The "Planning, Programming and Budgeting System" (PPBS) is the future oriented financial planning system brought into the Department of Defense by Robert McNamara when he was Secretary of Defense in the 1960s. He had been the boss at the Ford Motor Company and was offended by the lack of mathematically driven process and uniformity across the services at DoD. McNamara had been Curtis Lemay's chief staff officer in WW2 and had scientifically planned the devastation of Japanese cities (other than Hiroshima and Nagasaki) by massed low level B-29 raids employing a lot of incendiary bombs. All in all he was not a warm human being. We belonged to the same club in Washington and every time I saw him there I remembered the Operations Research and Systems Analysis study that he had his staff do on the VN War in 1969. It concluded that the North Vietnamese had surrendered to us in 1967.
In the PPBS system that he created for the Pentagon:
1. Strategy comes first. The USIC as a committee of the whole writes national intelligence papers normally called National Intelligence Estimates. Exactly who picks the subjects of these studies is a little unclear to me although I worked on many as the DIA member. These studies become the ground truth of the US government for the subject addressed; like "Russian General Purpose Forces in the next five years." These studies go over to the NSC staff where they hopefully drive strategy formulation, but not always since the ideologues among the Borgists there sometimes try to drive US strategy in the direction they favor. The opinions of institutions like the Council on Foreign Relations, RAND and the other Federally Funded Research institutions, Brookings, AEI, etc. are at least read before strategy documents are completed.
2. The emergent strategy documents and the NIEs go over to the Pentagon where they become the basis of the Quadrennial Defense Review (QDR), (every four years maybe?) . This is a massive undertaking that goes on for months and is done by the Office of the Secretary of Defense (OSD – civilians) and delegations from the armed forces. In this process it is decided largely by negotiation among the parties what the forces should be composed of in the future period under discussion. To say that these negotiations are a bit tense would be an understatement. OSD referees.
3. There exist financial entities called "Programs." These are for general categories of expenditure; General Purpose Forces, Strategic Forces, Medical, Retirement Pay (my favorite), Building things on bases (not a real one), Intelligence, etc. OK, wait for it – in this next phase of PPBS the results of the QDR are stuffed into the boxes of the "Programs" with subdivisions thereto. For example the DNI is the manager for the Intelligence Program and part of his money is hived off to the Defense Intelligence Agency and beneath them to the non-tactical intelligence assets of the Army, Air Force, etc. I once was the manager (among other things) for funds distributed by DIA to the services for HUMINT.
4. Next, comes "Budgeting". In this drill the programmed funds are reduced to "line items" in the budget of their organization. These budgets are then presented to Congress for approval.
State congressional delegations are, of course, acutely concerned about the locations of the facilities at which goods and services will be purchased for the armed forces. These expenditures represent jobs and money in their districts and states. Under the influence of lobbyists these congressmen talk to the OSD and the services pressing for more money to be spent where it will do them the most good politically. Sometimes this works. Sometimes it does not.
All in all, it can be said that this is a cumbersome system that impedes as much as it facilitates. Thank you, Robert McNamara. pl