2 Planning, Programming, Budgeting & Execution Process (PPBE) PPBE is…A DoD-wide annual process which…Provides civilian control and strategic directionEnsures DoD stakeholders have a voice in the development of the President’s BudgetProvides a basis for justifying budget requests to the White House and Congress for both peace-time budgets and cost-of-war budgets, but not for Supplemental RequestsCalendar driven!Joint CapabilitiesIntegration &DevelopmentSystem (JCIDS)Event DrivenDefenseAcquisitionSystemPlanning, Programming, Budgeting & Execution Process (PPBE)Calendar Driven
3 Programming and Budgeting AgendaBackgroundPlanningProgramming and BudgetingNavyOSDRole of CongressExecutionWrap-Up
4 Colors of Money -- Appropriation Time Line One YearTwo YearThree YearFive YearOPERATIONS & MAINTENANCEMILITARY PERSONNELRESEARCH & DEVELOPMENTSHIPBUILDING & CONVERSION/ MILITARY CONSTRUCTIONPROCUREMENTUnlike other government departments, where a dollar is a dollar, DoD uses multiple types of non-interchangeable funding in a system Congress mandated to obtain sufficient insight into how DoD spends its funds. The most common Air Force appropriations are shown above. (Acquisition folks rarely deal with the others.) Most people refer to them by their abbreviations or, sometimes, their U.S. Treasury codes. (The latter is a bad habit, because OSD and Congress do not use those codes.) RDT&E funding is used for research, development, test, and evaluation of concepts and ideas and purchase of test items. The various types of procurement fabricate, purchase, and/or modify end items for use – aircraft procurement for aircraft; procurement of ammunition for ammunition; missile procurement for missiles, spacelift boosters, and satellites; and other procurement for items not fitting in the other categories, such as vehicles, computers, telecommunications devices, and maintenance equipment. Military construction (MILCON) builds facilities, operations & maintenance (O&M) sustains equipment, and military personnel (MILPERS) funds uniformed military manpower. (Civilians are usually funded via O&M.) Acquisition efforts mainly involve RDT&E and procurement – these, plus MILCON, are known as the investment accounts.These appropriations are classified in various types. Incremental funding – RDT&E – pays for services for a specified effort or period of time. Examples include development efforts, studies, testing, contractor support, and research projects. Annual funding – O&M and MILPERS – is used for continuing expenses as they are billed. Full funding appropriations – all procurement types and MILCON – are used when the intent of the activities is purchase of a specific end item. After such work is complete, the government should have a complete, usable product such as an aircraft, satellite, or building; in each case the full cost of the end item must be budgeted for in a single year. One exception: a special type of procurement, advance procurement, can be used in limited instances to buy parts for an end item that require very long lead times to produce even though this technically does not fully fund a usable end item. Such funds are provided from a future year’s appropriation one or two years in advance. Another type of procurement is multiyear procurement, rarely allowed by Congress, which establishes a commitment to buy a specified quantity of end items over two to five years so the government can get a better deal on price.OPERATIONS & SUPPORTINVESTMENT
5 DoD FY14 - Enacted by Congress FY 2014 Defense Budget Enacted by CongressBase: $ 493.2BOCO: $ BTotal: $ 578.4B$ 110.0B$ 157.6B$ 150.4B$ 134.7BInvestment Accounts$ 24.6B$ 63.1B$23.4B$ 99.9B$33.6B$ 136.8B$ 209.4BThese numbers do NOT exceed the Budget Control Act limits and are not subject to sequestration.Readiness Accounts
6 Preview of One Cycle – Building POM 16 ASONDJFM2014201520162013Service inputs for drafting guidanceSecDef PlanningService Program AssessmentsService Program DevelopmentService POM Deliberation & ApprovalPresident's BudgetCommittee HearingsCommittee ActionFull House and Senate ActionExecutionPlanningService Programming& BudgetingTodayService Budget ReviewPOM/BES Submission to OSDSECDEF brief to President, OMB SubmitCOCOM Issue Briefs / CAPE-led Issue DispositionComponent POM Briefs and Issue NominationsUSD(Comp) / OMB HearingsSecDef DPPG & Fiscal Guidance, COCOM IPLsOSD Program& Budget ReviewCongressional Review & ApprovalBudget ExecutionUSD(Comp) RMDs / COCOM and Service Chief MBIsWarfighter Input
7 Planning Phase FY16-20 PPBE Cycle SECDEF Service Secretary A S O N D J FutureSECDEFService SecretaryThe Planning process begins about sixteen months in advance of the fiscal year for which the budget authority is requested.During the Planning phase, DoD analyzes the threat to national security and develops appropriate strategies to prepare for and handle the threat. The Planning phase culminates in the development of the Strategic Planning Guidance (SPG) and Joint Programming Guidance to the services and defense agencies. SPG provides planning assumptions and direction for the Component’s program submission, or Program Objectives Memorandum (POM). SPG is not resource constrained and becomes the foundation for many of the subsequent discussions in POM and budget review phases on military requirements.The focus of the Planning phase is to:Define the National Military Strategy (NMS) to support national security and US foreign policy two to seven years in the futurePlan the military forces to accomplish that strategyEnsure the necessary framework exists to manage DoD resources effectivelyPlan and negotiate goals, and revise as necessary and appropriate.Source:ASONDJFM2014201520162013Service inputs to draft Planning GuidanceAugustthruJanuarySecDef Guidance for Service Planning
8 Generally published every two to four years DOD PlanningSix “Gold Standard” documents:Quadrennial Defense Review (QDR)Strategic Choices and Management Review (SCMR)National Defense Strategy (NDS)National Military Strategy (NMS)Defense Planning and Programming Guidance (DPPG)Guidance for the Employment of the Force (GEF)Unified Command Plan (UCP)Defense Planningand ProgrammingGuidance(GDF)Guidance forthe Employmentof the Force(GEF)UnifiedCommandPlanSeveral DOD planning documents referred to as the “gold standard” documents are used to chart a strategic course for the U.S. military. Collectively they set the strategic direction of the department for the next two years, influencing revisions of: war and contingency plans; policies on equipping, managing and employing the U.S. military; defense and military strategies; as well as identifying which weapons systems to buy and which to shed across the FYDP.Gold Standard DoD planning documents:Quadrennial Defense Review (QDR) – directed by the Military Force Structure Review Act of 1996, this is a DOD review of defense strategy, force structure, modernization plans, infrastructure and budget conducted every four years. It is conducted every four years. The QDR begins in the latter part of the first year of a new administration, and the results are published the following February (second year of the new administration). The QDR results inform the PPBE process for the next four years. The last QDR was published in Feb 06.National Defense Strategy (NDS) – OSD document – a strategy paper that is written every four years and builds on the QDR. Last one was published in Mar 05.National Military Strategy (NMS) – CJCS document – a biennial document (generally) that describes for the President and SECDEF national military objectives, strategies, and required capabilities. It reflects JCS’s and the military departments’ views on the military role and posture of the United States and DoD in the world environment. The NMS is supporting documentation to SECDEF in preparing the GDF and to the Services for consideration during POM development. The 2003 House Auth Rpt (HASC) directed DoD to prepare NMS biennially (even-yr) starting 15 Feb The last one was published in Feb 05.Guidance for the Development of the Force (GDF) – OSD document prepared by USD(Policy). Provides DoD Components with direction on defense policy, strategy, force and resource planning, and fiscal matters for use in developing their POMs. Replaces the Strategic Planning Guidance, among other documents. Published every two years. First published in draft form in Dec 07 for use in POM-10, the last POM for the Bush Administration.Guidance for the Employment of the Force (GEF) – another new document for POM-10, also prepared by USD (Policy), and ultimately requiring the president’s signature. The GEF similarly aims to consolidate a number of documents that steer the more near term activities of combatant commanders as well as the services. It replaces the Contingency Planning Guidance, policy guidance for the employment of nuclear weapons (NUWEP), and the Security Cooperation Guidance. Published every two years. First published in draft form in Dec 07.Unified Command Plan (UCP) – updated every two years, the UCP is a classified document that defines Combatant Command areas of responsibility in terms of latitude/longitude, and assigns missions to each one.Other documents:National Security Strategy (NSS) – Executive Office document developed by National Security Council – establishes nation’s grand strategy and addresses all elements of national power used to achieve national goals. Published once every four years; last published Mar 06.Joint Planning Document (JPD) – CJCS document – derived from, and used with, the National Military Strategy to drive the planning process. Published every two years as a series of volumes that align with the JS J-codes (e.g., Intel from J-2).Joint Programming Guidance (JPG) – OSD document - final document of the planning process; contains fiscally constrained programmatic guidance. Published every two years. Along with the GDF, this is one of two key documents for POM development.Generally published every two to four years
9 Primary Missions of U.S. Armed Forces = Basis for establishing DoD Capacity
10 Service Programming and Budgeting Process FY16-20PPBE Cycle"Hey, bucko...I'm through begging."SONDJFMA2013201420152012Service Program Assessment / Service POM DevelopmentService POM Approval by Service SecretaryBSO Budget SubmitsPOM/Budget Submission to OSDASONDJFM2014201520162013SeptemberThroughJulyService Comptroller Budget Reviews
11 OPNAV Organization N1 N2/N6 N3/N5 N4 N8 N9 Chief of Naval Operations Admiral Jon GreenertVice Chief of Naval OperationsADM Mark FergusonStrategic StudiesGroupAdmiral Hogg (ret)CommanderOperationalTest & EvaluationForce (COTF)RDML PenfieldChief ofNavy Reserve (095)VADM BraunDirectorNavy StaffVADM SwiftSurgeonGeneral (093)VADM NathanChiefof Chaplains (097)RADM TiddN1DCNOManpower, Personnel,Training and EducationVADM MoranN2/N6DCNOInformationDominanceVADM BranchN3/N5DCNOInformation, Plans& StrategyVADM HowardN4DCNOFleet Readiness,Logistics, InstallationsVADM CullomN8DCNOIntegration ofCapabilitiesand ResourcesVADM MyersN9DCNORequirementsVADM AucoinBOTHPPBE Process Owner11
12 BUMED Resources Organization (M8) M8- Deputy Chief of Staff (DCOS) ResourcesM8- Executive AssistantM8S- SecretaryMr. Joseph MarshallDeputy Chief of Staff ResourcesM8B- ADCOSResource ManagementM8C- ADCOSComptrollerM8B1- Analysis & EvaluationM8B2- Reports & StatisticsM8C1- BudgetM8C2- AccountingCentral Player in Obtaining and Defending Funding for Naval Medicine
13 Program Objective Memorandum (POM) PPBEBiennial (every 2 years) documentDescribes and recommends total DoDcomponent resource and programobjectives to SECDEFProduct of the programming phase of theContinues for approximately 19 months(October through May)Submitted only for even numbered years("POM Years")Odd numbered years are called "Off Years"("PR Years" - Program Review)POMAn annual documentDescribes and recommends total DODContinues for approximately 16 months – from front-end assessments in August through OSD decisions the following NovemberAddresses “capabilities” within the PPBE constructRemains in the Pentagon; only the PresBud goes to the CongressNote Army and Air Force terms
14 CNO / CMC / SECNAV Staff Review, Balancing & Decisions FiscalGuidanceProgram/PolicyStrategicCapabilityPlanSponsorProgramProposals(SPPs)OPNAVInternalReview &DecisionsSECNAVDONPOM/BudgetHQMCReadinessAssessmentApril - May TimeframeCNO/CMC REVIEWSNavy Resource Sponsors brief SPPs to VCNO & CNO; N80 / N8 brief options to VCNO & CNOUSMC PEB Chairs brief PEB results to MROC; P&R briefs alternative COAs to MROC for recommendation to CMCKey focus on Core/Above CorePolitical Factors / Effects on Warfighting / Fit with Planning StrategyCNO / CMC make preliminary decisionsSECNAV REVIEWIssues presented to senior DON leadershipOPA has role in assessing USN/USMC POM mergeUSMC / USN integratedSECNAV makes final decisionsOutcome is the DON Internal POM for budget reviewBudget exhibits then prepared by Navy and USMC for NAVCOMPT Summer Review
15 Converting the POM to a Budget Program ObjectiveMemorandum (POM)SECDEF the customerImprecise pricing (Gross $)Uniformed leadConsider assessmentsUse prior year's execution dataas guidance (not most current)Plan and assess by capability areaBudget EstimateSubmission (BES)Congress the ultimate customerPrecise pricingSecretariat leadVia issue papers & reclama reviewsUse current execution data(based on reviews)Budget by appropriationa. Differences between Programming and Budgeting.A key difference is the level of precision and accuracy associated with resource estimates. During the programming review, many different program alternatives are considered and a high level of precision in estimates is not required. More precise budget estimates are required to ensure the executability of the budget. The budgeting review provides the decision maker with the final opportunity to refine estimates to reflect the most accurate data available.Another difference is the structure in which programs are presented for review. The programming process provides data in DOD major program categories with resources identified by mission/program element/line item/activity-subactivity group/project, while the budget process presents resources on an appropriation/budget activity/line-sub line item/activity-subactivity group/project basis. While there are also differences in the amount and kinds of detailed justification used in each process, much more being required in the budget process efforts to streamline and combine exhibits are ongoing.Another difference is that resources are allocated to resource sponsors in the programming phase and to budget submitting offices during the budget formulation phase. Each participate in the programming process and in the budgeting process.Source:
16 Comptroller Perspective $$$s belong to Service ChiefsNot to Budget Submitting Offices (BSOs)Not to Resource SponsorsResources are finiteFunds must be executed in a timely manner to satisfy cost, schedule, performance metricsRisk of poor execution -- losing in next cycle“Higher Level” priorities existWarfighter needs, cost of war, inflation adjustments, etc. – readiness bills that must be paidEveryone usually feels their program or project is of such high importance that they shouldn’t even be looked at for budget cuts. NAVCOMPT keeps us in check.Backwards concept. Person who spends the most is doing the best. NAVCOMPT would have used those resources elsewhere!Higher level decisions that are beyond our control (policy changes) Don’t take it personally if your program gets marked2
17 Justification Books, a.k.a. “J Books” Documentation in support of a Service’s budget requestThere is a J-Book for each Service AppropriationJ-Books contain hundreds of pages of supporting justification materialService Comptrollers have lead for J-Book preparation – with support from Service StaffsDefense-Wide:DoN:Army:Air Force:
18 OSD Programming and Budgeting Phase FY16-20PPBE CycleASONDJFM2013201420152012Component POM Briefs and Issue NominationsAugustThroughJanCOCOM Issue Briefs and CAPE-led Issue DispositionUSD (Comp) / OMB HearingsBudget RMDs and Service Chief MBIsSecDef Brief to President, OMB SubmitPresident's Budget
19 Principal OSD Interfaces Secretary of DefenseDeputy Secretary of DefenseUnder Secretary of DefenseAcquisition, Technology &Logistics (AT&L)Frank KendallUSD ComptrollerRobert HaleDirector CAPE*Jamie MorinDir (CAPE)to have a single stance on each major programAgreement exists betweenUSD (AT&L)* Cost Assessment and Program Evaluation(Formerly Program Analysis and Evaluation (PA&E))
20 OSD Program / Budget Review AUGSEPOCTNOVDECJANFEBPOM – Program Objective MemorandumBES – Budget Estimate SubmissionRMD – Resource Management DecisionSLRG – Senior Leadership Review GroupOSDComponentPOM BriefsSECDEFSLRG3-Star GroupCOCOMIssue BriefsElectronicPOMServicesPEO/PM,SVC HQsCOCOMsCJCS ProgramAssessment(CPA)JCSIssueDispositionResource ManagementDecisions (RMDs)ElectronicBESPBThe 3-Star Group will generally be the review authority for PDMs resulting from the “OSD/OMB“ “Issue Resolution” process. PDMs will approved by the SLRG and signed by SECDEF.J-BooksAdvance Questions /HearingsMajor BudgetIssues (MBIs)OSD/OMBPOM/BES Submissionupdates the FYDP(Service Databases “lock”)Balanced PRESBUD Submissionupdates the FYDP(Database “locks”)
21 Major Budget Issues (MBIs) At the final stage of the OSD Budget Review, one last opportunity to take exception to proposed RMDsMBIs are those issues that, if implemented, have so serious an impact on the Service/Department’s mission that they require the Service Secretary and Service Chief to personally work resolution with SECDEF and/or DEPSECDEFService comptroller develops a list of potential MBIs and offsets during draft RMD deliberationsService Comptroller with input from Service staffs approves issues to be forwarded to the Service Chief and Service Secretary for considerationService Chief and Service Secretary decide which MBIs and offsets they want to address and forward those issues to the 3-Star OSD/CAPE group3-Star group meets to resolve the MBIs and offsetsAlso assists SECDEF implement any final Presidential guidance as the PB is completedSimultaneously, Service programmers identify and review offsets to fund the estimate of the final RMD-driven billOnce MBI discussions complete, Services deliver the set of proposed offsets to OSDOSD has the final word on which offsets are acceptableNear the end of the OSD/OMB review (usually early December) the Secretaries of each Department meet with the Secretary of Defense to discuss signed PBDs/MIDs that the Department still takes exception in a Major Budget Issue meeting. For the DON, usually, the Chief of Naval Operations and the Commandant of the Marine Corps attend this meeting with the Secretary.SAF/FMB and AF/XPP work with OSD to incorporate final decisions into the fiscal, force structure, and manpower databases. The only changes allowed are those issued by OSD in budget runs which reflect final PBDs and approved offsets. This rule ensures the AF and OSD databases are identical when the President submits his budget. Completion of this activity culminates in the AF baseline for the DoD input to the PB.
22 President’s Budget (PB or PresBud) 3-Star OSD/CAPE panelPrepares the SECDEF for his meeting with the PresidentImplements any new guidance resulting from the President's final decisions on the size and composition of the Defense BudgetThe President makes the final decisions in December concerning the budget he will submit to CongressOSD submits the DOD budget request to OMB for incorporation into the PresBud submissionDetailed information and justification material is built into documents called Justification Books to accompany the President’s Budget submission to CongressPresident conducts the State of the Union address the last week in January and delivers budget to Congress by first Monday in February MarchThe Budget and Accounting Act of 1921 requires that the President submit to the Congress an annual budget request for the entire Federal government. This law enables the President to use the “power of the purse” to establish national priorities through the budget process. The President’s Budget submitted to the Congress sets forth the overall financial plan for the Federal Government indicating the priorities and proposals for government programs and financing as well as the detailed budget requests for the individual departments and agencies.Each year the Secretary of Defense and the Director of OMB meet with the President as part of the final Presidential determinations regarding the budget and to resolve any outstanding issues between OMB and SECDEF. The decisions resulting from this meeting can include new inflation indices, end strength numbers, specific Defense program decisions challenged by OMB or of extraordinary national significance, and new Defense Budget totals.Source:
23 Working Effectively with Congress How Congress operatesWhy programs succeed or failAnswering the question, “Threat or Ally?”SUSTAINING THE PROGRAM WITHIN THE PROCESSThreat or Ally?
24 The United States Constitution – Three Branches of Government Legislative Branch (Article 1)House of RepresentativesBy population2 year terms435 total membersSenate2 per state6 year terms100 total membersAuthoritiesLaws, Taxes and RegulationsDeclare warRaise and support ArmiesProvide and maintain a NavyAdvise and Consent (Senate)Executive Branch (Article 2)President4 year terms (2 max)3 roles:Chief ExecutiveHead of StateCommander-in-ChiefVice PresidentSucceed to or Act as PresidentPresident of the Senate(Most) All Government Agencies and Departments:DefenseStateHomeland SecurityJusticeTransportation, Commerce, Labor, VA, Ag, Ed, Energy, HHS, HUD, Treasury, InteriorJudicial Branch (Article 3)Supreme Court1 Chief Justice and 8 Associate JusticesFederal Courts are established by CongressUS Court of Appeals (12)US District Courts (94)
25 Why is Congress Always in My Business? Article I, Section 8The Congress shall have power to declare war … raise and support armies ... provide and maintain a navy … make rules for the government and regulation of the land and naval forces.Displayed in House Armed Services Committee hearing roomOversight -- It’s Constitutional25
26 113th Congress, 2nd Session Senate House Democrats: 53 Independent: 2 (caucus with Democrats)Republicans: 45HouseDemocrats: 201Republicans: 232Rep Young (FL-13) died 18 Oct; Primary Election 14 Jan; General Election 11 MarchRep Radel (FL-19) resigned 27 JanU.S. Senate: Why are 60 Votes so Important?The Senate was designed by the founding fathers to be a more deliberative body than the House.The Senate’s Rules of Procedure are complex. With certain exceptions, they permit an individual Senator or group of Senators to engage in unlimited debate on a question. Senators can use this procedure to delay and block Senate action on an issue. This delaying tactic is known as a filibuster.One of the exceptions to the ability of Senators to engage in unlimited debate is when a supermajority of Senators (60) vote to end debate on a question. This is known as cloture. It is used to break a filibuster.Cloture is a parliamentary procedure by which debate is ended and a vote is taken on the matter under discussion. It requires 60 votes to invoke cloture.In general, the U.S. Senate operates using unanimous consent agreements; known as “UCs.”A Senator makes a motion (ie: requests some action) on the floor of the Senate: “Mr. President, I ask unanimous consent that the Senate move to the consideration of S. 1547, the Defense Authorization Act for Fiscal Year 2008.” If none of the 100 Senators objects to this request, the Senate will begin debating the Defense Authorization Act and its underlying amendments.If one or more Senators object to the motion, (with the purpose of preventing the Defense Authorization Bill from being considered), the motion can be withdrawn or debated. If debate ensues, it can continue indefinitely unless there is Unanimous Consent to vote on the motion or move on to other matters. If there is no UC, the Senate must invoke cloture to end debate.Cloture Process: Sixteen Senators must sign a petition and file it with the clerk; on the second legislative day after filing, the Senate votes; if three fifths (60 Senators) of the Senate vote to end debate, cloture is invoked.After cloture is invoked, debate can continue for up to 30 hours with enhanced procedural restrictions. When the 30 hours expire, the Senate votes on the issue (whether to consider the Defense Authorization Act).Source: Office of the Clerk, US House of RepresentativesLast Update: January 28, 2014
27 Political Environment and Institutional Culture 2-year election cycle, multi-million dollar campaignsShared powerBetween partiesFederal vs. stateWith other branchesSeniority among MembersOrganizational basisSet committee leadershipSenior professional (committee) staffYoung personal staffInformation is powerBad news doesn’t get better with timeProvide knowledge and insightSchedule-drivenLimited opportunities to interactTerm limitsCostly elections: Every day is a campaign dayAll House runs every 2 years, 1/3 of Senate every 2 yearsCurrently: 31 House members leaving at end of 110th, 5 SenateBicameralism: Senate is “upper body,” “more deliberative body,” vs. House’s “people’s House” and “mob rule”U.S. Senate: Why are 60 Votes so Important? The Senate was designed by the founding fathers to be a more deliberative body than the House.The Senate’s Rules of Procedure are complex. With certain exceptions, they permit an individual Senator or group of Senators to engage in unlimited debate on a question. Senators can use this procedure to delay and block Senate action on an issue. This delaying tactic is known as a filibuster.One of the exceptions to the ability of Senators to engage in unlimited debate is when a supermajority of Senators (60) vote to end debate on a question. This is known as cloture. It is used to break a filibuster. Cloture is a parliamentary procedure by which debate is ended and a vote is taken on the matter under discussion. It requires 60 votes to invoke cloture. In general, the U.S. Senate operates using unanimous consent agreements; known as “UCs.” A Senator makes a motion (ie: requests some action) on the floor of the Senate: “Mr. President, I ask unanimous consent that the Senate move to the consideration of S. 1547, the Defense Authorization Act for Fiscal Year 2008.” If none of the 100 Senators objects to this request, the Senate will begin debating the Defense Authorization Act and its underlying amendments.If one or more Senators object to the motion, (with the purpose of preventing the Defense Authorization Bill from being considered), the motion can be withdrawn or debated. If debate ensues, it can continue indefinitely unless there is Unanimous Consent to vote on the motion or move on to other matters. If there is no UC, the Senate must invoke cloture to end debate.Cloture Process: Sixteen Senators must sign a petition and file it with the clerk; on the second legislative day after filing, the Senate votes; if three fifths (60 Senators) of the Senate vote to end debate, cloture is invoked.After cloture is invoked, debate can continue for up to 30 hours with enhanced procedural restrictions. When the 30 hours expire, the Senate votes on the issue (whether to consider the Defense Authorization Act).27
28 Timeline: 2nd Session, 113th Congress Jan 6 – Begin Second Session of 113th Congress (T)Dec 2014 (T) – House and Senate AdjournmentStaffer BriefingsHearingPrepsRFIs / QFRs/ IFRsJan2014AprMarFebJulJunMaySepAugOctDecNovDoD & Service FY 2015 Posture and Other Defense Hearings (T)FY 2015 beginsLEGEND:(T) = Tentative datesRFI = Request for InformationQFR = Question for the RecordIFR = Insert for the RecordHouse & Senate Armed Services Committees MarkupsHouse & Senate Defense Appropriations Sub-Committees FY2015 Budget Markups (T)FY 2015 Defense Appropriations Conference Committee (T)District Work WkAugust RecessArmed Services Conference Committee (T)Mar 4 - President’s FY2015 Budget submitted to Congress (T)Jan 28 - President’s State of the Union Address to Congress (T)28
29 Terminology Authorization (Statute provided by the Legislative Branch) Establish, continue or modify programs and set maximum funding levels and are a prerequisite under House and Senate rules for the Congress to appropriate budget authority for programs.Appropriations (Statute provided by the Legislative Branch)Provides Budget Authority (BA) for Federal Agencies to incur obligations and to make payments for specified purposes.BudgetRevenue and spending plan.Budget Authority (BA)The authority to incur legally binding obligations of the Government which will result in immediate or future outlays (BA is provided by Congress in form of enacted Appropriations).Total Obligational Authority (TOA)TOA is a DoD financial term which expresses the value of the DIRECT Defense program for a fiscal year.ObligationA liability incurred by the government (a signed contract for goods or services).OutlaysExpenditures, are the liquidation of Government’s obligations. Outlays generally represent cash payments.
31 “Civics 101” – A Refresher Congress is organized into two chambers The House of Representatives ( non-voting)The Senate (100)Congress creates policy and appropriates fundingCongressional legislation becomes law when it is signed by the PresidentException: Veto override by 2/3 vote of both House and SenateEvery two years, at the beginning of a new term, Congress reorganizes itself and chooses its leadersSpeaker of the House and Senate Majority Leader are chosen by members of the majority party in their respective chamberWe are currently in the “113th Congress, 2nd Session”There are two 1-year sessions in each “Congress”First session: Odd-numbered yearsSecond session: Even-numbered yearsSenatesideHouseside6 non-voting House delegates:District of ColumbiaPuerto RicoUS Virgin IslandsGuamAmerican SomoaMariannas31
32 Whitney, Bradley & Brown Inc. 6 April 2017How Our Laws Are MadeAuthorization BillHASCSASCConferenceAuth.BillFullHouseSenatePresidentSignsPress coverage/opportunities at each point in process...Appropriations BillFullHouseFullHouseHACAppropsBillConferencePresidentSignsSACFullSenateFullSenate32
33 Congress by CommitteeSenate Standing Committees (16)Agriculture, Nutrition, and ForestryAppropriationsArmed ServicesBanking, Housing, and Urban AffairsBudgetCommerce, Science, and TransportationEnergy and Natural ResourcesEnvironment and Public WorksFinanceForeign RelationsHealth, Education, Labor, and PensionsHomeland Security and Governmental AffairsJudiciaryRules and AdministrationSmall Business and EntrepreneurshipVeterans' Affairs4 Joint and 4 Special/ Select CommitteesHouse Standing Committees (20)AgricultureAppropriationsArmed ServicesBudgetEducation and the WorkforceEnergy and CommerceEthicsFinancial ServicesForeign AffairsHomeland SecurityHouse AdministrationJudiciaryNatural ResourcesOversight and Government ReformRulesScience, Space, and TechnologySmall BusinessTransportation and InfrastructureVeterans’ AffairsWays and Means4 Joint and 1 Special/ Select CommitteesJoint Committees:TaxationEconomicsPrintingLibrarySenate Select Committees:Indian AffairsEthicsAgingIntel (SSCI)House Special/Select Committee:Intel (HPSCI)“Congress in session is Congress on public exhibition, whilst Congress in its committee-rooms is Congress at work.”Woodrow T. Wilson, 28th President of the United States,
34 Defense Committee Outputs/Products Reports accompany respective billsHASC, SASC reports effective upon adoptionHAC-D, SAC-D reports may be amended by conferenceConference reportsReport languageEffective immediately, authorization language not conferencedDoes not carry the force of law, but ignore at your own perilDirectiveRequires specific action …. “The Senate … directs the Secretary of the Army to submit a report to the congressional defense committees …”Non-directive“The committee notes that none of this reduction should be applied against …”Bill languageStatutory: public law, US CodeWritten by Office of Legislative CounselIdentified by title, section, paragraphE.g., 10 USC §2466 (a)Must be conferenced between House and SenateEffective after President signs bill into lawOnline versions of committee reports available through THOMAS (Library of Congress) but will not contain funding tables.
35 Authorization Act Language FY 2014 National Defense Authorization ActSEC LIMITATION ON AVAILABILITY OF FUNDS FOR LITTORAL COMBAT SHIP.Not later than 60 days after the date of the enactment of this Act, the Chief of Naval Operations, in coordination with the Director of Operational Test and Evaluation, shall submit to the congressional defense committees a report on the current concept of operations and expected survivability attributes of each of the Littoral Combat Ship seaframes.35
36 How Our Laws Are Sometimes Made Whitney, Bradley & Brown Inc.6 April 2017How Our Laws Are Sometimes MadeApprops or Authorization BillFullHouseFullHouseHASCAuth.BillPresidentSignsConferenceSASCFullSenateFullSenate“Pre-Conference”The House and Senate roles can be reversedPress coverage/opportunities remain at each point in process...36
37 House and Senate Rules House Senate “Each House may determine the Rules of its Proceedings”-- US Constitution, Article 1, Section 5HouseSenateRules adopted Jan 2013 (113th Congress)Rules adopted Apr 2000 (2/3 vote to change)Majority Rules – the SpeakerIndividual rights of SenatorsHouse Rules CommitteeUnanimous Consent – privately negotiated agreementsAll bills pass from Committee of jurisdiction through Rules CommitteeHolds – informal custom honored by Party leadersSets terms and conditions for Floor debate to be approved by full HouseCloture – limits debate, 3/5 vote“Nuclear Option” for Executive AppointmentsNon-germane amendments allowed (unless UC says no)Amendments must be germanePolitical Party Rules – only the House Republican Conference releases its own rules.
38 Lobbyists Do government agencies lobby Congress? Provide information Seek to influence outcomesProfessional (i.e. paid) and volunteerProtected activity under First Amendment (free speech, assembly and petition)Regulated industryDo government agencies lobby Congress?DoDD : “Legislative Liaison. Legislative liaison activities are the direct, daily, and personal contact on a continuing basis made by representatives of the Department of Defense with members and committees of the U.S. Congress and their staffs for the purpose of presenting, justifying and defending the DoD, or a DoD Component’s, legislative program.”38
39 Role of Military Liaison Offices Support Service Secretary and Service Chief in preparing testimony, briefings, and in preparing for / making office calls on House, Senate membersPresent briefings as requestedStaff responses to Requests for Information (RFIs) via “Information to Members of Congress”Staff responses to Questions for the Record (QFRs)Respond to congressional inquiries and case workSupport CODELs and Staff DELsLiaison for authorizers and appropriators is separate and distinct by lawLiaison officers are action officers, not strategistsWork for Service Secretary, not for program officesTestimony: No long opening statements (members are eager to ask questions)If you don’t know the answer, don’t try to fake it by talking ad nauseum about nothing; take it for the recordIf possible, avoid taking a supporting cast of thousands to office visits or hearingsArriving too early sometimes as bad as being late because offices are small and there’s no place to put people when meetings are already going on in the reception area; instead, send one person in to speak with the receptionist or scheduler and ask if you should come back laterEffective communication:Come early and come often -- but don’t be a pest (Engel LD)Be brief (Inouye’s LD)Give the facts, not the rhetoric (“If I had a nickel for every time someone said, ‘This is going to help homeland security,’ I’d be a rich man. (Howard Waltzman, chief counsel for House Energy and Commerce Committee)Don’t fill up the staff’s inbox with s from people they don’t know (Brownback LA)Interactions are year-round & at many levels39
40 Surgeon General’s Key Points Navy Medicine’s Mission: Force Health ProtectionProvide world-class care for Sailors, Marines, their families and other beneficiaries around the globe, anytime, anywhereDeliver a continuum of care from the battlefield to the bedside and from the bedside to unit, family, or transitionOperate forward and promote and protect the fleet and Marine forcesCombat casualty careHelp Sailors and Marines suffering with traumatic brain injury and post-traumatic stress disorderProvide a comprehensive and holistic approach to wounded warrior recovery for service members and their familiesVice Admiral Nathan is the 37th surgeon general of the Navy and chief of the Navy's Bureau of Medicine and Surgery. He testified before the subcommittee on Defense of the House Committee on Appropriations on April 24, 201340
41 113th Congress: Congressional Report Language - Appropriations HAC-D Report“The Committee recommends funding to augment the request for enduring Traumatic Brain Injury and Psychological Health and Wounded, Ill and Injured requirements. To address these challenges of the Defense Health Program, the Committee recommends the following:Traumatic Brain Injury and Psychological Health Research $125,000,000 “ (plus up to RDTE, DHP)SAC Report“Traumatic Brain Injury [TBI]/Psychological Health [PH].—The Committee recommends $60,000,000 above the fiscal year 2014 budget request for continued research into treatment and prevention of traumatic brain injuries and improved psychological health.” (PG 189)“The Committee directs the Assistant Secretary of Defense (Health Affairs) to submit a report to the congressional defense committees within 180 days of enactment of this act on expenditure and obligation data of additional funding added by Congress for psychological health and traumatic brain injury. This report should include information on agreements made with other Government agencies.” (pg 189)$60M added by Congress in FY14Last Update: Jan 28, 2014
42 Sequestration started March 1, 2013 The concept was lifted from the Balanced Budget and Emergency Deficit Control Act of 1985Objective of sequester then (and now) was to force compromise and actionThe imperative: U.S. budget debt and deficit continue to grow and need to be addressedDebt currently nearing $17 trillion and another debt ceiling increase will be requiredPrevious studies and commission findings have not received Congressional support: Domenici & Rivlin; Simpson & BowlesBudget Control Act (BCA) of 2011 placed binding caps on discretionary spending each year over next decade, and:Formed the Joint Select Committee on Deficit Reduction to find $1.5T in deficit reduction over 9 years (FY12-21)If unable to develop plan and get Congressional approval, sequestration would force $1.2T in deficit reductionThe “Super Committee” failed, so the poison pill remainsThe American Taxpayer Relief Act of 2012 delayed onset 60 days and reduced amount for FY13Bipartisan Budget Act of 2013 (Ryan-Murray) adjusted spending limits for FY14 and FY15Sequestration started March 1, 2013
43 Sequestration: How the Automatic Cuts Work Examples of “Other Mandatory Cuts” include:Community and migrant health centersIndian health services and facilities (limit 2%)Farm price supportsSource: Bipartisan Policy Center - Task Force on Defense Budget and Strategy June 201243
44 DoD Budget FY00-18 and Sequestration Caps PB15 release expected 4 MarchPB14 FYDPDoD limit from Budget Control Act of 2011(sequestration)(updated by Bipartisan Budget Act of 2013 – FY14 and FY15)
45 The Future of Sequestration ….? Amended by Bipartisan Budget Act (BBA) of 2013 for FY14 and FY15, butIt remains the law … until 2021“Grand Bargain” opportunity in 2014?BBA and Omnibus appropriation act removed the urgency to act in near termDebt ceiling was lifted until 7 Feb by Default Prevention Act of 2013 (in conjunction with Continuing Resolution for FY14)US Govt expected to reach new debt ceiling in Spring 2014Legislation required to raise the debt ceilingPatient Protection and Affordable Care Act (PPACA) aka ObamacareElections and Mandates: 2014, 2016, 2018, …Negotiate, Posture, Compromise, Stand Firm, Make a Deal… ???
46 Congressional Lessons Learned Members of Congress don’t like surprisesBad news doesn’t get better with timeBe consistent, reliable and responsiveProvide knowledge and insightFocus your efforts on four principal committees / subcommitteesCertain members are more influential than othersKnow when, where and with whom to interactRelationships are keyNeed to develop over the long runFocus efforts on your representative or senatorsTurn obstacles into opportunities“All politics is local”Jobs, Jobs, JobsDebt and deficit issues are here to staySurprisesDon’t make members read about major changes in your program that have an impact on their district in the newspaper or hear about in on TV firstKeep them informed through the MLAPrincipalsKnow who the players are, build relationships with them and their staff, both formal and informalDon’t limit your contacts only to the Member-level, don’t ignore personal staff, don’t aim only at leadershipRelationshipsIndividual members can help push the right buttons to make things happen in your favor – if they know what’s happening with your program; plan opportunities to interactIf the building isn’t going to support the program, you had better ensure that Congress does (Crusader reaction vs. Navy Area reaction on Hill)Obstacles into opportunities – let the process work in your favorPolitics – while party affiliation, state implications, committee position, conscience, congressional interest groups (otherwise known as caucuses) and compromise may each influence a member’s vote, it’s the voters back home that got him or her here.Be proactive vs. reactive
47 Execution Phase FY16-20 PPBE Cycle Too little.. Too Late !!!! Waait I’m at 87%FY16-20PPBE CycleDon’t ask !!!What happens ifyou can’t spendall your money?The Congress carries out much of its Constitutional authority over Federal revenue and spending through the process of reviewing and marking up the President’s Budget request. Article 1, Section 8 of the Constitution states that....“The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; Article 1, Section 9 states that “No money shall be drawn from the Treasury but in Consequence of Appropriations made by Law;....”The appropriations approved by Congress, which become law, reflect the resource allocation decisions of that body. Through the language of an appropriations act and the supporting committee reports, hearing testimony and floor debate, the Congress provides direction and control for execution of the appropriations.Source:ASONDJFM2014201520162013ExecutionOctoberthroughSeptember +++
48 DoN Budget Request for FY14 - Enacted MilPers: $45.4BBasic Pays $18.6Housing Allowance $7.5Retired Pay Accrual $6.0Health Accrual $2.1Reserve Personnel $2.6Subsistence $2.1Allowances $1.1Special Pays $1.8Other $3.6Procurement: $43.5BAircraft $17.9Ships $14.3Weapons $3.1Marine Corps $1.3Ammunition $0.6Other Navy Procurement $6.3$42.6B$42.5B$145.6BFY14:$155.8BR&D: $16.0BBasic Research $0.6Applied Research $0.8Advance Tech Dev $0.6Adv Component Dev $4.7System Dev & Demo $5.0Management Support $0.9Ops Systems Dev $3.4O&M: $48.5BShip Ops & Maint $11.2Aviation Ops & Maint $8.6Base Ops & Support $7.5Marine Corps O&M $6.3Combat/Weapons Support $5.5Service Wide Support $4.7Training and Education $1.8Reserve O&M $1.8Enviro Restoration $0.3Mobilization $0.9$14.9B$43.1BInfrastructure: $2.3BMILCON $1.7BRAC $0.1Family Housing $0.5$2.1BOCO: $13.7BHR 3547 (Public Law )
49 Budget Execution Year – in brief Notional activities during the Fiscal Year1 Oct Jan Apr Jul Sep1st Qtr FY nd Qtr FY 3rd Qtr FY 4th Qtr FYBudget Authority released by OMB to OSD, then from USD(C) to Service Comptroller, to lower echelon comptrollers/PMsMonitor execution (obligation and expenditure rates, emerging “fact-of-life” issues)Performance reviewNew contracts are letConduct Mid-Year Review (all echelons) in Feb-Mar timeframeApply funding held in reserve for emergent problems; release withheld budget authority as requiredIdentify “sweep up” funds from under-executing programs; shift to other programs (within flex limits)Current year budget execution begins on October 1, around the same time that the Planning phase begins for the following year. During execution, funds are allocated, obligated, and expended to accomplish DoD’s plan. In addition, execution entails the rigorous monitoring and reporting of actual results to budgeted, anticipated results, along with causes of variances and planned corrective actions, if necessary.Once the appropriations bill is signed, the Treasury issues Treasury Warrants and the Office of Management and Budget (OMB) apportions congressional appropriations to DoD. The DoD Comptroller then allocates funds to the Components. This process begins the flow of budget authority. Budget authority, once apportioned, grants the services and military agencies authority to obligate the government to pay for goods and services used in carrying out DoD programs.With the implementation of the new Planning, Programming, Budgeting, and Execution System, DoD increases its emphasis on program performance and results. Budget execution and performance reviews allow DoD to assess the allocation of resources and determine whether the Department is achieving its planned performance goals against budget estimates.Throughout the Execution phase—but at least quarterly—OUSD(C) and the Director, Program Analysis and Evaluation (DPA&E ) review program performance using metrics that were integrated into the budget during the Programming and Budgeting phases. To the extent that a program fails to meet performance goals, recommendations may be made either to replace the program or to adjust funding as appropriate. As a result, programs are adjusted throughout the year to meet emerging conditions. At mid-year, comprehensive reviews of all performance indicators are conducted throughout DoD and programs are adjusted as required. (WBB Note – this refers to major programs, but it also occurs at lower echelons for smaller programs)Source:Four Congressional committees must approve major changes to programs required during execution: the House and Senate Armed Services Committees and the House and Senate Appropriations Committees. These approvals are accomplished through reprogramming and supplemental budget request procedures. In addition, the entire budget is subject to two reviews subsequent to the enactment of appropriations: once as the current year column of the next year’s budget and then as the prior year (or actual year) column of the succeeding year’s budget.Source:Funding Held in Reserve: used for emergent problems, primarily at mid-yearSupplemental request (a.k.a. Supplemental): request for additional funds (2007 Supplemental)Reprogramming: changes in the application of funds from original plan (Committees must approve)Omnibus Reprogramming: changes in the application of funds from original plan (Committees approve)Transfer Authority: approval to transfer funds between appropriations (Congress must be notified)Rescission List: OSD's refusal of items added to the PRESBUD (pork!)Execution Year Withholds: used by USD(C), Service comptrollers and BSOs to maintain flexibilityTransfer authority approval for reprogrammingAdjustments: Funding held in reserve, Withholds, Taxes, ReprogrammingAdjustments: Reprogramming (BTR and ATR)End of year closeout
50 Funding Execution: Reductions and Withholds 20 July 2006Funding Execution: Reductions and WithholdsReduction/WithholdDescriptionCongressional cutCongressional reduction to a program’s PB request (funds not yet appropriated)Congressional General Reduction (CGR)Across-the-board reduction to an appropriated funding categorySmall Business Innovative Research (SBIR)Reduction to RDT&E funding for small business effortsOSD withholdAppropriated funding held back by OSDService withholdAppropriated funding held back by Service to pay CGRs, SBIR, and other billsCongressional rescissionCongressional reduction to program funds appropriated in a prior yearOf course, a program never receives all the funds requested in the President’s Budget. In some cases, the first reduction is due to Congress cutting the request in the appropriations law. However, whether cut or not, a program will face a number of other reductions, such as:Congressional General Reductions (CGRs). When marking programs, Congress rarely manages to limit the defense appropriation to the top-line amount specified in its initial budget resolution. As a result, to balance the books after it is done marking programs, Congress reduces appropriation categories by aggregate amounts – e.g., a $380 million cut to RDT&E, Air Force. Usually it directs DoD to reduce all programs in the appropriation by a flat percentage, or “peanut-butter spread,” to make these funds available rather than letting DoD decide which programs should have funding reduced.Small Business Innovative Research (SBIR). All government departments with contract research efforts, not just DoD, fund this effort to encourage small businesses to meet federal government research & development needs. The amount paid to SBIR for a program is a specified percentage of the portion of its RDT&E funding that is used to fund work by non-government employees and/or work in non-government facilities.OSD and Air Force withholds. OSD(C) usually withholds any plus-up funding from the Air Force, particularly if appropriated but not authorized, until the Air Force provides a plan on how it intends to spend those funds. It may also withhold funds if a program has issues an OSD office wants resolved before they’re released for use, but this is rare. In any case HQ USAF holds back a percentage of appropriated funds for almost all programs in order to pay CGRs, SBIR, and other bills that arise. In FY06 initial withholds for RDT%E, APAF, and MPAF were 10%, but for most programs, some portion of that money was later released for use.Even then, a number of further funding reductions might occur because Congress, in a later appropriations law, cancels some prior year funds – an action known as a rescission – or for other reasons that will be discussed shortly.Programs never receive all funds requested in the PB,even if Congress didn’t cut the program
51 PPBE Isn’t Suited for Conditions of Fiscal Uncertainty! Take AwaysPPBE is a process guided by SECDEF policy; internal deliberations are protected communications and not releasablePPBE is a “calendar-driven” process vice “event driven” as JCIDS and AcquisitionPPBE framework supports resource allocation decisions that balance risk, affordability, and effectiveness of necessary warfighting requirementsStrategic planning sets overarching direction and priorities for the PPBE processDPPG and Service guidance are key for development of Service POMEach Service and Agency develops its own POM and Budget every yearThe Requirements Officer advocates for programs and monitor resources from year to yearThe FYDP is the database of all DoD personnel, equipment, and funding, arrayed by yearConsolidated DoD budget request and FYDP goes to Congress as part of PresBud; POM remains within DoDA single year gets looked at numerous timesPPBE Isn’t Suited for Conditions of Fiscal Uncertainty!