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Military budget of the United States

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Terminology
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The military budget is that portion of the United States discretionary federal budget that is allocated to the Department of Defense, or more broadly, the portion of the budget that goes to any military-related expenditures. This military budget pays the salaries, training, and health care of uniformed and civilian personnel, maintains arms, equipment and facilities, funds operations, and develops and buys new equipment. The budget funds all branches of the U.S. military: Army, Navy, Air Force, Marine Corps and Coast Guard. As the US military budget has been the largest military budget of any nation for the last few decades, it is constantly under analysis and scrutiny.

Budget for 2010

For the 2010 fiscal year, the president's base budget of the Department of spending on "overseas contingency operations" brings the sum to $663.84 billion.[1][dead link][2]

When the budget was signed into law on October 28, 2009, the final size of the Department of Defense's budget was $680 billion, $16 billion more than President Obama had requested.[3] An additional $37 billion supplemental bill to support the wars in Iraq and Afghanistan was expected to pass in the spring of 2010, but has been delayed by the House of Representatives after passing the Senate.[4][5]

Emergency and supplemental spending

The recent invasions of Iraq and Afghanistan were largely funded through supplementary spending bills outside the Federal Budget, so they are not included in the military budget figures listed below.[6] Starting in the fiscal year 2010 budget however, the wars in Iraq and Afghanistan are categorized as "Overseas Contingency Operations" and included in the budget.

By the end of 2008, the U.S. had spent approximately $900 billion in direct costs on the Iraq and Afghanistan Wars. Indirect costs such as interest on the additional debt and incremental costs of caring for the more than 33,000 wounded borne by the Veterans Administration are additional. Some experts estimate these indirect costs will eventually exceed the direct costs.[7] As of June 2011, the total cost of the wars in Iraq and Afganistan is approximately $3.7 trillion so far.[8]

By title

The federally budgeted (see below) military expenditure of the United States Department of Defense for fiscal year 2010, including the wars in Iraq and Afghanistan, is[9]:

Components Funding Change, 2009 to 2010
Operations and maintenance $283.3 billion +4.2%
Military Personnel $154.2 billion +5.0%
Procurement $140.1 billion −1.8%
Research, Development, Testing & Evaluation $79.1 billion +1.3%
Military Construction $23.9 billion +19.0%
Family Housing $3.1 billion −20.2%
Total Spending 683.7 billion +3.0%

By entity

Entity 2010 Budget request[10] Percentage of Total Notes
Army $244.9 billion 31.8% In FY2011 $17,175,805,014.00 dollars was paid to retired Soldiers and Survivors, which is about 6.9% of the total Army Budget
Navy $149.9 billion 23.4% excluding Marine Corps
Marine Corps $29.0 billion 4% Total Budget taken allotted from Department of Navy
Air Force $170.6 billion 22%
Defense Intelligence $80.1 billion[11] ?% Because of classified nature, budget is an estimate and may not be the actual figure
Defense Wide Joint Activities $118.7 billion 15.5%

Programs spending more than $1.5 billion

The Department of Defense's FY 2011 $137.5 billion procurement and $77.2 billion RDT&E budget requests included several programs with more than $1.5 billion.

Program 2011 Budget request[12] Change, 2010 to 2011
F-35 Joint Strike Fighter $11.4 billion +2.1%
Ballistic Missile Defense (Aegis, THAAD, PAC-3) $9.9 billion +7.3%
Virginia class submarine $5.4 billion +28.0%
Brigade Combat Team Modernization $3.2 billion +21.8%
DDG 51 Burke-class Aegis Destroyer $3.0 billion +19.6%
P–8A Poseidon $2.9 billion −1.6%
V-22 Osprey $2.8 billion −6.5%
Carrier Replacement Program $2.7 billion +95.8%
F/A-18E/F Hornet $2.0 billion +17.4%
Predator and Reaper Unmanned Aerial System $1.9 billion +57.8%
Littoral combat ship $1.8 billion +12.5%
CVN Refueling and Complex Overhaul $1.7 billion −6.0%
Chemical Demilitarization $1.6 billion −7.0%
RQ-4 Global Hawk $1.5 billion +6.7%
Space-Based Infrared System $1.5 billion +54.4%
Per-capita military spending 1962-2015 (inflation-adjusted 2011 dollars)
Military spending 1962-2015 (inflation-adjusted 2011 dollars)[13][14]

This does not include many military-related items that are outside of the Defense Department budget, such as nuclear weapons research, maintenance, cleanup, and production, which is in the Department of Energy budget, Veterans Affairs, the Treasury Department's payments in pensions to military retirees and widows and their families, interest on debt incurred in past wars, or State Department financing of foreign arms sales and militarily-related development assistance. Neither does it include defense spending that is not military in nature, such as the Department of Homeland Security, counter-terrorism spending by the FBI, and intelligence-gathering spending by NASA.

Audit of Implementation of Budget for 2010

The US Government Accountability Office (GAO) was unable to provide an audit opinion on the 2010 financial statements of the US Government because of 'widespread material internal control weaknesses, significant uncertainties, and other limitations'.[15] The GAO cited as the principal obstacle to its provision of an audit opinion 'serious financial management problems at the Department of Defense that made its financial statements unauditable'.[15]

In FY 2010 six out of thirty-three DoD reporting entities received unqualified audit opinions.[16]

Chief Financial Officer and Under Secretary of Defense Robert F. Hale acknowledged enterprise-wide problems with systems and processes,[17] while the DoD's Inspector General reported 'material internal control weaknesses ... that affect the safeguarding of assets, proper use of funds, and impair the prevention and identification of fraud, waste, and abuse'.[18] Further management discussion in the FY 2010 DoD Financial Report states 'it is not feasible to deploy a vast number of accountants to manually reconcile our books' and concludes that 'although the financial statements are not auditable for FY 2010, the Department's financial managers are meeting warfighter needs'.[19]

Audit of 2011 budget

Again in 2011, the GAO could not "render an opinion on the 2011 consolidated financial statements of the federal government", with a major obstacle again being "serious financial management problems at the Department of Defense (DOD) that made its financial statements unauditable".[20]

In December 2011, the GAO found that "neither the Navy nor the Marine Corps have implemented effective processes for reconciling their FBWT." According to the GAO, "An agency’s FBWT account is similar in concept to a corporate bank account. The difference is that instead of a cash balance, FBWT represents unexpended spending authority in appropriations." In addition, "As of April 2011, there were more than $22 billion unmatched disbursements and collections affecting more than 10,000 lines of accounting."[21]

Budget breakdown for 2012

Defense-related expenditure 2012 Budget request & Mandatory spending[22][23] Calculation[24][25]
DOD spending $707.5 billion Base budget + "Overseas Contingency Operations"
FBI counter-terrorism $2.7 billion At least one-third FBI budget.
International Affairs $5.6–$63.0 billion At minimum, foreign arms sales. At most, entire State budget
Energy Department, defense-related $21.8 billion
Veterans Affairs $70.0 billion
Homeland Security $46.9 billion
NASA, satellites $3.5–$8.7 billion Between 20% and 50% of NASA's total budget
Veterans pensions $54.6 billion
Other defense-related mandatory spending $8.2 billion
Interest on debt incurred in past wars $109.1–$431.5 billion Between 23% and 91% of total interest
Total Spending $1.030–$1.415 trillion

Support service contractors

Main article: Defense contractor
See also: List of United States defense contractors

The role of support service contractors has increased since 2001 and in 2007 payments for contractor services exceeded investments in equipment for the armed forces for the first time.[26] In the 2010 budget the support service contractors will be reduced from the current 39 percent of the workforce down to the pre-2001 level of 26 percent.[27] In a Pentagon review of January 2011, service contractors were found to be "increasingly unaffordable."[28]

Military budget and total US federal spending

World War II commenced a new era of permanency in the United States military budget. With the advent of the Cold War, the United States began to maintain a standing army and a permanent state of readiness for war that permanently elevated national defense expenditures. At the conclusion of his second term, President Eisenhower said in his Farewell Address:

Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea. Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations. This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.[29]

Fiscal Year 2010 U.S. Federal Spending – Cash or Budget Basis

The U.S. Department of Defense budget accounted in fiscal year 2010 for about 19% of the United States federal budgeted expenditures and 28% of estimated tax revenues. Including non-DOD expenditures, military spending was approximately 28–38% of budgeted expenditures and 42–57% of estimated tax revenues.[citation needed] According to the Congressional Budget Office, defense spending grew 9% annually on average from fiscal year 2000–2009.[30]

Because of constitutional limitations, military funding is appropriated in a discretionary spending account. (Such accounts permit government planners to have more flexibility to change spending each year, as opposed to mandatory spending accounts that mandate spending on programs in accordance with the law, outside of the budgetary process.) In recent years, discretionary spending as a whole has amounted to about one-third of total federal outlays.[31] Department of Defense spending's share of discretionary spending was 50.5% in 2003, and has risen to between 53% and 54% in recent years.[32]

For FY 2010, Department of Defense spending amounts to 4.7% of GDP.[33] Because the U.S. GDP has risen over time, the military budget can rise in absolute terms while shrinking as a percentage of the GDP. For example, the Department of Defense budget is slated to be $664 billion in 2010 (including the cost of operations in Iraq and Afghanistan previously funded through supplementary budget legislation[34][35]), higher than at any other point in American history, but still 1.1–1.4% lower as a percentage of GDP than the amount spent on military during the peak of Cold-War military spending in the late 1980s.[33] Admiral Mike Mullen, former Chairman of the Joint Chiefs of Staff, has called four percent an "absolute floor".[36] This calculation does not take into account some other military-related non-DOD spending, such as Veterans Affairs, Homeland Security, and interest paid on debt incurred in past wars, which has increased even as a percentage of the national GDP.

Comparison with other countries

Military spending as a percentage of GDP

The 2009 U.S. military budget accounts for approximately 40% of global arms spending. The 2012 budget is 6-7 times larger than the $106 billion of the military budget of China, and is more than the next twenty largest military spenders combined. The United States and its close allies are responsible for two-thirds to three-quarters of the world's military spending (of which, in turn, the U.S. is responsible for the majority).[37][38][39]

In 2005, the United States spent 4.06% of its GDP on its military (considering only basic Department of Defense budget spending), more than France's 2.6% and less than Saudi Arabia's 10%.[40]information 2006 This is historically low for the United States since it peaked in 1944 at 37.8% of GDP (it reached the lowest point of 3.0% in 1999–2001). Even during the peak of the Vietnam War the percentage reached a high of 9.4% in 1968.[41] Countries such as Canada and Germany spend only 1.4% of GDP on their military.

Recent commentary on military budget

Defense spending 2000-2011
Defense spending as % Outlays FY 1950–2009

In February 2009, Congressman Barney Frank, D-Mass., called for a reduction in the military budget: "The math is compelling: if we do not make reductions approximating 25 percent of the military budget starting fairly soon, it will be impossible to continue to fund an adequate level of domestic activity even with a repeal of Bush's tax cuts for the very wealthy. I am working with a variety of thoughtful analysts to show how we can make very substantial cuts in the military budget without in any way diminishing the security we need...[American] well-being is far more endangered by a proposal for substantial reductions in Medicare, Social Security or other important domestic areas than it would be by canceling weapons systems that have no justification from any threat we are likely to face."[42]

Republican historian Robert Kagan has argued that 2009 is not the time to cut defense spending, relating such spending to jobs and support for allies: "A reduction in defense spending this year would unnerve American allies and undercut efforts to gain greater cooperation. There is already a sense around the world...that the United States is in terminal decline. Many fear that the economic crisis will cause the United States to pull back from overseas commitments. The announcement of a defense cutback would be taken by the world as evidence that the American retreat has begun."[43]

Secretary of Defense Robert Gates wrote in 2009 that the U.S. should adjust its priorities and spending to address the changing nature of threats in the world: "What all these potential adversaries—from terrorist cells to rogue nations to rising powers—have in common is that they have learned that it is unwise to confront the United States directly on conventional military terms. The United States cannot take its current dominance for granted and needs to invest in the programs, platforms, and personnel that will ensure that dominance's persistence. But it is also important to keep some perspective. As much as the U.S. Navy has shrunk since the end of the Cold War, for example, in terms of tonnage, its battle fleet is still larger than the next 13 navies combined—and 11 of those 13 navies are U.S. allies or partners."[44] Secretary Gates announced some of his budget recommendations in April 2009.[45]

The Congressional Research Service has noted a discrepancy between a budget that is declining as a percentage of GDP while the responsibilities of the DoD have not decreased and additional pressures on the military budget have arisen due to broader missions in the post-9/11 world, dramatic increases in personnel and operating costs, and new requirements resulting from wartime lessons in the Iraq War and Operation Enduring Freedom.[46] [dead link]

Four billion dollars of the five billion dollars in budget cuts mandated by the Congress in the 2013 budget were achieved by declaring that nearly 65 thousand troops were now temporary and no longer part of the permanent forces and so their costs were shifted to the Afghanistan war budget.[47]

An April 2012 study by the Program for Public Consultation, in collaboration with the Stimson Center and the Center for Public Integrity showed a representative sample of Americans the size of the military budget from different perspectives and presented with arguments that experts make for and against cutting it. Among other findings, three quarters of respondents favored cutting military expenses as a way to reduce the deficit, including two thirds of Republicans as well as nine in 10 Democrats. Overall, respondents composed a military budget for 2013 that was significantly smaller than for 2012, with an average cut of 18%. Republicans cut an average of 12% and Democrats 22%. [48]

As part of Obama's East Asia "pivot", his 2013 national military request moves funding from the Army and Marines to favor the Navy, but the Congress has resisted this.[49]

GAO audits

The Government Accountability Office was unable to provide an audit opinion on the 2010 financial statements of the U.S. government due to "widespread material internal control weaknesses, significant uncertainties, and other limitations."[15] The GAO cited as the principal obstacle to its provision of an audit opinion "serious financial management problems at the Department of Defense that made its financial statements unauditable."[15]

In Fiscal Year (FY) 2011, seven out of 33 DoD reporting entities received unqualified audit opinions.[50] Under Secretary of Defense Robert F. Hale acknowledged enterprise-wide weaknesses with controls and systems.[51] Further management discussion in the FY 2011 DoD Financial Report states "we are not able to deploy the vast numbers of accountants that would be required to reconcile our books manually".[50] Congress has established a deadline of FY 2017 for the DoD to achieve audit readiness.[52]

In addition to FY 2011, the Department of Defense's financial statements were either unauditable or such that no audit opinion could be expressed for FYs 2010-1998.[53][54][55][56][57][58][59][60][61][62][63][64]

Reform

In a statement of 6 January 2011 Defense Secretary Robert M. Gates stated: "This department simply cannot risk continuing down the same path - where our investment priorities, bureaucratic habits and lax attitude towards costs are increasingly divorced from the real threats of today, the growing perils of tomorrow and the nation's grim financial outlook." Gates has proposed a budget which, if approved by the Congress, would reduce the costs of many DOD programs and policies, including reports, the IT infrastructure, fuel, weapon programs, DOD bureaucracies, and personnel.[65]

See also

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References

  1. ^ Updated Summary Tables, Budget of the United States Government Fiscal Year 2010 (Table S.12)
  2. ^ http://www.gpoaccess.gov/usbudget/fy09/pdf/budget/defense.pdf
  3. ^ Senate OKs defense bill, 68-29
  4. ^ The New York Times, Pentagon Expected to Request More War Funding
  5. ^ Gates ‘concerned’ about delayed war supplemental
  6. ^ David Isenberg, Budgeting for Empire: The effect of Iraq and Afghanistan on Military Forces, Budgets and Plans
  7. ^ Center for Strategic and Budgetary Assessments-Cost of the Iraq & Afghanistan Wars Through 2008
  8. ^ http://www.reuters.com/article/2011/06/29/us-usa-war-idUSTRE75S25320110629
  9. ^ Table 3.2—Outlays by Function and Subfunction: 1962–2014
  10. ^ Death and Taxes
  11. ^ [1]
  12. ^ Defense Comptroller, FY 2011 Program Acquisition Costs by Weapon System
  13. ^ Historical Outlays by Function and Subfunction
  14. ^ Historical Outlays by Agency
  15. ^ a b c d "US Government's 2010 Financial Report Shows Significant Financial Management and Fiscal Challenges". US Government Accountability Office. Retrieved 6 January 2011. Cite error: The named reference "GAO press release" was defined multiple times with different content (see the help page).
  16. ^ "FY 2010 DoD Agencywide Agency Financial Report (vid. p.25)" (PDF). US Department of Defense. Retrieved 7 January 2011.
  17. ^ "FY 2010 DoD Agencywide Agency Financial Report (vid. p.18)" (PDF). US Department of Defense. Retrieved 7 January 2011.
  18. ^ "FY 2010 DoD Agencywide Agency Financial Report (vid. p.32)" (PDF). US Department of Defense. Retrieved 7 January 2011.
  19. ^ "FY 2010 DoD Agencywide Agency Financial Report (vid. pp. 20, 28)" (PDF). US Department of Defense. Retrieved 7 January 2011.
  20. ^ "Significant Financial Management and Fiscal Challenges Reflected in the U.S. Government's 2011 Financial Report". US Government Accountability Office. Retrieved 2 January 2012.
  21. ^ "DOD Financial Management: Ongoing Challenges with Reconciling Navy and Marine Corps Fund Balance with Treasury". US Government Accountability Office. Retrieved 2 January 2012.
  22. ^ "Federal Government Outlays by Function and Subfunction: 1962–2015 Fiscal Year 2011 (Table 3.2)". Retrieved 2010-12-21.
  23. ^ Table 8.5—Outlays for Mandatory and Related Programs: 1962–2014
  24. ^ Robert Higgs. "The Trillion-Dollar Defense Budget Is Already Here". Retrieved March 15, 2007.
  25. ^ Christopher Hellman. "America Spending More on Security Than Most Know". Retrieved September 30, 2009.
  26. ^ Sandra I. Erwin (June 2007). "More Services, Less Hardware Define Current Military Buildup". Defense Watch. National Defense Industrial Association. Retrieved 6 December 2009.
  27. ^ Defense Budget Recommendation Statement, SoD Gates, 6 April 2009
  28. ^ Liebelson, Dana. "NYT Misses Elephant in the Room: Defense Service Contractors." POGO, 3 January 2012.
  29. ^ Military-Industrial Complex Speech
  30. ^ CBO-Monthly Budget Review-Sept 09
  31. ^ Congressional Appropriations: An Updated Analysis
  32. ^ "Fiscal Year 2002 Budget". Center for Defense Information. Retrieved 2006-07-13.
  33. ^ a b The President's FY 2010 Budget
  34. ^ Mike Carney (22 October 2007). "Bush submits $42.3B Iraq war supplemental funding bill". USA Today. Retrieved 06 October 2009. {{cite news}}: Check date values in: |accessdate= (help)
  35. ^ AUGUST COLE (5 February 2008). "Bush's Successor to Confront Tough Decisions on Defense". Wall Street Journal. Retrieved 6 October 2009.
  36. ^ Joint Chiefs Chairman Looks Beyond Current Wars
  37. ^ World Military Spending, Anup Shah
  38. ^ "World Wide Military Expenditures". GlobalSecurity.org. 2006. Retrieved May 10, 2010.
  39. ^ "The FY 2009 Pentagon Spending Request - Global Military Spending". Retrieved 2010-06-09. {{cite web}}: Unknown parameter |= ignored (help)
  40. ^ CIA World Factbook. "Rank Order – Military expenditures percent of GDP". Retrieved 2006-05-26.
  41. ^ "Relative Size of US Military Spending from 1940 to 2003". TruthAndPolitics.org. {{cite web}}: External link in |publisher= (help)
  42. ^ Barney Frank – The Nation
  43. ^ Robert Kagan – Washington Post
  44. ^ [2]
  45. ^ Slate-Gates Follows Through
  46. ^ CRS Defense: FY2010 Authorization and Appropriations, pages 6–8
  47. ^ Bender, Bryan. "Pentagon accused of end run on budget cuts." Boston Globe. March 03, 2012.
  48. ^ [3] Program for Public Consultation
  49. ^ Pellerin, Cheryl. "Carter: DOD Puts Strategy Before Budget for Future Force." American Forces Press Service, 30 May 2012.
  50. ^ a b "FY 2011 DoD Agency Financial Report (vid. pp. 25-29)" (PDF). Comptroller, Department of Defense. Retrieved 13 December 2011.
  51. ^ "FY 2011 DoD Agencywide Agency Financial Report (vid. p.45)" (PDF). Comptroller, Department of Defense. Retrieved 13 December 2011.
  52. ^ "Financial Improvement and Audit Readiness (FIAR) Plan Status Report" (PDF). Comptroller, Department of Defense. Retrieved 13 December 2011.
  53. ^ "DoD Agency Financial Report for FY 2011 (vid. p.46)" (PDF). Comptroller, Department of Defense. Retrieved 13 December 2011.
  54. ^ "DoD Agency Financial Report for FY 2010 (vid. p.44)" (PDF). Comptroller, Department of Defense. Retrieved 13 December 2011.
  55. ^ "DoD Agency Financial Report for FY 2009 (vid. p.23)" (PDF). Office of the Under Secretary of Defense (Comptroller). Retrieved 11 January 2011.
  56. ^ "FY 2008 Agency Financial Report (vid. p.21)" (PDF). Office of the Under Secretary of Defense (Comptroller). Retrieved 11 January 2011.
  57. ^ "DoD Agency Financial Report FY 2007 (vid. p.17)" (PDF). Office of the Under Secretary of Defense (Comptroller). Retrieved 11 January 2011.
  58. ^ "DoD Performance and Accountability Report FY 2006 (vid. p.74)" (PDF). Office of the Under Secretary of Defense (Comptroller). Retrieved 11 January 2011.
  59. ^ "DoD Performance and Accountability Report FY 2005 (vid. p.137)" (PDF). Office of the Under Secretary of Defense (Comptroller). Retrieved 11 January 2011.
  60. ^ "FY 2004, FY 2003, FY 2002 Component Financial Statements". Office of the Under Secretary of Defense (Comptroller). Retrieved 11 January 2011.
  61. ^ "DoD Agency-Wide Financial Statements Audit Opinion FY 2001" (PDF). Office of the Under Secretary of Defense (Comptroller). Retrieved 11 January 2011.
  62. ^ "DoD Agency-Wide Financial Statements Audit Opinion FY 2000" (PDF). Office of the Under Secretary of Defense (Comptroller). Retrieved 11 January 2011.
  63. ^ "DoD Agency-Wide Financial Statements Audit Opinion FY 1999" (PDF). Office of the Under Secretary of Defense (Comptroller). Retrieved 11 January 2011.
  64. ^ "DoD Agency-Wide Financial Statements Audit Opinion FY 1998" (PDF). Office of the Under Secretary of Defense (Comptroller). Retrieved 11 January 2011.
  65. ^ "Gates Reveals Budget Efficiencies, Reinvestment Possibilities". US Department of Defense. Retrieved 11 January 2011.
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