Security Studies Program Seminar

Planning and Resource Allocation for Homeland Security

Cindy Williams
Principal Research Scientist, MIT Security Studies Program

March 19, 2008

Introduction

• At five-year anniversary of Department of Homeland Security, time to ask what benefits were promised and why haven't they been lived up to. Answer by looking at three layers of government--inside DHS, inside White House and Executive Office of the President (National Security Council and more obscure Homeland Security Council, and Office of Management and Budget), and inside Congress.
• Idea had been to have one cabinet secretary with budgetary authority over all these departments. Office of Homeland Security started right after 9/11, but Tom Ridge was a czar without budget authority.

1. Federal budgets for homeland security

• Total spending on homeland security is $65B this year, $66B next year. That number appears nowhere in regular federal budget--it is an OMB aggregation of relevant spending across line items. (Some of the increase over the past years has to do with how homeland security is defined.)
• Of the $65B for FY08, only $32.7B is DHS. (DHS's budget is larger than $32.7B--only about 65% is homeland security; other spending is for coast guard, etc.) Second biggest--with a quarter of the total homeland security budget--is Defense Dept. ($17.4B), followed by Health and Human Services ($4.3B), then Justice ($3.5B--includes FBI, which isn't part of DHS), then State ($2.0B--mostly protecting embassies), then Energy ($1.8B), etc.

2. Promise of a consolidated DHS

• Advocates said that consolidating budgetary authority under single cabinet secretary would have several benefits:
  • The secretary could press national priorities down into the budgets. They'd understand security risks and priorities, and could allocate budgets accordingly.
  • Unity of effort: All 22 agencies would sing to the same tune.
  • Cost effectiveness: The department would have new analytic offices and overhead, but the secretary would also be able to consolidate things at lower levels and throw out duplicates, so savings at the bottom would offset any costs at the top.

3. Check on progress toward the promises

• Are top national priorities getting into the homeland security budgets? Look at strategy documents and compare them to budgets, and there's not a lot of connection.
  • Strategy documents focus on WMD in hands of terrorists as key threat. Three layers of homeland security: preventing terrorists, protecting infrastructure and people, preparing to respond/mitigating consequences of an attack. Strategy documents say the first layer is the most important.
  • Budget is divided into infrastructure and warning; border and transportation; domestic counterterrorism; protecting critical infrastructure; catastrophic terrorism; emergency preparedness and response.
    • Catastrophic is where we spend the least amount of money, though it's where we have the most risk, though it has doubled. Less than 2% of the total is in the top layer of strategy, which is indicated as most person.
    • The really big money is being spent on border and transportation, and protecting critical infrastructure; and that's stayed roughly the same between 2003 and 2008. Those aren't the top layer of strategy.
• What about success at identifying and allocating risks?
  • Usually discussion of risk is how to divide up money to states, which is only 5% of the homeland security budget. When it comes to big questions--eg., should one spend so much on TSA or move it to port security or locking down Russian nuclear materials?--there's very little work on it.
  • Tracking shares of DHS budget between ‘03 and ‘07: not more than a 1% shift in the share of budget to components of DHS. Only shift is Secure Border Initiative (they've added there and reduced TSA)--only example of a strategic change.
    • Originally DHS planners had hoped they could make big shifts in the budget--for instance, they put a lot towards borders. When DHS sent the budget proposal up to the White House, it came back to them almost identical to 2001 or 2003.
• Success at realizing unity of effort?
  • How could Secretary of Homeland Security bring unity when he only controls half the overall homeland security budget?
  • DoD holds out--big bucks in biosecurity/biodefense, and held on to its authority to spend without DHS input. White House allows DoD to call its own shots. No top-down plan for building of new biological containment facilities.
  • The fact that shares of budget haven't changed since DHS started also suggests unity hasn't happened.
• What about savings at the bottom to offset costs at the top?
  • Budgets for central administration and new elements tripled. Components retained 73 percent share of total since ‘03. You've added a lot at the top and subtracted nothing at the bottom
  • Was saving consolidation even realistic?
    • Initially believed savings could be realized immediately in IT budgets, when they should have known it takes longer--they had a problem right from the beginning.
    • Internal study of support functions that are duplicated--that report went nowhere.
    • Now working to consolidate data centers, which could save money.
    • Obviously enduring overlaps: air forces in Customs and Border Patrol, Immigration and Customs Enforcement, and Coast Guard.

4. What went wrong?

• Did the president want it to work? If so, why return revised DHS budget the same as before? Does the secretary want it to work?
• Within DHS, set up a program evaluation process (PPBE--Planning, Programming, Budgeting, and Execution)--went through all the motions. Had a document supposedly tying strategy to plan, but the secretary declined to sign it, and so it went out without his imprimatur; secretary never had a joint meeting with component heads about budgeting. Everyone on PA&E's staff was too junior to make big trade-off considerations, and tied up doing other things so they can't think about big tradeoffs. DHS components were stronger than the department.
• Within Executive Office of the President, Homeland Security Council is small, understaffed (25 professionals, vs. 225 on NSC), and weak. OMB was realigned to handle DHS, but multiple divisions and branches overlap on homeland security issues (for instance, one biodefense document required 18 branch chiefs to sign off). No explicit linkage between strategies and resource allocations.
• Within Congress--the biggest part of the problem--organization of the committee structure isn't unified. A committee for homeland security exists in House and Senate, but Senate's committee jurisdiction extends to virtually nothing; House is better with some exceptions. Appropriations committee in both House and Senate created good subcommittees for homeland security. But if you look at components of DHS and who has jurisdiction over them, every one is headed by a different committee or set of committees. Too many committees are involved in authorizing legislation so it's hard to get legislation off the ground; committees are constantly requesting testimony and reports (component heads are called to the Hill hundreds of times a year); the back door is always open for legacy agencies and concentrated interests (everybody on the Hill has a piece of something that's important to DHS, which means a component head can always find a congressman or committee to overturn a White House decision). Also, the absence of a homeland security budget function/line item makes it hard to do a consistent audit track, prevents consolidated allocation, and circumvents focused attention of budget committee. Congressional agencies don't have the staff to study homeland security tradeoffs.

5. Recommended remedies

• Within DHS:
  • Quadrennial Homeland Security Review (mandated by congress)--must start with top and go through programs, attaching them to dollar amounts. Will force following the thread from strategic priorities to budgets. (Hasn't worked well at DoD because they ignore the budget part, and it just becomes another strategy document with no budgetary connection.)
  • Strengthen DHS leadership engagement, and fix up PPBE staff (make them more senior and skillful).
• Within Executive Office of the President:
  • Either strengthen HSC, or (better) abolish it and fold it into an expanded NSC. Anomalous lacks of overlap in certain areas (Secretary of Homeland Security isn't on NSC).
  • Move OMB's homeland security branch into the National Security Resource Management Office. Would put 75% of homeland-security budget pie into a single branch (DHS and DoD).
  • Get people from NSC and OMB together to conduct long-term planning, risk assessment, and tradeoff studies. (Need someone who knows policy and someone who knows money.)
• Within Congress:
  • Establish a single committee of jurisdiction for DHS oversight in each chamber of Congress.
  • Hold joint hearings on cross-cutting issues.
  • Create a homeland security budget function.
  • Expand Congressional Budget Office to study homeland security
  • Eliminate “constant shares” algorithm.

Q&A

• Are we better off with or without it? Benefits from having a spokesperson for the issue. But mostly money has been wasted. Possible that we had budget allocations right from the beginning and that's why it hasn't changed? Yes--but it's not what people seem to think and they don't seem to align with relative risks.
• WMD allocation--makes sense because it's hard to spend money on WMD versus something like border security, or because WMD is less capital intensive? Nuclear money is mostly spent on developing and installing nuclear-detection devices. Could spend more money on port installation. Big political issue with TSA--they don't want another 9/11; they'd rather have something different happen than a second 9/11. (Counterargument is that hardening cockpit doors was the main thing to do, so airport security isn't adding much marginal security.) Are we doing the easy things, or are the things that are important also cheap--hard to know.
• Where could viable incentives come from? White House could create incentive structure, if a president really wanted a DHS. Not clear what messages the Secretary was getting from the White House--was he just told we hope it fails? It sometimes feels that way.
• Where does the Homeland Security aggregation number come from? Decisions about what to call “homeland security” and what to call “counterterrorism” within the budget--counterterrorism, except domestic counterterrorism, is not included in the Homeland Security allocation described above. One person in OMB (David Lee) is responsible for collecting the data--he sends out the definition and then departments self-report. Always confusing (how do you count coast guard spending).
• Possible to argue to spend a lot of money on everything--because of uncertainty--but not a good argument for taxpayers, and prevents thinking through important issues.

Rapporteur: Jacob Hale Russell

back to Wednesday Seminar Series, Spring 2008