The U.S. Intelligence Budget: A Basic Overview

The U.S. Intelligence Budget: A Basic Overview

Order Code RS21945
Updated October 4, 2004
CRS Report for Congress
Received through the CRS Web
The U.S. Intelligence Budget:
A Basic Overview
nae redacted
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Summary
The 9/11 Commission recommended that a new National Intelligence Director
(NID) should have control over personnel and budgets of all agencies that collect and
analyze national foreign intelligence in order to foster more cooperation. This CRS
report describes the intelligence budget and gives rough estimates of amounts for major
components of the budget based on unclassified sources. It also reviews current
procedures for formulating and executing the budget. And it highlights how proposed
legislation addresses the issue. For a more extensive description of the Defense
Department agencies whose budgets are at issue and a discussion of pros and cons of
giving greater authority over them to a National Intelligence Director, see CRS Report
RL32515, Intelligence Community Reorganization: Potential Effects on DOD
Intelligence Agencies, by Richard Best. This report will be updated as events warrant.
The Commission’s recommendation would affect an estimated one-half to two-thirds
of the intelligence budget, the portion devoted to the “National Foreign Intelligence
Program” (NFIP). The other parts of the intelligence budget finance intelligence activities
of the Department of Defense that support tactical military operations, though the
distinction between tactical and national intelligence is often blurry. A major issue in
Congress is how greater centralized authority over the NFIP budget would affect
operations of four large Defense Department agencies funded in large part from NFIP: the
National Reconnaissance Office, the National Security Agency, the National Geo-Spatial
Intelligence Agency, and the Defense Intelligence Agency. These agencies provide
intelligence that supports both national decision-making and military operations.
The Three Major Components of the Intelligence Budget
Since 1995, the U.S. intelligence budget has been divided into three elements:
! The National Foreign Intelligence Program (NFIP), which, in
principle, funds all foreign intelligence and counterintelligence activities
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of the government that respond to “national” needs, as opposed to needs
of a single department or agency;
! The Joint Military Intelligence Program (JMIP), overseen centrally by
the Defense Department, which funds programs that respond to defense-
wide intelligence requirements as opposed to the needs of a particular
military service; and
! Tactical Intelligence and Related Activities (TIARA), which is an
aggregation of funding for tactical military intelligence programs
managed by the individual services.
Some agencies may receive money from different accounts. Both NFIP and JMIP,
for example, provide funding for cryptologic activities of the National Security Agency
(NSA). By all estimates the bulk of NSA’s funding is provided through NFIP, but some
programs that are of interest to military consumers may be funded through JMIP.
Organizationally, the NFIP budget finances intelligence activities both of agencies within
the Department of Defense and of agencies outside DOD, while JMIP and TIARA finance
only activities of the Department of Defense. Non-defense agencies or activities funded
from NFIP include
! the Central Intelligence Agency,
! FBI foreign counterintelligence and intelligence activities,
! the State Department Bureau of Intelligence and Research,
! the Department of Energy Office of Intelligence, and
! the Department of Treasury Office of Intelligence Support.
Agencies within the Defense Department funded at least in part from NFIP include
! the National Reconnaissance Office (NRO), which designs, builds, and
operates spy satellites;
! the National Security Agency (NSA), which monitors, collects,
deciphers, and analyzes signals intelligence;
! the National Geospatial-Intelligence Agency (NGA), which makes maps,
including sophisticated digital maps for military operations; and
! the Defense Intelligence Agency (DIA), which collects and analyzes a
variety of defense-wide intelligence.
Size and Composition of the Intelligence Budget
The amount spent annually on intelligence has been classified except for two years
in the late 1990s. In October 1997, Directory of Central Intelligence George Tenet
announced that the intelligence budget for FY1997 was $26.6 billion, and in March 1998,
he announced that the budget for FY1998 was $26.7 billion.1 Officials have not released
1 CIA Press Release, “Statement by the Director of Central Intelligence Regarding the Disclosure
of the Aggregate Intelligence Budget for Fiscal Year 1998,” March 20, 1998, available
electronically at [http://www.cia.gov/cia/public_affairs/press_release/1998/ps032098.html.]

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totals since then, nor have they ever provided a breakdown of the intelligence budget by
agency or activity.
Some information about the composition of the intelligence budget was, however,
provided in 1996 by the Commission on the Roles and Capabilities of the U.S.
Intelligence Community.2 The Commission did not reveal the total amount spent on
intelligence, but it did provide a substantial amount of information on trends in
intelligence funding and on the share of the budget for NFIP and other areas. The
Commission reported that about two-thirds of the intelligence budget at the time was for
NFIP, that almost all of the NFIP budget was for the CIA and DOD, and that about three-
fourths of the NFIP budget was for DOD programs.3 The Commission also printed a
graphic that showed relative amounts for major intelligence agencies.4 Breaking out their
rulers, and assuming that the overall intelligence budget was about $30 billion, non-
government analysts were then able to make rough estimates of the budgets of the CIA,
NRO, NSA, and other agencies.
Currently, it is widely estimated in the press that the total intelligence budget has
grown to about $40 billion.5 The composition of the intelligence budget has likely shifted
to some degree since the Commission’s 1996 report, but no official overview of the
budget has been produced in the interim. Some press accounts still estimate that NFIP
is about two-thirds of the total, while others guess that the NFIP is abut half.6 So a
reasonable range would put NFIP at between $20 and $27 billion, JMIP at $5-7 billion,
and TIARA at $12-15 billion.
Within the NFIP account, if three-fourths of the total is still for DOD, then the
defense share would range from $15-20 billion, divided among the NRO, NSA, NGA, and
DIA, with the bulk for NRO and NSA. The remaining $5-7 billion of the NFIP budget
would be for the CIA, FBI, and other agencies, with the bulk for the CIA. So the proposal
to give greater budget authority over NFIP to the new National Intelligence Director has
largely to do with control over $15-20 billion for these large Department of Defense
agencies. The 9/11 Commission did not discuss how to handle JMIP funding for these
agencies.
2 Commission on Roles and Capabilities of the U.S. Intelligence Community, Preparing for the
21st Century: An Appraisal of U.S. Intelligence, March 1, 1996, available electronically at
[http://www.access.gpo.gov/su_docs/dpos/epubs/int/pdf/report.html.]
3 Ibid., Chapter 7, “The Need for an Effective Budget Structure and Process,” p. 72.
4 Ibid., Chapter 13, “The Cost of Intelligence,” Figure 13:2, p. 132.
5 See, for example, Philip Shenon, “Powell Rejects 9/11 Panel’s Plan For Intelligence Office,”
New York Times, September 14, 2004 and Walter Pincus, “Bush’s Plan Limits Intelligence
Chief,” Washington Post, September 11, 2004, Pg. 4
6 See, for example, the estimates of John Pike of Global Security.org at
[http://www.globalsecurity.org/intell/library/budget/index.html.]

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Formal Authority Over the NFIP Budget
Under current law, the Director of Central Intelligence (DCI) already has
considerable statutory authority over the formulation and execution of the NFIP budget,
though this authority is shared with the Secretary of Defense and other department heads.
Proponents of giving greater authority to a National Intelligence Director, however, argue
that the DCI’s formal statutory authority is not reflected in practice.
The relative authority of the DCI and the Secretary of Defense over the intelligence
budget was not defined in the original version of the National Security Act of 1947.
White House directives in later years laid out the agencies’ respective authorities. And
in 1992, with some refinements in 1997, Congress approved legislation amending the
National Security Act of 1947 to more clearly define responsibilities.
Under the terms of the National Security Act as amended in 1992 and 1997,7 the DCI
is responsible (1) for developing and presenting to the President an annual budget for the
National Foreign Intelligence Program and (2) for participating in the development by the
Secretary of Defense of the annual budgets for the Joint Military Intelligence Program and
the Tactical Intelligence and Related Activities Program. The DCI also has the authority
to provide guidance to elements of the intelligence community for preparation of their
annual budgets and must approve their budgets before they are incorporated into the
NFIP. The amended statute also requires that the DCI approve any transfers of NFIP
funds after they are appropriated (see below for a further discussion), and that the
Secretary of Defense consult with the DCI on any transfers of JMIP funds. And the
statute gives the DCI authority to transfer both funds and personnel within the NFIP,
except for funds and personnel of the FBI, subject to the approval of the head of the
agency that controls the funds — i.e., in most cases, the Secretary of Defense.
The amended statute also gives the Secretary of Defense specific responsibilities and
authorities. Most significantly, the law makes the Secretary of Defense responsible for
ensuring that the NRO, NSA, NGA, DIA and other defense intelligence activities
(1) produce intelligence adequate to meet Defense Department requirements and
(2) produce intelligence to meet national requirements, including requirements established
by the Director of Central Intelligence.
On its face, this gives the DCI considerable authority over NFIP budgets. The
statutory language, however, gives the Secretary of Defense operational control over the
major defense intelligence agencies, even though tasking of the agencies may be issued
by the DCI. So, as a practical matter, it is the Secretary of Defense who has the main
authority to establish priorities.
The NFIP Budget Process
Although the National Security Act makes the DCI responsible for preparing the
NFIP budget, annual budget requests for the defense agencies have in practice been
formulated through the normal Department of Defense Planning, Programming, and
Budgeting system, augmented to include input from the intelligence community. At the
7 The relevant provisions are Title 50 U.S. Code, Sections 403-4 and 403-5.

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beginning of the process, the DCI provides formal programming and budgeting guidance
to the agencies financed in the NFIP. The head of each agency is then responsible for
preparing a detailed budget plan. For DOD agencies, that plan is then reviewed as part
of the Defense Department’s normal programming and budgeting process, which is
overseen by a formal decision-making body, chaired by the Deputy Secretary of Defense,
called the Defense Resource Board (DRB). For intelligence programs, the DRB is
expanded to include representatives of the DCI; the augmented board, appropriately, is
referred to as the “Expanded DRB.” Final decisions on funding for intelligence programs
are formally made by the Expanded DRB.
This formal budgeting process interacts with the process by which the Defense
Department makes decisions on major acquisition programs, though the acquisition
process is, both formally and in practice, quite distinct from programming and budgeting.
The role of the DCI in the acquisition process is not specifically addressed in statute. The
DCI’s guidance to the defense agencies in formulating their budgets, may, however,
include directions to the agency heads to address certain national requirements in
developing new systems. Moreover, procedures are in place to include input from the
overall intelligence community in developing requirements for new DOD intelligence,
surveillance, and reconnaissance systems. In 1998, the DCI established a Mission
Requirements Board within the intelligence community staff to identify technical issues
of concern to the CIA and other elements of the intelligence community, as well as to
DOD, in acquiring new systems.
Transfer/Reprogramming of Intelligence Funding
A key aspect of control over budgets is the authority to review budget execution and
to “transfer” or “reprogram” funds from one use to another after money is appropriated.
Appropriations laws typically allow agencies to transfer funds from one appropriations
account to another subject to specific conditions and up to certain annual totals. Under
procedures worked out between agencies and the relevant congressional committees,
agencies my also “reprogram” funds within appropriations accounts subject to certain
additional restrictions. Though “transfers” and “reprogramming” are technically distinct,
the Defense Department refers to both as “reprogramming,” and some “reprogramming”
actions, including all that involve a “transfer” between accounts, require advance approval
of the congressional defense committees.8
The 9/11 Commission recommended giving the NID authority to reprogram NFIP
funds. Under current law the DCI has authority to reprogram funds subject to approval
from the Office of Management and Budget and subject to the concurrence of the head
of the department to which the funds are appropriated — i.e., for defense intelligence
programs, the Secretary of Defense. The law also permits the Secretary of Defense to
transfer or reprogram NFIP funds, but it requires that any transfers be approved by the
DCI or be carried out under procedures specified by the DCI. It also requires the
Secretary of Defense to consult with the DCI about any transfers of JMIP funds. These
8 For definitions and a discussion of current procedures governing defense programs, see CRS
Report RL32422, The Administration’s FY2005 Request for $25 Billion for Operations in
Iraq and Afghanistan: Precedents, Options, and Congressional Action, by (name redacted)
and (name redacted), updated July 22, 2004, especially pp. 19-21.

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statutory requirements are reflected in DOD financial management regulations governing
reprogramming of intelligence funds.9
Legislative Proposals
The legislative proposal that the Administration submitted to Congress on
September 16, 2004, gives a new National Intelligence Director (NID) the same
responsibility to prepare the NFIP budget formerly given to the Director of Central
Intelligence along with some added authority and responsibility. The added measures
provide that the NID shall “manage and be responsible for appropriations for the NFIP”
and shall “allot or allocate those funds ... to the agencies and organizations within the
Intelligence Community for programs and activities that are part of the NFIP.” The
measure also provides that the allotment or allocation of funds shall be “executed through
existing agency comptrollers or other appropriate budget execution officers.” The
Administration proposal also gives the NID authority to transfer NFIP funds, subject to
OMB approval and in consultation with department heads.
S. 2845, as proposed by Senators Susan Collins and Joseph Lieberman and reported
by the Senate Governmental Affairs Committee, similarly gives a new NID the budget
authority formerly granted to the DCI along with some added authority. The Collins-
Lieberman proposal gives the NID responsibility to “manage and oversee the National
Intelligence Program,” including execution, reprogramming, and transfer of funds (see
§112 (2)). Additionally, the Collins-Lieberman proposal would give the NID
responsibility to oversee plans for acquiring major new intelligence systems, with a
proviso that this authority shall not apply until the NID, in consultation with the Secretary
of Defense, determines that the intelligence community has the personnel and capability
to carry out this task (see §162).
H.R. 10, the House leadership-sponsored intelligence reform bill, would also give
the new NID the budget authority previously granted to the DCI, and it would make the
NID responsible to “ensure the effective execution of the annual budget for intelligence
and intelligence-related activities” and to “facilitate the management and execution of
funds appropriated for the National Intelligence Program.” The NID would need approval
of other agency or department heads to transfer or reprogram more than $100 million.
For full side-by-side comparisons of key legislative proposals on intelligence reform,
see CRS Report RL32600, Comparison of 9/11 Commission Recommended Intelligence
Reforms, Roberts Draft Bill, H.R. 4104, S. 190, S. 1520, S. 6, H.R. 4584, Current Law,
by (name redacted), and CRS Report RL32601, Comparison of 9/11 Commission
Recommended Intelligence Reforms, Collins/Lieberman Draft Bill, S. 2774, H.R. 5024,
Administration Proposal, and Current Law, by (name redacted).
9 Department of Defense Financial Management Regulations, Volume 3, Chapter 6, Section 0606,
available at [http://www.dod.mil/comptroller/fmr/03/03_06.pdf, pp. 6-13 to 6-15.]

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