Resourcing Strong and Capable Space Force Begins with Budget Reform
The United States Space Force requested $29.4 billion for Fiscal Year 2025 (FY25), a two percent drop from the previous year. The final budget, however, has yet to be passed as the federal government is operating under a continuing resolution that expires in mid-March. While the Space Force was founded in response to the actions of near-peer competitors in space that threatened the United States’ national and economic security, declines in funding for the Space Force, compounded by the inherent restrictions of continuing resolutions and the financial burdens of legacy defense programs, are compromising the Space Force’s ability to effectively resource against the space-based threat.
“A continuing resolution means we don’t have a budget for this fiscal year, and so we have to comply with last year’s budget limits and existing programs,” said General (Ret) John E. Hyten, Senior Principal Advisor at Elara Nova: The Space Consultancy. “This means no new start programs can begin and any other programs that require a budget increase to deliver a needed capability can’t be executed. Therefore, several space programs are consistently delayed and this inefficiency wastes billions of taxpayer dollars.”
The Space Force has been in existence for a little over five years, or about 60 months. For roughly half that time, the Space Force has been operating under a continuing resolution. This can provide significant barriers for a new military service seeking to adopt rapidly evolving technologies.
An Underfunded Space Force
But even if a budget for FY25 was passed by now, the traditional approach to developing the Department of Defense (DOD) budget means the Space Force would still only receive a marginal amount of funding it needs.
“Traditionally, the DOD budget is typically carved out in thirds,” said Lieutenant General (Ret) Nina Armagno, executive director of international partnerships at Elara Nova: The Space Consultancy. “One third goes to the Department of the Army, another to the Department of the Navy and the Marine Corps, and a final third to the Department of the Air Force, which includes funding for the Space Force and the intelligence community. But this approach means the Space Force only garners about three percent of the overall DoD budget – that’s harmful to our national security.”
Space capabilities underpin joint force and military operations in other domains, and recent adversarial actions demonstrate they are developing their own space capabilities to threaten the United States’ national and economic security. That’s why, in a recent Opinion Editorial co-written by Gen Hyten and Gen Armagno published by SpaceNews, they argued it’s time for the DOD budget to refocus away from outdated legacy programs to reflect the modern, space-based threat.
“The defense budget should be all about responding to the threats right now, and the most significant threat is China building strategic air and space capabilities to challenge the United States in the Pacific,” Gen Hyten said. “The second is Russia, which is probably even more concerning in the near-term. Russia has realized the American way of war depends on space capabilities and that’s why President Vladimir Putin has threatened to deploy and perhaps employ a nuclear weapon in low-Earth orbit.”
A Changing Threat Landscape in Space
Russia’s threat to deploy a nuclear weapon in space comes in response to the United States’ shift toward proliferated architectures in the domain.
“Russia spent an enormous amount of treasure and time building a direct ascent anti-satellite [ASAT] capability that would take out one satellite,” Gen Hyten said. “But then in the early stages of the Ukranian conflict, a commercial company with a proliferated satellite architecture essentially rendered the ASAT capability useless. Now, Putin has to threaten that capability with a nuclear weapon because he’s got nothing else in the inventory, so we need to pay attention to what our adversaries are doing to fill any voids.”
Therefore, as the nature of warfare and the threat landscape has changed, so too should the budgeting process.
“The first thing an adversary will do is take out the ‘eyes and ears’ of the United States in space,” Gen Hyten said. “This will be followed by cyber influence and chemical or biological warfare that will insert doubt into the American population about our military’s ability to achieve its objectives. Then an adversary will challenge the United States with military force because now the doubt is across the American people. That’s how conflict could start and defending ourselves against those threats should be the highest priorities reflected in the budget.”
Defense Spending Declines Undercut Strategy
Further exacerbating this shortfall in necessary funding, however, is the broader decline in recent defense spending by the United States Congress. In 2022, U.S. defense spending came in at just over 3.4% of Gross Domestic Product (GDP) and the Congressional Budget Office forecasts this decrease will continue toward 2.5% GDP by 2034. For context, these percentages are lower than the running 4.2% average for total defense spending in the United States over the past half-century.
“The FY25 budget request being essentially flat was a huge failure, and even Former Secretary of the Air Force Frank Kendall said the Space Force budget should probably double,” Gen Armagno said. “Every indication is that the Space Force budget needs to grow, because the Space Force is acquiring new capabilities and new technologies for new missions. Any delay to those Space Force programs is significant, particularly for its support to the entire joint force.”
The budget process begins with developing a strategy based on the threat, but when there is not enough funding to acquire the capabilities needed to fulfill the strategy’s broader goals, difficult decisions must be made on prioritizing certain programs or capabilities. This results in program cuts that can compromise the joint force.
“We learned in the early days of standing up the Space Force that there were tough choices for funding the new service,” Gen Armagno said. “For example, we prioritized Space Domain Awareness under a strategy called ‘Pivot to SDA.’ But we soon realized that there were competing space priorities and requirements from the other military services and Congress, against limited available funding. Without the appropriate funding, our budgets for ground-based radars and optical telescopes necessary for SDA got cut.”
DOD, Congress Can Overcome Budget Challenges
However, solutions exist for Congress and the DOD to effectively adapt its budget and force structure so that the United States can secure its national and economic security interests in space.
“Congress writes the law that the president signs into action, but any law can be changed,” Gen Hyten said. “People think the acquisition program is inflexible. But the Federal Acquisition Regulations are the compilation of all the laws that have passed over the decades, and Congress can change the law for the benefit of the country. If the DOD educates Congress on what they’re trying to accomplish, Congress will do their utmost best to include those imperatives in the budget.”
Gen Armagno points to two recent examples that reflect how the DOD and Congress previously worked together to overcome budget challenges to acquire necessary space capabilities: the Space Force’s Silent Barker program and former Secretary Kendall’s request for “Quick Start” approval for Resilient-GPS under a continuing resolution.
“When I worked space programs in the Air Force, we successfully communicated with Congress and their staffers regarding a space-based situational awareness program called ‘Silent Barker,’ so Congress understood its priority and the acquisition strategy before the program was even announced,” Gen Armagno said. “Then another example is former Secretary Kendall working with Congress to get an exception to the ‘no new start’ rule under a continuing resolution for Resilient-GPS in the FY24 budget. It was a great idea, and more of that work needs to happen in working with the Hill, because laws can be changed.”
Iron Dome Highlights Need to Fund Space Imperatives
Now, a recently issued executive order from the Trump administration, “The Iron Dome for America,” will also require significant investment in space-based capabilities that must be incorporated into the Space Force budget. This new effort only strengthens the imperative for adapting the DOD’s budget and force structure according to the modern threat environment.
“You can’t shoot anything you can’t see, so the first priority will be to build an integrated terrestrial and space-based surveillance system to see and characterize all the ballistic and hypersonic cruise missiles that threaten America,” Gen Hyten said. “Then you have to build a capability to attack multiple targets with ground-based, naval-based and air-based systems to neutralize those incoming threats, so you don’t have to respond in kind with nuclear weapons.”
General Hyten points to further solutions already proposed in the Congressional Commission on the Strategic Posture of the United States in 2023.
“The Missile Defense Agency needs to divest itself of all production and sustainment programs to the appropriate Military Departments. This means the Missile Defense Agency can just focus on the research and development for the long-term missile defense capabilities of the future. This can be done in the FY26 budget, but not if a majority of the MDA is focused on production sustainment and not on innovative moves toward the future.”
Balancing the national security needs against the threat, so that they’re reflected in the budget, represents the complex problems Elara Nova and its partners are prepared to provide solutions for.
“The budget must reflect the threat that’s out there today, and we need Space Force Guardians that understand the entire space enterprise,” Gen Hyten said. “Elara Nova partners fill a critical void in providing that experience, expertise and analytic capability to developing the enterprise approach necessary for establishing the United States’ national and economic security in space.”
Elara Nova is a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space domain. Learn more at https://elaranova.com/.
Episode 22: Department of Defense Budget Must Realign to Space-Based Threats
Host: Scott King
SME: Gen (Ret) John E. Hyten, Senior Principal Advisor at Elara Nova: The Space Consultancy (JH)
Lt Gen (Ret) Nina Armagno, Executive Director of International Partnerships at Elara Nova: The Space Consultancy (NA)
00:02 – 01:43
The United States Space Force requested $29.4 billion for Fiscal Year 2025, a two percent drop from the previous year. The final budget, however, has yet to be passed as the federal government is currently operating under what’s known as a “Continuing Resolution.”
This is a reality the Space Force has become familiar with. For half of its existence – or about thirty of the past sixty months since the Space Force was founded – the military’s newest service has been operating under a Continuing Resolution.
The Space Force was founded in response to the threatening actions of near-peer competitors in space. But without the appropriate funding to build and maintain a strong and capable Space Force, the national and economic security of the United States remains at risk.
However, even the traditional Department of Defense approach to building and resourcing its force structure, which begins with the budget, leaves the Space Force with only a marginal amount of the funding it needs.
Welcome to the Elara Edge: Expert Insights on Space Security,” I’m your host Scott King. I’m joined today by retired General John Hyten, former Vice Chairman of the Joint Chiefs of Staff and Senior Principal Advisor at Elara Nova: The Space Consulantcy, as well as retired Lieutenant General Nina Armagno, the first director of staff with the United States Space Force and executive director of international partnerships at Elara Nova.
Together, they co-wrote a recent opinion editorial, published by SpaceNews, stating that it’s time to re-focus the DOD budget away from legacy programs to resource against the modern, space-based threat.
General Hyten, Sir, welcome to the show!
01:44 – 01:46
JH: It’s great to be here.
It’s great to be with General Armagno, always.
01:47 – 01:49
And General Armagno, thank you for taking the time to be here today.
01:50 – 01:51
NA: Thank you. Scott.
01:52 – 02:14
As of our recording today, Congress and the DOD are operating under what’s known as a “Continuing Resolution.” This is in lieu of a passed budget for Fiscal Year 2025.
Now, many in our audience are likely familiar with Continuing Resolutions, but for those who aren’t, let’s set the table here:
What is a Continuing Resolution? And how does it affect the Space Force’s overall budgeting and planning process?
02:15 – 03:12
JH: So a Continuing Resolution real simply is the fact that we don’t have a budget for this fiscal year. Therefore, the Continuing Resolution said we will comply with last year’s budget limits and budget programs, which means no new starts can happen.
Which means any changes in budget can’t be done because we have to operate at last year’s budget level. That means any relatively new program that started the last couple of years probably has a required budget increase that is needed in order to deliver the capability. That budget increase can’t be executed because it hasn’t been passed by Congress.
Therefore, all of these programs are delayed. The inefficiencies waste of billions of dollars of taxpayers’ money, and most importantly, from our perspective, you can’t deliver the required capability that we need for the nation because we can’t fund the programs and so many space programs in today’s day and age, are in that – that category of we need additional funding in order to execute and we can’t execute them.
03:13 – 03:52
NA: And if you look at the Space Force budget in particular, you’re probably looking at about a $4 billion deficit, but that doesn’t tell the full story. The full story is the impact on the new starts as General Hyten just mentioned. And for a new service trying to consolidate capabilities from across the other services – that’s one thing.
But what the Space Force is really working on are new capabilities, using new technologies for new missions and the impact to delaying those programs is significant, not just for the Space Force, but the entire joint force and our nation.
03:53 – 04:23
JH: It’s kind of a little bit of a Catch-22.
We actually build our budgets assuming that Congress passes a budget on time. So that come the 1st of October, with the new budget, the new program is executed on the 1st of October. Here it is, the middle of February, soon to be March, and there’s no budget. That means the last six months we’ve been wasting time and money because of the law that says there will be a budget on the 1st of October, we build our budgets assuming that there will be there on the 1st of October. So it’s a little bit of a Catch-22 because they’re never there.
04:24 – 05:02
NA: And so guess what the entire Pentagon has been working on assuming the new budget’s going to be passed? They’re already working on 2026. I mean, that whole thing’s probably being blown up by new presidential priorities, of course. But traditionally the approach is it’s typically carved out to be a third, a third, a third. A third goes to the Army, a third goes to the Department of the Navy, which includes the Navy and the Marine Corps. A third goes to the Department of the Air Force, which is Air Force and Space Force, roughly. But the newest service in town only garners about three percent of the overall DOD budget and has been flat over the last year. This is harmful.
05:03 – 06:06
JH: And the other piece of that puzzle that really hurts the Department of the Air Force is that the Air Force in their budget, is the only service that has a pass-through element of the budget.
That pass-through element I think in the 25 budget was roughly $45 billion. That goes straight to the intelligence community. That doesn’t come to the Air Force. It was put in the Air Force a long time ago when that budget was hidden from the world. Nobody knew that budget exists. Everybody knows that budget exists right now. In fact, we can pull out the Air Force budget, and look at it.
So when you go one third, one third, one third, the Air Force one third includes $45 billion for somebody else. So we actually don’t have, we the Department of the Air Force, don’t have one third. We have about one fifth and when you actually are trying to build an Air Force, that’s why we have ancient airplanes. I mean, the newest B-52 is like 63 years old.
We can’t build our new space capabilities because they’re paying other people’s bills, and it’s almost untenable. But you basically can’t have an Air Force and you can’t have a Space Force unless you change that fundamental structure.
06:07 – 06:29
Funding for the Space Force has increased year-over-year since its inception. The outlier, however, is the latest budget request for Fiscal Year 2025, which came in at about $600 million less than the previous year.
If passed that way, this budget request would still put funding for the Space Force at around $29 billion. But even so, is that enough?
06:30 – 07:33
NA: No, it’s not enough. What is the actual number? Well, I don’t have it. But I’m sure it’s not enough. This is a service that’s barely five years old. Every indication is that it needs to grow.
I hear today there’s a ceiling on the Space Force budget. We are flat-lined and I know decisions are very difficult within the Space Force and within the Department of the Air Force.
But I don’t believe that flat-lining the Space Force should have been one of those decisions. I know Secretary Kendall has said right before he left that the Space Force budget should probably double, but perhaps he had an opportunity to, at the very least, put some more funds into 2025. There are nuances. I know there’s a story behind the story, I get it.
But the service hasn’t been around long enough to have those deep relationships with staffers on the Hill, or within the Pentagon. And I think some of that lack of experience contributed to this flat budget.
07:34 – 08:51
JH: To me, the defense budget should be all about ‘How do we respond to the threats of the world? Right now, the most significant pacing threat that we have is China. China is basically building air and space capabilities and strategic capabilities to challenge the United States in the Pacific.
The second one is Russia. Probably even more concerning in the near term. They’re building the same thing. Why have they been building those things? They’ve been building those things because they realized the American way of war depends on air and space capabilities, period.
Therefore, seems to me like the threat demands an increase in air and space capabilities, an increase in naval air and deployment capabilities. And the third priority would be the United States Army. If you look at the numbers, it’s actually the reverse, which means, and don’t get me wrong, the Army is critical in the Middle East, will be critical in anything to do with Russia.
But if we’re going to deal with the threats we have to do, you shouldn’t see a declining budget. You should see an increasing budget.
And so it bothers me when the threat does not drive our requirements. When it’s all about the threat. I would expect to see a robust capability to defend the capabilities we have on-orbit and deny adversaries the use of capabilities against our forces on the ground, at sea, and in the air and I don’t see that.
08:52 – 09:04
And with respect to the role of space-based capabilities in joint military operations, how might an under-resourced or under-funded Space Force adversely affect its ability to support the other services like the Army and the Navy?
09:05 – 09:53
NA: Space is used in every operational mission. Certainly every joint operational mission. Every single day, the other services use capabilities from space. Just think of satellite communications, GPS, weather, missile warning. These are fundamental capabilities that all of our operations, our plans. We rely on the fact that they’re going to be there. With a flat budget and other priorities coming down, especially now from a new administration.
And I’ve seen those hard choices. I’ve seen the Space Force and the Air Force have to make very hard choices about those capabilities. You know, what gets funded? So you certainly can’t make everybody happy. But it’s even worse when you’re not even starting on a level playing field.
09:54 – 10:49
JH: So you kind of put two and two together and you see it as up to three.
And the reason is because the bills that General Armagno just described for PNT, comm, missile warning, all of those bills have to be paid and they have to be paid upfront because every military service requires them. Now we’ve moved into a contested world in space where we have to worry about somebody threatening us in space, threatening those capabilities that I just described that are the must-pay bills.
And so the Space Force lays in the capabilities that are needed to go do that offense, defense, fires however you want to describe it. They lay in those capabilities. And then we can’t get a budget, because Congress won’t pass a budget and so all of that money that is programmed can’t be used.
And then the waste in the Space Force budget is astronomical, no pun intended, because of that same issue. That’s why when you add two and two, you get three because you have the must-pay bill and then you have the inefficiencies put in, because we don’t have a budget.
10:50 – 11:04
And, Sir, you mentioned the need for the DOD to pay their bills upfront – which leads into my next question.
Can each of you elaborate on the role that Congress plays in this process, and how can the DOD work with Congress to streamline these efforts to receive the funding that it needs?
11:05 – 12:54
NA: The budget gets sent over to Congress. But then what Congress says, and I think to this day, though, they will tell you – they get the president’s budget and they throw it in the trash and they start over with their own priorities. The president’s budget is not literally in the trash. I mean, it is the foundation of what the executive is posturing for and supporting and trying to get Congress to align.
Then come posture hearings where the Department of Defense and all the other, most senior leaders of our government, come to the Hill and it’s a parade of briefings.
Following that is lots of engagement and what I found in trying to fight for programs and advocate for budget, for the space programs in the Air Force when I was part of AQS. General Hyten and also led AQS earlier in his career, the acquisition for space, essentially in the Department of the Air Force. I found that bringing them in early, bringing the staffers into program briefings, your acquisition strategies and plans to help them understand what you’re going after.
I found that to be very helpful. We did it very deliberately with a program called “Silent Barker,” which is space-based space situational awareness. So satellites in-orbit that can also monitor that very domain and I found that this was a program that the Air Force and the National Reconnaissance Office were working together at the direction of Congress.
The best thing we did, was we went to the Hill, talked to staffers before the program was even announced, or certainly approved, and they certainly felt like – and they were – part of the program from day one and part of the decision-making.
12:55 – 14:51
JH: So Congress’s number one job is the power of the purse to pass a budget. That’s their job, not the president’s job, not the Supreme Court, the Congress of the United States, the Senate and House of Representatives together have to come up with a budget.
Now, they’re supposed to come up with a budget by 1 October. So they lay in a series of briefings. General Armagno called them “posture hearings.” They lay those posture hearings, usually for a Combatant Command like STRATCOM or Space Command or Central Command or Indo-Pacific Command. They lay those posture hearings in usually early March. You have the Secretary of Defense usually comes in the posture hearings in late February or early March kind of leading the way.
Then you have the Combatant Commanders after that, then you have the services come in. And the job of all those people, the SECDEF, the Chairman of the Joint Chiefs, the Deputy Secretary, the Vice Chairman, all the Combatant Commanders, and then the services is to defend the president’s budget to Congress. The schedule is the schedule. You’re going to go ahead and schedule those things.
I can’t tell you how difficult it is as both a major command commander, then a Combatant Commander, and then the Vice Chairman of the Joint Chiefs to have to go testify to Congress on the president’s budget when no president’s budget was submitted to Congress, because the schedule is going to be the schedule, and everybody thinks the budget’s going to be there other then it’s not, then you have to stand and answer all their questions on these future programs when you have no budget. So when the budget does come over, then you basically have to do it all again.
What General Armagno described is a great way to do it. You bring the staffers over, you educate them as fast as you can, but you’re behind the game trying to get to October 1st, and then you do this every year.
So the waste that goes to the taxpayers is horrible. But the education of the Congress, which is the job of the Department, I mean, we don’t lobby, but we have to educate Congress on what we need – that is damaged tremendously when the leadership of the Department can’t talk about their priorities to Congress because they don’t know what they are yet, because the president hasn’t decided. So it’s, it’s just a raw mess.
14:52 – 15:07
Here I’d like to lean into each of your respective careers and experiences working with the budgeting process.
Starting with General Hyten, Sir, can you share some insights from your experience as the former Vice Chairman of the Joint Chiefs of Staff?
How can we overcome some of these budget challenges?
15:08 – 16:15
JH: The first thing I’ll say is that as a whole, Congress has become dysfunctional the last ten years. But the amazing thing to me that surprised me in all my three four-star jobs, Space Command, Strategic Command, and Vice Chairman was how much each member of Congress, Senate and House of Representatives were interested in educating themselves and trying to do the right thing to build the budget that they have to do.
And when you take the time to go talk to the members and talk to their staffs on a frequent basis, they will work hard to do the right thing for the country, and things will end up in the bills that you think are impossible, because they really it’s just this tight margin between the Republicans and Democrats in Congress.
It makes moving things as a whole very difficult. But if you take the time to actually go across the river and explain to Congress what you’re trying to do, they will do their absolute upmost best to include those things in the budget, and you can move these things forward. We could actually move fairly quickly, if we could solve this overall problem of passing the budget on time.
16:16 – 16:22
Thank you, Sir. And to take it one step further – is there a particular program or specific experience that really encapsulates this effort?
16:23 – 17:34
JH: An initiative that we had when General Ellen Pawlikowski was Commander of Space and Missile System Center. I was AQS, head of acquisition of the Pentagon. Our desire was to buy more than one satellite at a time in production and that was against the law. The law said, if you go to production, you have to fully fund that program.
Well, fully funding a satellite program back then, it was a multi-billion dollar satellite. And I’ll just make up numbers. And it was for the Space-Based Infrared System, the Advanced EHF system. If we paid for one, it would cost roughly $2 billion. If we paid for two, it cost us $3 billion.
In other words, a billion and a half dollars a satellite. So we could save the taxpayer $1 billion each on both of those programs. So we could save the taxpayer $2 billion if we could just spread the funding out to buy two. But that would cause a change in the law. But General Pawlikowski and I, we spent tons of time on the Hill educating both the staff and the members of Congress.
What would happen if we did that? And son of a gun. When the law came out, they changed the law to allow us to do that for those programs. That was remarkable.
17:35 – 18:05
NA: Another example, last Secretary of the Air Force, Secretary Kendall, worked with Congress on the law that says there should be no new starts under a Continuing Resolution and he was able to get an exception.
There was a new program the Space Force wanted to start. I think it was a Replacement GPS or some smaller program, and that was being used to kind of test out the new exception to the law and more of that kind of work needs to happen, because laws can be changed.
18:06 – 18:47
JH: That’s the thing to remember, because the Congress writes the law, the president signs them into action. Any law can be changed. People think the acquisition program is inflexible, that there’s only one way through the process. This is the way it’s going to be.
If you actually read the Federal Acquisition Regulations, which are basically the compilation of all the laws that have passed over the last number of decades, on how you buy things, pretty much every way you want to buy something is included in the law.
And oh, by the way, if it’s not, all you have to do is get Congress to change it, which means the right person, or the right military leader has to go over and explain. And then Congress can and does on many occasions change the law for the benefit of the country.
18:48 – 19:01
Now, General Armagno, you served as the first director of staff at the United States Space Force, where you had a hand in crafting the very first Space Force budget.
So, Ma’am, what perspectives can you share from this first-hand experience?
19:02 – 21:06
NA: Well, it was really difficult to build the first Space Force budget because there was really nobody in the Pentagon yet. General Thompson was leading a team of maybe 30 of us.
I was asked to come over as a two-star to help him and everyone else, all of our expertise, all of our ‘budgeteers,’ if you will. Was back at Air Force Space Command in Colorado Springs. So we really had to communicate well. It starts with a strategy. You start with trying to fulfill your overarching strategy and goals for the service.
Brand-new service. A lot of that wasn’t yet defined. As a service, you start with budget guidance. Now, we did get that guidance from General Raymond. You take the guidance and then you realize when you’re done with this process, there’s way more that you want to pay for that you want to do than you could ever possibly finance it.
So there’s a lot of competing requirements coming from other services. Congress as well, has their favorite programs and projects.
And so one example of how hard it is to pivot your budget. There was a recognition, especially during that time, that space domain awareness was so crucial and important for our new Command, U.S. Space Command.
It was important to their planning, to their missions. And the Space Force coined a term ‘Pivot to SDA.’ But I saw, especially in those budget deliberations, I saw that SDA, especially the ground-based radars and optical telescopes, were talking about space-based systems as I just mentioned, Silent Barker. I saw those budgets get cut. I mean, they just couldn’t stand up to the pressure of the other things that the Space Force was trying to do so early on snd so even if your strategy and the guidance is written as ‘Pivot to SDA,’ if there’s no money behind that, there’s not much of a pivot.
21:07 – 21:47
Thank you, Ma’am. Now this declining budget request is also indicative of a broader trend that we’ve been witnessing in defense spending over the years.
In 2022, U.S. defense spending came in at just over 3.4 percent of our GDP, or Gross Domestic Product. The Congressional Budget Office forecast that this spending will continue to decrease by another percentage point by 2034.
That would put our defense spending at nearly half of the running average of 4.2 percent of GDP Congress has traditionally allocated for defense spending over the last half century.
From your perspectives, what has triggered these broader declines in defense spending from Congress?
21:48 – 22:51
NA: The national debt is a problem. We also see rising non-discretionary fund needs. We see an aging population that needs to be cared for. And when you see how large the defense budget is, there have been efforts along the way to decrease the DOD budget. I remember something called “Sequestration,” back in 2012, 2013, 2014 time rame, which was a ten percent budget cut for ten years that the Congress passed into law.
Yeah, I know the DOD has a big budget, but I can tell you from somebody, a commander on the ground, it was really difficult basically cutting programs that were non-mission, but they were the the essence of what made a base, a community, for example, or the Air Force feel like they were part of a community.
And I think today you see just different changing congressional priorities and you see a focus on the perceived and probably real bloat across our entire government budget. That’s what I see.
22:52 – 24:30
JH: I see it that way, plus a little different. I agree with everything that General Armagno said. But the little different comes from, well, two things. And these are things that former bosses taught me.
And since I’m going to quote them, I’ll tell you they were. General Mattis once said, “America’s the richest country in the world. We should be able to afford survival. We should pay the bills that we have to pay in order to do that.”
But then it was General Bob Koehler when I think he was at STRATCOM, when he said that because the budget at the time was $700 billion, he said, you know, if you talk to the average guy in the street and and say, you know, the defense budget is $700 billion, 700 billion with a ‘B,’ they would assume that we have a pretty darn awesome defense for the $700 billion.
We’re approaching a trillion now and right now, we are the least efficient acquisition bureaucracy that I’ve ever experienced. We pay sometimes ten times more than we need to for something. We keep things around much longer than we need them. We waste enormous amounts of money through Continuing Resolutions, and if we actually spent our money correctly, that amount would be plenty to build a defense.
But there’s so much waste and you started this discussion with the Continuing Resolution. That’s money you never get back. That’s just gone. So we got to stop wasting money. We got to get rid of bloated bureaucracies. We have to delegate decisions down to lower levels so people can make decisions and move quickly and effectively energize our budget.
So number one, we should pay the money we need to pay for survival. And number two, when we see waste, we should kill it.
24:31 – 24:40
So where do we go from here? What needs to happen not only with regard to the budget for FY25? But for the defense budget process as a whole moving forward?
24:41 – 25:22
JH: You know, everybody thinks that the president’s budget is the budget. It’s not, it’s just the start of the discussion. So the actual budget, what goes to space in FY25 will be decided by the Congress. I know that the current administration is going through a quick re-look at the 25 budget to come up with what I would hope they make some different recommendations that were in the previous version.
And then Congress has the opportunity to change things, and I would hope they would do it strategically with regard to the threat. And if they do that, the budget will align where it needs to be. But there’s a lot of political pressures from local communities all the way up to the companies that actually have the work, that will put huge pressure on it.
But if I had one thing to say, it would just be focus on the threat. If it doesn’t respond to the threat we shouldn’t be doing.
25:23 – 25:57
NA: I totally agree with that. And I just wanted to highlight that Representative Bacon, who as a Congressman in Nebraska, he wrote an opinion recently where he says enough about talking about innovation and working on new technology.
And I think it kind of goes along with what General Hyten and saying he wants tough choices to be made based on priorities. Those priorities should be based on the threat. But he says it’s time to actually set priorities. Congress fund those priorities and move out quickly on producing systems.
25:58 – 26:32
JH: If I was Secretary of Defense, and thank goodness I’m not, but if I were Secretary of defense and I went to my posture hearing before a budget was even submitted, perhaps I would do nothing but talk about the threats and the capabilities that are required to deal with the threats.
Somehow we forget that that’s what we’re all about. Our job is to defend the nation against all threats. Everybody that wears the uniform, everybody that serves in government, swears an oath to the Constitution and embedded in that is the ability to defend the United States.
And if we’re doing things that don’t. I would say stop that and reprioritize against the threat that should inform Congress where the budget has to go.
26:33 – 27:02
NA: And as the threat changes, which we’ve seen it change over the last ten years to the point where there’s a theory that the next war will begin in space, the next war will begin in cyber. It’ll be unseen. It won’t be somebody crossing a border. It won’t be a build up along a border.
It won’t be a bullet fired. It will be in the space domain and therefore a restructuring of our national defense is probably in order here.
27:03 – 28:25
JH: If I was an adversary like China or Russia, looking at the United States, you don’t have to be a military scholar or a historian to say, if I was going to start a conflict with the United States, what’s the first thing I have to do?
It’s not actually attack the United States. The first thing I have to do is I have to insert doubt into the American population about our ability to achieve our objectives. I don’t do that with a military confrontation because the American people – rightly – believe and trust the United States military will dominate anybody on a battlefield. And oh, by the way, we will.
That’s not the way you start. First you take our eyes, ears, that’s space. Then you influence cyber to incur doubt. Then you attack the United States through chemical and biological warfare that nobody can see. Nobody can figure out where they’re coming from. And if you look at the way we responded to COVID in the not very coordinated activity we had responding to a COVID virus, all you have to do is insert that doubt, and then you challenge the United States with military force because now the doubt is across the American people.
So it’s not through the Army or the Navy or even through the Air Force originally. It’s through space, cyber, chemical and biological warfare that’s unattributable and those things we actually don’t do very well defending ourselves right now and that should be one of the highest priorities we have, because that’s how conflict would start.
28:26 – 28:41
Thank you, Sir, and in response to how the nature of warfare is changing.
What are some of the technologies, capabilities, and mission areas that the Space Force needs to prioritize in communicating with Congress so their funding efforts can be resourced appropriately?
28:42 – 29:33
NA: Well, you can look at it in basically two buckets. One bucket, what is needed to fight tonight in space, but in support of every other domain. That would be capabilities like anti-jam communications, protected PNT – position, navigation and timing.
And then there’s another bucket. What about a war that extends to space? What about a war in space? Those technologies definitely are being discussed at classified levels, but we can talk about the vulnerabilities of satellites and vulnerabilities in the space domain.
Satellites have no defenses. Zero. None. Well, one technology would be on-board sensing – an on-board sensor that could simply provide a satellite its own warning or its own sensing of something nearby or an approaching threat.
29:34 – 30:51
JH: So I was lucky enough to serve at the four-star level for a long time, through three different administrations. And without going into detail, which would be inappropriate for so many reasons, classification as well as discussion with presidents, I’ll say with the three presidents I worked for directly: President Obama, President Trump and President Biden.
At some point during that time, I had a discussion with them about offense and defense. At some point in the discussion, they would look at me and say, all three of them, right? Now think, President Obama, President Trump, President Biden, three different people as you can imagine, but they would look at me and hold me accountable, rightly so in saying, ‘Didn’t you tell me years ago that we needed to build a more resilient space architecture because we don’t have the ability to defend ourselves? And then that would change the whole discussion about offense and defense, if we had a resilient space architecture. How come you haven’t built a resilient space architecture?’
And by the time I got to President Biden, that had been going on for like ten years. But it was the same question from three different presidents, three different things.
You said multiple times, we need a resilient architecture, and then you don’t build it. Now we’re building it, slowly because the status quo still wins in the discussions. But, again, it’s all about the threat.
30:52 – 31:27
NA: And looking at the threat, it’s also very difficult to defend 1 v 1. So Russia, China proliferating on the ground, for example, anti-satellite capabilities, jamming capabilities, to counter 1 v 1 would be a fool’s errand. It would be very expensive.
And so it’s out-thinking your adversary out-maneuvering your adversary and putting capabilities in motion and funding them, most importantly to counter. But it can’t be platform centric. It has to be mission-area centric.
31:28 – 32:59
JH: So I’m looking at some of the things are adversaries do and learning from that is important.
A couple years ago, in the early phases of the Ukraine crisis, Vladimir Putin threatened to deploy and perhaps employ a nuclear weapon in low-Earth orbit. Everybody says that’s nuts. Why would he do that? Well, let’s think about what they’ve been trying to do in counter space. They spent an enormous amount of Russian treasure and time building a direct ascent anti-satellite capability that would take out one satellite.
And then they deployed that basically to threaten us. And then in the early stages of the Ukrainian conflict, a commercial company proliferated across the heavens, is being used against them. And that direct ascent ASAT they spent enormous treasure to build – tens or hundreds of millions of dollars to take out a ten or $100,000 satellite that doesn’t do anything to damage it.
So what’s the only option he has to actually threaten that capability? A nuclear weapon in low-Earth orbit, which is the dumbest thing in the world to do. It impacts them. It impacts us, impacts the world – it’s horrible. He’s got no way else to threaten us.
We need to pay attention to what they’re doing, what works and what doesn’t work, and fill the void in the criteria so we never are in the point where we would ever consider what we did in the 1960s, which was build a nuclear-tipped ASAT capability. We did that in the 60s. That’s horrible. But we need to be smart about what we do and learn from our adversaries.
33:00 – 33:21
NA: And, you know, it’s not 1 v 1. It’s not space versus space. We can counter our adversaries from other domains.
We can counter our adversaries by using the levers of national power, like diplomacy, information – yes – military might, but also economic power. So there are many, many ways to get after this problem.
33:22 – 33:42
JH: There’s no such thing as war on space. There’s only war and all tools of the government, so if somebody attacked us in space, I want the adversary to know we may not come back in like we come back in a different way that will be more damaging to you than what you just created to us, because the goal is to win the conflict. The goal is not to win the battle.
33:43 – 34:11
Thank you.
Now, I want to leave time for another major recent development that will have significant budget implications. And that is the Trump administration’s executive order, titled “The Iron Dome for America.”
This order directs an assessment for a missile defense system for the United States homeland, while also signalling that space will play a big role in this initiative.
So can each of you elaborate on the role of space and what Space Force programs might be involved in this Iron Dome?
34:12 – 36:27
JH: So the first thing to say is that I would recommend that anybody listening to this go back and look at the Strategic Posture Commission Report of 12 bipartisan people that met a couple of years ago and came up with recommendations for missile defense that even talked about coercive threats against Russia and China, that we needed to have a defensive capability for that.
And a lot of that has turned into what President Trump is calling an Iron Dome for America and I think that’s good. But the first thing you have to realize that if you’re going to have any kind of missile defense capability, you can’t shoot anything you can’t see.
So the first thing you have to do is be able to see the threat and characterize it. Right now, the threat is moving from just a ballistic threat that we can see pretty well to cruise missile and hypersonic threats that we can’t see very well. So the first priority to deal with those threats will have to be to build surveillance systems to deal with that.
Now some of those surveillance systems will be terrestrial, but most of those will be space-based, and they’ll have to be changed. And some of those, by their very nature, will have to be low to see the dim targets that are going to be cruise missiles and hypersonics. So coming up with an integrated architecture of ground and space to be able to see and characterize all the missile threats that threaten America is the first step to an Iron Dome.
The second piece is that we have to go after the rogue states, the North Koreas and Iran and make sure we can defend ourselves against that. And then the coercive threat from Russia and China, which is a low number of low-yield weapons, threatened to be used like in Ukraine to change the equation because we don’t have a like capability to respond to that.
Wouldn’t it be great if we had a small number of defense capabilities in order to take out those capabilities, so we didn’t have to respond in kind with a nuclear weapon?
Now, those capabilities can be broadly built, using ground -based, air-based, naval-based systems in order to deal with those kind of threats, but ultimately to get to an Iron Dome for America, you have to get to a capability that can attack many targets with one capability, because otherwise you get to the problem we were talking about earlier with the ASAT capability.
You’ll never be able to build enough interceptors, so ultimately, on the weapons side, to achieve the vision that President Trump has defined, you’re going to have to move into space.
36:28 – 37:12
NA: From what I’ve read, the Defense Department is taking this in phases. They know they can’t build the whole thing today with today’s technologies and today’s budget.
So we know that current systems will certainly participate in the Iron Dome. Our current missile warning systems, even though they can’t see all threats. Those will be part of this architecture. Our strategic communications systems in space will be part of this architecture. The Proliferated Warfighter Space Architecture that the Space Development Agency is building will be enhanced and part of this architecture as well.
So it remains to be seen exactly how it all will fit together in the end. But they do realize that they’re going to use what we have and build upon it.
37:13 – 37:37
JH: That’s why I recommend the Strategic Posture Commission and I have to admit, I was one of the authors.
So, you know, it’s somewhat self-serving. But what we laid out was the phased approach. What you do near-term, what you do in the mid-term, and then what you do in the far-term in terms of technologies to change the game and everybody on the commission agreed with those recommendations, which tells me that’s a pretty good starting point.
37:38 – 37:58
Now, the executive order also states that funding for this Iron Dome for America should be included in the Fiscal 26 budget request. As we mentioned before, we currently don’t even have a budget for 2025.
So what needs to happen to make this a reality to incorporate such a monumental effort such as this Iron Dome, into the Fiscal 26 budget?
37:59 – 38:42
JH: So the first thing that has to happen is the Missile Defense Agency needs to divest itself of all production and sustainment programs, period. Which means they don’t do any production sustainment, all they do is research and development. Then the services responsible for producing, sustaining THADD, Patriot, ground-based interceptors. All those capabilities that are out there and the Missile Defense Agency can just focus on: ‘What do we need in order to get to the long term future?’
And you lay in the capabilities of applied research and technology, basic research and technology all the way through in order to build that, you can actually do it in the 26 budget pretty easily, but not if 80 percent of your people are doing production sustainment, because if that’s your organization, your culture is production and sustainment, not innovative moves to the future.
38:43 – 39:20
NA: And to be sure, this will be very disruptive for the status quo that the Pentagon is used to and to some extent, the other services.
And if you bring it back to the role of Congress that we talked about as well. I read that Senate Republicans are proposing a $150 billion more for the defense budget for 26.
Will that all go to the Iron Dome? Doubtful. And even if it did, there will still have to be tough choices and programs and projects that are killed among all services to afford to do what this very ambitious project is asking us to do.
39:21 – 40:11
JH: I assume it’s going to be the Missile Defense Agency. But however this team is formed, the Space Force needs to have active members on the team.
If you look at the UCP that’s out there right now, this integrated global surveillance mission is a Space Command mission, and therefore the Space Force is the primary service provider for that capability. So the Space Force needs to be heavily involved in that.
And then as the threat gets played out in this group, the smart people in the Space Force should look at and say, you know, I’ll look at directed energy, I’ll look at kinetic energy, and I’ll look at all those things and they can do trades pretty quick because they have the capability to do that and say, this is what space could provide in those areas.
And then you could say, what is the technology readiness of it? So what would it take in order to improve technology readiness levels of those capabilities and lay those programs in to do that? If you have the right people in the room from the Space Force, they can lay all those pieces out and you can have an integrated approach.
40:12 – 40:20
Together, you also wrote an OpEd that was published recently by SpaceNews. What was the motivation behind writing that OpEd and why release it now?
40:21 – 41:20
JH: So, Scott, you can probably get my answer. It’s all about the threat. And we’re not responding to the threat, and the budget doesn’t reflect the threat that’s out there today. And we’re not making the right decisions as a nation for how are we going to deal with that threat? And because we’re not making the right decisions, we’re lagging in the capabilities as we need to deter this kind of threat.
The last thing anybody in this country should want or anybody in this world should want, would be a war between the United States and China, or a war between the United States and Russia.
Nothing good can come from that. But in order to deter you actually have to have real capabilities, and those capabilities have to be seen by the adversary, and they have to strike fear into the adversary, so they decide when it’s an opportunity to act or not. They make the decision, “Not today.” And that’s got to be every day going on to the future.
And so the reason we we wrote the OpEd was to emphasize the point that resources are not being put in the right place, and we need to adjust where we’re putting the resources.
41:21 – 42:10
NA: They’re not. And actually, you know, failure to act is not an option.
What China is doing in space: intercepting our satellites. That is a maneuver that brings us one satellite closer to another. It’s not stopping a mission or intercepting and turning something around like you would think in the air domain. An intercept is a very close pass. They’re doing this all the time to our satellites. They are practicing tactics and techniques.
They’re getting ready to do this to the United States. We can see not only their build up, we can see them practicing their TTPs. The threat is so very real and can be seen. Now the budget needs to be re-prioritized and re-worked to meet this reality.
42:11 – 42:28
Now, each of you represent Elara Nova: The Space Consultancy in various capacities. So how is Elara Nova and its team of partners and consultants, prepared to provide the experience and expertise necessary to build and maintain a strong and capable Space Force – a process that begins with the fiscal budget?
42:29 – 43:13
JH: I tell you what, we have some pretty spectacular Guardians right now that understand the pieces of the space capability.
But what we don’t have in large numbers are Guardians that understand the entire enterprise. What Elara Nova understands through the leadership and the folks that we’ve hired, is we understand the entire enterprise and how to bring enterprise capabilities together and integrate the “eaches” to build something that is much broader. We have consultants that do that. We have advisors that do that.
When you use Elara Nova, you get all of that capability. Right now, I believe, and I wouldn’t be involved with Elara Nova if I didn’t believe this, that we fill a critical void and the capability by providing that enterprise approach. I think that’s the unique thing that Elara Nova provides.
43:14 – 43:50
This has been an episode of The Elara Edge: Expert Insights on Space Security. As a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space domain, Elara Nova is your source for expertise and guidance in space security.
If you liked what you heard today, please subscribe to our channel and leave us a rating. Music for this podcast was created by Patrick Watkins of PW Audio. This episode was edited and produced by Regia Multimedia Services. I’m your host, Scott King, and join us next time at the Elara Edge.
Incoming Administration Must Implement Commission’s Recommendations, or Risk Losing Great Power Competition
China’s rapid rise in adopting and deploying innovative technologies has sparked a new “Great Power Competition,” particularly in the space domain. Meanwhile, the budgetary process the Department of Defense (DOD) uses to acquire military capabilities – Planning, Programming, Budgeting, and Execution (PPBE) – is increasingly unable to keep up with the rapid innovations of modern technology. But now, after a Commission on Planning, Programming, Budget and Execution (PPBE) Reform delivered guidance for modernizing the budgetary process, the 2024 election presents both promise and peril for PPBE reform in acquiring the military capabilities necessary to deliver space superiority for the warfighter.
“The doctrinal definition of space superiority is mission-oriented: to provide space capability at a time and place of your choosing,” said Shawn Barnes, partner at Elara Nova: The Space Consultancy. “But in the context of budgeting and strategy, space superiority is about having the space capabilities that provide superior capability to support the warfighter across domains to deter or defeat an adversary.”
According to DOD officials, China is having a “strategic breakout” in space that directly coincides with their adoption of innovative space technologies. Major General Gregory J. Gagnon, the United States Space Force’s chief intelligence officer, recently acknowledged China has over 1,000 satellites on-orbit and has demonstrated a capacity for launching 200 satellites a year.
For added context, Maj Gen Gagnon noted that just 10 years ago China was capable of putting only 24 satellites on-orbit in a single year.
“China has gone from being a potential near-peer competitor to an out-pacing challenge in areas like quantum computing, air and missile systems and space capabilities,” Barnes said. “Meanwhile, one of our nation’s greatest attributes is innovation in the private sector, but the PPBE process no longer serves us as well as it should.”
PPBE From the Cold War to Today
The PPBE process evolved from the Planning, Programming, and Budgeting System (PPBS) originally introduced by Secretary of Defense Robert McNamara in the 1960s. By developing the DOD budget sequentially through four phases, PPBE brought discipline to the DOD’s budgetary process and enabled the United States to acquire the military capabilites it needed to project deterrence through the Cold War and maintain decades of military hegemony after the Soviet Union’s collapse.
But in today’s Information Age, the PPBE process that once enabled military success is increasingly constricting the DOD’s capacity for keeping pace with technological innovation, most notably in space.
“The cost of launch has been reduced dramatically, which enables cheaper and more frequent access to space,” Barnes said. “More capability can also be put into smaller satellites, which can be effectively networked to outperform larger satellites. These changes are accelerating innovation across the space ecosystem.”
In response to this emerging Great Power Competition and the exponential rate of technological innovation, the Fiscal Year 2022 National Defense Authorization Act (NDAA) mandated a Commission on Planning, Programming, Budgeting, and Execution (PPBE) Reform to evaluate PPBE and recommend policy changes to modernize the process.
Then last spring, the Commission published its Final Report with 28 recommendations across five critical areas to overhaul the budgeting process across the DOD’s military services. But given the inherent interconnection of space and technology, along with the growing reliance on space for Joint Force operations, the Commission’s recommendations can have an outsized influence in delivering space superiority.
The Imperative for Strategy-Driven Budgets
The first critical area the Commission provided recommendations for is to: “Improve the Alignment of Budgets to Strategy.” To do this, the Commission recommends creating a Defense Resourcing System (DRS) to replace the PPBE process and consolidate the PPBE’s four phases into three: strategy development, resource allocation and execution.
“It is absolutely critical that we have strategy-driven budgets, and not budget-driven strategies,” Barnes said. “The Commission proposed an ongoing discussion within the DOD to provide timely updates to strategy that would come before each service’s budget submission to the Office of the Secretary of Defense (OSD).”
Key documents such as the National Security Strategy, National Defense Strategy, and National Military Strategy will continue to drive the strategy development phase. But significant changes exist in the resource allocation phase, where senior leadership forums informed by strategic wargaming and analytics would produce a Defense Resourcing Guidance (DRG) that would replace the Defense Planning Guidance (DPG) document used today.
“The Defense Planning Guidance is used as a grading mechanism after the services provide their budget recommendations to OSD, but the DPG doesn’t present difficult decisions for the OSD budget,” Barnes said. “So the new DRG would facilitate a more rigorous discussion upfront, where senior leaders across the DOD can evaluate budgetary risk in a more substantive manner.”
The Commission also recommends replacing the Program Objective Memorandum (POM) and Budget Estimate Submission (BES) documents with a single, Resource Allocation Submission (RAS) proposal. This step would streamline what OSD submits as the DOD portion of the President’s Budget that will ultimately go to Congress.
Balancing Discipline with Flexibility
The second critical area identified by the Commission is to: “Foster Innovation and Adaptability.” To this end, the Commission aims to increase the availability of Operating and Maintenance (O&M) funds, which expire at the end of the fiscal year regardless of when those dollars are appropriated.
In other words, if Congress does not pass a budget on October 1st – the first day of the fiscal year – but rather passes a Continuing Resolution (CR) until a budget is passed at a later date, the O&M funds still expire on September 30th of that fiscal year.
“The DOD only has so much time to expend O&M funds,” Barnes said. “Sometimes at the end of the fiscal year, there is a mad rush to spend money as quickly as possible. So the Commission proposes that about five percent of O&M funding be eligible to roll-over as two-year or three-year money to make better use of taxpayer dollars.”
The Commission also recommends the DOD be able to fund new programs and capabilities, known as “new-starts,” which is currently prohibited under a CR. The Final Report also suggests eliminating Below Threshold Reprogramming, or the amount of funds the DOD can transfer between programs without Congressional approval, to facilitate flexibility in responding to evolving military requirements.
A Collaborative Relationship to Streamline Budget Development
Each of these efforts, however, will still require a level of transparency with the Hill. That’s why the Commission emphasizes a need for transparency in its third critical area: “Strengthen Relationships Between DOD and Congress.”
It’s for this purpose that the Commission recommends establishing enclaves for both classified and unclassified information exchanges between the DOD and Congress, which in turn may also promote greater cohesion between the authorizers and appropriators in Congress.
“The Senate Armed Services Committee and the House Armed Services Committee are the ‘Authorizers’ that write the NDAA, a policy bill that describes what money is available for certain requirements,” Barnes said. “But the four Appropriations Committees are more data-driven and focused on their oversight role. Sometimes, different views between the Authorizers and the Appropriators can create tension in the DOD when they receive authorization for a program, but aren’t appropriated the money to implement it.”
The Commission concludes its report by recommending a single, common data system from which each service can build its budget under the fourth critical area: “Modernize Business Systems and Data Analytics,” and providing more education and training related to the budgeting process in its fifth critical area: “Strengthen the Capability of the Resourcing Workforce.”
2024 Election Implications for PPBE Reform
Since its release, Deputy Secretary of Defense Kathleen Hick pledged to evaluate the Commission’s Final Report in collaboration with executive and legislative partners. At the same time, the DOD also published an Implementation Plan for the Commission on PPBE Reform’s Interim Report, which was previously released in August 2023.
But the 2024 election creates both promise and peril for the Commission’s recommendations to reform the PPBE process. While a change in executive and legislative branches can facilitate an opportunity to implement these necessary changes, the Commission’s Final Report is also at risk of being neglected during the transition – thus, perpetuating the status quo.
“The Implementation Plan signals that DOD is taking the Commission’s recommendations seriously, and they are willing to work with the Hill to implement it,” Barnes said. “A new Congress also creates an opportunity to adjust the budgetary process and the Commission’s recommendations add flexibility without removing the discipline. We live in perilous times, and space is not unique in suffering the budgeting challenges that the PPBE process has today, so it’s especially important to apply these changes to acquire the innovative commercial space technologies of the future.”
Elara Nova: The Space Consultancy recognizes the significant role government policy serves in the acquisition process, and its’ experts are prepared to support not only the commercial space companies developing innovative technologies, but also the government partners seeking to leverage policy to exploit these technologies to deliver space superiority to the warfighter.
“The breadth and depth of experience at Elara Nova is unparalleled,” Barnes said. “There are Elara Nova experts who understand the resource allocation process, and its relationship between the executive and legislative branches. But there’s also experts who have been program managers and program executive officers leading large acquisition organizations within the DOD. So when a company wants to work with Elara Nova, they get the benefit of all of that experience across the space security spectrum.”
Elara Nova is a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space domain. Learn more at https://elaranova.com/.
Episode 18: 2024 Election Presents Promise and Peril for PPBE Reform to Deliver Space Superiority
Host: Scott King
SME: Shawn Barnes, Elara Nova Partner
00:02 – 02:24
Over the past decade, China’s rapid rise in adopting and deploying innovative technologies has sparked a new “Great Power Competition,” particularly in the space domain. According to Major General Gregory J Gagnon, the chief intelligence officer for the United States Space Force, China’s “strategic breakout” in space is evident by the country’s more than 1,000 satellites on-orbit today, and a demonstrated capacity to launch over 200 satellites each year.
To put into context just how rapid China’s rise has been, Major General Gagnon also noted that in 2014 – China was only able to put 24 satellites on-orbit in a single year.
Meanwhile, the budgetary process for the Department of Defense (DOD) – known as the Planning, Programming, Budgeting, and Execution or PPBE – is increasingly unable to keep up with the rapid innovations of modern technology. And in the Fiscal Year 2022 National Defense Authorization Act – or NDAA – Congress mandated a Commission on PPBE Reform to deliver guidance for modernizing the DOD’s budgetary process.
Last spring, the Commission on PPBE Reform issued its Final Report – with 28 recommendations across five critical areas. And now, with the 2024 election underway, the inevitable change in administration – regardless of the election’s outcome – presents both promise and peril for PPBE reform.
Welcome to the Elara Edge: Expert Insights on Space Security. I’m your host, Scott King. And our guest today is Elara Nova partner – Shawn Barnes, Former Deputy Assistant Secretary of the Air Force, Congressional Budget and Appropriations Liaison. In this role, Shawn successfully advocated for the Air Force and Space Force budgets for fiscal years 2023, 2024, and 2025, securing critical funding for future operations.
Now, Shawn is here to discuss the Commission on PPBE Reform’s Final Report, and the implications for the next administration – regardless of the 2024 election outcome – to see their recommendations through and deliver space superiority to the warfighter.
Shawn, welcome to the show!
02:25 – 02:29
Well, thank you very much, Scott. I really appreciate the opportunity to be able to speak with you today.
02:29 – 02:43
Of course, now, we hear the term “space superiority” used a lot these days. So first and foremost, I’d like to define what that is, in the context of this conversation.
So can you describe what we mean by “space superiority?”
02:44 – 03:25
Yep, absolutely. So, I think for the purposes of this discussion today, we ought not to focus on the doctrinal definition, which is really very mission-oriented and focused on making sure that you can provide space capability at a time and place of your choosing.
But rather think about space superiority and having the space capabilities that provide us superior capability to both support the terrestrial warfighter as well as defeat any potential adversary and, of course, deter adversaries. So that’s when I think of space superiority for the purposes of this conversation today – that’s what I mean.
03:26 – 04:07
Thank you, Shawn. Now, the current budgeting process the DOD uses today is known as PPBE – or Planning, Programming, Budgeting, and Execution – and it’s been in place for quite a long time.
But last spring, the Congressionally-mandated Commission on PPBE Reform published its Final Report advocating for a new approach to the budgeting process for defense acquisition.
I’d like to tie this into our need for space superiority – so can you describe why this commission was necessary in the first place? And in what ways might the PPBE process be restricting our budgeting process to acquire the military capabilities the DOD needs to maintain space superiority?
04:08 – 06:35
Yep, as you said, the PPBE process, formerly known as PPBS, had been put in place by Robert McNamara back in the Kennedy administration in 1961 because, frankly, the defense budgeting lacked any sense of real discipline. And it was done, in a fairly ad hoc manner. Now, that ad hoc manner gave it flexibility, but it lacked oversight by the Hill and the Department of Defense. And so, McNamara’s approach was to take what was a fairly loose system and put a significant amount of rigor and discipline into it that I think served the nation pretty well for several decades.
At that time, however, the pace of change was relatively slow. It was critical that we tie budget to strategy and clearly the nation had in mind, strategy to be able to defeat the Soviet Union and so, to have that PPBE process was important.
As we have moved forward, and the world has continued to change – what we find is that that pace of change is now at a point where the PPBE process, as it currently exists, no longer serves us as well as it should.
And space is not unique in suffering the challenges that the PPBE process has today, but because the pace of change is even faster in the space domain than it is in the air and the maritime and the terrestrial domains in general, and that pace on both the adversary as well as the technology, because that pace is so much faster in space, the impact of not being able to make those changes at an appropriate pace, is even larger.
It typically on a well-oiled PPBE process is about two years from the time that the services begin their work to the time that money is actually appropriated and often it’s more like two and a half years. Well, frankly, the world changes a lot in two and a half years, and we need to be able to act more quickly.
And so the Authorizers, in this case, the House Armed Services Committee and the Senate Armed Services Committee, through the National Defense Authorization Act, put in place a Commission to look at the PPBE process and make a series of recommendations as to how that might be improved.
06:36 – 06:47
So you described how the pace of change is accelerating, but can you put that into context with China’s advancements in space? And how does that factor into this need to re-assess our budgeting process?
06:48 – 08:12
Yeah, and it isn’t just the pace of our adversary. It’s actually the pace of technology and opportunities as well. And so there were really two – those two key factors that drove the need for this Commission.
If you take a look at what China has been able to do over the last decade, it is truly remarkable. They have gone from being a country that was clearly following, but learning, to a country that is now, on the verge of leading in many, many different areas. Some of that is quantum computing, their air and missile systems and tremendous growth in their space capabilities. So China has gone from being a potential near-peer competitor to a pacing challenge – and I think some would argue – they are an out-pacing challenge and one that we need to take very, very seriously.
At the same time, the pace of change in technology has also created opportunities that we need to be able to take advantage of and frankly, the United States’ greatest attribute is its innovation in the private sector and so being able to take advantage of that innovation in the private sector is absolutely critical to our ability to stay in front of a pacing challenge like China.
08:13 – 08:20
And specifically on the pace of innovation for space technologies – how does this present both an opportunity and a risk for the DOD?
08:21 – 09:36
So there’s a couple of major things that have happened in the space industry. There’s several, but a couple of, I think, very important ones. One is the cost of launch has been reduced dramatically and that’s been driven by competition and that competition now allows us to be able to launch much, much, cheaper than we ever have been before.
In addition to the cost of launch, the frequency of launch is now up at a very, very high pace and so, that part of it gives us access to space in a way that we hadn’t had before. That also drives the opportunity to launch things that are less expensive and launch more frequently because that cost of launch is down.
The other side of that is the miniaturization. We have been able to frankly, stuff more capability into a smaller box and then put it onto satellites, which now allow us to be able to do things that heretofore have had to be done on very large, very heavy, very expensive systems and so having lightweight, small capabilities, that can be networked to outperform large satellites has been a significant driver and allows that innovation across the ecosystem.
09:37 – 10:18
Now, I’d like to transition to the Commission’s Final Report itself.
The Commission published 28 recommendations across five critical areas. And, I’d like to go through each of these five critical areas and have you provide some perspective on what the Commission is trying to achieve.
The first critical area described in the report was to “Improve the Alignment of Budgets to Strategy.”
To this end, the Commission recommends replacing PPBE with what they call the Defense Resourcing System – or DRS.
In what ways might the current PPBE process have misalignment between budget and strategy? And how would the DRS present a solution for that misalignment?
10:19 – 14:16
So first of all, absolutely critical that budgets align to strategy and not the other way around. And frankly, as much as we say every year that we want to have strategy-driven budgets, in the end, what very often happens is that we figure out what our strategy is after we put the whole thing together, despite all the intentions to the otherwise.
So today PPBE stands for Planning Program Budget and Execution and what the Commission is recommending is that we simplify that a little bit and so they wanted to describe it as the Defense Resourcing System.
And they think about it in terms of Strategy Development, Resource Allocation and Execution. So sort of a three phase as opposed to a four phase, but they make recommendations for each of those parts to improve the effectiveness and efficiency of each of those three phases.
So it kind of starts with the timing of some strategy documents: our National Security Strategy, National Defense Strategy, National Military Strategy – those will continue to be foundational documents. But coming out of that then is some guidance that today we call the Defense Planning Guidance and that document, typically is not particularly impactful for the development of the budget by the services.
It is used as a grading mechanism once the services provide their budget recommendations to OSD, but it doesn’t fundamentally change the way that the services do that for a couple of reasons.
First of all, it usually comes too late so that by the time the Defense Planning Guidance or DPG arrives on the services as a finalized document, the services are largely done with building their budget submission.
And the second is, is the Defense Planning Guidance, frankly, does not make the kinds of hard choices that need to be made by the Office of the Secretary of Defense and I think that a more rigorous discussion upfront, that includes senior leaders across the Department of Defense, not just within OSD, then leads towards a document where those hard decisions about where we can accept risk can be made in a more substantive manner.
And there’s a couple of things that the Commission has recommended that will assist with that. One is – is to have an ongoing strategy discussion within the Department of Defense that has periodic and timely updates to strategy, and by timely updates what I mean is that it would be in front of the main efforts to actually develop what today is called the “POM, the Program Objective Memorandum,” which is really the services’ submission to OSD for their budget and so the Department of the Air Force has a single POM, that includes both US Air Force and US Space Force and some other Department of the Air Force administrative housekeeping kinds of money in it and in the future has a different term to it.
So, that’s an important part of what they’re looking to do is have that continuous strategy development and update that’s driven by things like wargames and senior level conversations, so that seniors understand the sort of expectations that would be put forth for when they’re developing their budget.
A second part of that is to understand the budget in a way that you can show that it is related to strategy. So even when we do budgets that are highly-aligned to strategy, it is often difficult to explain that to Congress and to the public in a way that is compelling and so being able to adjust the way that budgets are explained, and displayed, and documented will be an important part of aligning to strategy.
14:17 – 15:02
You mentioned the POM – which together with the Budget Estimate Submission make up what the service submits to the Office of the Secretary of Defense – or OSD – for the DOD portion of what ultimately becomes the Presidential Budget.
Now, the future term you referenced for this step in the process the Commission suggests calling the “Resource Allocation Submission” – or RAS – which would replace the POM and the Budget Estimate Submission by consolidating them into a single RAS document that will streamline the budget submission process.
So if these changes were to take effect – how would a better alignment between budget and strategy help with adopting innovative space technologies? Particularly with respect to the pace of innovation that we were discussing earlier?
15:03 – 16:30
I think there’s a number of opportunities there. If you think about, displaying your budget material in terms of an overall capability.
So let’s think about strategic missile warning as an example. Strategic missile warning is done through a combination of satellites on-orbit and large radars on the ground and the people that operate them and the connections between them all coming together to provide that warning of incoming, intercontinental ballistic missiles. Today, the way that the budget is displayed, it would show each of those piece parts as something different from each other and not be done in a holistic manner.
And because of that, it makes it very difficult to make trades across different programs within a capability set. So now, if I have an innovative capability to – let’s just say that I’ve got some sort of new magic that allows for a much greater fidelity coming from satellites, maybe that means I don’t have to have the same sort of capability on the ground or from a different set of satellites.
So it is difficult to take advantage of that innovation today in a way that allows the most efficient use of budgets in the future and so being able to pull all that together in a more holistic fashion allows the more effective on-ramping of technology.
16:31 – 16:40
The second critical area the Commission identified is to: “Foster Innovation and Adaptability.”
How does the Commission recommend the DOD do this?
16:41 – 20:23
This really gets into sort of the Resource Allocation phase, by and large, although some of it is also in the Execution phase. Part of what they recommend is to increase the flexibility primarily in what we call “operations and maintenance funding, O&M,” which is, funds that are only good for a single year.
So when they’re appropriated, ideally on October 1st of 2024. They expire on September 30th of 2025. If they’re appropriated on March 1st of 2025, they still expire on September 30th of 2025 and so you only have so much time to be able to expend those funds. And because of that, at the end of the year when you haven’t necessarily spent all funds in the manner that you had intended, there is a mad rush to spend money, as quickly as possible and not necessarily in the most effective manner.
So one of the things that the the Commission recommends is to take a small portion of O&M funding, and they think about 5% to be able to say, “Let’s roll that over and make that two-year money or three-year money,” so that you don’t have a mad rush to spend every last dollar, even if you’re not buying the most important things and I think that that would make better use of the taxpayers’ dollars.
Another thing that they talk about is, during the budget execution, the ability to move money around a little bit easier. There is something called, “Above Threshold and Below Threshold Reprogramming Authorizations.”
And when something is Below Threshold, it means that the services can move money around and if it’s Above a Threshold, then they have to ask for permission from Congress and it goes to the two Appropriations committees and the two Authorization committees, and then sometimes also the intel committees depending on what that money is.
And they have to get permission from all 4 or 6 committees to move money from one program to another program, or from one color of money to another color of money. And that is not necessarily the most effective way to do business, so if they were to raise the Above Threshold Reprogramming Threshold, then the Department of Defense could move more money around.
They also point out, though, the need to be able to do that in a way that maintains transparency with the Hill because, frankly, absent that transparency, it is very, very unlikely that the Hill would approve changes that would be significant in that.
A third is, the limits on Continuing Resolutions. So a Continuing Resolution goes into place almost always on October 1st, just like it has this year and what that means is you can spend on the same things that you spent last year and basically at the same rate that you were spending them. But it doesn’t take into account the new things that you want to be able to do and it also doesn’t take into account that you want to maybe stop doing some of the things that you were doing in the previous year.
So we have now moved into a Continuing Resolution for Fiscal Year ’25 that is spending at the same rate and on the same things that we had in Fiscal Year ’24. What it doesn’t allow us to do is new things and those are called “new-starts.” Now there’s reasons to not want to have new-starts as part of that authority, but it does certainly reduce the flexibility and reduce the timeliness of being able to get new capabilities going.
20:24 – 20:46
Thank you, Shawn. And so this leads us to the third critical area, which the Commission defines as “Strengthening Relationships between DOD and Congress.”
You just mentioned the need for more transparency, especially between DOD and the Hill. So what are the current communication gaps that often exist or sometimes exist between the executive and legislative branches?
20:47 – 22:16
There is a bright line for discussions between the executive branch and the legislative branch, with respect to budget and the timing of budget decisions. And I think that that tends to lead to a relationship that is not particularly collaborative and I think that that is something that needs to be adjusted, quite frankly.
I believe that early and more substantive discussions between the Department of Defense and the Hill on the kinds of challenges that are faced, both from a budgetary standpoint, but from a capability standpoint, a threat standpoint, as well as a sense of changes that the Hill should expect to see in future budgets would help with the transparency challenges that are there today.
So when the Hill receives a budget and they’re surprised by what is in it, you’re starting an uphill battle. If, on the other hand, we could have some of those conversations early and often, then when a budget’s delivered, they would say, “Yes, we expected that you would be making these changes.” It doesn’t necessarily mean that they would be accepting of them, but it would mean that they’re not surprised by them and I think that that would go a long way toward a more collaborative relationship between the Hill and the executive branch.
22:17 – 22:49
And specifically as it pertains to classification – or even over-classification in some cases – this can complicate some of these communication efforts.
So one recommendation the Commission is putting forward in this critical area – is to establish classified and unclassified communication enclaves.
How would these enclaves, both in a classified and unclassified sense, help inform our congressional leaders so that there aren’t as many surprises when the President’s Budget is unveiled every spring?
22:50 – 24:15
So in terms of the over-classification. The challenges are a couple. One is, not everyone on the Hill would be clear to the most highly-classified material, whether that is threat material – what our adversary is up to – or, how we intend to address the threat with a set of capabilities that we have and when not everyone is cleared to that information, it gets stovepiped in a way that isn’t helpful sometimes and so being able to reduce the level of classification, prudently, will be important in the future.
The second is that if you want to gain support from your constituency, the taxpayers are the congressman’s and the congresswoman’s constituents. They need to be able to explain things and so it’s got to be simple and they’ve got to be able to do that at an unclassified level. And so the more that we can talk about our capabilities and the adversary’s capabilities in an unclassified way, the easier it will be for the Hill to explain why it’s important to their constituents because they can’t very well just say ‘Just trust me. We have a problem that we need to deal with.’
Because that, frankly, doesn’t go a long way. We have a skeptical society and for good reason and so I think being able to explain in clear ways at an unclassified level will be very important.
24:16 – 24:38
Now, these communication efforts even extend to the varying roles of Congress and their respective relationships to the DOD.
For example, different committees in Congress serve the role of “Authorizers,” while others serve the role of “Appropriators.”
Can you describe why it’s important to understand the difference between Authorizers and Appropriators and how they relate to the DOD budget?
24:39 – 26:26
Authorizers – the HASC and the SASC – House Armed Services Committee and the Senate Armed Services Committee, they’re the ones that write the National Defense Authorization Act, which is primarily a policy bill. It has numbers in it to authorize funding.
But in the end, that authorized funding is not what actually gets put into a budget. So the Authorizers primarily are developing a policy bill that has dollars associated that give a sense of the sorts of money that would likely be available.
The Appropriators build a budget and it is very light on policy. But they do focus very significantly on the specific dollar amounts by program, by budget line item. They are less concerned about whether or not the Department of Defense has the right requirements, as they are: “Are they making the right use of taxpayers dollars?”
Because that’s their job. They are the appropriators that will appropriate budgets that eventually get spent. And so, their budget development and their oversight role is focused very clearly on that and so that’s a very data-centric demand.
And it is, in the end, the money that’s appropriated that matters when it gets to be spent. And there are sometimes different views on, on things between the Authorizers and the Appropriators. And that can create some tension on the Hill, but it can also create some tension in the Defense Department when the Authorizers would say, “I want you to do A at level X,” and the Appropriators say, “Well, I want you to do B at level Y,” because in the end, you can’t do A at level X if you don’t have money to do that and you have to obey the appropriations law in the end.
26:27 – 26:44
The fourth critical area evaluated by the Commission is to “Modernize Business Systems and Data Analytics.”
Can you explain how the DOD currently manages its budgetary data? And how would a single, common platform the Commission is proposing improve decision-making for the DOD budget?
26:45 – 28:11
I’d start by saying there is no single system that the Department of Defense uses today.
What the Department of Air Force uses is different than what the Department of Navy uses, which is different than what the Department the Army uses. And, oh, by the way, it’s different from what OSD uses, and different from what OMB uses and so you’ve got multiple databases, and so just the challenge of moving information from one database to another lends itself to mistakes.
And it lends itself to having funds go into the wrong budget line item and because those mistakes can, frankly, be pretty significant, we spend an awful lot of human time and effort to reduce those mistakes. Well, that’s not a very effective use of human beings. We should have humans do what humans are good at, which is making judgments and let machines do what machines are good at, which is transferring data from one database to another database. And even better yet, having a single database that we can all work off. That really only makes sense.
So I think that there’s, some real opportunities there. And I think the data analytics would, both tie capabilities together and understand, “Oh, if I cut something out of a program, A, that will have significant impacts on programs B, C, and D, even though, they may not be tied in your head in the same way that, that they actually are implied.”
28:12 – 28:25
Moving to the last critical area, the Commission aims to “Strengthen the Capability of the Resourcing Workforce.”
Why is it important to strengthen the knowledge base of personnel that are managing the budgetary side of acquiring space technologies?
28:26 – 29:33
So I like to use the terms ‘Recruit, retain and refresh.’ Because refresh, indicates that maybe, it’s time for changing some people in and out and it also means that they continue to be educated on what’s the latest in the greatest.
In today’s world, we have financial management professionals. That is, an AFSC within the Department of the Air Force to be an FM professional. And obviously the civilians do the same things. They are FM professionals and they’re certified in the same way that we have acquisition professionals.
On the other hand, the people that today build the POM may have gone through a few days training, and maybe they have some years of experience, but there’s not a certification program for developing a POM for doing that resource allocation piece.
And so it’s something that comes with a lot of experience and there are some classes in it, but there’s nothing like the sort of professional piece to it that we have on the comptroller side of it. And so I think that there are certainly some opportunities for more formalized training for those folks that go into that – I think would be significant value added.
29:34 – 29:55
Thank you, Shawn.
Since its release, the DOD announced an Implementation Plan for the Commission’s previously issued “Interim Report,” which came out in August of 2023.
Now, based on both the Implementation Plan and the DOD’s response to the Final Report – what do these signals suggest about the DOD’s key takeaways from the Commission’s findings?
29:56 – 31:57
The reaction of the Department of Defense to the Report has been overwhelmingly positive, and overwhelmingly forward-leaning.
The Dep. Secretary of Defense, Secretary Hicks, stood up a team to begin implementing as many of those things as were within the Department of Defense’s control as they could. That signals that the Department of Defense understands that there are significant limitations to the current system that we have.
Now, there are many things that are outside the Department of Defense’s ability to implement on its own and will take collaboration with the Hill. And I think that the Department of Defense is very willing to engage in that collaboration and I think that there are portions of the Hill that are looking forward to that, and there are portions of the Hill that are somewhat resistant to that.
And I understand that resistance. They want to ensure that they can provide the appropriate oversight that’s necessary and I think that that’s absolutely critical, it’s the way that the Constitution drives things.
So I think it’s incumbent on the Department of Defense and the Hill to work together to understand how can that necessary transparency be put in place in a way that then allows some of the other changes that I think everyone agrees the goals for the changes, which is more rapid, and more agile, reaction to both the adversary as well as the opportunities of innovation.
There is no one on the Hill that says we need to slow down. To a person, it is: “How can we adjust faster?” So the goals – there is great agreement on. How you get to those goals is going to continue to take some work.
But I think the main signal from the Department of Defense’s Implementation Plan is that they take it very, very seriously and that they are more than willing to work with the Hill to implement as many of the recommendations as possible.
31:58 – 32:38
At the time of this taping – we are in the heat of the 2024 election. And by law, the Presidential Budget – for the upcoming fiscal year – is presented to Congress on the first Monday in February.
Regardless of election outcome, there will be a new incoming administration, as well as a new Congress.
So, in order to make sure that the Commission’s Final Report and its findings don’t fall through the cracks, so to speak, and also considering the quick turnaround time from Inauguration Day in late January, to a Presidential Budget in early February – what key points from the Commission’s Final Report should the incoming administration consider as it prepares its next budget?
32:39 – 34:31
The first thing I would do is I would commend to the incoming administration – read the Report. The entire report’s fairly long, but the executive summary is 20-some odd pages. It is absolutely worth the, you know, half hour or 45 minutes to read the Report and understand the kinds of challenges that are there.
The second is for the new administration to take a collaborative approach with the Hill, and to try to set that up as quickly as possible, and set up a relationship between the Department of Defense and OMB and the Hill – that is one that looks to collaborate on solving the nation’s problems.
From a practical standpoint, talk to the commissioners, talk to the chair and the vice chair of the Commission about what their findings are and, frankly, behind closed doors say, “Is there more that you would do?” Because my view of the Commission’s Report is that, while there are some very, very positive, substantive recommendations.
I think that they probably would have liked to have recommended more, but they knew that they were unlikely to be received as well. That’s what I would commend the incoming administration to do, whichever administration is elected.
And by definition, as you said, the next administration is going to be a new administration. You’re going to have a new Congress. I expect that there’ll actually be significant turnover on both the House and the Senate side and so you’ll have a number of freshmen members that will be willing to take a fresh approach.
And this will be a great opportunity to be able to say, “Hey, let’s maybe bury the hatchet in some cases. Let’s take a fresh approach. Let’s take into account the seriousness of the world that we face, and determine as a nation that we are willing to adjust some of the conventions that we’ve had in the past to address the challenges and take advantage of the opportunities that face us today.”
34:32 – 34:50
What about the status quo? Despite this unique opportunity with a new President and a new Congress – what if the Commission’s findings are neglected and their recommendations aren’t implemented, or lost in the transition?
Can you reinforce the imperative for why the Commission’s Final Report needs to be taken seriously?
34:51 – 35:40
I will tell you, I think we live in perilous times. And, I commented earlier that, I don’t think that China, in many ways, is a pacing challenge.
I think it’s an out-pacing challenge. And I think that the sooner that our nation comes to understand that, and that’ll start with a new President reinforcing that. The sooner that that can happen, the sooner it will be easier to put in place the changes necessary to get after that.
If we fail to take advantage of the innovation that the commercial world brings us and when I say the commercial world – industry in general – we will find ourselves playing second to China, within the next five years. And I don’t think that that’s a place that our nation wants to be, and it’s not a place that the rest of the world wants our nation to be.
35:41 – 36:04
It seems to me, the Commission’s findings seem to really be pushing for a delicate balance between maintaining the discipline needed for a budget, while also implementing some flexibility to adapt and innovate in the modern era.
So can you tie these critical areas and these recommendations to that delicate balance between budgetary discipline and flexible adoption for innovative technologies?
36:05 – 37:26
I think you hit it spot on, Scott, that this is about that balance between discipline and agility or flexibility. And when you take a look at the 28 recommendations that are there, they generally are about adding agility and adding flexibility, but they do it in a way that doesn’t remove the discipline.
There is great recognition and respect for the role of the legislative branch in this, and that the PBBE Commission was very smart to take that approach.
It is in the main – their recommendation that we seek a more collaborative relationship between the executive and legislative branches, which would then facilitate the sort of agility and flexibility, because you have a relationship that at least has a modicum of trust that’s associated with it.
There will always be a need for checks and balances and there will always be a need for oversight on the part of Congress. And there will always be a need for the budget to begin and end on the Hill. I mean, they are the ones that are responsible for doing that. But that doesn’t mean that there aren’t tremendous opportunities for greater collaboration and a greater sense of trust between the executive and the legislative branches and that, in my mind, is really what the Commission’s Report is all about.
37:27 – 37:43
Now, what role can Elara Nova: The Space Consultancy, and its partners such as yourself – not only support the commercial space industry developing these innovative technologies, but also the government partners looking to adopt them and deliver space superiority to the warfighter?
39:49 – 38:44
Listen, I was attracted and started working with the Founders of Elara Nova, based on their personal credibility. I’ve known the Founders for many years, and each of the individuals are fantastic human beings.
As I got to know Elara Nova better and got to understand the 70-some odd consultants that are part of it. I’m amazed at the breadth and the depth of experience. You’ve got folks like myself that understand the resource allocation process very well, that understand the relationship between the executive branch and the legislative branch very well.
You’ve got other folks that have been, program managers and program executive officers, and leading large acquisition organizations within the Department of Defense. And then you’ve got folks that are experts at private equity and venture capital, folks that have started their own companies, and all of that has been kind of within the space ecosystem and so when a company wants to work with Elara Nova, they get the benefit of all of that.
38:45 – 39:22
This has been an episode of The Elara Edge: Expert Insights on Space Security. As a global consultancy and professional services firm focused on helping businesses and government agencies maximize the strategic advantages of the space domain, Elara Nova is your source for expertise and guidance in space security.
If you liked what you heard today, please subscribe to our channel and leave us a rating. Music for this podcast was created by Patrick Watkins of PW Audio. This episode was edited and produced by Regia Multimedia Services. I’m your host, Scott King, and join us next time at the Elara Edge.