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In an era of draw down, Dempsey's Capstone Concept fails to set priorities

We are living in an era of a defense "draw down." We have been there for two years. But the Defense Department is still framing strategy with little reference to the reality that resources are limited.

The latest iteration of this problem is the Capstone Concept for Joint Operations released, to little comment, on September 10. It represents an effort led by Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, to put military flesh on the bones of the DOD strategy document released earlier this year.

And it has the same weakness as that strategy. It does not fully recognize that resources and strategy, money, missions, and capabilities are intrinsically linked. In an era of draw down, it is critical to recognize that link by making choices, setting priorities, and analyzing risk.

Sadly, the Concept does none of that. Instead, it calls for "globally integrated operations," complete with the military capability to conduct operations anywhere, anytime, against any potential threat, known or unknown. In the end, without saying so explicitly, it is a plea for more money.

The Concept is built around the notion that "the geography of threats and crises grow more complex," leading to a security environment "likely to be more unpredictable, complex, and potentially dangerous than today." How that squares with the chairman's view, in the same document, that "the world is trending toward greater stability overall," is not clear. But "uncertainty" is the only clear potential adversary described in the document.

So we don't know the real adversary from the document. And we don't know much about current U.S. military capabilities to deal with adversaries, either. This is a common failing of Pentagon strategy documents. They rarely acknowledge that the U.S. military is globally capable today, the only force that can deploy, sail, and fly globally. The only one with global logistics, intelligence, transportation, communications, and infrastructure. No other country comes close; no other country even tries. By not recognizing our global military superiority, the Concept becomes simply a plea for more.

And the document does not help set priorities in any way. There is no hierarchy of challenges, problems, or threats. The JCS says, "it will be impossible to predict with certainty when, where, and for what purpose Joint Forces will operate." In other words, in a world where uncertainty is the enemy, the U.S. military needs to be prepared for any eventuality. Again, we have here an implicit justification for more, with no priorities.

Most seriously, aside from one brief sentence about the need to "adapt to the nation's fiscal environment," the report is fiscally unconstrained. There is no discussion of what such an adaptation might mean in terms of choices among capabilities, hardware, or people.

That is not a very realistic approach to operational planning. The nation's defense budgets have always been resource-constrained; capabilities and resources are intrinsically bound to each other in defense planning. Ask Eisenhower, who knew defense choices had to be made, however persuasive the service chiefs were trying to be. Ask Secretary of Defense Mel Laird, who oversaw a draw down. Or ask Gen. Colin Powell, who takes pride in having managed the draw down of the early 1990s.

With or without a sequester, we are in a defense draw down era, the fourth since the Korean War. The Pentagon knows this, industry knows this, even Congress knows this (they have agreed to cut the defense budget for the last two years running). Only the planners seem to have missed that point.

There is one more important weakness in the document. It briefly mentions the relationship of military planning to our broader toolkit of international engagement. American statecraft engages the world in a variety of ways -- many, if not most, of which are non-military. The military is not the only, nor necessarily the lead element in U.S. global engagement.

National security strategy, arguably, stands above the military, above the secretary of defense's strategy document of last January, and well above this Concept. All the agencies involved in our international engagement, including the military, are support functions for that strategy, not the other way around.  The Concept seems to argue that other institutional "partners" need to be integrated into the Concept, which sets national security strategy on its head, rather than integrating the military in support of broader strategy.

While the new Capstone Concept contains many useful, if general, observations about how to build future capabilities, it does not pass this reality test. A draw down is a time for making choices, not a time for broad brush concerns about "uncertainty." Uncertainty is always with us, but it doesn't provide a guide to decision-making.

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National Security

Budgeteers to the Rescue

Can accountants save the Pentagon?

Will the fiscal cliff turn into a mere step off the curb for the Pentagon? It may depend on the definition that the administration's accountants use in applying the Budget Control Act to defense -- a definition about which there seems to be disagreement.

The Office of Management and Budget put out its sequester report ten days ago, saying it could not provide details on how the budget sequester would affect government "programs, projects, and activities (PPA)," the way last year's Budget Control Act requires, because Congress only gave the agency 30 days to complete the report. The number-crunchers just didn't have time to get their institutional arms around the definition of PPA and wrestle the details to the ground, according to OMB.

So their report only assessed the impact of sequestration at the level of "accounts," of which there are about 50 in the Pentagon budget -- Air Force aircraft procurement, Navy operations and maintenance, etc. Every one of these accounts has multiple programs tucked inside -- specific weapons systems, for example -- and OMB implied that each of those programs would be hit in a sequester with a 9.4 percent cut.

OMB is still working on exactly what PPA means across the government, but yesterday in an offhand comment Pentagon Comptroller Bob Hale was reported as saying that the OMB document "would give us more flexibility" because it might allow DOD "accounts" to be defined as the PPA.

If Hale's interpretation survives the day, DOD would have an early holiday present. And it would put out the firestorm being whipped up both by the secretary of defense and by such Republican stalwarts as John McCain, Lindsey Graham, and Buck McKeon, who have been running a high-volume mini-campaign about the fiscal cliff, warning about job losses, plant closures, and layoff notices -- all backed up by the Aerospace Industries Association's warning about a million defense jobs being lost in the event of sequestration.

Not reporting out data on specific programs ten days ago allowed the Obama administration to escape the politically-charged damage of identifying specific programs and locations that would be hit by the automatic cuts in the middle of the election campaign. That makes a smaller political target for defenders of the F-35, like Lockheed Martin, which integrates the plane, and whose CEO, Bob Stevens, has loudly warned that he will have to send layoff notices to his workers before the election because of the impact of the sequester.

But the Hale interpretation also breaks with past precedent. In the sequesters under the old Gramm Rudman Hollings Act of 1985 (incorporated into the Budget Control Act), OMB defined "PPA" as "program elements" in the defense budget, which means individual programs, like the F-35. This time around, that interpretation would lead to a 9.4 percent cut in resources for each and every specific program; a tough management task. (Though perhaps not that tough: As an Air Force program manager told me last week: "You're telling me I have to manage my program this year with 9.4 percent fewer dollars than I asked for. Heck, that's my job; I do it all the time inside my overall program account. I could do it with no harm to the program at all.")

For DOD, the "accounts as PPAs" interpretation would provide a gift if there is a sequester: flexibility. If a 9.4 percent budget cut hit "Air Force procurement," the Pentagon would have greater flexibility to find those dollars, trading off between various aircraft programs. Defense officials could reduce the funding for additional work on the troubled F-22; they could slow the buy of the new tanker; they could protect the F-35 from the cuts. The budget request for Air Force Aircraft Procurement is $11.3 billion, leaving lots of room for "in flight" budgetary maneuvers. Not so rigid, and good news for Pentagon managers looking for space to maneuver.

Hale's comment may be more wish than reality; it may not last for long. There is no sign from OMB that it agrees, and it is very easy (and probably right, I understand) to read the OMB report the other way. But it tells us the sequester "shadow play" is not over. Flexible or not, though, DOD is in for budget discipline it has not seen over the past decade, something I will be writing about in the coming weeks.

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