U.S. Military Budget, Its Components, Challenges, and Growth

Why Military Spending Is More Than You Think It Is

Air Force Jet
••• 1991: An American airforce jet returning to base in Saudi Arabia after a raid on Iraqi ground forces during the Gulf War. Photo by MPI/Getty Images

Estimated U.S. military spending is $892 billion.That's from the spending bill signed by President Trump on August 13, 2018. It covers the period October 1, 2018 through September 30, 2019. 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

There are four components. First is the $616.9 billion base budget for the Department of Defense.

Second is $69 billion in overseas contingency operations for DoD to fight the Islamic State group.

Third is the total of other agencies that protect our nation. These expenses are $181.3 billion. They include the Department of Veterans Affairs ($83.1 billion), the State Department ($28.3 billion), Homeland Security ($46 billion), FBI and Cybersecurity in the Department of Justice ($8.8 billion) and the National Nuclear Security Administration in the Department of Energy ($21.9 billion).

The last component is $18.7 billion in OCO funds for the State Department and Homeland Security to fight ISIS. 

The spending bill allocates $7 billion more than that requested by President Trump's budget for Fiscal Year 2019 Congress must pass a spending bill for defense and the other departments by September 30, 2018, to avoid a government shutdown.

Defense Department Base Budget

DoD requested $597.1 billion.

It seeks to:

  1. Increase manning levels for all four branches from 1.314 million in 2018 to 1.338 million.
  2. A 2.6 percent pay raise for military personnel. It brings total compensation to $61,700 for enlisted personnel and $113,500 for officers. Those figures include tax-free allowances for food and housing.
  1. Continuing the Missile Defeat and Defense Enhancement initiative.
  2. Increase procurement of preferred and advanced munitions.
  3. Modernize equipment for the second Army Armored Brigade Combat Team.
  4. Buy three littoral combat ships, six icebreakers, an aircraft carrier, and a missile submarine.
  5. Increase production of the F-35 and F/A-18 aircraft. The F-35 Joint Strike Fighter program cost $400 billion for 2,457 planes, mostly for development and testing. The spending bill authorized $7.6 billion for 77 new F-35 jets. It blocks sales of the two jets Congress had previously authorized to sell to Turkey.
  6. Modernize the nuclear triad too enhance deterrence.
  7. Enhance communications in space.
  8. Increase the use of technology innovation.

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 the 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 $69 billion for DoD and $12 billion for the State Department.

 For OCO spending back to 2001, see War on Terror Facts.  (Source: "2018 Budget, Table 2," OMB, March 16, 2017.)

Military Spending History

Here's a summary of military spending in billions of dollars since 2003: 

FY DoD Base  BudgetDoD OCO Support BaseSupport OCOTotal Spending  
2003 $364.9   $72.5    $437.4
2004 $376.5   $91.1    $467.6
2005 $400.1   $78.8    $478.9
2006  $410.6  $124.0  $109.7   $644.3  
2007  $431.5  $169.4  $120.6   $721.5
2008  $479.0  $186.9  $127.0   $792.9
2009  $513.2  $153.1  $149.4   $815.7
2010  $527.2  $163.1  $160.3   $0.3  $851.6
2011  $528.2  $158.8  $167.4   $0.7  $855.1
2012  $530.4  $115.1  $159.3 $11.5  $816.3
2013   $495.5    $82.1  $157.8 $11.0  $746.4
2014  $496.3    $85.2  $165.4   $6.7  $753.6
2015   $496.1    $64.2  $165.6 $10.5  $736.4
2016  $521.7    $58.6  $171.9 $15.1  $767.3 
2017 Actual  $523.2    $82.8  $177.1 $35.1  $818.2
2018 Enacted  $574.5    $71.7  $181.8 $46.4  $874.4
2019 Budget  $597.1    $88.9  $181.3 $18.7  $886.0

 

Factors Influencing the 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. 

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 percent 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 percent excess capacity in all its facilities. If nothing is done, that will increase to 22 percent by 2019. 

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 $216 billion. It's almost 10 times bigger than Russia's budget of just $84.5 billion. It's difficult to reduce the budget deficit, and the  $20 trillion debt, without cutting defense spending.

Federal Budget Overview