Getting Inside the Budget
Process for Homeland Security
Cindy Williams
Security Studies Program
Massachusetts Institute of Technology
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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
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Homeland Security Budget Authority
FY 2008 Request ($ Billions)
DHS
29.7
Defense
17.5
Health & Human Services
4.4
Justice
3.3
Energy
1.8
State
1.4
Agriculture
0.7
National Science Foundation
0.4
Other Agencies
1.6
Total Homeland Security
61.1
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Buying Homeland Security
Outline 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
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The promise of a new department:
unity of effort
“Creating a unified homeland security structure will align
the efforts of many of these organizations….”
Tom Ridge, testimony before Senate Judiciary Committee on
President’s proposal for reorganizing the federal homeland defense
infrastructure, June 26, 2002
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The promise of a new department:
resource allocation based on
national priorities & risk
“We must carefully weigh the benefit of each homeland
security endeavor and only allocate resources where the
benefit of reducing the risk is worth the amount of
additional cost.”
One “goal for homeland security spending is to prioritize
those activities that most require additional resources.”
National Strategy for Homeland Security, White House Office of
Homeland Security, July 2002
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The promise of a new department:
cost effectiveness
“…The cost of the new elements (such as the threat
analysis unit and the state, local, and private sector
coordination functions), as well as department-wide
management and administration units, can be funded from
savings achieved by eliminating redundancies inherent in
the current structure.”
Tom Ridge, testimony before Senate Judiciary Committee on
President’s proposal for reorganizing the federal homeland defense
infrastructure, June 26, 2002
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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
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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
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Component Shares of DHS Budget
(Percent)
2003
2004
2007
Secret Service
FEMA Ops
Coast Guard
TSA
4
n.a.
20
17
4
1
19
15
3
1
19
14
ICE
CBP
CIS
9
19
5
9
17
5
11
21
4
Component Total
73
69
73
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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
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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
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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
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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 longterm 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
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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
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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
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Some Oversight Committees for DHS
Big 7
House
Senate
Coast Guard Homeland Security; Judiciary; Commerce, Science &
Transportation & Infrastructure Transportation
ICE
Judiciary; Ways & Means
Judiciary; Finance
CBP
Homeland Security; Judiciary
Finance; Judiciary
CIS
Judiciary
Judiciary
FEMA
Homeland Security;
Homeland Security &
Transportation & Infrastructure Governmental Affairs
TSA
Homeland Security
Commerce, Science &
Transportation
Secret
Service
Judiciary
Judiciary
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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
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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
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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
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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
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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
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Backup Slides
• Homeland security funding by critical
mission
• Spending for central administration & new
elements
• DHS planning, programming, budgeting &
execution (PPBE) system
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Fraction of Homeland Security Funding
0.5
0.4
0.3
2003
2008
0.2
0.1
0
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Central administration & new
elements in DHS ($ billions)
Departmental
operations
Inspector General
S&T (including in
DNDO)
Analysis &
operations
Total central &
new elements
2003
2008
0
0.7
0
0.6
0.1
1.1
0.1
(estimated)
0.3
0.7
2.2
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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
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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
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DHS’s PPBES for FY 2008
Planning Phase
Oct 05
Threat & Vulnerability Assessment
Office of
Intelligence &
Analysis, with
Components
Oct 05
Strategic Assessment Report
Director,
Strategic Plans
Nov 05 to
Jan 06
Integrated Planning Guidance (IPG):
strategic goals & objectives, program
priorities, cross-cutting issues; program
performance assessments (PART)
Assistant Sec.
for Policy, with
PA&E
Jan 06
IPG Instructions for Resource Allocation
Plans (RAPs) & funding targets by
component
CFO (PA&E
and Budget)
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DHS’s PPBES for FY 2008
Programming and Budgeting Phases
Jan to
Apr 06
Resource Allocation Plans (RAPs)
Apr to
Jul 06
Program Review, culminating in Resource PA&E,
Allocation Decisions (RADs) to
Secretary
components: emphasis on resource
allocation, priorities
Jun to
Sep 06
Budget Review, culminating in DHS
budget & FYHSP: emphasis on pricing,
phasing, performance, financial execution
CFO (Budget)
Sep 06
DHS budget & FYHSP to OMB
CFO
Feb 07
DHS budget & FYHSP to Congress
OMB
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Components
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