Death of a Sacred Cow

The federal debt and deficit crisis has put a clear target on U.S. national security spending, including by the U.S. Intelligence Community, or IC. For the first time in decades, the intelligence budget is facing real reductions. These cuts come as the IC is taking on increased burdens in the rapidly changing world. Despite the looming cuts, there is little discussion in the national security community about the implications of budget reductions on intelligence gathering and covert action.

This discussion needs to happen to avoid the mistakes of the 1990s, when the U.S. made personnel and budget decisions without much strategic thought or consideration for top performers.

Members of Congress and senior national security leaders have made clear that they plan to include the intelligence budget in federal spending cuts. In February, Director of National Intelligence James Clapper warned that intelligence was “in for some belt tightening,” while Sen. Dianne Feinstein, chair of the Senate Select Committee on Intelligence, argued, “It is clear that the overall spending on intelligence has blossomed to an unacceptable level in the past decade.

”In January, then-Defense Secretary Robert Gates signaled a coming downsizing of the IC, and specifically the military intelligence capacity of each combatant command. In describing his changes, Gates said, “They include downsizing the new intelligence organizations that have grown up around a number of the combatant commands in recent years, most of which are not directly engaged in the post-9/11 military conflicts.

”The cuts do not coincide with a reduced workload for intelligence analysts and operatives, but rather the opposite. The dilemma was captured by David Shedd, the deputy director of the Defense Intelligence Agency, in August: The current budget pressures are not the product of a “peace dividend” as in the past, but rather “in terms of demand signal for intelligence, demand is increasing when budget is shrinking.”The program-specific details of the intelligence budget remain classified, but the publicly available top-line spending figures highlight trends across the community. Additionally, the changing roles and missions of the IC allow for forecasting of future demand for intelligence products.

The U.S. intelligence budget has avoided major cuts over the past 30 years, though the Clinton administration is sometimes wrongly accused of severe cuts. Despite slowdowns in spending in the 1990s, the top-line budget never turned downward in real terms, and it was Congress that capped IC personnel in the years before the Sept. 11 attacks.

Amid future cuts, it is important to recognize not only the vulnerability of the IC’s resources but also its future requirements to support an elevated role in protecting U.S. interests abroad.

The 1990s saw a strain on personnel within the community. The priority of today’s IC leadership and congressional leaders must be to avoid binding our options. If the workforce is to be cut, the community must find ways to retain top performers, and continue to recruit and train highly capable individuals. In short, it must punch harder than its weight class would suggest, and punch above its weight budgetarily. Analysts no longer operate solely behind closed doors but instead are fused to operators, technicians and policymakers in ways only vaguely understood two decades ago.

Retention and morale are key indicators of the level of talent staying within the IC.
Community officials and leaders must work to maintain high morale and keep analytic, operative and technical capabilities focused on meeting the future security challenges.
Much of the success of the U.S. intelligence enterprise relies upon the immense and sophisticated resources made available to operators, analysts and policymakers. Shedd, the DIA director, highlighted the need for continued innovation in intelligence platforms and acquisitions, saying, “Intelligence always has to be ahead of everyone else because your adversary already has what’s out there.”

This technological superiority must be maintained to preserve American dominance. The cost of maintaining the technological edge will continue to increase. To mitigate the potential crowding out of personnel and other lines of the budget by acquisition systems, strategic decisions must be made to reduce redundancies and better integrate the myriad capabilities and organizations throughout the IC. One potential solution would be to replicate Gates’ efficiencies initiative that pressed services to find their own savings and allowed them to reinvest the money in priority programs rather than losing funding overall.

Policymakers should not assume intelligence budgets are protected due to their classified nature. The current fiscal climate has brought nearly every conceivable federal program to the table, to include the black budget. The recent hiring slowdowns and budget pressure at CIA and elsewhere are here to stay. IC leaders can expect more questions coming from legislators as the long knives of budgeteers come out.

The IC must be cautious not to assume core DoD Title 50 missions as part of its daily operations. The 9/11 Commission recommended divesting paramilitary capabilities from the CIA and shifting them to U.S. Special Operations Command to streamline capabilities. This recommendation was rejected by Congress and the Bush and Obama administrations, and momentum has spun in the opposite direction. The IC — specifically the CIA — is increasingly picking up operational roles and missions in the use of armed drones over Yemen, Somalia, Pakistan and Afghanistan.

The CIA also is providing security force assistance and foreign liaison. Within this transfer of responsibility, there lies a danger of the Intelligence Community becoming a holding basket for core Defense Department missions, detracting from the IC’s traditional core competencies and statutory responsibilities in intelligence gathering and analysis for senior government leaders. Intelligence leaders must resist taking on unrealistic assignments with too few resources to avoid risk of both future intelligence failures and policymakers viewing the IC as more capable than possible.

With the prospects of a major portion of the deficit reduction falling on the Defense
Department, the IC will increasingly be looked at as a willing and able substitute for combat forces. Boots on the ground will increasingly be replaced by intelligence collection and targeting via human, signals, imagery and other forms of intelligence.

The intelligence apparatus is vital to U.S. interests and security. However, it is clear that the budget for the IC will decrease. Elected and IC leaders cannot wall off the National Intelligence Program and Military Intelligence Program accounts from debt-driven reductions on Capitol Hill. Realistically, a cut to the IC budget must be managed to not catastrophically reduce capabilities but rather focus attention on priorities. Finding new ways to streamline processes, acquire top-flight technology and support the best intelligence workforce in the world is a priority.