The New National Security Budget: Are We Getting the Tools Right? Posted by Gordon Adams

With the arrival today of the proposed Fiscal Year 2007 budget, we now know what the administration wants to spend on national security next year: at least $578.2 b. 

- The Defense Department would get 84.6% of the total - $439.3 b. (seven percent higher than the $410.7 b. it received from the Congress for FY 2006), plus a $50 b. down payment for Iraq, Afghanistan, and the “war on terror” next year (DOD is also seeking a supplemental budget of another $70 for this year’s costs of that war, on top of the additional $50 b. it already got from Congress.)

- Homeland Security funding (including the Department of Homeland Security) would be 9.3% of the total, growing to $53.8 b., $3.4 b. or six percent over the FY 2006 level. 

- International affairs (including the State Department and AID) would be 6.1% of the total rise to $35.1 b., an increase of $3.5 b. or over 11 percent from what Congress provided for FY 2006. 

These numbers suggest that, as in years past, America’s tools of statecraft are not in balance. Once again, the tool “on steroids” is the Department of Defense, while international affairs is more on “life support.” This is why, over the years, the military services have been asked to carry such a large share of dealing with the new national security challenges – it seems like the best organized and best funded department to do the job. Moreover, the new Quadrennial Defense Review makes it clear that, as far as the Defense Department is concerned, its commitment to what the Pentagon calls the “long war” will continue well into the future, and will be reflected in future defense budgets.

There are many aspects to this long-war focus and to the concentration of the national security budget on the military tool of statecraft, and I will focus on some of them in forthcoming blogs. The one I want to note here, which is intriguing, is that, despite this commitment to the “long war,” the Defense Department seems to have learned a lesson in Iraq, while the international affairs agencies are struggling to deal with the same reality. 

The lesson is buried way down near the end of the QDR (on p.83) in a dramatic observation, generally missed by the media: “The Department of Defense cannot meet today’s complex challenges alone. Success requires unified statecraft: the ability of the U.S. Government to bring to bear all elements of national power at home and work in close cooperation with allies and partners abroad... Interagency and international combined operations truly are the new Joint operations.” As the QDR notes, being on steroids has meant that “the Department has tended to become the default responder during many contingencies.” 

For an agency whose leadership grasped control of Afghanistan and Iraq policy with both hands, in fact, for an administration that lead a coalition in Iraq that was close to unilateral, this is a startling, and very realistic, observation.

I want to focus here on the interagency piece. The QDR and the budget documents make it clear that the Pentagon supports strengthening the diplomatic and economic tools of American statecraft. DOD is supporting legislation to strengthen diplomatic and foreign assistance programs to be better prepared and more capable of dealing with post-conflict stabilization, governance and reconstruction requirements. The QDR endorses a stronger Office of Stabilization and Reconstruction, the creation of a Civilian Reserve Corps and a Conflict Response Fund all in the State Department. Pretty revolutionary stuff.

The trick will be getting the international affairs agencies in line to play their part, ensuring that there will be top down support for a more coordinated, interagency approach to such operations and, above all, convincing the Congress that it makes sense to fund other agencies to play this role, instead of defaulting to “letting the Pentagon do it.” None of this will be easy.

In the case of “international affairs” (code for State and AID, for the most part), there is a high learning curve before a focused, operational capability emerges that can carry off this task. The budget requests $75 m. for the new Conflict Response Fund. The “transformation” Secretary Rice has promised in the diplomatic corps is intended to turn America’s diplomats into more operational program administrators, a management skill not generally emphasized in diplomatic training. And the restructuring of foreign assistance she announced the next day is designed, in part, to integrate foreign assistance programs more closely into national security and diplomatic priorities (which makes some advocates of development assistance uneasy).

The goal, as the new budget proposal makes clear, is “to build the civilian response capabilities of the United States, including establishment of a civilian reserve component that can quickly provide needed expertise to rebuild the institutions of government in post-conflict or failed-state situations. With an early and effective civilian response, responsibility for key functions can be transferred more quickly from military to civilian actors, thus reducing the need for a more robust and costly military commitment over the long term.”

It will take a long time to reorient State and AID into an effective stabilization, reconstruction and governance fire-fighting force, however. The proposal is a wrenching change to the way business is done in both agencies, and resistance is likely. Iraq and Afghanistan are likely to be distant memories before this promised land has been reached.

There will also be obstacles at a higher level to making this interagency coordination work. The budget and the QDR make no clear proposals about how this process would be coordinated at the White House level. In fact, the new Presidential Directive on the subject, issued in December, leaves the coordination responsibilities to the State Department and its small Office of Reconstruction and Stabilization. Anyone who has participated in the interagency process understands well how deeply reluctant other agencies are to following State Department lead in coordinating interagency operations.

Success in the executive branch is likely to require some higher level of coordination, at the National Security Council/Office of Management and Budget level, along the lines suggested by a Center for Strategic and International Studies report last summer. The new budget, however, relies on the “decentralized” model, which is likely to fall afoul of the sorry history of interagency processes led by one of the stakeholder agencies.

If we could overcome the problems at State and AID, the toughest obstacle is likely to be the Congress. DOD, and presumably State, are seeking greater flexibility for the President to move money around among departments, in order to tailor an operation for success. This is precisely what Congress does not like to do; they prefer clear appropriations and control over the movement of monies between agencies. And if there is anything Congress hates it is contingency funds. That Conflict Response Fund looks like and may quack like a contingency fund.

It is going to take some heavy lifting, inside the executive branch and with the Congress before the US government is reshaped to allow the use of all the tools of statecraft in a contingency like Iraq or Afghanistan. 

And an important underlying question has not even been addressed if we reach that point: just exactly where and why will the US be carrying out these operations? What are the contingencies all this work seeks to deal with? And is there likely to be such a contingency as big as Iraq, even Afghanistan in the near future? This is the same issue I raised in the February 3 blog – what would a larger Army be for? In this case, what is the policy this larger, successfully interagency process is designed to carry out. More on that in future blogs.

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[j. pierce]

From Seattle Weekly

Mesdames Ambassadors
Two very rich Eastside Republican donors are suddenly faces of America abroad.
By Rick Anderson

For diplomacy to be effective, words must be credible—and no one can now doubt the word of America.
—President Bush, a year after the invasion of Iraq
A few months ago, she was a Kirkland venture capitalist. The other day, she was informing a Vienna newspaper that the U.S. was prepared for war with Iran. If "it came to a military conflict," said Susan McCaw, "we would have the necessary capability." That's the novelty about ambassadorial work. One day you are an Eastside banker, the next you are telling a foreign nation we are ready to roll again.

McCaw, 43, who describes her background as investor, banker, and board member, is one of two new Bush administration diplomats from the Seattle suburbs settling in abroad. A member of the pioneering cell-phone family, McCaw is the U.S. ambassador to touristy, snow-capped Austria. Her Eastside neighbor, fellow businesswoman and former King County Republican Party chair Pat Herbold, 64, of Bellevue, is newly ensconced as U.S. ambassador to tropical, skyscraping Singapore.

Typically, diplomatic experience isn't a prerequisite to head America's overseas embassies. Deep familiarity with the designated country isn't essential, either. Herbold had been to Singapore twice, and McCaw says she'd made "several trips" to Austria. An ambassador's ethnic or social background can mean little in deciding a country of posting, as well. Democratic former Speaker of the House Tom Foley, an Irishman born in Spokane, was Bill Clinton's U.S. ambassador to Japan from 1998 to 2001. Former Seattle Mariners owner and George W. Bush appointee George Argyros, of Greek ancestry, reigned in Spain from 2001 to 2004—even while his California land company was accused of illegally evicting and overcharging Latinos and other minorities.

In other words, they're political appointments mostly in return for party loyalty and campaign contributions. Like Argyros, a billionaire who helped raise $30 million for the GOP in 2000, McCaw and Herbold are exceptionally wealthy and were appointed by Bush after they gave and raised millions for his 2000 and 2004 elections. They replace other big Bush donors. In Vienna, McCaw took over in January from Frank Lavin, who helped gather $100,000 for the 2000 Bush-Cheney campaign. In Singapore in December, Herbold replaced W.L. Lyons Brown, an executive in the Jack Daniels Whiskey empire, who, with his wife, gave $338,000 to Republicans from 2000 through 2004, according to the campaign watchdog Center for Responsive Politics.

Ambassadors theoretically should mirror U.S. thinking and represent American political and economic interests. Besides their Republican credentials, both new Eastside ambassadors have extensive business portfolios. Their Executive Branch financial disclosure reports show each has extensive stocks and bonds investments. McCaw's personal worth in assets and annual income is in the range of $50 million to $160 million, while Herbold's worth is $78 million to $188 million. Precise figures are lost within the ballpark math allowed by the disclosure forms. Herbold, for example, says she has from $1 million to $5 million invested in consumer-products giant Proctor & Gamble (her husband is a former P&G executive) and from $25 million to $50 million in a short-term Vanguard tax-exempt fund. She makes up to $1 million in interest from the fund annually. McCaw lists her collection of artwork as worth $5 million to $25 million and has an annual income of up to $9.9 million. Ambassadors, by law, may have to divest some positions and seek a waiver on investments to minimize potential conflicts of interest. Herbold, for example, has resigned from the Washington Policy Center, a conservative Seattle think tank, and as a director of Salmon P. Chase College of Law at Northern Kentucky University. McCaw has given up her presidency of COM Investments and her managing partnership of Eagle Creek Capital, both McCaw family investment companies. As ambassadors, each appointee is paid around $160,000 annually plus perks that include paid staff and free housing, car, driver, and international air travel.

Some of the ambassadors' reported assets are shared with their wealthy spouses and fellow Bush supporters, Craig McCaw and Bob Herbold. The spouses' own extensive holdings are not detailed in the disclosure filings, but Craig McCaw, who with his brothers sold McCaw Cellular (now part of Cingular) in 1994 for $11.5 billion, is said to be worth $2.1 billion. He's the 125th richest American, according to Forbes. Bob Herbold, now a private consultant, is a retired Microsoft chief operating officer whose fortune is estimated in the hundreds of millions. He weighed running for governor against Christine Gregoire in 2004 and is a member of President Bush's Council of Advisors on Science and Technology.

Susan McCaw, who prior to her appointment had considered running against Democratic Sen. Maria Cantwell this year, was finance co-chair for the state Bush-Cheney campaign and personally helped raise at least $200,000 for Bush's re-election. In an hour-and-a-half-long fund-raiser at the McCaws' estate at Hunts Point in 2003 attended by President Bush, the re-election campaign took in $1.7 million. Bob and Pat Herbold have contributed more than $120,000 to Republicans since 1997. A onetime co-chair of Initiative 200—which rolled back state affirmative-action laws—and an oft-rumored Congressional candidate, Pat Herbold helped found a U.S. business coalition, the Club for Growth, that in 2004 collected $20 million for the GOP. Both families also operate private foundations and donate widely to charity.

Neither ambassador responded to requests, made through their embassies, for comment. During a hearing last year to confirm her appointment to the Mandarin-and-English-speaking island state, Herbold told a senate committee her credentials included board memberships and a law background "negotiating multimillion-dollar contracts." That seemed to sound the right notes, at least for Singapore's prosperous, export-driven electronics and banking economy. She also alluded to the republic's questionable human-rights record, saying she looked forward to "highlighting the advantages of free expression and assembly for continued political and economic development."

McCaw, in two Austrian newspaper interviews last month, said her goals include addressing "America's negative image" abroad. Though German-speaking Austria clings to its postwar neutrality, it struggles with a resurgence of Nazi politicism. One interviewer from Vienna's Der Kurier pointed out that Austrian citizens generally "reject corruption, lies, and the Iraq war," to which McCaw said "We have a debate even in the U.S. about these issues." Indeed. As for Iran, where an estimated 1 million candlelight marchers supported America after the Sept. 11 U.S. terrorist attacks and now appear to loathe us? She told Die Presse that diplomacy should come first when dealing with the Iranis' purported nuclear-bomb building (WMD Version 2). But Bush, she noted, hasn't ruled out a military response to this "highly irrational government in Tehran." It may not have resonated well in the neutral Alps. But it was the sound of music to Eastside Republicans.

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