T2 B10 Omb Submission Fdr- Questions For Omb And 3-17-04 Omb Response 701

Questions for OMB

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1) For the FBI's counterterrorism and information technology programs for FYs 1993 through 2004, please provide: a. b. c. d.

DOJ' s budget request; OMB's passback; "*" The President's request to Congress; and The congressional appropriation (including any supplemental allocations).

2) How did you determine what of the FBI's expenditures for these years could be captioned as counterterrorism expenditures? Information technology expenditures? 3) Does OMB consider critical infrastructure protection a part of the FBI's counterterrorism program? FBI building security (i.e., guard force)? Security for major events (i.e., Olympics)? 4) Please explain how the FBI's annual "counterterrorism crosscut" is calculated and the significance of the five OMB categories used to track FBI counterterrorism expenditures.1 5) Does OMB track both the funding and the personnel dedicated to counterterrorism at the FBI? Do the counterterrorism personnel figures include analysts, agents, linguists and surveillance personnel? 6) Does OMB track the FBI's NFIP expenditures separately from its expenditures in other program areas? 7) Did OMB see a change in DOJ's counterterrorism and counterintelligence expenditures after national and economic security became the FBI's top priority in 1998? 8) What was the FBI's total funding allocation for FYs 1993 through 2004, including percentage increase calculations from year to year?

1 Department of Justice Office of the Inspector General Audit Report 02-38, Review of the Federal Bureau of Investigation's Counterterrorism Program: Threat Assessment, Strategic Planning and Resource Management, September 2002, sets forth FBI "Counterterrorism Crosscut" figures reported to OMB for FYs 1998 to 2002, and mentions five different counterterrorism expenditure categories.

Page 1 of 1

Kevin Scheid From:

Kevin Scheid

Sent:

Monday, April 19, 2004 5:55 PM

To:

Newstead, Jennifer G.; Kesselman, Marc

Subject: Lines of Inquiry for OMB Interviews Jennifer, As I mentioned on the phone, most of our questions will be focused on issues raised in the interrogatory. We just want to probe this issues a bit further than the responses provided. Additional lines of inquiry include:

1. The reason behind the Administration's use of supplemental appropriations for funding the global war on terrorism (GWOT). 2. Congressional oversight of the GWOT and the implications for congressional oversight when supplemental are used to fund the GWOT. 3. OMB's role in the examination of the supplemental requests, like the FY 1999 supplemental for the Intelligence Community. 4. OMB's examination of the CIA-FBI information sharing issues and what if any steps OMB took to improve these coordination issues through the "management side" of OMB. 5. The pros and cons of a single appropriation for national intelligence. 6. OMB's capabilities to oversee intelligence activities. I hope this helps. Please do not hesitate to call if you have any questions. These interviews are intended to help us clarify some issues that have come up in our previous interviews of government officials. I may have additional questions on the FBI. I'll forward them as soon as possible. Thanks for your help. Kevin Scheid k/.

4/20/2004

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Confidential - Contains Deliberative Information OMB's Response to Questions for the Record for the Office of Management and Budget From the National Commission on the Terrorist Attacks Upon the United States 3/17/2004 Consistent with the President's policy of support for the work of the National Commission on Terrorist Attacks Upon the United States ("Commission"), and as a matter of comity between the legislative and executive branches, the Office of Management and Budget ("OMB") is hereby providing to the Commission information that maybe responsive to the Commission's request of January 8,2004, entitled "Questions for the Record for the Office of Management and Budget From the National Commission on the Terrorist Attacks Upon the United States." This information is provided with due regard for the constitutional separation of powers and reserving all legal authorities, privileges and objections that may apply, including with respect to other governmental entities or private parties. This information is furnished to the Commission in confidence and as in closed session. Please ensure that the Commission protects it from unauthorized disclosure and from use for any purpose otherthan the purpose for which the Commission made the request. j The responses provided herein are based on information contained in files in the possession of current OMB staff, and the recollections of current OMB employees. OMB has endeavored to provide detailed answers to the questions posed by the Commission; however, in some cases the available information is limited by the fact that many individuals who worked on counterterrorisra-related matters at OMB during the timeframes requested are no longer employed b y t h e agency. . . . 1. Describe how the Office of Management and Budget conducted oversight of U.S. counterterrorism efforts from January 1995 to the terrorist attacks on the United Stales of September 11, 2001. How has this effort changed since September 2001? Prior to the transmission of the FY 1998 Budget, OMB conducted oversight of efforts that are now considered "combating terrorism" in a manner similar to the oversight OMB affords all programs in the Government OMB program examiners analyze departmental and agency budget requests to determine whether proposed program funding allocations are accurately estimated, consistent with Administration policy, and likely to result in the desired outcomes. Examiner recommendations are vetted with OMB's policy officials through a structured budget review process. OMB's recommendations are shared with the agencies in a "passback,." and final funding recommendations to the President are determine^ through negotiations between the agencies, OMB, and the White House. Throughout the year, OMB analysts work with agencies to ensure that programs are executed in an efficient manner, consistent with agency plans, apportionments, and Administration policy. Beginning with the transmission of the FY 1998 Budget, OMB was required by the Fiscal Year 1998 National Defense Authorization Act to produce an annual Report to Congress on Combating Terrorism ("Combating Terrorism Report") which details government-wide spending to combat terrorism. To develop this report, OMB created an interagency working group to O j. develop definitions of categories of spending that support "combating terrorism." Oncethe 3 t£ definitions were set, the agencies were required to report on funding in these categories and «

Confidential - Contains Deliberative Information OMB's Response to Questions for the Record for the Office of Management and Budget From the National Commission on the Terrorist Attacks Upon the United States 3/17/2004 •: describe how this funding supported combating terrorism. The definitions used in the Combating Terrorism Report, as well as the specific activities encompassed by the definitions have evolved over time and been refined from year to yeari: In developing the Combating Terrorism Report, and by utilizing information from the report to inform an annual crosscutting review of combating terrorism efforts, OMB performed the same basic analytical functions as were performed with respect to other government programs, but in a manner that focused on the entire universe of programs related to combating terrorism, hi examining the combating terrorism universe as a whole, OMB - often working with other Federal agencies and entities - could more sharply analyze! funding decisions by considering factors such as: . . ' •'•. _ various agency roles and missions in combating terrorisin;^(***A*rc"s y f—^ coordination among agencies in evaluating and executing these missions; overlap and duplication among various agency missions and programs; Administration goals, objectives, and priorities for combating terrorism programs; and program effectiveness in addressing these g o a l s ; T ~ ~ ^ ^e>(0 «*>«**. Additional information on OMB's role in coordinating couhterterrorism resource issues prior to September 1 1 , 2001 is provided in response to Question 2, below. Since the introduction of the Combating Terrorism Report for FY 1998, OMB has continued working with agencies to develop, refine, and validate the universe of combating terrorism programs. : Specifically, programs have been added to, or taken out o£ the combating terrorism universe based on discussions about whether or how they align with the combating terrorism mission. Following September 11, 200.1, the definition of "combating terrorism" activities "~"-| utilized for the 2003 Combating Terrorism Report underwent a far-reaching revision. Most p' notably, as the Administration recognized the central role of a broader set ol activities in "^ . protecting the American homeland, OMB brought additional programs under the combating terrorism umbrella. For example, broader border security efforts- such as the entire Border Patrol and thei Coast Guard's drag and migrant interdiction mission- were incorporated. / Additionally, over time agencies have refined their methodology to better capture funding related to combating terrorism, .and activities have been aggregated: jar disaggregated differently to facilitate analysis. For example,, a bureau may have previously reported a set of smaller programs that appeared unique and did not facilitate intra- or inter-agency examination. The same bureau may now report those programs as part, of a larger, coherent effort, allowing analysts: to compare efforts across the government OMB has also worked to improve its data management tools. Once combating terrorism activities are identified their costs must be documented in a transparent system that facilitates mformedidecision-making. The combating terrorism data have evolved from a spreadsheet to an agency-activity-based database to the current budget-account-based database. OMB has provided •& detailed briefing to Commission stafFon the current structure of this database and how it has evolved since its inception. /

Confidential - Contains Deliberative Information OMB's Response to Questions for the Record for the Office of Management and Budget From the National Commission on the Terrorist:Attacks Upon the United States 3/17/2004 i Since September 2001, OMB has been engaged in many aspects of the Administration's efforts to combat terrorism: j i

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Increased Oversight of Combating Terrorism Resources. This Administration's highest priorities are winning the war on terror and securing the jhomeland. As such, the resources allocated to pursuing the global war on terrorism - including resources for combating terrorism overseas and securing the homeland - have increased significantly, hi the area of , f, for example, the FY 2005 Budget requests nearly three times the / ^discretionary resources provided in FY 2001. The FY 2005 resource levels request funding for a significant number of activities that the Government did not perform in FY 2001, such as operating the Transportation Security Administration ?nd encouraging the development and purchase of new biological countermeasures through' Project BioShield. As OMB continues its traditional work of reviewing budget requests and policy implementation, the increased funding and heightened program activity requires that OMB interact more frequently with the agencies on issues related to cdmbatmg terrorism than they did prior to September 11,2001. ! Improving Combating Terrorism Data. OMB has also ta^en steps to improve transparency and accountability for combating terrorism resources. For example/prior to September 11, 2001, OMB's combating terrorism database was finalize^ during the development of the Combating Terrorism Report, which occurred subsequent to the formulation of the President's Budget each year. Also, the data were developed at the activity level so that it was more difficult to track funding to specific budget accounts. For the FY 2005 Budget, I OMB completed the detailed database prior to the budget's transmission, gathered activity-^ level data that track to specific funding accounts, and embedded the account funding levels J into the Budget database so that other stakeholders can review and analyze the data, ( i Support to Executive Office of the President ("EOF") Policy Groups, Since September, 11, 2001, OMB has participated in a variety of intra-White Hjouse and interagency policy efforts related to combating terrorism. There has been a high levjel of cooperation among these groups and OMB. After the establishment of the Homelapd Security Council ("HSC"), for example, OMB dedicated staff and managers to work directly with the HSC and its staff, and many more were engaged with homeland security on an i$sue-by-issue basis. That cooperation continues not only with the HSC, but also the; National Security Council ("NSC"), the Office of Science and Technology Programs; ("OSTP"), and other groups. OMB has also worked with the NSC, HSC and other fedebl entities on the development of a number of policy documents related to combating terrorism, including the National Strategy for Homeland Security, the National Strategy for Combating Terrorism, the National Strategy for the Physical Protection of Critical Infrastructures and Key Assets, the National Strategy to Secure Cyberspace, and the National Strategy'\to Combat Weapons of Mass Destruction (collectively "Strategies"). OMB participated in a variety of formal and informal

Confidential - Contains Deliberative Information OMB's Response to Questions for the Record for die Office of Management and Budget From the National Commission on the TerroristiAttacks Upon the United States : 3/17/2004

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activities - such as participation in HSC and NSC Policy Coordinating Committees - to monitor progress in executing or to build upon these Strategies. Although OMB's involvement in these efforts began at least as early as ithe 1990s, it dramatically increased after September 11,2001 because of the Administration's emphasis on combating terrorism. Throughout this time, OMB's role has remained-.the sanie: helping to ensure that the keyO ^ capacities required to combat terrorism are developed imj an efficient and effective mannero OMB also has continued to review combating terrorism iroles and missions - often along with' other entities such as HSC, NSC, OS.TP, or Fedeiral agenjcies - to try to ensure that new. resources support complementary programs and enhance^ capacity, and do not create or perpetuate duplication, overlap, or fragmentation. ; | / •

Defining Homeland Security in Budgetary Terms. In Working with the HSC, one of OMB's initial tasks following September II, 2001 was to helpipolicy officials define and understand the budgetary scope of programs and activities that constituted homeland security. OMB undertook this process during the development of the FY 2003 Budget. For example, as a result of this process, the Administration determined that1 all border security efforts - much .more broadly defined than the limited programs that hid previously been reported as combating terrorism - should be categorized as homeland security in the budget database. Another significant change following September 11,2001 was the inclusion in the budget database of programs involving Critical Infrastructure Protection ("CIP") and which ensure Continuity of Operations ("COOP") in the homeland security and combating terrorism universes. For the FY 2003 Budget, OMB concluded that these activities should be classified for budget purposes as homeland security. However, b;ecause they had been maintained separately from the combating terrorism universe :in prior! Combating Terrorism Reports, in the 2002 Report (released in June 2002) these activities were included as homeland security, but excluded from the combating terrorism totals.; Subsequently, because the National Strategy for Homeland Security (released in July 2002)! defines homeland security as related to terrorism — and includes a "protecting critical infrastKicture key assets" mission area that largely encompasses the historical definitions of GIF and COOP - the 2003 Combating * o Terrorism Report included these activities in the Combating Terrorism totals. <*-> '

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Establishing the Department of Homeland Security. In 'establishing the Department of Homeland Security ("DHS"), the Federal Government iias undertaken its largest reorganization since 1947. OMB has been involved throughout mis process - from the development of an initial proposal to create a newicabiriet-level department, through the stand-up of DHS, to traditional OMB oversight of:the new organization. In doing so, OMB has provided a range of technical and policy expertise. For example, during the formulation of the FY 2004 budget, which occurred prior to the. enactment of the Homeland Security Act of 2002, OMB worked to simultaneously consider :the bjudjget and policy implications to the government if programs were shifted to DHS or if they j-eihained in their pre-DHS agencies. After enactment of the Homeland Security Act, OMB fpnhcd a Homeland Security Branch to oversee DHS, consistent with OMB's oversight structure for other federal departments and

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Confident

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OMB's Response to Questions for the Recorilfor e Office of Management and Budget From the National Commission on the Tcirpri Attacks Upon the United States 3/17/200<

agencies. The Homeland Security Branch also co|ordi|ijaf:es crosscutting homeland security issues. Performance Measurement and Accountability: jOMB s worked to improve the measurement of, and hold agencies accountable f terrorism activities. For example, one of this Adnjuhis don's key motives for proposing to create DHS was to unify a range of fragmented cooiba :g terrorism-related programs into a single department and, in doing so, improve accot ntal|i| for those functions. The FY 2004 presented resources for these Budget proposed a budget account structure for D iS formerly fragmented functions as merged activities,1 an requested new resources in that structure. This allowed a range of stakeholders to cp: er DHS as an integrated Department and facilitated DHS' integration as these functions weix Iransferred. OMB continues to work with DHS to consider opportunities to unify or better cc rdinate similar operational activities across the Department, in particular in the development t if its required Future Years Homeland Security Program ("FYHSP"). OMB h is aj s; jheld DHS to the Government-wide standard of evaluating 40 percent of its funding thi oug; i| he Performance Assessment Rating Tool ('TART'). The PART has been useful in foe usi^J DHS and other agencies on building a sound architecture to measure and achieve results : 2. Haw did OMB interact with other EXOP offices to opo* ite. evaluate, and resolve counterterrorism resources issues, including the Natfo TO! . :ty Council (NSC) staff, the lchnology Policy (OSTP), and other Office of the Vice President, and the Office of Science st important issues during this offices from 1995 to September 11, 2001? What were period? : Numerous formal and informal consultations occurred bj well as the Office of the Vice President ("OVP"),:as part o: development and analysis process.. :

OMB and other EOP offices, as e regular resource issue

The two most significant vehicles for coordination witlin tj ij JEOP were the production of the President's Budget and, beginning in FY1998, the Conibai Terrorism Report (discussed above). For the President's Budget, OMB invited: EOP aj_ _ es to raise issues, participate in policy discussions, and provide advice on funding-decision! ' [he degree of this participation varied from year to year, depending on circumstances1: and ti Interest of the participants. For the Combating Terrorism Report, all EOP entities were incited: comment as part of the regular clearance process. In particular, the NSC and OSTP h eview and draft those portions of the Combating Terrorism Report falling within their areas [expertise - national security policy and research and development respectively. In addition, OMB attended NSC and OSTP-sponsoredi-inii , reviewed Presidential Decision Directives and other policy papers, and analyzed proposals T ited to counter-terrorism. OMB developed close working relationships with several offi ;ring this time period, and often worked closely with these agencies when policy decisions h significant resource implications.

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Conndcnti I'- Contains Deliberative Information OMB's Response to Questions for the Recoi tfor he Office of Management and Attacks Upon the United States Budget From the National Commission on the Teij 3/17/200^

More details on specific relationships and issues follow: •

! Transnational Threats NSC: OMB worked closely wim me NSC, particular] Personnel in OMB!s Command, ^ Directorate, on funding issues related to counterib Control, Communications. Computers, and Inte^genc jranch developed strong links with the NSC's Transnational Threats directorate. B ,nni|Lg|in the spring of 1999, the NSC chaired a Counterterrorism Security Group to review ? program/policy process for aitical resource needs to support counterterrorisni and identified their key objectiyi those objectives. OMB regularly participated in this fpffup's activities at the staff level. We do not have detailed information regarding the f participation at higher levels, although we believe it occurred on an ad hoc basis.: Tj list of objectives, shortfalls, and program funding recommendations were given to the ii ^ncics for their consideration in with OMB for consideration during drafting their proposed budgets. NSC also shared the sisted, OMB resolved certain the review of agency requests. For funding issues thai issues at formal interagency meetings and worked thnj !gh other issues via informal staff contacts. Current OMB staff, to their knowledge, do i: have official correspondence between NSC and OMB to confirm these meeting 5,;.oij lefinitive listing of dates of the meetings. OMB '5 records do not provide a definii ive of issues, but show that the following issues were among those discussed: o Weapons of Mass Destruction (WMD) -' ; the Federal capabilities to defend against a WMD attack, and how should the, golent allocate resources to improve those capabilities most effectively? o Bio-terrorism defenses - What is the appro pria ivision of resources and responsibility between the federal governor eint states? o Replacement of the Foreign Emergency S'u ppo earn (FEST) aircraft: What is the best way to replace the aircraft that deployi :d t ejge teams overseas during a crisis, which agency should pay for it, and how? .o Rapid Assessment and Initial Detection (R MD sams1 - How many teams should be funded and where should they be based? ;• o Level of support for Critical Infrastructure ^ro ion: What is the level of priority to assign these activities and what is the corre $po ,£ig funding level? o Cybersecurity: What is the best set ofappn to secure Federal computer systems, and what are the funding implicati ons those options? OSTP: OMB's interaction with OSTP came prima ijy development ("R&D") OMB ^participali ., , _ programs. ^ ^ xj _ in _ interagency working groups to try to ensure the bMtiuse efforts to prevent or mitigate the use of WMD in a. tern! biological, chemical, radiological, and nuclear wea 3br4 B

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tugh examining research and jvcral _._.. OSTP-sponsored _^ . _ _R&D ifresourccs in the government's —--••- •" *J on it attack These groups focused id very large explosive devices.

units "WMD-Civil Support Teams" to rcfiect :thc' \w broader mission.

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Confidently '— Contains Deliberative Information OMB's Response to Questions for the Record fo ic Office of Management and Budget From the National Commission on the Tcrrons Attacks Upon the United States 3/17/2004 •i

The working groups produced documents that out linejj ic types of projects being pursued, the agencies involved in the work, and where resjourc
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lent align various agencies' R&D

o Research duplication: How can the Federal] gov efforts to minimize duplication? o Research priorities: How should the go\?

jptimally focus limited research

3. From January 1995 to September 1001 we.re the errorism efforts of the nation annual "Director'sReviews." examined by the Director of OMB or other senior offl If so, -what -were the assessments, -what changes were ri led, and how did OMB staff follow up on these changes? \g with the development of the FY1999 Budget. conducted an annual Director's / and other senior officials participated in these reviews. As with other OMB Dircctoif s Reviews, the combating terrorism reviews typically focused on funding levels for programs a|s aated with combating terrorism and major funding or policy issues for the upcoming fiscal iyi r. And because combating terrorism cuts across various Executive Branch agencies, uSb /iews also considered how to properly align responsibility for combating terrorism across i jencies while avoiding overlap and 1C? duplication, as well as how to optimize combating terfc risnji; Durces, To the greatest extent possible, OMB worked to align budgetary resources wi h.'"' listratipn priorities within overall resource constraints.

Due to turnover in personnel and the volume of issues: t lat | id have been considered over the course of numerous budget cycles, it would be impossil >le to i iil all of the OMB assessments and recommendations throughout this time period. Hov /evejrj jsome of the more significant policy and funding issues include the following: :i

Weapons of Mass Destruction (WMD) Consequence May it: Issue in Director's Review FY1999. OMB examined the time frame for trz ' tioning the lead agency role in WMD. consequence management from the Departan nit ^ {Defense to the Federal Emergency Management Agency. This included consideration^ of tt|e )urce implications of an expanded WMD consequence management program for^l ites and localities involving training, equipment, exercises, and expert advice.

Confy

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OMB's Response to Questions for the Record foi e Office of Management and Budget From the National Commission on the Tcrrorifci Attacks Upon the United States 3/17/200<

Embassy Security: Issue in Director's Review FV 20QC OMB reviewed requests for aftermath of the bombings in additional funds for embassy security, particular!} in fforts for overseas security and the Africa. OMB considered the status of standards-is speed at which security upgrades could be executed. Critical Infrastructure Protection (including proit ctidn | if cyber infrastructure): Issue in Director's Review FY 2000 and FY 2001. OMB isonsid zred a variety of issues related to critical infrastructure protection, including: fundai ig lev is for critical infrastructure protection activities, agency roles and missions in critici infrastructure protection, coordination of critical infrastructure protection acjtivitiqs and their consistency with Administration policy guidance, and difficulties rnj obtai] ing sound data for critical infrastructure protection activities. •

Continuity of Operations: Issue in Director's Review Jftt 2001. OMB examined a variety of issues related to Continuity of Operations, including this itatus of agencies' continuity of operations planning efforts and the funding allocated to $ upport continuity of operations programs. ; Combating Terrorism Research and Development: Issie in Director's Review FY 2001. OMB reviewed the government's combating terrorism ;?4 search portfolio, including the level ermeasures (e.g., chemical, — ^ _ ^__ j , j — — _. — — .^ — iber of issues, including: whether the overall funding level was appropriate; if the dis ribtt n of funding among agencies and agency efforts were duplicative types of countermcasures was effectively balanced; or complimentary; how specific bill or report Ian ght affect the execution of combating terrorism research and development pro and how to ensure technology transitioa 9

To follow up on budgetary and policy recommendatibnls, QN B staff employs a variety of means -many as part of their day-to-day responsibilities in exercisi g program oversight For example, r\\n ~*^£T J i; , cc* _ ' i _ _ ^ - ^ _ _ J i _ - ? _ ^ ? _ ^ _ ^ .:_«__ •! ' " ^ ' j . j / _ _ » i _ j J_A_ OMB staff and policy officials attend briefings and maJfcc sit visits to.^^% gather morej _detailed data in their areas of responsibility. OMB staff work with iricy counterparts on a regular basis to ensure that they are executing their programs consistent \ legal requirements and Administration policy. For the staff who worked on db ; the Director's Review and OMB's Combating Terrorism Report, reviewing the Gfc venm ent's crosscutting execution of combating terrorism programs was one of their areas pf r sibility. In addition, OMB works to ensure that policy decisions are appropriately reflecte d m1< ngressional Justifications and other agency budget materials. When substantive legisl atioia required to implement an OMBgenerated initiative, OMB staff work to coordinate the:dev *'•cj|bment of the legislation.

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As a matter of longstanding practice, OMB programj e xami: [iers arc responsible for assessing program performance within their assigned agencies^ mclud programs whose objective is to combat terrorism. The examiners use data provided jihrpu, budget reviews, briefings by agency effectiveness. In reviewing a personnel, and site visits to develop judgments about a pro budget request, examiners also take into account thcjprioriti expressed by the Administration and the particular agency. i j I

As combating terrorism programs have grown in impc rta land size, OMB has .reviewed them more systematically. While most of the personnel wh > revi red these programs from 1995 to 2001 no longer work at OMB, we know that the follc^ring formance measures were implemented during that time: The 1993 Government Performance and Results £ct ("GPRA") required Executive Branch. jility by focusing on program agencies to improve effectiveness, efficiency, and iccoi ; strategic and performance plans, results. Under the statute, agencies had to begin devel< which encompassed their combating terrorism acii d e s . lOMB worked with agencies to approve their strategic and performance plans. I OMB participated in several interagency working) groups established to ensure consistency among programs throughout the government OMJb's wrjrk with OSTP in the area of combating terrorism R&D (as noted in the ans\g review ofdon government-wide progratr two) is an example of a a ensure greater program effectiveness. In the 1998 Defense Authorization Act, Congress je rtabli! ifeed the requirement for OMB to submit the annual Combating Terrorism Report, jjn draftiM tin's report, OMB had to examine programs and see which actually contributed to cojmbati |: terrorism activities, and which contained program duplicatioa j 1 : '. For the FY 1999 President's Budget; OMB establife] icd a ^^»^v-™-. counter-terrorism „«. „«.w*—. tore standard Director's Review crosscut This review summarik xi the bonibating terrorism programs for t^ t*^««,i Government, i the n,^ Directoi T^:_J.«*A_ with w_-ti. 1^ ^aiygis of combating terrorism the0 Federal spending across government agencies.

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The current Administration has developed a new l;the ogram Assessment Rating Tool ("PART'), to rate program effectiveness. Li partipu iar, tl | PART attempts to determine the strengths and weaknesses of federal programs with] focusl on program results. The PART is being applied to numerous programs across the government, including certain combating terrorism and intelligence related programs. To daje, the Jfdministration has assessed approximately 400 programs across the entire federal gove oiment. As part of this process,

Confidential - Contains Deliberative Information OMB's Response to Questions for the Record for the Office of Management and Budget From the National Commission on the Terrorist Attacks Upon the United States 3/17/2004 OMB's Intelligence branch reviewed theHuman Intelligence programs at both the Central Intelligence Agency ("CLV])_andJfae Defense J^tenigenlSgAgency-^TJlA") - programs that directly support the war onterrorism. Other OMB branches, including the Homeland Security Branch (as discussed in the responses to Questions one and thirteen), have also performed PART reviews on combating terrorism programs. In three more years, the Administration plans to have assessed the performance and management of roughly 100 percent of the Federal Budget. 5. From 1995 to 2001, did the OMB Director report to the President regarding the effectiveness of the nation's counterlerrorism efforts; the adequacy of U.S. resources on counterterrorism across the government: and the management of the overall national effort? As described in detail in response to prior questions, OMB reviewed combating terrorism programs' funding and effectiveness through the annual budget development process. Beginning with the FY 1999 budget, OMB staff presented to the Director a crosscut review of combating terrorism programs across the government. The crosscut review entailed OMB collecting data from all agencies and working with other EOF entities (such as OSTP and the NSC) to review the data and to inform programmatic and budgetary decisions. The process of putting together <\j^ the crosscut review allowed OMB staff to better assess the effectiveness of the nation's combating terrorism efforts and the overall adequacy of the resources. The crosscut review process also provided the Director with a better understanding of the resources being expended to combat terrorism, and whether those resources supported a cohesive strategy across the government In order to pro vide the Director with the most cracial information, staff included / recommendations from the NSC's Counterterrorism Security Group. ,*' .

Current OMB employees do not have personal knowledge .of prior OMB Directors'

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communications with the President However, the foregoing describes what was done at the staff i level to inform the Director about counterterrorisTri issues, and thereby to assist the Director in his role of advising the President on these issues. 6. Describe any major differences, if any, on the effectiveness of U.S. counterterrorism efforts between the OMB and the federal departments and agencies that execute CT programs during the years 1995 to September 2001. OMB's participation in efforts related to combating terrorism are consistent with OMB's overall responsibilities: to ensure that the Federal Government clearly defines its goals and seeks to achieve those goals in as efficient and effective a manner as possible. To this end, OMB takes • into account numerous factors when reviewing agency funding requests. These factors — each of which are independently important - include whether the agencies' requests are consistent with the Administration's priorities, accurate in terms of cost, realistic in their assumptions for implementation in the relevant time-frame, duplicative or redundant with other Federal programs, and efficient and effective in accomplishing the goals of the program.

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Confidential - Contains Deliberative Information OMB's Response to Questions for the Record for the Office of Management and Budget From the National Commission on the Terrorist Attacks Upon the United States. 3/17/2004 When OMB declines to fully support a specific agency funding request or policy proposal, it is not necessarily due to major differences on the program's absolute effectiveness. OMB's role often requires it to make judgments about the relative effectiveness of various programs so that funding can be optimally allocated. As one of the primary considerations described above, program effectiveness can be an important consideration in resource allocation and policy decisions. For example, in its review of the request for the FY 2000 budget for Embassy Security cited above in response to Question 3, OMB did not support the agency's request for funding for construction of new facilities (as opposed to the ongoing costs of security upgrades initiatives). OMB believed that money could not be effectively spent on new construction in the absence of updated security standards. , Additional examples are provided in the classified annex.. I v€u 7. Describe the nature of the OMB budget reviews on counterterrorism, including the specific programmatic areas where the reviews focused (e.g., diplomatic, intelligence, and/or military efforts); and the internal staff and analytic resources OMB assigned to the conduct of counterieirorism oversight. As discussed above, OMB has conducted an annual Director's Review of combating terrorism efforts since the development of the FY 1999 Budget. As a crosscutting review, the combating terrorism review typically summarizes major budget and program decisions made up to that point in the budget formulation process (ie., how do individual agency decisions aggregate into the Government's combating terrorism effort as a whole). Some of the broader issues that have been addressed include: •

What is the Government-wide funding level recommended for combating terrorism efforts? How does that compare to the current estimate of the previous year's level? OMB staff typically highlight for the senior policy officials the major changes - increases, decreases, new initiatives - from the previous year.

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Are. there any major changes in the universe of combating terrorism programs that affect the estimates? These are larger program changes like the definition of homeland security discussed above, not inconsistencies in the estimates. For program changes, OMB adjusts its estimates for at least a three-year period (the prior year, the current year, and the budget year) to ensure comparability in the funding estimates.

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Presentation of various crosscutting analyses of the data. For example, pie charts showing each agency's slice of total combating terrorism funding have been presented in the past.

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Discussion of any large-scale budgetary issues hi combating terrorism programs. For example, at the time of the FY 2004 Budget review, the Homeland Security Act had not yet

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- Contains Deliberative Information OMB's Response to Questions for the Record for the Office of Management and Budget From the National Commission on the terrorist Attacks Upon the United States 3/17/2604 been passed. OMB staff presented two analyses of the Government's comhating terrorism efforts to senior policy staff, one with and onejwithout the Department of Homeland Security. | The response to question three (above) provides examples of some of the specific programmatic areas where reviews have focused. ! As is also detailed above, staff and analytic resources across OMB have been assigned to counterterrorism oversight on an issue-by-issue basis. For example, critical infrastructure protection efforts span across Federal agencies; OMB examiners with responsibility for those efforts exercise oversight of those efforts. In addition, from 1998 to 2001, OMB had one examiner specifically assigned to crosscutrine comhating terrorism responsibilities. Since, OctoFer of 2001, OMB has had two examiner? assigned to crosscuttmg combating terrorism and homeland security issues^ In addition, in Octoberiof 2001. one Senior Executive Service Branch Chief was assigned to crossci^ttirig homeland seMiritv issues. In February of 2003. he became. Chief of a new Homeland Security Branch., j

8. Describe the role OMB plays in National Security Council forums to help formulate the government's counterterrorism policy, and the role, if any, OMB played in the review of NSC directed "special activities." \B works closely with the NSC on counterterrorism' funding iss

is to raise questions about the effectiveness of programs, make resource trade-offs explicit, and ensure that approved operations have sufficient resources. As part of this role, OMB staff I

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Regularly participate in meetings on counterterrorism at various levels, ranging from stafflevel contacts to NSC-led Deputies' Committee meetings to. cabinet-level "Principals' Committee" meetings. OMB typically does nbt participate in purely operational discussions, particularly those that are highly sensitive.

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Review policy papers, providing comments aijd feedback on any funding concerns identified outside OMB or raising funding concerns when they exist but have not yet been identified by the agencies or the NSC.

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Help the NSC and agencies find resources to cover out of cycle but important proposed activities.

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Worked closely with the NSC when producing thi.e Combating Terrorism Report,

.Please see the classified attachment for the answiers related to "special activities."

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Confidential - Contains Deliberative Information OMB's Response to Questions for the Record for the Office of Management and Budget From the National Commission on the Terrorist Attacks Upon the United States 3/17/2(304

9. Describe the intelligence support provided to OMB senior officials to help them understand the nature of the terrorist threat and thereby evaluate -whether resources -were being appropriately applied to the problem. \, OMB officials have several ways of getting the intelligence t informed funding decisions:

j I • Certain OMB senior officials have access to the daily Senior Executive's Intelligence Brief. j | • Various OMB policy officials regularly adend National Security Council and Homeland Security Council-sponsored policy meetings on a wide variety of topics. These meetings often include an intelligence update, including a discussion of the terrorist threat level. •

Senior policy officials receive briefings on an ad hoc basis as particular issues emerge. In addition, these officials talk regularly wjith senior officials in the intelligence community to solicit their views on budget priorities.

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OMB staff interact with and receive briefings from intelligence community counterparts throughout the year, but particularly during the development of the intelligence community's regular budget or supplemental funding requests*

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OMB staff occasionally make field visits tjo various sites to help inform program judgments and funding recommendations. I

10. What is the current resource strategy across the government to conduct the global war on terrorism? What is the estimated impact of this strategy on the federal budget?

The Federal government's current resource strategy for conducting the global war on terrorism includes financing overseas military operations, hbmeland security protection, and classified intelligence operations. Base funds support those! activities needed over the long-term to prosecute the global war on terrorism. These activities include core intelligence capabilities, such as intelligence case officers, force protection' teams, analytic and processing capabilities, R&D efforts for WMD sensors, and other procurement. Supplemental funding has supported ") , activities whose requirements either arose outside] of the regular budget cycle or which cannot be\d far enoug the Administration has used supplemental to supjport short-term activities, such as military ^ "3TC operations, specific law enforcement actions, or clandestine operations against specific targets. \ The table below shows the estimated funding, botk base and supplemental, associated with I combating terrorism since FY 2001 as shown in the FY 2005 President's Budget '

iflac?

Confidential - Contains Deliberative Information OMB's Response to Questions for the Record for the Office of Management and Budget From the National Commission on the Terrorist Attacks Upon the United States 3/17/2004

FY2001

AccountrOperatton

FY2002

Emergency Response Fund (9f18/01)1 Supp 8/2/02

FY2003

FY2004

Supp» on: 2/10rt)J, 4V1«/03

•Supp on

Grand Tout

FY2005

11/16/03

Annual Report on Combating Terrorism Department of Defense Base Supplemental Non-Defense Agencies Base Supplemental

""723

.

•

7.8 3.3

8.7 0.3

17.1

11.4 &£

155 2,9

2B.3 5.3

Base Supplemental Non-Defense Agencies Base . . Supplemental ratal

15.0 .

63.6 3.6

335 .0.1

38.7

126.2 17,1

10 3 66.1

10.6

31.0 1697

13.6

15.3

25.9

65.9 32.5. 298.5

49.2

53.7

182.0

2M

2M

73.3

7S.6

KiS. 288.6

so

:

The Broader War on Terrorism Department of Defense

15.3

. 17.2

13.3

10.1 72.6

11.3

12.4

13.2

2.0 30.5

U

27.2

Base Funding Annual Report Broader War Total Base Funding

30.5

J37.0

Supplemental Funding Annual Report Broader War Total Supplemental

12.1 19L2 31.3

I 3.2

Total Global War on Terrorism

61.8

55.0.

62

104.0

45.4 23J

!&§ •1S.O

20 £

es. e 5.3 B0.8 86.1

154.7

fi&S 87.0

0.0 00 0.0

20.7 201.6 222.4

160.3

79.6

511.2

0.1

NOTE The Annual Report refers to OMB's Annual Report to Congress or? Combating TerroriEm. Since the Global War on Terrorism (SWOT) encompasses operations broader than thoie captured in the Annual Repbrt. the Report does not caolure efl base funding (hat supporta the GWOT. ' | . . I

The impact on the Federal budget has been significant More than three-quarters of the increase in discretionary spending in the last three years hals been directly related to our response to the events of September 1 1, 2001, enhanced homeland security, and Department of Defense resources primarily for the global war on terror, j 11. Why has OMB opted to use supplemental appropriations to fight the -war on terrorism? How does OMB assess the impact of this strategy on long-term planning for the war against terrorism? The President has requested and Congress has funded homeland security and the war on terrorism through both base and supplemental appropriations. Some aspects of the global war on terror are permanent features in our Nation's war-on-terrbr strategy and should be funded in the base. For example, most of the funding identified in the Combating Terrorism Report (approximately $48 billion in FY 2003 and $52.5 pillion in FY 2004) resides in agencies' base budgets. In FY 2003, the Administration added another $10 billion per year, adjusted for

Confidential - Contains Deliberative Information OMB's Response to Questions for the Redord for tjhe Office of Management and Budget From the National Commission on the Terrorist Attacks Upon the United States 3/17/2004 inflation, to the Department of Defense's base budget for.th; long-term aspects of the war on terror. Since taking office, the current Administration has also steadily increased the base budget for intelligence, much of which supports the Intelligence Community's ability to prosecute the war on terrorism. . ; *

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Other aspects of the war on terror are more unpredictable o • short-term in duration. The Administration and Congress have chosen to address these requirements through supplemental appropriations. The President has requested and Congress has approved approximately $220 billion in supplemental funds for specific operations such as Operation Enduring Freedom, Operation Iraqi Freedom, Operation Noble Eagle, land urgently required homeland security activities. These emergency supplemental appropriations have generally been for incremental .^ funding that is dif5cult_to predict and estimate, temporary i a nature, and for urgent needs-^Thc f Administration and Congress have taken this approach for wo reasons. First, supplemental requests are made after the President's annual budget request for the upcoming fiscal year, providing the Administration and the Congress wijth more time and greater flexibility to collect information on the requirements before seeking arjid enacting the additional funding for that fiscal year. Second, supplemental appropriations jensure that the proper level of resources are provided for these extraordinary needs without unnecessarily making these expenditures a l y ^ permanent part of the base of agency operations, j

j ~J

:

Please see the classified attachment for additional; details.

'

M*\12. What if any role does OMB play in rationalizing the n sponsibilities of the Terrorist Threat & u< Integration Center (TTIC), the CIA Counlerterrorjsm Center (CTC), the DoJ/FBI ^ >) Counterterrorism Division (CTD), the DoD/DJA Joint Intelligence Task Force on Coimterterrorism (JITF-CT), the DHS Information Analysip and Infrastructure Protection Directorate, the DoD/NSA Counterterrorism SIGINT Production Line and other similar entities across the government. . \h of these organizations has a distinctive set o^responsibilities

their functions are complementary. Four of these! elements; are new - TTIC, CTD, the Terrorist Screening Center ('TSC"), and the DHS Directorjate of Information Analysis and Infrastructure Protection ('TAIP"). NSC and HSC were instnrojental in t ic establishment of the TTIC and TSC. OMB contributed to these inter-agency elenients by addressing budget, information technology, and other management and administrative issu es during the implementation process. For example, LAIP was established in the DHS re:brganizat ion plan. OMB contributed to the creation of IAIP, both through the legislative probess, and jy coordinating implementation of the reorganization. Additionally, the FBI Counterterrbrism Dr vision was elevated and re-focused as part of the FBI's reprioritizing of its activities to prevent te Torist attacks. In each case, OMB emphasized the need for organizations, processes'- and infc rmation systems that increased the effectiveness of our overall counterterrorisni efforts.

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Confidential - Contains Deliberative Information OMB's Response to Questions for the Record for the Office of Management and Budget From the National Commission on the Terrorist Attacks Upon the United States 3/17/2004 OMB continues to work with these elements, their parent agencies, the NSC, and the HSC to refine their responsibilities and operations and to ensure the most efficient allocation of resources possible. The exact process for rationalizing rolesj and responsibilities varies from issue to issue. During the budget process, OMB will sometimes |ake an -active role in reviewing agency responsibilities in order to allocate resources morel effectively. For example, to improve <~\ , transparency and simplify administration, the FY 2005 Budget propose;? to centralise non- £ ^ sources fOf the TTIC-JIl Qie Unclassified int^li'^nrp Cnrnmnnity M*n*finmmt -P ^°~

Account OMB worked with the relevant agencies to develop this proposal . In other instances, jiowever>'poh'cymakefs have determined that some decree of redundancy is advisable, and OMB lias recommended tnat funding t>e provided accordingly^ In addition to the budget process, the PgDuva V CH^NSC and HSC will manage interagency meetings that include OMB where policy responsibilities are determined. j . ! 13. Describe efforts OMB is taking today throughlits budget guidance, budget reviews, management reviews, agency passbacks, and apportionment reviews to help avoid future terrorist attacks on the United States. I. • . Although agencies such as the Department of Defiense ("DOD"), Department of Justice ("DOJ"), CIA, and DHS have frontline responsibility in the- war on terror, OMB is actively involved in efforts to strengthen the United States' efforts to combat terrorism. OMB's efforts include: i

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Prioritizing Funding for combating terrorism programs. OMB continues to review funding requests for combating terrorism activities on ian agency-by-agency basis and in a crosscutting context This Administration has! prioritized existing budgetary resources to . ensure that adequate resources are available tci fund combating terrorism programs and activities. OMB reviews these programs to h01p ensure that they are meeting policy goals and are consistent with a rational, efficient, arid effective, government-wide effort For example, OMB considers: I : i o Are funding requests properly justified? Has the agency provided enough . information to understand what outputs and outcomes it is seeking? Are these outputs or outcomes consistent with AJdministration priorities spelled out elsewhere (e.g., the National Strategy for Homeland Security)1}

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o Does responsibility for the program Ii6 with the correct executor? Given the changes to government-wide combating terrorijsm efforts since September 11, 2001, and in particular the. Homeland Security Act bf 2002, is the distribution of responsibility for combating terrorism resources rational? Is there unnecessary duplication and overlap? •; ; • . Oversight of Combating Terrorism Programs^ OMB analysts work with agencies on a dayto-day basis to exercise oversight of combatirig terrorism programs. This may include briefings or site visits, PART reviews, reviewis! of information technology efforts or

-fa

Confidential - Contains Deliberative Information OMB's Response to Questions for the Record for the Office of Management and Budget From the National Commission on the Terrorist Attacks Upon the United States 3/17/2004 ; : " regulations, oversight of specific activities (e.g., regular: updates of progress on the development of specific information systems, staffing plans, or other efforts related to combating terrorism), and other activities. j. '. • •

Participation in Interagency Groups Related to Combating Terrorism, OMB staff participate in a variety of Policy Coordinating Committees, interageney work groups, and crosscutting efforts related to combating terrorism. In some cases, t^ese groups seek to identify goals for, or recognize gaps in, combating terrorism activities. OMB staff are valuable to these working groups because of their program and resource knowledge.

•

Oversight of the Department of Homeland Security. The creation of DHS consolidated a significant portion of the Federal govemment'Js combating terrorism programs and resources. OMB has assisted in oversight of the reorganization, and is working to help ensure that the Department achieves the merger's potential synergies. For example, OMB reviews DHS plans and documents to try to combat "stovepiping" byjhelping to ensure that the broader DHS mission is kept in focus regardless of the| specialised responsibilities of individual DHS components. j ;

These more general processes play out through specific efforts on a day-to-day basis. For example: j . j / i

'_

!

•

In developing the FY 2005 Budget, OMB worked with JDHS to complete a PART for the Assistance to Firefighters Grants program. Ofcc of the recommended changes from the PART review was to prioritize terrorism and mass casualty preparedness needs. The FY 2005 Budget includes the recommended changes to ensure that theprogram is targeted towards homeland security requirements, consistent with the President's and the Department's overall priorities. ' ' \ ;

•

The FY 2005 Budget reflected a significant fqnding increase to the Department of Energy's Safeguards and Security program to support I}oE's response to the higher performance level demanded by the revised Design Basis Threat;- its assjessment of threats and the requirements necessary to counter them. These funds enable DoE to respond to increased requirements with long-term, permanent enhancements to meet the challenge of protecting the Nation's nuclear weapons complex, as wejl as nuclear weapons and their components 'while in transit between facilities. ! : • : i

•

'.

In developing the FY 2005 Budget, OMB participated in HSC-led processes to review the Nation's biosurveillance and food and agriculture defense efforts. The FY 2005 Budget includes new investments in these areas for the Departments of Agriculture, Health and Human Services, and Homeland Security. THese investments will improve the government's ability to analyze and integrate biosurveillancje data,: arid to address threats to the food and agriculture system - key inputs into an integrated biosurveillance architecture.

17

Confidential. - Contains Deliberative Information OMB's Response to Questions for the Recjord for the Office of Management and Budget From the National Commission on the terrorist Attacks Upon the United States 3/17/2004 I : •

The FY 2005 Budget proposes to transfer a nuinber of Research and development programs throughout DHS to its Science and Technology Directorate. This is consistent with OMB's emphasis on consolidating similar functions throughout the DHS to enhance accountability . and improve efficiency. \ •

•

On ongoing basis, OMB has participated in th| development and execution of the U.S. Visitor and Immigration Status Information System ("U.S. VISIT'). OMB has reviewed various iterations of U.S. VISIT spending planls to ensure that activities are soundly planned, that they have specific goals, and that the expenditures outlined will contribute to achievement of those goals. OMB also reviewed the regulations associated with U.S. VISIT to ensure that they will achieve the programs gbals, are not unnecessarily burdensome, and are consistent with. Administration policy. \

•

Through its OIRA functions, OMB also plays ;a key role in a range of regulatory development and oversight activities related to: conibatihg terrorism. La just the past several months, OMB has worked to strengthen regulations concerning important homeland security initiatives such as implementing U.S. VISIT; Designing;personnel reforms; protecting critical infrastructure information; defining and outlining procedures to properly share sensitive homeland security information; and implementing thfc Support Anti-terrorism by Fostering Effective Technologies Act of 2002. • 1 I j .

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