Time to Get the Black Out of the Blue

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Theoretically, the Pentagon operates under a so-called “golden ratio” where roughly equal funding is allotted for each military service. While that is not true, as Todd Harrison has documented previously, the myth persists.

Worse than this legend is the fact that it is based on misleading data to boot—artificially inflating the Air Force’s topline and therefore its sympathy (or lack thereof in this case). Sure, the Army, Navy, and Air Force have jockeyed to increase their share of dollars for decades. Recent examples abound, from the Army’s redirection of funding intended to support troop surges into modernization efforts to the Navy’s gimmicky National Sea-Based Deterrence Fund.

For the Air Force, however, the game was rigged from the start.

There’s little understanding inside the Beltway that the golden ratio is an apples-to-oranges comparison. Every year, the Air Force budget includes tens of billions of dollars in “non-blue” pass-through money which funds people and institutions that are not the Air Force—most notably the intelligence community. Even at the height of sequestration, these non-service funds accounted for about $30 billion annually. In the current request, that figure has shot up to $38 billion—about one-fifth of the total service budget.

A comparison showing the removal of this mostly-classified intelligence funding from the U.S. Air Force’s books reiterates that the golden ratio is a little more than a convenient narrative advanced by Army and Navy supporters to secure disproportionately higher outlays.

But thanks to the Senate version of the annual defense policy bill on the floor this week, the days of obfuscation may be over through the shifting of the non-blue account off the Air Force’s books. Section 1002 of the draft legislation would transfer this pass-through money to the defense-wide portion of the Pentagon’s budget where it belongs.

Why does this proposed accounting change matter?

The most evident reason is simply due diligence. As Congress clamors for a clean Pentagon audit, it should support any effort to increase transparency. Right now, the only way to assess the size of the non-air force Air Force budget comes through a series of ever-changing tables or graphics. It is possible to track the changing size and composition of the non-blue budget request, but there is no equivalent way to consistently evaluate enacted spending, dampening the visibility of this funding to legislators and taxpayers. While the substance of these accounts must be opaque because of the sensitive nature of the missions they support, there is enough information in the request to establish accountability—for example, by observing if the proportion of funding allocated toward a specific public law title (like procurement) is growing faster than the others.

 

Despite the Defense Department’s recent push to make private previously public information, there is no reason similar data should be unavailable for enacted spending. The Pentagon’s quest for “lethality” cannot be allowed to trump its mandate for accountability. The Senate is right to be worried about these disturbing trends and encroachment on Congress’ ability to understand what is being spent and why, as well as the effectiveness of those investments.

 

More generally, the non-blue budget is a barrier to truly aligning resources with strategy by hollowly bloating the Air Force’s topline while undervaluing the intelligence community’s sizeable means. While tracts of the non-blue budget have their origin in Cold War spy satellite programs, it is not the Air Force’s responsibility to foot the bill or have any ownership—even if only on paper—for capabilities it does not directly control.

This proposition, in particular, may lead navalists to cry wolf. After all, the Department of the Navy is also responsible for Marine Corps funding. But equating non-blue Air Force “pass-through” money to the Marine Corps is a false dichotomy. The Secretary of the Navy has oversight responsibility for the Navy and the Marines. Their missions are closely aligned and highly complementary.

In contrast, intelligence community operations (and their resulting investments, particularly in space) have inherently military-wide and government-wide implications. Contrary to the Marines understandable dependency on the Navy, it is in the best interest of the intelligence community to maintain its distance from the often-parochial interests of the military to preserve objectivity. The Defense Intelligence Agency was originally established for that express reason, to say nothing of the CIA’s separation from the Pentagon and the 15 other intelligence agencies in operation.

Nor should the Air Force be asked to carry funding for entities like the National Reconnaissance Office merely because their satellites are in orbit. That would be akin to asking the Air Force to pay for the flying components of each sister service. Meanwhile, both the Army and the Navy have their own satellites in operation.

Considering the Senate is proposing a once-in-a-generation report asking the services to justify their highest priority roles and missions, it is important to ensure dollars are flowing to the plans and programs where they are most needed. These discussions are more difficult without a transparent count of service branch resourcing.

It would be absurd to suggest that Pentagon budgeteers are not aware of the non-blue budget when making such programmatic tradeoffs, but it is equally implausible to claim that the non-blue funding has had zero impact on Air Force funding trends over time. Rationalizing Air Force funding would allow healthy inter-service competition to flourish by constructing a public, transparent, and accurate comparison of the means available to each service.

The consequence of this approach would be an increase in funding for the Pentagon’s nebulous defense-wide account. While the House version of the defense policy bill slashes funding for such “fourth estate” spending, those cuts exclude the warfighting and intelligence functions covered by the non-blue budget. Conversely, the House is likely to be supportive of the Senate’s plan, owing to their growing support for space reforms designed to dampen the role of the Air Force outside the earth’s atmosphere.

Let us hope that we have seen the last Air Force budget weighed down by the albatross of classified intelligence spending. If Congress is truly concerned about demanding greater rigor from the Pentagon on organizing, training and equipping the force for the new defense strategy, it will finally level the (budgetary) playing field between the three services.


Mackenzie Eaglen is a resident fellow in the Marilyn Ware Center for Security Studies at the American Enterprise Institute (AEI), where she works on defense strategy, defense budgets, and military readiness.



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