Getting Inside the Budget Process for Homeland Security

1. Getting Inside the Budget Process for Homeland Security Cindy Williams Security Studies Program Massachusetts Institute of Technology Security Studies Program at MIT 112907

2. About the Project • Part of an independent research project by Cindy Williams of MIT and Gordon Adams of American University • Project sponsored by John D. and Catherine T. MacArthur Foundation • Transition paper for 44th President and 111th Congress to be published by IBM Center for the Business of Government, January 2008 • Book to be published by Taylor and Francis 2008 Security Studies Program at MIT 112907

3. Security Studies Program at MIT 112907

4. Buying Homeland SecurityOutline of Discussion • The promise of a consolidated Department of Homeland Security, circa 2002 • Check on progress toward the promise • What went wrong • Findings specific to the biosecurity case • Recommended remedies Security Studies Program at MIT 112907

5. The promise of a new department: unity of effort Tom Ridge, testimony before Senate Judiciary Committee on President’s proposal for reorganizing the federal homeland defense infrastructure, June 26, 2002 Security Studies Program at MIT 112907

6. The promise of a new department: resource allocation based on national priorities & risk National Strategy for Homeland Security, White House Office of Homeland Security, July 2002 Security Studies Program at MIT 112907

7. The promise of a new department: cost effectiveness Tom Ridge, testimony before Senate Judiciary Committee on President’s proposal for reorganizing the federal homeland defense infrastructure, June 26, 2002 Security Studies Program at MIT 112907

8. Progress check:Not realizing unity of effort • DHS cannot be expected to bring unity of effort across federal homeland security activities • DHS controls only half of the federal homeland security budget • 40% of DHS budget is not for homeland security Security Studies Program at MIT 112907

9. Progress check:Not allocating resources based on national priorities & risk • Within DHS, little top-down exercise of the budget tool to instill national priorities • Legacy components still call the shots on their own budgets • Little money shifted from one DHS component to another Security Studies Program at MIT 112907

10. Component Shares of DHS Budget (Percent) Security Studies Program at MIT 112907

11. Top national priorities • As reflected in strategy documents • Weapons of mass destruction in hands of terrorists • Prevention of terrorist attacks • As reflected in budgets….would expect to see a lot of money to prevent weapons of mass destruction from falling into the hands of terrorists • In fact….less than 2% of federal budgets for homeland security go to prevent WMD from falling into the hands of terrorists Security Studies Program at MIT 112907

12. Progress check:Little evidence of savings from consolidation or elimination of duplicated effort • Obvious overlaps: air forces in CBP, ICE, Coast Guard • Internal DHS study of duplication in support structure brought no changes Security Studies Program at MIT 112907

13. Progress check:Cost of central administration and new elements not offset by eliminating redundancies • Budgets for central administration and new elements tripled • Components retained their 73 percent share of total Security Studies Program at MIT 112907

14. What went wrong:Problems in Executive Branch • Executive Office of the President not well structured or staffed to integrate strategic planning & resource allocation to address long-term security challenges • Homeland Security Council is weak and understaffed • OMB was realigned to handle DHS, but multiple divisions & branches get involved in cross-cutting issues • No explicit linkage between strategies and resource allocation Security Studies Program at MIT 112907

15. What went wrong:Problems in Executive Branch (continued) • Weaknesses in DHS Planning, Programming, Budgeting and Execution (PPBE) Process • Leaders engaged too late, did not sign integrated planning guidance, held one-on-one meetings with components • Program review’s focus on performance leaves little time for tradeoff studies • PA&E understaffed and junior • DHS components remain stronger than the department • White House may not want a strong department • Office of Vice President plays a powerful role, especially in bio area Security Studies Program at MIT 112907

16. What went wrong:Congress • Congress lacks a unified approach to homeland security • Jurisdictions for homeland security remain splintered across committees, particularly for Senate oversight • Little authorizing legislation (exception is bio) • Frequent committee requests for testimony & reports • Back door is always open for legacy agencies & concentrated interests • Appropriation subcommittees are now aligned with DHS, but that leaves seams in areas that cross department lines Security Studies Program at MIT 112907

17. Some Oversight Committees for DHS Big 7 Security Studies Program at MIT 112907

18. What went wrong:Congress (continued) • Absence of homeland security budget function • Inhibits transparent audit of spending for key initiatives, weakens links between planned & executed budgets • Circumvents focused attention of budget committees • Prevents consolidated allocation to homeland security in Congress’s budget resolution • Congressional agencies lack staff to conduct homeland security tradeoff studies Security Studies Program at MIT 112907

19. Findings specific to the biosecurity case • Budgets not firmly linked to priorities • HSC-led end-to-end review set top-down priorities, but not clearly linked to budgets • No single office tracks budget details • 18 separate branches in OMB • Homeland Security Presidential Directives (HSPDs) not well understood by those who must resource & implement them • HSPD -18 realigns medical countermeasure roles, but treats DOD as exception • Much of new funding came through emergency supplemental appropriations • Little planning within or across departments • High potential for pork-barrel politics in pull from biotech industry, state & local grants • No formal allocation of roles for new labs Security Studies Program at MIT 112907

20. Recommended remedies • Abolish Homeland Security Council and fold its functions into expanded National Security Council • Move OMB’s homeland security branch into the National Security Resource Management Office • Create dedicated cells in NSC and OMB to conduct long-term planning, risk assessment, tradeoff studies Security Studies Program at MIT 112907

21. Recommended remedies (continued) • Institute Quadrennial Homeland Security Review (QHSR) • Mandated by Congress • Must follow the thread from strategy to budgets • Strengthen DHS leadership engagement in PPBE • Involve Secretary earlier through review & decision on Integrated Planning Guidance • Schedule meeting with senior leaders of major components for review & decision on key priorities, resolution of cross-cutting issues • Institute department-wide, consolidated leadership review of operating component Resource Allocation Plans Security Studies Program at MIT 112907

22. Recommended remedies (concluded) • Expand DHS PA&E with senior staff, skilled in conducting cross-cutting tradeoff studies • Provide clear alternatives across tools aimed at prevention, protection, & preparation to respond • Reexamine roles & missions across main operating components • Establish single committee of jurisdiction for DHS oversight in each chamber of Congress • Create a Homeland Security budget function • Expand Congressional Budget Office to conduct tradeoff studies on homeland security • Eliminate “constant-shares” as a planning algorithm; budget based on priority missions Security Studies Program at MIT 112907

23. Backup Slides • Homeland security funding by critical mission • Spending for central administration & new elements • DHS planning, programming, budgeting & execution (PPBE) system Security Studies Program at MIT 112907

25. Central administration & new elements in DHS ($ billions) Security Studies Program at MIT 112907

26. Department of Homeland Security PPBE Process • Homeland Security Act of 2002 requires Future Years Homeland Security Program (FYHSP) • DHS established PPBES, modeled after DOD’s • DHS established office of program analysis & evaluation (PA&E) within CFO organization Security Studies Program at MIT 112907

27. Purposes of a PPBE • Executive management • Civilian control of military • Unity of effort across components • Resource allocation • Rational process for exploring priorities and tradeoffs • Make decisions based on explicit criteria of national strategy, not compromises among institutional forces • Consider requirements & costs simultaneously • Consider multi-year plan, to project consequences of present decisions into the future Security Studies Program at MIT 112907

28. DHS’s PPBES for FY 2008Planning Phase Security Studies Program at MIT 112907

29. DHS’s PPBES for FY 2008Programming and Budgeting Phases Security Studies Program at MIT 112907