. The point of the new system was to help the Secretary of Defense make decisions about the future size of the military, its force structure, weapons programs, operations, sustainment, military pay and benefits, and infrastructure based on explicit criteria of national strategy. Secretary McNamara and his staff saw PPBS as a tool of executive management that would help to unify the department and strengthen civilian control of the military.4 The process ensured that key decisions about priorities and resource allocation would be made centrally within the department, rather than left solely to the individual
services or to the compromises they might be able to strike among themselves. The idea was to provide top-down national and departmental guidance early in the process-the planning phase; give the services the opportunity to develop their desired programs consistent with that guidance, and then have the Secretary make adjustments based on a program review run by the Office of the Secretary of Defense (OSD)—the programming phase; and finally, tune the programs to account for problems related to budget execution, and translate the department’s databases into the categories and formats required for submission to Congress-the budgeting phase. The PPBS considered military requirements and costs simultaneously, and considered both the five-year costs and the future consequences of present decisions.5 Since the 1960s, the PPBS has undergone substantial modifications. The Goldwater-Nichols Act of 1986 introduced the voices of combatant commanders and the chairman of the Joint Chiefs of Staff (JCS) explicitly into the process. In 2003, DOD modified the system again and gave it a new name: the Planning, Programming, Budgeting, and Execution process (PPBE).6 The Quadrennial Defense Review (QDR), first mandated by Congress in 1996 and now required near the beginning of each presidential term, is now an integral part of the planning phase of the process.7 The process is likely to continue to change in the future. This chapter describes the workings of the PPBE as of May 2009. It begins with a discussion of the organizations involved in the process. It then outlines in turn the activities involved in planning, programming, budgeting, and execution. The chapter ends with a brief concluding section that highlights some problems with the current arrangements.
