Who should exert the greatest influence over the defense budget—the four services, which actually prepare American forces for battle, or the nation’s 10 warlords, combatant commanders who lead them in operations?
It’s a big question in Washington, where the Pentagon has recently adopted new rules favoring the warlords. The result will go a long way toward determining how much the nation will devote to immediate needs in Iraq and Afghanistan and how much to the development of future combat capabilities.
Six commanders deal with regions (Europe, Pacific, Africa, Mideast, Latin America, North America), and four with functions (transportation, global strike, joint-force preparation, special operations). They and their staffs are preoccupied with "warlord" issues—readiness, training, sustainment, and so forth, all of which are vital to today’s fight.
Adm. Michael Mullen, Chairman of the Joint Chiefs of Staff (l) and Army Gen. David Petraeus, then commander of Multinational Force-Iraq (r), leave a Baghdad meeting. (DOD photo by Petty Officer 1st Class Chad J. McNeeley)
The four services also are obviously interested in all of these factors, but they have another preoccupation—preparing the forces to be strong tomorrow. Long-term investment of this type, of course, pays no dividends in the short term. Secretary of Defense Robert M. Gates calls it "next-war-itis."
Few disagree that the United States needs both. The real question is one of emphasis. However, it is unavoidable that the power of one increases at the expense of the other.
Today, in a series of budget struggles, the services are squaring off against the warlords, which are represented by new "capability portfolio management" teams. These CPM teams are led by civilians from the Office of the Secretary of Defense and officers representing the unified combatant commanders.
The CPM teams look to shift funds across the entire defense establishment, and not just within a service’s budget.
Advocates of portfolio management would like to give future Pentagon leaders the tools to make bold—heretofore unimaginable—changes, allowing major trade-offs in spending. This might allow future leaders to eliminate, say, a fighter wing to pay for new infantry brigades, or to cut a portion of the submarine fleet to fund intelligence-surveillance-reconnaissance capability.
The CPMs, thus, are the new focus of a long-running debate over whether the services shortchange present needs for future capabilities, or if wartime commanders are dangerously obsessed with here-and-now problems and indolent in preparing for larger dangers of the future. The changes could upset the balance of spending in which each service has received a relatively constant share of each year’s annual base defense budget.
This summer, the Pentagon’s civilian leaders prepared to lock in new rules that shift the balance of power between the combatant commands and the military services. By formally endowing select COCOMs with responsibility to be "capability portfolio managers," Deputy Defense Secretary Gordon England would advance a long-standing OSD goal of giving greater voice to the Pentagon’s ultimate customer: the combatant.
The ramifications are uncertain but potentially severe.
This could be one of the biggest institutional reforms the Bush Pentagon leaves to its successor, said Ryan Henry, DOD deputy policy chief. Henry ranked it alongside the decision to convert the Army from a division-based to a brigade-based structure as among the Administration’s most significant organizational changes.
"I think we put a real good idea on the launchpad," said Henry. "I think it will take some fresh perspective in a new Administration coming in to see how to apply this tool. I would really encourage them not to discard it out of hand but to see how they can make it work."
The Pentagon’s move is not universally acclaimed. The services fear that a more-muscular set of combatant commanders—with their focus on near-term challenges—could hamper the services’ effectiveness in organizing, training, and equipping the force. These are the statutory responsibilities of the services. They entail balancing today’s needs with those of the next decade or two.
Lockheed Martin’s F-22 assembly line. Some CPMs want to shift resources from building forces capable of high-end warfare toward dealing with irregular operations and training foreign militaries.
The grand goal of portfolio management is cross-service assessments of weapon systems and force structure. This, as Pentagon leaders explain, would let DOD balance strategic risks and make capability trade-offs between services.
OSD has therefore worked this year to formally engrave the responsibilities of capability portfolio managers in official policies and directives.
In February, England made permanent four teams established in 2006 as pilot projects. Each is headed by a senior Pentagon civilian and combatant commander and strives to identify so-called "seams" between service investment plans and to advocate budget decisions that would fill those seams.
The four permanent CPM teams are:
Command and control, led by the assistant secretary of defense for networks and information integration and the head of US Joint Forces Command.
Battlespace awareness, led by the undersecretary of defense for intelligence and the commander of US Strategic Command.
Net-centric operations, led by the assistant secretary of defense for net activities and, again, the commander of US Strategic Command.
Logistics, led by the undersecretary of defense for acquisition, technology, and logistics and the head of US Transportation Command.
These capabilities—command and control, battlespace awareness, net-centricity, and logistics—are judged by some to be insufficiently backed by the Army, Navy, Air Force, and Marine Corps, to the frustration of the operational commanders.
England also launched five new capability portfolio management pilot programs, expanding this initiative to encompass all other capabilities. These teams have a slightly different personnel leadership arrangement. The interests of the combatant commanders are represented by members of the Joint Staff.
The five experimental portfolios are:
Building partnerships, led by the undersecretary of defense for policy and the Joint Staff director of strategic plans and policy (J-5).
Force protection, led by the Pentagon acquisition executive and the Joint Staff director for force structure, resources, and assessment (J-8).
Force support, led by the undersecretary for personnel and readiness and the J-8.
Corporate management and support, led by the Pentagon’s director for administration and management and the director of the Joint Staff.
Force application, whose leadership comprises DOD’s undersecretaries for policy and for acquisition, along with the entire Joint Requirements Oversight Council. That council includes the vice chairman of the Joint Chiefs and the vice chiefs of the four military services.
While all five of these CPMs are potentially significant, the one attracting the most attention is the fifth one—force application. This would entail control of major weapon systems such as aircraft carriers, fighter aircraft, ground vehicles, satellites, missiles, and the like. It covers all domains of warfare.
Vice Adm. Evan Chanik, then head of force structure, resources, and assessment on the Joint Staff, and Ryan Henry, deputy undersecretary of defense for policy, address reporters at a 2006 Pentagon briefing.
England has assigned these CPM teams a central and influential role in developing the Fiscal Years 2010 to 2015 program objective memorandum, allowing the new portfolio managers to influence the service programs in three ways.
First, the portfolio managers helped Henry’s policy office draft the relevant capability chapter of the Guidance for Development of the Force—a key strategic planning document that is essentially a scorecard for grading the service six-year investment plans.
Second, portfolio managers were invited to make recommendations on what programs the services should include in the FY10 budget proposals and accompanying five-year investment blueprint.
Third, portfolio managers were given an opportunity to critique service-designed investment plans.
The services, for their part, privately regard the CPM concept as the latest in a long string of bad ideas promulgated by England. They hope and expect that portfolio management will sink beneath the waves with a change of power in Washington following the 2008 Presidential election.
"The general feeling of the services is that capability portfolio management will die with the next Administration, very quickly," said one service representative.
The services are concerned that capability portfolio management overly empowers COCOMs who are obsessed with immediate combat needs but not ultimately responsible for the results of their investment decisions. Should COCOM-influenced investment decisions have a poor result, goes the argument, it will be the services—not the commanders—that are left holding the bag when Congress asks what went wrong.
The big question hanging over the shift toward giving COCOMs more influence in shaping the defense budget is to what degree immediate requirements pushed by the combat forces will siphon resources from investments the services believe are needed for future capabilities. Until recently, combatant commanders have had little influence on what weapons DOD procures.
A B-1B takes off from Andersen AFB, Guam. Some are concerned that COCOMs will neglect the future needs of the services
That’s changing. A recently updated Pentagon directive, No. 7045, gives capability portfolio managers numerous opportunities to influence the Pentagon budget by giving them access to senior leaders at every stage of the planning, programming, and budgeting process to advocate for investments in their respective portfolios.
"While we haven’t given them new authorities, we have given them access to key decision-making forums where they can present that view and it can make a big difference," said Henry.
This access is not trivial. It provides an opportunity for the portfolio managers, if they are unable to directly persuade the services to fund a key capability, to appeal, in hopes of prevailing on England to order the services to support the program. "That means sometimes the component is going to win the argument and sometimes the capability portfolio manager is going to win the argument," said a Pentagon official.
Last fall, during a trial run in which capability portfolio managers advocated for specific programs in the FY09 budget proposal, the services squared off against combatant commands on a number of key issues.
USAF Maj. Gen. David M. Edgington, who handles the day-to-day C2 portfolio management for Joint Forces Command, said JFCOM prevailed in securing $500 million over five years for its high-priority Net-Enabled Combat Capability program. This is a long-term effort to put in place an architecture enabling continuous cross-service C2 enhancements.
In preparing the Fiscal Year 2010 budget this summer, England asked the four permanent capability portfolio managers—as well as five experimental portfolio managers—to draw up a list of programs they want the services to fund.
In mid-April, Marine Corps Lt. Gen. Emerson N. Gardner Jr., deputy director of program analysis and evaluation, delivered a lengthy memo containing the portfolio managers’ recommendations for programs the services should consider funding in their FY10-15 budgets.
The military services ignored these "requests" at their own peril. To ensure recommendations are given serious consideration, England is providing each portfolio manager opportunity to critique how the services treat the funding requests.
"What we hope to have happen is the services will work with portfolio managers during the budget build and program build so that we don’t have a shoot-out at the end," said Marine Corps Brig. Gen. Raymond C. Fox, who last fall was in the Joint Staff J-8. "The services can’t ignore them and the portfolios can’t work in their own little vacuum—it really helps if they come together."
To head off any perceived surprise and unexpected battles during the budget endgame, Marine Corps Gen. James N. Mattis, JFCOM commander and command and control capability portfolio manager, worked this spring to make clear to the military services the programs he planned to fight for. "There will be no surprises," Edgington said.
Could capability portfolio management be a vehicle for fundamentally refocusing the shape of the military to deal with irregular operations and training foreign military? These are top priorities for combatant commanders, but shifting investment toward them could diminish service efforts to build forces optimized for high-end combat.
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