Budgeting for the War on Terrorism. (Workshop Report).

Ms. Heidi H. Grant is a budget analyst for the Directorate for Operations and Personnel, Office of the Under Secretary of Defense (Comptroller) (OUSD(C)). She oversees financial matters dealing with combating terrorism, homeland security, and military operations other than war (which includes contingencies, noncombatant evacuation operations, migrant situations, overseas humanitarian assistance, and disaster relief).

On September 11, 2001, Heidi's workday as a budget analyst was going to be like no other. She is a member of the Crisis Coordination Group (CCG), and immediately following the attack on the World Trade Center, she was called to a CCG meeting to participate in plans for the Department of Defense's (DoD) response to the crisis. Reporting to that meeting room brought her even closer to the location of the forthcoming attack on the Pentagon.

When the Pentagon was hit, all of the CCG members were able to make it to safety; however, some of the members, including Heidi, then reported directly to the Executive Secretariat Support Cell (ESC) in the Pentagon Crisis Command Center to stand up operations even while the building was still on fire.

Heidi received a Special Act Award for her extraordinary dedication in supporting the ESC in the Crisis Command Center, which was mobilized for 24-hour coverage. For several weeks, Heidi made herself available around the clock to answer any questions regarding coordination of deployment orders and support to other agencies. She often received calls at 2 or 3 a.m. to respond to questions from Comptroller personnel on duty in the ESC.

Following the passage of the initial emergency supplemental, she then became the key person for working with the Office of Management and Budget (OBM) to justify releases of funds.

On May 30. 2002, Heidi presented a workshop titled "Budgeting for the War on Terrorism" at the ASMC PDI at Denver, Colorado. Some of her briefing graphs, included herein, depict initial funding by Component for recovery and the war on terrorism, the fiscal year (FY) 2002 Supplemental Request, and the FY 2003 President's Budget Request (budgeted by Component).

Initial Funding

For the most part, the Joint Staff (J8) and the OUSD (C) developed the initial funding estimate shortly after September 11. The 0MB also played a significant role in shaping the DoD request.

Initially, $20 billion was requested for New York City, the Pentagon, and Pennsylvania. Another $20 billion was requested for the global war against terrorism. However, only $17.4 billion was appropriated and only $16.4 of it was available to DoD for war and recovery. Of that amount $15.2 billion went to the Defense Emergency Response Fund (DERF). See Figure 1 on page 32.

The OUSD (C) staff knew at that time that the initial funding provided would be insufficient and that supplemental funding would be required to sustain operations for the balance of FY 2002.

The Department did not receive the funding for recovery and for Operation Enduring Freedom (OEF) and Operation Noble Eagle (ONE) in September. Instead, the Congress and the OMB released funds incrementally over an extended period.

FY 2002 Supplemental Request

The objective of the FY 2002 (second) supplemental was to sustain the current level of activity in the global war on terrorism.

Chronology

* Requested component inputs -- Jan. 25

* Small group meetings -- Feb. 1, 4, 6

* Senior leadership review -- Feb. 8 to 15

* Initial submission to OMB -- Feb. 15

* Negotiations with OMB -- Feb. 15 to Mar. 20

* Request forward to Congress -- Mar. 21

Criteria

* Only items or requirements that can be executed in FY 2002

* Priority given to ongoing operations and other readiness shortfalls

* Finance critical items not approved in the first supplemental

* Correct projected readiness shortfall resulting from congressional action

* No acceleration of programs from FY 2003 into FY 2002

Process

* Components submitted requirements

* J8 estimated the cost of deployment orders

* Met with J8 and OSD staffs (Policy; Program Analysis and Evaluation; Personnel and Readiness; Acquisition, Technology and Logistics; Command, Control, Communications and Intelligence; and Comptroller)

* Jointly evaluated Component submissions based on:

* Obligations to date

* Projected obligations through the end of year

* Known shortfalls

* Anticipated mission activity

* Projected pace of operations

* Executability of the requested program in FY 2002

Figure 2 depicts the funding requested by Component. The amount requested in the supplemental is the bare minimum to sustain OEF and ONE for the remainder of FY 2002.

The FY 2003 President's Budget Request

The Office of Director, Program Analysis and Evaluation (OD,PA&E) developed the initial estimate after consultation with the military services, Defense agencies, and OSD offices. The Comptroller approved the budget request in PBD 736, "Continuing the War on Terrorism," January 31, 2002.

The DERF appropriation is being used as a transfer account to maximize flexibility. For this reason, the OUSD (C) may change the funds allocation to Components during execution in order to capture changes in the threat, OPTEMPO, and strategies.

The FY2003 President's Budget requests a total of $20.1 billion in the DERF to continue the war against terrorism (OEF and ONE). A total of $10.1 billion is to be transferred to the Components' operating accounts for specific activities, weapon systems, munitions, and operations. See Figure 3.

Another $10 billion is to finance the incremental operating and military costs of continuing the war on terrorism. These funds would be transferred from the DERF to the Components after presidential designation that the funds are still required, and Congress has been provided a detailed budget request.

Based on the expenditure rate for the war in FY 2002, it is estimated that the $10 billion requested will finance only about the first 5 months of FY 2003, assuming engagement at the current level of operations.

Summary of Funding

Initial Funding             ($ in Billions)

Requested                              20.0
Directly War Related                   16.4
Available to DoD                       15.2

FY 2002 Supplemental
Component Request                      27.4
Approved by OMB                        14.0
Approved by Congress                      ?

FY 2003 President's Budget
Requested                              20.1
Approved by Congress                      ?
Figure 1

Initial Funding by Component for Recovery and the War on Terrorism

USD (Comptroller)

Funding the Global War Against Terrorism

Initial Fundidng

Actual Funds Issued by Component



Army                                 2.588
Navy                                 3.756
 (Includes Marine Corps)
Air Force                            4.523
SOCOM                                 .691
Classified Agencies                  1.135
(Excludes Special programs (1.165)
Defense Agencies                     2.527
Total                               15.220
(Dollars in Billions)



Defense Agencies     13%
Classified Agencies   8%
SOCOM                 5%
USAF                 29%
NAVY/Marine Corps    26%
ARMY                 17%

Note: Table made from pie chart
Figure 2

Fiscal Year 2002 Supplement Request

USD (Comptroller)

Funding the Global War Against Terrorism

FY 2002 Supplemental Request

Funding Requested by Component


Army                      3.745
Navy                      2.844
(Includes Marine Corps)
Air Force                 5.064
SOCOM                      .038
Defense Agencies          2.331
 Total                   14.022
(Dollars in Billions)


ARMY               27%
NAVY/Marine Corps  20%
USAF               36%
SOCOM              >1%
Defense Agencies   17%

Note: Table made from pie chart
Figure 3

Fiscal Year 2003 President's Budget Request (Budgeted by Component)

USD (Comptroller)

Funding the Global War Against Terrorism

FY 2003 President's Budget Request

Budgeted by Component



Army                      1.498
Navy                      2.821
(Includes Marine Corps)
Air Force                 3.728
SOCOM                      .067
Defense Agencies          1.939
 Total *                 10.055

* (Excludes $10.0 Billion for contingencies)
(Dollars in Billions)


ARMY               15%
NAVY/Marine Corps  20%
USAF               37%
SOCOM              >1%
Defense Agencies   17%

Note: Table made from Pie chart

The author wishes to thank Heidi H. Grant for providing notes and graphs from her presentation and for obtaining permission from the OUSD(C) to use them in this article.

Reported by Tommie Teel

Tommie Teel is o budget analyst for the Comptroller's Budget Office, Marine Air Ground Task Force Training Command (MAGTFTC), Twentynine Palms, California. One of her special assignments is working with MAGTFTC's Anti-terrorism/Force Protection Officer on budgeting for anti-terrorism projects and equipment. Tommie is a member of the California inland Empire Chapter of ASMC. She lives in Joshua Tree, California, with her husband, Charles, and numerous rescued pets.