By Josh Rogin, CQ Staff

When Defense Secretary Donald H. Rumsfeld returned to the Pentagon in 2001, he immediately set out to reorganize the nation’s missile defense program into a powerful new agency that operated without the kind of oversight normally applied to Pentagon programs.

Democrats did not particularly like what Rumsfeld was doing in creating the Missile Defense Agency, but they did not have the political muscle to stop him. And after Sept. 11, the “whatever it takes” mind set that had taken hold in Washington further dampened their ability to challenge the program.

SETTING THE AGENDA: Rumsfeld, upon returning to the Pentagon in 2001, quickly announced his intention to create a national missile defense system. (GETTY IMAGES \ AFP \ TIM SLOAN )

For example, Democrats mostly failed in their attempts to reduce the agency’s budget, which Republicans fed with tens of billions of dollars on the strength of Rumsfeld’s A-vision of a missile system that could defend the country and its allies from potential nuclear threats such as Iran and North Korea.

Now, energized by their majority status and fueled by reports from watchdogs such as the Government Accountability Office (GAO), Democrats are starting to rein in the agency and what they consider the Bush administration’s questionable plan for missile defense by exerting closer oversight and budgetary constraints.

They say the MDA, which received $9 billion this year, operates too far outside normal government supervision, and that it has been allowed to take an inappropriately large role in selling U.S. missile capabilities abroad.

The MDA also faces questions related to its technical capabilities, as experts debate whether the testing that’s been done so far justifies the Bush administration’s effort to rapidly deploy the system. There is now a limited missile defense system on the West Coast, but some former Defense officials, rocket scientists and experts at defense think tanks say the system offers only rudimentary protection from ballistic missiles.

This criticism comes at a time in which the MDA is in transition itself, as it evolves from an experimental agency operating in its own sphere into a more mature defense system whose programs are increasingly incorporated into the armed services and whose actions are integral to U.S. relationships with allies and partners.

“MDA is an agency that needs some adult supervision,” said Democratic Rep. Ellen O. Tauscher of California, who chairs the Armed Services Strategic Forces Subcommittee, which oversees the agency. “We believe that MDA was without oversight for many, many years.”

Defense-minded Democrats such as Tauscher are caught between their general support for missile defense and their desire to bring more accountability to the program.

Congress has appropriated more than $100 billion for missile defense since the program was started in the 1980s. Current forecasts are that Congress will be asked to spend another $50 billion or so between now and 2013.

For all its faults and failings, though, missile defense in an age of terrorism is difficult for politicians to challenge, even for the Democrats and moderate Republicans who have doubts about the program.

In the end, the system gets support because it has a loyal and powerful contingent of backers in Congress who argue that the United States cannot afford to spare any expense in countering the growing threat of ballistic missiles.

Republican Rep. Trent Franks of Arizona sums it up this way: “We may have to someday apologize to the American people for building an expensive system that we didn’t use. But God save us from the day when we have to apologize to them for failing them because we didn’t build a system when it was in our power to do so.”

GETTING INVOLVED: Rep. Franks meets last year with Czech RepublicPresident Vaclav Klaus, left, and U.S. Ambassador Richard W. Graber at Prague Castle. (GETTY IMAGES \ AFP \ MICHAL CIZEK)

Unable to take on the program directly, Democrats have adopted a two-part strategy to begin reining it in. First, they are shifting money from longer-term experimental programs to near-term existing technologies. At the same time, they are adding checks and balances to the missile agency’s acquisitions program. The defense authorization law for fiscal 2008, for example, included a modest shift in emphasis and an increase in congressional supervision.

But with President Bush in his final year in office and Democrats forecast to gain seats in the next Congress, more change is expected. “The way MDA has been doing business,” said one Democratic committee staff member, “those days are coming to a close.”

Meanwhile, the agency itself is in transition as its director, Lt. Gen. Henry Trey Obering III, prepares to leave his post after four years. Bush has nominated Obering’s deputy, Army Maj. Gen. Patrick O’Reilly, to replace him. O’Reilly’s Senate confirmation hearings could become another forum for Congress to question MDA’s operations.

Going Its Own Way

The rationale that Bush and Rumsfeld used in giving extraordinary leeway to the Missile Defense Agency in 2002 was that it was vital to the nation’s survival in the uncertain post-Cold War world.

Rumsfeld had chaired a 1998 commission that Congress created to study foreign missile threats, and the commission had concluded that North Korea and Iran could “inflict major destruction on the U.S. within about five years of a decision to acquire such a capability.” Iraq, the commission wrote, would take five years longer.

Bush had made clear during his 2000 campaign that he would reinvigorate the missile defense program that President Ronald Reagan had begun in 1983 with his Strategic Defense Initiative. After taking office in 2001, Bush quickly set about doing so.

Within his first year, Bush had announced that the United States would pull out of the Anti-Ballistic Missile Treaty with Russia to give himself more freedom to deploy missile defenses. Meanwhile, Rumsfeld pulled together all of the Defense Department’s missile defense efforts and placed them under the newly formed MDA.

While drawing all these systems and research together, Rumsfeld rewrote the bureaucratic rulebook. “The special nature of missile defense development, operations, and support calls for non-standard approaches,” he wrote in a Jan. 2, 2002, memorandum.

Rumsfeld removed the missile agency from the oversight of the Pentagon’s testing and acquisitions boards and exempted it from most of the checks that govern new research programs. Missile defense program managers would not have to independently verify the total projected cost of projects they started or adhere to strict timelines for meeting performance goals.

The agency adopted what Rumsfeld and his aides called capability-based or “spiral” development, which encouraged the development of new technologies to address future threats. In adopting this course, Rumsfeld jettisoned the Pentagon’s traditional “threat-based approach,” which would require a program to deal with an existing threat.

Since the MDA began its work, national missile defense has grown to encompass several related defense programs managed under one roof. The ground-based system for hitting missiles in midflight is the most controversial: a network of radar units positioned around the Pacific and linked to the interceptors at two sites in California and Alaska. The administration plans a third site in Poland, designed to protect against missiles from Iran.

Defense Against Iran: Click Here to View

A Navy system that uses missiles launched from Aegis cruisers and destroyers is designed as another layer of defense from North Korea, and also seeks to protect Japan and U.S. forces in the Pacific. Elements of this system were recently used to destroy a military satellite in space before it could re-enter the atmosphere. (The meaning of success, p. 782)

The system with the smallest geographical coverage is the land-based Patriot — the current generation is called PAC-3 — which is designed to destroy missiles in their final, or terminal, stage.

The architects of MDA say they deliberately set up the program to help it avoid the Pentagon’s famously cumbersome defense acquisitions process. Moreover, they add, the Pentagon’s traditional rules for oversight were crafted for large weapons systems such as tanks and helicopters and would not necessarily apply to experimental programs like ballistic missile defense.

Obering, the MDA’s director, said the program’s experimental nature requires continued flexibility. The missile defense effort would be harmed, he said, if it had to adhere to the constraints facing other large weapons development programs.

“We do the opposite [of most programs]. We make the programs demonstrate their capability first, and then we lay in the larger acquisition system,” Obering said. He pointed out that other programs subjected to the usual rules also face cost overruns, delays and other problems.

“Give me an example of which one you want me to emulate,” he challenged.

The ambitious nature of the program requires that it be given breathing room to establish stability and allow it to slowly gain credibility, advocates argue. Mandating perfection in these systems, they say, would leave the country vulnerable indefinitely.

Defense experts who support ballistic missile defense argue that the United States and its allies are defenseless against enemy missile attack, and therefore neither the administration nor Congress can take any chances by hampering MDA with excessive regulation or oversight.

“While the United States has made progress in putting missile defense systems in the field in recent years, in most respects the U.S. remains vulnerable to this threat,” said Baker Spring, a research fellow at the conservative Heritage Foundation. “This is no time for the U.S. to slow the pace of developing and deploying effective defenses against ballistic missiles.”

Beyond Experimental

But critics say the administration, in its rush to deploy the system, has ignored the sound acquisition and good-governance practices that would increase the chances for success.

Thomas Christie, who from 2001 to 2005 was the Pentagon’s director of operational testing and evaluation, said the Pentagon’s policy of producing components before they’ve been shown to work as part of a larger missile defense system ran counter to the usual “fly before you buy” axiom of government procurement.

Key Components of the Missile Defense System: Click Here to View

“The problem was that this administration had made a commitment politically to have an operational system by 2004,” Christie said. “We kept saying that we have no confidence that this will operate in a realistic manner.”

In fact, the Rumsfeld Commission in 1998 was neutral on the question of whether to deploy national missile defense. But having prominently publicized the perceived danger, missile defense proponents had the ammunition they needed to marginalize the opposition.

“People who were against it were painted as being soft on whoever the threat was,” said Richard Garwin, one of the country’s most eminent physicists and a member of Rumsfeld’s 1998 commission.

Watchdog groups have produced a number of reports in recent years detailing the consequences of Rumsfeld’s approach. For example, the GAO has pointed out that because MDA is not required to submit cost estimates for the life cycle of its programs, nobody knows the eventual price of the system.

Also, although its entire budget is classified as research, the agency is buying a lot of heavy equipment and operating two interceptor A-bases, with plans for a third in Europe. “They’re buying hardware hand over fist,” said Philip Coyle, another former director of the Pentagon’s testing and evaluation office. “It’s a procurement program masquerading as a research and development program.”

In their final report to accompany the fiscal 2008 defense appropriations bill, the House Appropriations Committee wrote that MDA has not done enough to supervise its contractors. In one example noted by the committee, the agency had more than $2.7 billion worth of contracts that did not include detailed information on expenditures.

Though the MDA has acknowledged that several of its prime contractors have been incorrectly classifying their work in order to boost performance statistics, according to the GAO, the agency still awarded 90 percent of contract performance bonuses in fiscal 2007, totaling $579 million.

Several congressional staff members expressed frustration about the agency’s contracting tactics, such as splitting a contract after awarding it to one company, but they said the oversight committees have few options beyond criticizing the agency in legislative reports.

“Remember, MDA isn’t bound by the regular rules,” one aide said. “MDA has been given carte blanche.”

In its fiscal 2009 budget documents, the Pentagon did announce some plans to increase MDA oversight and accountability while asking for an additional $9.4 billion next year for the agency and approximately $3 billion for missile programs in other parts of the Defense budget.

For example, MDA will shift its budgeting away from “block” segments based on two-year increments and will now center blocks on the different missions the system aims to accomplish. The move is meant to give more transparency to spending and allow better tracking of program achievements.

Coyle said slippage of the schedules made the old block system unworkable. One year’s activities, for example, were simply transferred to the next block with little explanation, he said. “Everything was everywhere; there was money in every block for practically everything,” Coyle said, adding that it remains to be seen whether the new system will clear up such discrepancies.

Also, MDA is starting to move away from its practice of classifying the entire budget as research, in favor of separate accounts for procurement, operations and research. This division into “different colors of money” is sure to allow better accounting of expenditures, but MDA is worried that the change could stifle its ability to make timely adjustments to some programs.

“The flexibility that the single-color money has given us has been tremendous,” Obering said.

Lastly, the Pentagon in 2007 created a new internal oversight mechanism called the Missile Defense Executive Board, which reports to the deputy Defense secretary and the undersecretary for acquisition technology and logistics. The board is seen as a replacement for the defunct Missile Defense Support Group, a previous effort at internal oversight at the Pentagon, which had been highly criticized for its lack of activity and had not met since June 2005.

Selling the System

Like many defense programs that involve international partners, MDA has had a prominent role in selling its systems abroad. This means explaining the system to foreign governments and negotiating and managing cooperative agreements.

In the case of MDA, critics say the administration gave it too much authority to market the system to European allies. The question is whether leeway the administration granted MDA allowed it to cross the line into areas that are normally handled by diplomats.

DIPLOMATIC MOVES: Missile defense was one of the prominent topics of discussion when Secretary Robert M. Gates visited Tokyo last November.He called the North Korea weapons program a “direct danger” to Japan. (GETTY IMAGES \ JUNKO KIMURA )

Committee members and staff contend that the administration ceded too much diplomatic control to a technical agency that wasn’t suited to examine the complexities involved in international relationships.

Obering sees his prominent place at the head of missile defense diplomacy as part of the job. He continues to lead delegations to talk about missile defense around the world. Last year, for example, he met with Ukrainian officials in Kiev, where hecklers barged in on a news conference he was holding to explain the system to the Ukrainian press. Such opposition is widespread in Europe.

Theodore Postol, a former scientific adviser at the Pentagon and now a missile defense expert at the Massachusetts Institute of Technology, said that in his dealings with European governments, he has found skepticism about the missile system’s capabilities.

For example, MDA often presents slides asserting that 10 interceptor missiles planned for Poland would not be capable of hitting intercontinental ballistic missiles fired from Russia toward the United States, a key concern of Russian security officials.

Postol and other experts say the interceptor missiles would be able to counter Russian missiles, but MDA maintains that they would not.

The Russian government has also been suspicious that the Poland site could even be used for nuclear-tipped missiles that could be aimed at Russia. President Vladimir V. Putin has threatened to target European cities if the missile base is installed.

When the tensions surrounding the planned sites in Europe boiled over last year to become a major dispute between the United States and Russia, senior U.S. officials — including Eric Edelman, the undersecretary of Defense for policy, and John Rood, then assistant secretary of State for international security and non-proliferation — stepped in to address Moscow’s concerns. Their deliberations paved the way for last week’s visit to Moscow by Defense Secretary Robert M. Gates and Secretary of State Condoleezza Rice , who sought to engage the Russians on possible compromises.

Gates has reportedly offered to keep the system offline unless a more tangible threat from Iran materializes. Meanwhile, Bush took time in Washington this month to meet with visiting Polish officials to address their concerns about the site. The Eastern European sites are expected to be a prime focus of the upcoming NATO conference in April in Bucharest, Romania.

Though Postol and other opponents of missile defense are sometime discounted in the debate, their sentiments are reflected by a much broader segment of Congress who share their concerns, especially in the foreign policy area.

“We see MDA out there, breaking glass everywhere,” said one member of Congress who asked not to be identified because of a need to work with the agency. “They’ve got their agenda, and they’re pushing in a very aggressive way.”

Tauscher and other lawmakers and their aides cite another episode that they view as indicative of the problems that can result from MDA’s management of international relationships.

In the spring of 2007, Obering told congressional committees that he planned to abandon a component of a joint $3 billion program with Japan to upgrade the Standard Missile-3 used aboard ships and shift the money toward placing multiple warhead interceptors on Aegis cruisers, according to several committee staffers.

Aides to the defense authorization committees and Defense Appropriations subcommittees said Obering’s request came before he had consulted with the Japanese, who are heavily invested in the program.

“We said absolutely not,” one committee aide said. “The Japanese are investing all this money.”

Obering went back to the Japanese to pitch his idea, the staff members said. In a June 20 letter, Ro Manabe, then the director of the defense policy division at Japan’s Ministry of Defense, rejected Obering’s proposal, citing the continuing threat from neighboring North Korea.

U.S.-JAPAN COOPERATION: An SM-3 missile is launched from the Japanese destroyer Kongo. (MISSILE DEFENSE AGENCY)

“We have a serious and present threat in the area surrounding Japan,” Manabe wrote, adding that any delays to fielding the new class of SM-3 missiles, due out in 2014, could cause “a serious national security problem” for Japan. Also, any cost increases to the joint U.S.-Japan missile defense project would “bring about a serious political issue” for the Japanese supporters of missile defense, the letter said.

Obering, in an interview, called the situation a misunderstanding and said MDA had ultimately decided to pursue both programs on separate tracks.

At the same time, Congress this year inserted language in the Defense authorization bill preventing MDA from taking money away from the Japan project without Japanese consent. Defense officials have set the U.S.-Japan missile defense relationship back on track; and Democratic Sen. Daniel K. Inouye of Hawaii and Tauscher have each traveled to Japan since then and made efforts to smooth relations, several aides said.

“When you have a circumstance where a major decision is being made and our partner isn’t aware of it, it highlights . . . the overall role and mission of MDA and how it actually plays with everybody,” Tauscher said.

Incremental Approaches

Democrats in Congress have been aggressive themselves over the past year in challenging Bush’s missile defense program. They were unable to reduce spending much, but in the defense authorization law they began to tighten the agency’s acquisition powers.

As a result of the fiscal 2008 defense authorization, the Pentagon’s Office of Operational Test and Evaluation will have an increased role in evaluating MDA’s testing programs, though it won’t have oversight enforcement powers.

The law also calls for a federally funded research and development center to study the roles and missions of MDA and requires the agency to spell out explicitly which funding is for which segment of its system.

Congress’ most significant check on the MDA was reflected in a provision in the 2008 defense authorization law that prevents the Bush administration from moving ahead on construction of the proposed missile sites in Poland and the Czech Republic until it signs agreements with those host nations and gives Congress more information on the proposed system.

Congress cut the administration’s $310 million request for those European sites by $85 million this year, infuriating missile defense advocates.

“The potential consequences of delaying the third site are profound,” said Franks. He said the value of the system is not just in defending against missiles but removing the incentive for Iran to build them in the first place.

Overall, Congress gave the MDA about $8.7 billion for fiscal 2008, $185 million less than Bush’s $8.85 billion request, taking some funds away from futuristic technology programs.

As part of their strategy of incrementally expanding the examination and control of missile defense programs, the House Oversight and Government Reform Subcommittee on National Security and Foreign Affairs has started an investigation of the program and has begun a series of public hearings.

“When there was a Republican majority, I didn’t sense the same vigor for oversight,” said the subcommittee’s chairman, Democrat John F. Tierney of Massachusetts. “The administration was just plowing ahead with this program.”

With the defense budget rising and the economy declining, Tierney said Congress should re-examine whether the missile defense program should be a priority relative to other defense programs and whether the government can afford it.

The equation of cost vs. necessity is a difficult one for many members of Congress, including Republicans. Rep. Christopher Shays of Connecticut, the ranking Republican on Tierney’s subcommittee, is typical of those who worry about both the cost and the threat.

“My bottom line is, I don’t want us to spend unlimited sums,” Shays said. “But I think this program should continue.”

The Congressional Budget Office said the cost of missile defense will rise significantly with the new cost obligations of maintenance, spare parts and personnel to support all of the new hardware, but that such cost increases aren’t absolutely necessary.

In a 2006 analysis, CBO charted an alternative plan for missile defense, focusing on research only. That plan would cost an average of $3 billion per year, compared with an average of $13 billion under the current plan when the cost of risk is included.

This year, CBO raised its estimate, saying that spending for missile defense will peak at $15 billion annually around 2018 but could be as much as $20 billion per year when unbudgeted costs are taken into account.

Focusing on research rather than trying to expand the current small ground-based system would help mitigate criticism that the missiles are being deployed before they have been proved to work. That criticism is now coming from inside the Pentagon itself.

In its annual report on program progress, released in February, the Pentagon’s Office of Operational Test and Evaluation said that the ground-based system is the most unproven part of the program and has “demonstrated a limited capability against a simple foreign threat.”

The testing so far, it said, “is not sufficient to provide a high level of statistical confidence in its limited capability.”

Some experts, meanwhile, have criticized the agency as slow to address the chances that a future adversary could use inexpensive countermeasures, such as dispersing biological agents in hundreds of bomblets or launching decoy balloons to confuse or overwhelm the U.S. system.

Costs— and Alternatives: Click Here to View

Tests against countermeasures have been highly scripted and limited in value, said Victoria Samson, a missile defense analyst at the Center for Defense Information.

“Countermeasures is one of the betes noires for the MDA,” she said. “They’re having a really hard time dealing with that, and they’re kind of grasping at straws with this. The system is a long way from really being tested in operationally realistic conditions.”

MDA officials argue that their testing is gradually getting more sophisticated and realistic as time goes on.

Some experts on defense and foreign policy also contend that the diminishing threat of a missile strike on the United States simply doesn’t justify the huge expense of the current design.

“The ballistic missile threat today is limited and changing relatively slowly,” Joseph Cirincione, former vice president for national security and international policy at the Center for American Progress, testified at Tierney’s March 5 hearing. “There is every reason to believe that it can be addressed through diplomacy and measured military preparedness.”

In Congress, the debate over missile defense is likely to remain an ideological one for its advocates, who are willing to forgive any excesses. Democrats contend that they are not trying to end the program but simply to bring it under control.

“This isn’t to slow down getting the capability or to thwart technical development,” Tauscher said. “This is to get it right.”

FOR FURTHER READING: Missile Defense Agency Web site, fiscal 2008 defense authorization law (PL 110-181), CQ Weekly, p. 266 and 2007 CQ Weekly, p. 3659; congressional opposition to Eastern Europe missile plan, p. 1768.