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Thursday, October 17, 2013

Intelligence Spending and Appropriations: Issues for Congres

Marshall C. Erwin
Analyst in Intelligence and National Security

Amy Belasco
Specialist in U.S. Defense Policy and Budget

It is now publicly acknowledged that intelligence appropriations are a significant component of the federal budget, over $78 billion in FY2012 for both the national and military intelligence programs. Limited publicly available data suggest intelligence spending, measured in constant 2014 dollars, has roughly doubled since the September 11, 2001, terrorist attacks and, before declines over the last three years, was almost double spending at its peak at the end of the Cold War. The recent disclosure by the Washington Post of details from the Administration’s FY2013 National Intelligence Program (NIP) budget request may spark further debate about intelligence spending. It is likely that Members of Congress will more closely examine intelligence programs to ensure they are both effective and affordable. Perhaps the most important questions for Members are how and to what extent intelligence spending, after a decade of sharp growth, should fall in comparison to declines in other defense spending. See the section titled “Comparison with National Defense Spending” for further discussion on that topic.

Fiscal pressures today will require intelligence officials to more clearly establish priorities and to make difficult choices between different intelligence collection platforms and agencies. Such choices may not have been required during the past decade, during which additional funding could be found to address new threats and to fix organizational weaknesses. In the 1990s, during a previous round of budget cuts and prior to the establishment of the Director of National Intelligence (DNI), it was argued that the intelligence community lacked a rigorous system to establish priorities and to tailor the intelligence budgets to meet those priorities. It remains unclear whether intelligence reforms after September 11, 2001, sufficiently addressed this issue.

Intelligence spending is spread across the 17 organizations comprising the intelligence community. Over 90% of NIP funding, which focuses on strategic needs of decision makers and is notionally under DNI control, falls within the Department of Defense (DOD) budget. DOD members of the intelligence community also receive funding for tactical intelligence from the Military Intelligence Program (MIP), which is under the authority of the Secretary of Defense but which may fund intelligence collection platforms that could be used for both tactical and strategic purposes. The remaining portions of the NIP fall within several other Cabinet departments and two independent agencies. These overlaps complicate both budget formulation and the congressional appropriation process.

The appropriations process for intelligence activities is complex and not widely understood. A number of changes have been proposed that would streamline the process or disentangle the NIP from the Department of Defense budget. Some, such as the proposal by a 9/11 Commission to combine authorization and appropriation responsibilities in a single committee, would be inconsistent with congressional practices during the past century. Other proposals to separate intelligence appropriations from defense appropriations, or to establish a separate intelligence title within defense appropriations acts, are less radical, but have met with opposition.

As a result, the congressional intelligence appropriations process is likely to receive continued attention. Congress may choose to review the DNI budget formulation process and appropriations procedures to ensure that they maximize effective decision making at a time when both national budgets and international threats to the United States remain issues of major public concern.

Date of Report: September 18, 2013
Number of Pages: 21
Order Number: R42061
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