Congress Pads Pentagon Budget with This One Weird Trick: Unfunded Priorities Lists
Each year, as Congress embarks on the annual nightmare we call the budget process, federal agencies make their funding requests known through the President’s Budget. This kicks off the business of crafting appropriations bills, which ideally will be signed into law by midnight on Sept. 30, ahead of the new fiscal year. The challenges and frequent shortcomings of this process are well-documented. Less widely known is that the Pentagon benefits from a special workaround that helps pad their bottom line: unfunded priorities lists (UPLs).
Background
Like other federal agencies, the Department of Defense (DoD) submits annual funding requests as part of the President’s Budget. But since the FY2017 National Defense Authorization Act (NDAA), military service branches, combatant commands, and the Missile Defense Agency have been required to provide Congress with UPLs—additional lists of priorities not funded by the President’s Budget. The Coast Guard joined the party in 2018, shortly followed by the National Guard, Space Operations, and other Pentagon offices including the comptroller and the Under Secretary of Defense for Acquisition and Sustainment.
For more than two decades prior to the statutory requirement, UPLs had been submitted on a voluntary basis. Supporters say the lists are an essential way for Congress to hear directly from the uniformed leaders of the national security apparatus—implying that the official budget request is adulterated by civilian authorship. Despite supporting UPLs, the American Enterprise Institute (AEI) admits that the wish lists are especially useful to Congress “when it decides the president’s budget is too low.” So, when former Secretary of Defense Robert Gates tried to break the UPL habit as part of a broader effort to reform Pentagon finances, Congress responded by making the lists mandatory.
Key Concerns
1. Requiring Pentagon officials to go around the President and the Secretary of Defense undermines the constitutionally prescribed role of Commander-in-Chief and the inherently American practice of civilian leadership of the military. As a former R Street fellow wrote in 2022, “Civilian control of the military is not simply a norm. It is embedded in the nation’s founding.”
2. The UPL requirement can disrupt the chain of command. Again, even as the AEI report defends the lists, it admits that they “are specifically not meant to be vetted through the department-wide lens, and they are often not even seen by the DOD leadership until after they are submitted to Congress.” The report also states:
It is obvious why the Pentagon leadership is not fond of UPLs. After working for months on analysis and evaluation of the department’s programs and budget in context of the overall strategy, negotiating for the best possible defense topline, and then submitting that budget to Congress, the immediate submission of a long list of unfunded priorities seems to counter all that work and, in some cases, even undermine it.
3. UPLs make it difficult to tell which items actually are a priority. After all, if a weapon, plane, or ship were truly essential to the fulfillment of the mission laid out by the Commander-in-Chief, why would it not be included in the budget request? In a 2021 budget hearing before the House Armed Services Committee, when asked if UPL items were “critical for the military’s success relative to China, terrorism, and other threats,” Joint Chiefs of Staff Chairman General Mark Milley responded, “The answer is no, in my professional opinion. If they were critical, then they need to be higher on the priority list and in the base budget.”
4. The UPL mandate puts upward pressure on the Pentagon budget and can exacerbate wasteful spending by forcing services and other leaders to submit lists regardless of whether or not there are other significant needs. And because the lists (unlike the President’s budget request) are not subject to spending caps or other spending restrictions, Pentagon officials have no meaningful limits as to what they can include and no incentive to critically weigh needs versus wants.
5. Unlike official budget documents, UPLs have no standardized format and lack basic information to help lawmakers make funding decisions. By contrast, the President’s Budget must provide essential financial, programmatic, and strategic context, including prior year outlays and estimated costs for the full 10-year budget window, in addition to budget justifications, which lay out the full cost of a program, how they interact with strategic objectives, alternatives or consequences of other funding levels, cost-benefit analysis, and associated studies or other recommendations. Reams of data are included with the DoD’s FY2025 annual budget request and the U.S. Navy’s FY2025 budget materials, whereas the Navy’s UPL is a paltry seven pages. The wish list provides minimal data with no future or alternative cost estimates. Worse, UPLs are not made available to the public on a systematic basis. They do tend to leak, however, providing taxpayers with some insight into this otherwise secretive process.
6. Pentagon top brass would like to see the UPL mandate retired. At a 2023 Senate hearing, Secretary of Defense Lloyd Austin said he would support ending the UPL requirement. Comptroller Michael McCord has likewise expressed frustration with the process, writing in a letter that Congress should “reconsider the merits of this approach.” McCord went on: “The current statutory practice of having multiple individual senior leaders submit priorities for additional funding absent the benefit of weighing costs and benefits across the department is not an effective way to illuminate our top joint priorities.”
7. Because they are outside the comprehensive national security strategic planning process, UPLs exacerbate unwanted competition between services, subverting efforts to increase cross-branch cooperation. For decades, a core component of our national defense strategy has been to enhance joint cohesion across branches in order to limit waste and duplication, achieve efficiencies, and maximize impact. According to a 2009 Time article, “funding such weapons outside normal channels leads to an unbalanced military force, jeopardizing the never-ending quest for the military services to fight wars jointly instead of engaging in internal budgetary guerrilla warfare with one another.”
8. Services could be gaming the budget process, making funding decisions and oversight more difficult. In 2022, the Government Accountability Office (GAO) reported that the Navy moved an already-contracted submarine from the President’s Budget to their UPL without providing clear rationale for the maneuver. They may have hoped this would provide wiggle room in the “official” budget request and a more favorable topline number (assuming Congress would fulfill the terms of the contract and fund the project). The GAO explained that this “can hamper the ability of the committees to oversee programs and make decisions without having to request supplemental information and explanations from the Navy.”
9. The UPL requirement and its expansion set a poor precedent for how policy and funding decisions are made in other discretionary budget areas. Though the wish list mandate is currently restricted to functions related to national security, it is reasonable to assume that it could easily spread to other federal agencies and projects. Depending who you ask, practically anything can be justified as a national security essential—either for reasons of earnestly held belief or for political expedience
10. UPLs are a habit we can no longer afford. So far, the cost of UPLs that have reached the public sphere total $27.5 billion—and that is not even a complete tally. The Fiscal Responsibility Act of 2023 already caps the topline for defense discretionary spending in FY25 at a record $895.21 billion. So far in FY24, we have spent more on just the interest on our $34 trillion debt than on defense and Medicare combined. Any further increase poses a major threat to our economy and national security. Rather than look around for more things to buy, service chiefs and other Pentagon leaders should work to identify savings opportunities.
What Can Congress Do?
Congress can and should repeal the statutory mandate requiring the submission of UPLs. Reverting to pre-2017 voluntary status could reduce the budgetary mischief caused by the wish lists. This is a commonsense first step, and the bipartisan “Streamline Pentagon Budgeting Act” aims to do just that. Leading this important legislation are Sens. Elizabeth Warren (D-Mass.), Mike Braun (R-Ind.), Mike Lee (R-Utah), and Angus Stanley King, Jr. (I-Maine). House cosponsors include Reps. Pramila Jayapal (D-Wash.), Tom McClintock (R-Calif.), John Garamendi (D-Calif.), Warren Davidson (R-Ohio), and others.
Other reforms could require UPLs to include pay-fors to offset the additional spending requested and for the wish lists to be made publicly available online. They could also require the Pentagon to pass a clean audit before considering additional UPLs.
Conclusion
Providing for the common defense is the federal government’s primary role. However, the UPL mandate unnecessarily complicates the already difficult task of planning for and funding our national security apparatus on an annual basis. Members of Congress should not let a political contrivance bog down this critical task any further.