How Arcane Budget Rules Threaten Government Cybersecurity

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Because of budget arcana, DHS’s cyber operations wing has to compete with DOD for funding.

Why is it so tough to raise funding for civilian government cyber protections? You can blame the White House and Congress, but a portion of the responsibility lies with the Pentagon too.

House appropriators hinted at this explanation in the committee report for their Homeland Security appropriations bill.

Their funding proposal for operations of the civilian government’s main cyber defender came in 2 percent below the White House’s budget request, a fact the appropriators pegged on “budget constraints on funding for defense functions.”

So, what does defense funding have to do with cross-government civilian cyber defense, which is managed by the Homeland Security Department’s National Protection and Programs Directorate?

It’s complicated…

Competing Against the Whole Defense Budget

The main issue is that a substantial portion of NPPD’s funding is coded as a “defense function” in the early stages of the budgeting process.

As a result, a lot of NPPD funding gets lumped in with Defense Department priorities like battleships, fighter jets, major weapons systems and salaries, health care and other benefits for more than a million troops at home and abroad. So, on some level, NPPD is competing with those big ticket defense items—and their supporters in Congress—for scarce appropriations dollars.

On the scale of DOD’s $658 billion annual price tag in this year’s House Appropriations bill, NPPD’s $703 million cybersecurity appropriation can look pretty paltry.

“Basically, it puts NPPD in competition with the entire DOD budget,” said Christian Beckner, deputy director of The George Washington University’s Center for Cyber and Homeland Security and a former top Senate Homeland Security Committee staffer.

Here’s how it works.

OMB and congressional budgeters code government funding based on its purpose rather than on the agency that’s spending it. The code 550 for health functions, for example, includes money that goes to the Health and Human Services Department as you’d expect but also to hospitals run by the Veterans Affairs and Defense departments.

Agencies are required to use these codes when they submit budget requests to the White House’s Office of Management and Budget and OMB uses the codes in the president’s budget request to Congress. Congressional budget committees use the codes when they set top-line funding numbers for various categories and top congressional appropriators pay attention to them when they divvy up available funds to their various subcommittees.

The code for defense functions is 050. About 96 percent of 050 funding goes straight to DOD and the military services, according to the Congressional Research Service, but the remaining 4 percent goes to a handful of civilian agencies like NPPD that perform defense-related activities.

NPPD, like the rest of DHS, was constructed from various existing government components after 9/11. In addition to managing governmentwide cybersecurity, it’s also responsible for helping ensure the physical protection of U.S. critical infrastructure, such as power plants and transportation hubs, from terrorist attacks.

Within the 4 percent of 050 money that goes to non-DOD defense functions, about 75 percent, or 3 percent of the total, is spent on nuclear security programs at the Energy Department and elsewhere, according to CRS. Then the final quarter, just 1 percent of the total, goes to a handful of defense-centric programs at the Justice Department, the CIA and DHS, including parts of the Coast Guard and NPPD.

By that time, cyber advocates say, there’s not a lot of flexibility left to significantly boost NPPD funding.

And, once again, if Congress wanted to raise federal cybersecurity funding within this pool, it would have to steal funding from nuclear security, which is, understandably, also an extremely high priority.  

“It makes it a lot tougher,” Rep. Dutch Ruppersberger, D-Md., told Nextgov soon after this year’s Homeland Security appropriations bill passed the full committee July 18.

“We tried to make a move this year to get more and there’s just not enough money there with other needs,” said Ruppersberger, who serves on the Appropriations Committee’s defense panel and was formerly an advocate for government cyber protections as ranking member on the House Intelligence Committee.

Ruppersberger, whose district includes the National Security Agency, made similar complaints during committee debate.

Not Much Wiggle Room

Domestic cyber funding is not withering away. While the $703 million for NPPD cybersecurity in this year’s House bill trailed President Donald Trump’s request by about $18 million, it was still $33 million, or about 5 percent, above fiscal year 2017 funding.

Ruppersberger and other cyber advocates, however, wish that figure could be higher.

While it’s far from an apples-to-apples comparison, House appropriators approved a 19 percent boost for military cyberspace activities this year.

That figure reflects myriad issues specific to military cyber operations, including staffing up U.S. Cyber Command, which is scheduled to be fully operational in 2018, and CYBERCOM’s recent elevation to a full combatant command. Defense appropriators, however, certainly had much more wiggle room to make trade offs.

About half of NPPD’s funding also comes from fees paid to DHS for various services.

NPPD manages several governmentwide cyber defense programs, such as the Einstein system, which scans web traffic for a mix of government and industry cyber threat indicators and halts malicious traffic, and DHS’s continuous diagnostics and mitigation program.

Civilian agencies’ information technology offices also scan their own networks for threats and respond to cyber incidents.

The Senate Appropriations Committee’s homeland security panel held a hearing on the administration’s budget request in May but has not yet marked up its version of the appropriations bill.  

And Then There’s BCA

Civilian cyber funding—along with all other government priorities—is also hemmed in by the 2011 Budget Control Act, popularly known as sequestration. The BCA was the result of a budget standoff between then-President Barack Obama and congressional Republicans that capped both defense and non-defense spending.

Neither the president’s budget request nor House and Senate appropriations bills abide by those caps. But, if Congress succeeds in passing a budget this year—which is far from assured—it will likely be because Republican and Democratic lawmakers compromise to raise those caps with Democrats pressing for more nondefense funding to even out defense hikes championed by the president and congressional Republicans.

So, total defense function spending is still artificially limited and NPPD cyber funding along with it.

It’s possible NPPD could find funding more easily if it was competing for resources with civilian programs, George Washington University’s Beckner said, because civilian programs rarely have the strong constituencies and vested interests behind them that defense programs do.

On the other hand, funding is already much tighter on the civilian side of the budget and there’s unlikely to be a push from the White House to add more civilian spending given Trump’s focus on cutting domestic programs in favor of defense.

That may not translate to more wiggle room on the civilian side, said Joshua Huder, a senior fellow at Georgetown University’s Government Affairs Institute.

“If NPPD was on the nondefense side with rest of the DHS budget, then you’d have to take money from agencies that are already getting 10 to 20 percent cuts to funding,” Huder said. “They’re already cut to bare bones.”

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