In a report titled, “Long-Term Implications of the Fiscal Year 2010 Defense Budget,” the Congressional Budget Office (CBO) points out that this year’s Department of Defense (DoD) budget will exceed the real dollar equivalent of the Pentagon’s budget at the time of the defense build-up in the 1980s. Specifically, CBO calculates that this year’s defense budget will total $664 billion, compared to roughly $500 billion in 1985 — an increase of one-third.
This comparison is no surprise to Congress or the American people because the U.S. is currently fighting two wars in Iraq and Afghanistan. In 1985, a military build-up was required because the military had become a hollow force after Vietnam. A hollow force lacks the resources to do three critical tasks at once:
• Provide trained and ready forces,
• Support ongoing operations, and
• Modernize its equipment and platforms.
Out of necessity, the federal government increased defense spending in the 1980s to rebuild a military broken in the course of the Vietnam War and its aftermath.
The key difference between 1985 defense spending and that of today is that the military was not engaged in any major contingency operations then, one of the three pillars of a balanced defense program.
Defense spending today is higher because of ongoing combat operations that are a significant strain on the force. Spending is also higher because the U.S. military is simultaneously trying to recover from the “procurement holiday” of the 1990s. Throughout the ‘90s, Congress and the President cut the size of all three military services by one-third to one-half and reduced the purchase of modern equipment to match. As a result, defense spending dropped significantly in the 1990s to less than 3 percent of gross domestic product.
Today’s Military is Doing More than Yesterday’s
Any discussion about spending on today’s combat operations must examine the defense budget more closely. When the U.S. military is operating at a high operations tempo, as it is today, these wartime demands impose resource burdens on the operation and support accounts within the defense budget.
These accounts—operations and support—primarily fund military pay and operations and maintenance activities. In the President’s fiscal year 2010 defense budget request, these accounts will roughly absorb nearly 65 percent of the DoD budget. Yet in 1985, these accounts absorbed roughly half, or 50 percent, of the defense budget.
The wear and tear on military equipment during wartime is also straining resources and burning through equipment at rates five, six, and even seven times that of peacetime. To bring the military back in balance, weapons systems and platforms can either go through significant maintenance to restore them, or the military may seek to buy newer replacements with next-generation technology. This reset and recapitalization of military equipment is funded largely through the procurement account. However, today’s procurement funding accounts for a much smaller share of the defense budget than it did in 1985.
The 2010 defense budget will allot less than one-fifth of its total to procurement funding. By comparison, in 1985 procurement absorbed over one-third of the DoD budget.
The recovery from the procurement holiday of the 1990s was never fully achieved after 9/11 due to ongoing wartime requirements and the necessity of prioritizing funding for restoring weapons and equipment lost or damaged in combat.
Defense Spending is Less than One-Fifth of the Federal Budget
Finally, the defense budget should not be examined in isolation from the rest of the federal budget. If policymakers do not compare the increase in defense from the mid-1980s and current defense spending levels with other federal budget accounts, they may assume out of context that the defense budget is too large.
The Medicare budget this fiscal year is currently estimated to be seven times what it was in 1985. Other health care funding is 11 times what is was in 1985. Social Security funds will likely be more than three times their 1985 levels. This explosion in other federal spending comes when the Administration is arguing the federal government is not spending enough on health care and is looking at significant tax increases to fund this additional spending.
Instead of isolating one factoid for examination from a larger report, Congress should pay special attention to what CBO says about future defense spending. CBO analysis is not limited to comparisons between past defense budgets and 2010 defense spending.
CBO projects that the average DoD budget for the period covering fiscal years 2011 through 2028 will be $50 billion less in real dollars than its current estimate for this fiscal year. This estimate includes the costs that the Congressional Budget Office calculates that the Obama Administration has not fully budgeted.
The report estimates that future defense budgets will average $91 billion less annually in real dollars than for the current fiscal year when the Administration’s stated defense budget is submitted to Congress. In essence, CBO acknowledges that the Obama Administration is cutting the defense budget, both in real dollar terms and as a percent of the economy.
Congress should not be intimidated by charges that defense budgets are excessive by historical standards. They are not when taken in context, and Congress should fight the defense budget reductions the CBO expects are coming from President Obama.