2.5 The President’s Budget Request
2.5.2 Creating the President’s Budget Request
The president’s budget request is the culmination of a five-year process driven by the PPBE system, which is informed by the priorities set in the NSS and the NDS. It pro- vides constant analysis of programming requirements, the amounts appropriated toward those programs, and the funding spent in order to construct the FYDP – the five-year projection required by the BEA. The FYDP then informs the defense portion of the president’s budget request. While the technical aspects of how DoD develops this bud- get request are important, they do not in themselves lead the outcomes of significant interest. Those outcomes – the decisions of what to request, what not to, and at what levels – are mainly determined the year prior to the budget request through a series of
17It is important to note that the NDS is a product of the secretary of defense who, by nature of his appointment, is a member of the administration. The chair of the Joint Chiefs of Staff also produces a National Military Strategy, which is a DoD military document but which is not viewed as a driving
decision points within DoD and between DoD and OMB.
In October the process for building the following year’s defense budget request begins in earnest and culminates with the rollout of the president’s budget request to Congress in February. This is significantly different from the budget requests of other agencies that begin in February, as soon as the last president’s budget request is submitted to Congress.18 This process involving OMB, the Office of the Secretary of Defense (OSD), and the individual services focuses on adjustments to the current budget and features multi-level interaction and negotiations. Figure 2.2 below depicts the primary players along with the inputs and outputs that lead to the finalized president’s budget request.
The center column of Figure 2.2 depicts the hierarchical structure of the budget formulation process. The column to the left depicts the inputs at each level that drive the budget formulation process. As mentioned, the NSC, with guidance and approval from the president, publishes the NSS and in subsequent years, the DPG. The secretary of defense publishes the NDS and the service secretaries publish their respective planning guidance. Only the Army, Navy, and Air Force have appointed service secretaries; the Marine Corps falls under the department of the Navy.19
The process begins in October. When the services start their work, they have two sets of guidelines in hand. First, agencies have top-line budget caps from OMB. As one OMB official told me, this top line is more of a range and is based mainly on administration policy and changes in the security environment,20 but it is also informed by what the
18While the budget formulation process for a given fiscal year technically begins as soon as the last president’s budget request is submitted to Congress, most of the significant changes are made from October to February. Two factors drive this. First, by October, it is largely known what is being appropriated within the previous president’s budget request. Second, changes in the national security environment and administrative priorities are more clearly known.
19This point becomes more important during the congressional phase when issues of advocacy and appeals arise.
20For example, a national security threat from a country or non-state actor may emerge, requiring
Figure 2.2: Process: Developing the president’s budget request
President (NSC)
Office Secretary of Defense (Comptroller)
Navy
Army Air Force
Marine Corps Office of Management
and Budget (OMB) National Security
Strategy (NSS)
National Defense Strategy (NDS)
Service Specific Planning Guidance
Service Requests DoD Request President’s Budget
Request (FYXX)
Inputs Outputs
National Military Strategy (NMS) Defense Planning
Guidance (DPG)
“Passback”
Programming Decision Memorandums
Office/Agency
The president’s budget request is derived from requirements to support the national security strategy.
Interactions between the administration, DoD, and the services determine the resources requested.
The services begin forming their budget estimates in October. Passback between DoD and OMB occurs in December. The president’s budget request is finalized late January and submitted to
Congress in February.
administration believes Congress is willing to approve. Using OMB’s guidance, the Office of the Secretary of Defense provides similar top-line guidance to the services. Second, the services have guidance from previous years’ work on the budget through the PPBE process. This process provides information on which programs are on schedule, which are behind, and whether any of them require changes to their funding level. It also identifies the effects of actions taken by OMB or Congress during the previous appropriations cycle. (More on this later.)
Refinement of the budget requests occurs at two different levels (as denoted by the dotted lines in fig. 2.2). The first is between the individual services and the Office of the Secretary of Defense (Comptroller) (OSD-C). The year leading up to the release of the president’s budget request begins with broad guidance from OMB regarding the top line for the request for defense. This guidance is provided to all agencies soon after the previous president’s budget request is submitted to Congress in February. The second is between OSD-C and OMB. Multiple interviews with service, OSD, and OMB officials have shed light on how these interactions occur.