When then U.S. Defense Secretary Robert Gates began a series of meetings in 2009 on overhauling the Pentagon's budget, he made sure that Michèle Flournoy, his powerful policy chief, was a key player in the negotiations. After all, strategy is supposed to drive financial choices in the Pentagon. And the office of the undersecretary of defense for policy has long been seen as the Pentagon's strategy house.
Four years later, current Defense Secretary Chuck Hagel has called for a strategic review of the Pentagon's budget. But Flournoy's successor, James Miller, isn't in control.
Instead, Christine Fox, director of cost assessment and program evaluation at the Pentagon -- who's known for her budgetary and programmatic acumen -- is in charge of this so-called "Strategic Choices and Management Review." Within the Defense Department, that has been taken as a signal that the set of financial options for the Pentagon has been driven by resources, not policy. In cash-strapped 2013, the budget appears to determine the strategy, and not vice versa. The Pentagon's spending is in the ditch, the thinking seems to be, and the strategic review process is about how to get the Pentagon out of it.
That may make some sense as the Defense Department is forced to trim its budget by $487 billion over the next 10 years under the Budget Control Act, plus do another 10-year $500 billion cut under sequestration -- if Congress doesn't help the Pentagon by paring those cuts back.
But it has left some observers of the budget process concerned.
"My view is that policy has taken a back seat," said one well-placed observer. "It is also my personal view that the back-seat role they're in is maybe not the wrong role for them to be in right now."
The sense that the Pentagon's policy shop hasn't played as much a role in the strategic review feeds the perception that has plagued the review: that it has been an exclusive process whose objectives are unclear and that the players who've been sitting at the table operate with unknown biases and disproportionate power. Loren Thompson, a consultant to a number of large defense firms, thinks the Pentagon is just in a different time and place.
"This seems to have been a budget-driven process, probably because threats are receding, but the demands of deficit reduction are pressing hard on the department," Thompson said.
The fact that Miller, the undersecretary for policy, recently floated the notion of major cuts to his staff doesn't exactly feed the sense that the policy team is ascendant.
But some officials think that the policy shop had its say already, devising the rebalance-to-Asia strategy that has figured so strongly in Pentagon strategy over the last year. Others say they think Miller may not have enough sway with the White House, or even with Hagel, and that helped sideline the policy shop's contributions. Still others claim this current process isn't all that important, even if it does amount to a precursor to next year's congressionally mandated Quadrennial Defense Review.
But a senior defense official said that policy is playing a key role in the strategic review. "Miller and his team have been instrumental in working on the hard choices that may come down the pike," the official said.