Here is the estimable Frederick Mosher in his 1954 classic discussing the rise of the program budget. A programmed budget, of course, is when money is tied to specific outputs or objectives, like F-35 aircraft or Constellation-class frigates. By contrast, the heritage of financial management through the Korean War had money tied to inputs like organizations and objects of payments, where leaders had discretion in how they turned military plans into programs.*
The first major push for programming was the FY 1952 budget (due to the passing of Title IV of National Security Act Amendment of 1949). Frederick Mosher basically tore apart the foundations of that reform in his 1954 book, and in any rate the emergencies of the Korean War interrupted real implementation. McNamara and his whiz kids largely took the principles from a decade before, and just implemented the programming ideals in the most radical way imaginable. We still live with that today, mind you.
Enough preamble. Here’s a slice from Mosher:
But certain reservations must be made. In the first place much of what has been discussed is a “paper” plan. The JCS proposal began to go into effect during 1953. The Army program system, while in operation in certain respects for some years, has yet to be tried on a full-scale basis. Some still scoff at it; and the budget, as passed, is still the ruling document whether or not the “program” has caught up with it. The Air Force, in spite of its programming system, is still regarded by many, including some of its own staff, as being an opportunistic and largely “unplanned” organization. The extent to which it has in the past departed from its own programs suggests doubts at least as to the future effectiveness of its system. It is apparent that the planning and programming systems described in the foregoing pages are still, in large part, plans and hopes.
In the second place, serious questions may be raised whether the systems, either as practiced or envisaged, provide satisfactory answers to the problems of relating plans and budgets. All of them require that plans and programs be completed more than a year before the budget year begins, which means more than two years before it ends. None of them has yet included a satisfactory way to take into account budgetary possibilities when plans and programs are first developed. All of them follow the sequential pattern whereby the plan and the program are developed before the budgetary process beings. All of them are highly centralized, either in Washington or at Wright Field.
The simplicity of the performance budget is a delusion in another way. In fact, it is extremely difficult budgeting. One of the probable reasons that so much of our Federal budgeting has not reflected the program approach is that it is easier to budget and control funds simply on the basis of organization and object. For the performance budget does not replace these; it is in addition to them. Accounts still have to be kept, payments still have to be made, accountability still must be maintained in terms of organization and object. And the change-over to a performance system, as many hundreds of Federal employees would testify, is an enormous job.
The changes which we have come to associate with performance budgeting, such as simplification and reduction of appropriations, revision of classifications, and others, important as they are, are only a part of the concept. Underlying them is a notion which represents a quite radical departure from previous practice and previous ways of thinking. It is simply that when we budget and authorize funds we are providing for things to be done rather than for things to be bought. Moneys are furnished for activities and functions rather than for purchases and payments. Almost our entire experience and heritage in governmental financial control is the other way around. In a sense, this amounts to substituting ends for means as the focal point of financial planning and control.
*End Note: The sharp observer will note that today’s Military Pay and Operations and Maintenance accounts are not programmed budgets. Programming was only accomplished for RDT&E and Procurement accounts, but that’s the effort that in the long run wages the tail of O&M.
David Novick, sometimes called the “father of cost analysis,” helped hopes that the true programming could apply further. Could you imagine the DoD, OMB, and Congress all approving everything done in military sustainment and operations? For example, if there was an unexpected conflict requiring the use of special forces in some country, that would be a “new start” and appropriations would have to be reprogrammed or Congress pass a supplemental. Crazy to consider, but that’s what its like for building weapon systems! I shudder to think.
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