US Military Budget, Its Components, Challenges, and Growth
Why Military Spending Is More Than You Think It Is
Estimated U.S. military spending is $989 billion. It covers the period October 1, 2019 through September 30, 2020. Military spending is the second largest item in the federal budget after Social Security. The United States spends more on defense than the next nine countries combined.
This estimate is more than the $750 billion announced by President Donald Trump. The United States has many departments that support its defense. All these departments must be included to get an accurate picture of how much America spends on its military operations.
The Four Components of U.S. Military Spending
If you really want to get a handle on what the United States spends on defense, you need to look at four components.
First is the $576 billion base budget for the Department of Defense. Second is $174 billion in overseas contingency operations for DoD to fight the Islamic State group. These two combined total the $740 billion touted by the president.
Third is the total of other agencies that protect our nation. These expenses are $212.9 billion. They include the Department of Veterans Affairs ($93.1 billion). Funding for the VA has been increased by $10 billion over 2018 levels. That's to fund the VA MISSION Act to the VA's health care system. The other agencies are: Homeland Security ($51.7 billion), the State Department ($42.8 billion), the National Nuclear Security Administration in the Department of Energy ($16.5 billion), and the FBI and Cybersecurity in the Department of Justice.
The last component is $26.1 billion in OCO funds for the State Department and Homeland Security.
Defense Department Base Budget
The defense base budget is $576 billion funds the National Security Strategy and National Defense Strategy. It creates three new initiatives: the U.S. Space Force, the U.S. Space Command, and the Space Development Agency. DoD will spend $9.6 billion on cyberstrategy and expansion of artifical intellligence. It will build a new missile field in Alaska to defend against ballistic missile threats. Emplloyees will receive a 3.1% pay increase.
Congress also provided funds to safeguard bases from climate change. It required facilities in the 100-year floodplain to design for two more feet of flooding. It wants DoD to investigate China’s activities in the Arctic. To that end, it authorized icebreakers.
Overseas Contingency Operations
Ironically, the DoD base budget does not include the cost of wars. That falls under Overseas Contingency Operations. It's budgeted at $174 billion for DoD and $26.1 billion for other departments Since 2001, the OCO budget has spent $2 trillion to pay for the War on Terror.
Military Spending History
Here's a summary of military spending in billions of dollars since 2003:
|FY||DoD Base Budget||DoD OCO||Support Base||Support OCO||Total Spending|
Factors Influencing the OCO Budget
- 2003: Iraq War launched March 19.
- 2004: U.S. torture at Abu Ghraib prison increased resistance to the war, but not enough to lower costs.
- 2005: Afghanistan War costs rose to protect free elections.
- 2006: Costs rose in Iraq.
- 2007: Surge in Iraq to counter violence.
- 2008: Violence rose in Middle East due to recession.
- 2009: Surge in Afghanistan.
- 2010: Obama funds Iraq drawdown.
- 2011: Iraq War ended but costs reached all-time high.
- 2012: Troop withdrawal in Afghanistan War. Costs began falling.
- 2013: Sequestration cut spending.
- 2014: Wind-down of Afghanistan War.
- 2015: Sequestration cut spending. Still higher than in 2007.
- 2016: Resurgence of ISIS.
- 2017: Increase in VA and FBI funding. Trump asked Congress for $30 billion more in military spending.
- 2018: Trump asked Congress to repeal sequestration for the defense budget. Requested a spending increase to fight ISIS.
- 2019: Congress repealed sequestration for defense for two years.
- 2020: Trump increase VA and OCO and reduced the State Department.
Three Ways DoD Tries to Save Money, But Congress Won't Let It
The Defense Department knows it needs to become more efficient. It now spends a third of its budget on personnel and maintenance. That will rise to 100% by 2024, thanks to retirement and medical costs. That leaves no funds for procurement, research and development, construction or housing. These necessary support programs now take up more than a third of DoD's budget.
How could the DoD become more efficient? First, it needs to reduce its civilian workforce instead of resorting to hiring freezes and unpaid furloughs. The civilian workforce grew by 100,000 in the last decade,
Second, it must reduce pay and benefits costs for each soldier. Instead, it plans to raise both.
Third, and most important, it should close unneeded military bases. By its own estimates, the DoD is operating with 21% excess capacity in all its facilities.
Congress won't allow DoD to close bases. The Bi-Partisan Budget Act of 2013 blocked future military base closings. Few elected officials are willing to risk losing local jobs caused by base closures in their states. Instead, the Pentagon will need to reduce the number of soldiers so it can afford the benefits of bases.
Congress is also reluctant to allow DoD to cut other costs, like military health benefits and the growth of military pay. Sequestration cut defense spending by $487 billion over 10 years. Many in Congress said the cuts jeopardize national security. They are concerned about a cutback of about 100,000 troops, closure of domestic military bases, and termination of some weapons systems. All of those cuts cost jobs and revenue in their districts. That's why lawmakers added $180 billion to the limits imposed by sequestration for FY 2018 and FY 2019
At the same time, U.S. military spending is greater than those of the next 10 largest government expenditures combined. It's four times more than China's military budget of $228 billion. It's almost 10 times bigger than Russia's budget of just $69.4 billion. It's difficult to reduce the budget deficit and the $22 trillion debt without cutting defense spending.