the politicians decide how much they are prepared to pay for the insurance policy. When crises occur, then will then call the insurance company (the Military) and ask what can be done. Based on their premiums, the insurance company will explain the possible options from which the politicians choose.
Yes, this is currently what happens, but unfortunately the insurance company in question has 3 divisions who are each competing for business from the other and are prepared to make unsustainable short-term offers in the hope of obtaining longer-term business for their division. So instead of the customer begging the insurance company for a payout, we have the unusual situation of the 3 parts of the insurance company begging the customer to accept their payout. No wonder the customer doesn't want to pay any more when he seems to be getting a gold-plated service.
Unfortunately the customer needs to be more intelligent in all this because the internal politics at his insurer doesn't actually result in an increased level of protection; it just fools him into thinking that he's getting what he wants. This has been the classic way of driving down the insurance premium (defence budget) but the quality of cover inevitably suffers.
I note that since the much-vaunted CSR the 3 single-service heads have maintained full staffs in Main Building and, at least in CAS' case, seem to spend more time there than they do at their Command HQs. To that extent, I'm not sure that the CSR is achieving its desired endstate of restricting the political-military interface to the CDS-Ops Dir-PJHQ axis...