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U.S. Military Budget

How Much the U.S. Spends on Defense Will Surprise You

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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

The U.S. military budget is $756.4 billion for FY 2015. This includes:

  • $495.6 billion for the base budget of the Department of Defense (DoD).
  • $85.4 billion for Overseas Contingency Funds for the wind-down of the War in Afghanistan.
  • $175.4 billion for defense-related agencies and functions. This includes the Veterans Administration ($65.3 billion), the State Department ($42.6 billion), Homeland Security ($38.2 billion), FBI and Cybersecurity in the Department of Justice ($17.6 billion), and the National Nuclear Security Administration in the Department of Energy ($11.7 billion).

That makes military spending the second largest Federal government expenditure, after Social Security ($896 billion). Military spending is dropping, thanks to sequestration and the end of the War in Iraq in 2011. It's all-time high was $851.3 billion in FY 2010. (Source: Office of Management and Budget, 2015 Budget, Summary Tables, Table S-11)

Military spending is greater than Medicare ($529 billion), Medicaid ($331 billion), or the interest payment on the debt ($251). It's also more than the three next largest departments combined: Health and Human Services ($73.1 billion), Education ($68.6 billion) and Housing and Urban Development ($32.6 billion).

If all military spending could somehow be safely eliminated, there would be a budget surplus of $174.8 billion, instead of a $564 billion budget deficit.

Defense Department Base Budget:

DoD requested $495.6 billion for its base budget, and planned to cut its costs as follows:

  1. End War in Afghanistan. Reduce active duty military by 13% and reserves by 5%. Shrink the Army to 450,000, or Pre-WWII levels. Boost Special Operations forces by 6%.
  2. Shift focus from the Middle East to Asia. Pay more attention to al-Quada in Africa.
  3. Beef up cyber security forces. Focus on nuclear deterrence by spending more on the nuclear weapons complex and on nonproliferation. 
  4. Lower spending with the Better Buying Power (BBP) initiative. Reduce spending on the F-35 Joint Strike Fighter, or eliminate the program completely. (Source: WSJ, Defense Budget Targets New Threats, February 25, 2014)

The Department wants to focus on its counterterrorism capability and alliances with organizations such as NATO. It's spending $176.2 billion for troop operations, training, and support activities. It's increasing pay by 1% and the housing allowance by 4.2%, while providing $49.4 billion for medical benefits for the 9.6 million active duty personnel, their families, and veterans.

The DoD wants to close unneeded military bases, but Congress won't allow it. Congress is also reluctant to allow DoD to cut other costs, like military health benefits and the growth of military pay. Few elected officials are willing to risk losing local jobs caused by base closures in their states. The Pentagon will be forced to reduce the number of actual soldiers so it can afford these benefits. (Source: Department of Defense FY 2015 Budget; WSJ, Pentagon Lays Out Way to Slash Spending, August 1, 2013))

Overseas Contingency Operations:

Surprisingly, the DoD base budget does not include the cost of wars. That's separated out in Overseas Contingency Operations. The cost for the War in Afghanistan, which is winding down, was $85.4 billion for FY 2015.  For OCO spending back to 2001, see War on Terror Facts. (Source: OMB, FY 2015 Budget, Table S-11)

The Bi-Partisan Budget Act of 2013 recommended $80.7 billion for OCO and a record $552 billion for the Defense Department. It blocked future military base closings and gave service-members a 1% pay increase, but cut the cost-of-living-adjustment by 1% for veterans who retire before age 62.  However, disabled veterans and surviving families had the cut re-instated.  (Source: Stars and Stripes, House Quickly OKs Bipartisan Budget Deal, December 12, 2013; CNN, Disabled Veterans Get Back Pension Raises, January 14, 2014)

DoD Must Become More Efficient:

The Defense Department needs to become more efficient. Without a reduction, it will pay 100% of its budget on personnel and maintenance by 2024, leaving no funds for procurement, research and development, construction or housing. These necessary programs to support U.S. troops now take up more than a third of DoD's budget.

How could the DoD become more efficient? First, it needs to rationally reduce its civilian workforce, which grew by 100,000 in the last decade, instead of resorting to hiring freezes and unpaid furloughs. Second, it must reduce pay and benefits costs for each soldier, which have risen from $70,000 to $110,000 per person in the last 10 years. Third, it should close unneeded military bases. By its own estimates, the DoD is operating with 21% excess capacity in all its facilities. (Source: Center for Strategy and Budgetary Assessments, Pay Will Swallow DoD Budget by 2024, April 8, 2013)

Defense spending would have been reduced by $487 billion in ten years if sequestration had continued. However, many Congressmen said the cuts would jeopardize national security. They were particularly concerned about a cutback of about 100,000 troops, closure of domestic military bases, and termination of some weapons systems -- all of which would have cost jobs and revenue in their districts. That's why defense spending is the only budget area that rarely gets focused on as an area to cut. (Source: Reuters, Lawmakers skeptical of cuts in 2013 defense budget, February 15, 2012)  

Here's how spending has escalated since 2006. 

Total Military Spending By Year (in billions)

FY DoD OCO Support Total Comments
2006  $594.6  $120.4    N.A.   N.A.  
2007  $671.6  $173.6    N.A.   N.A. Surge in Iraq
2008  $686.0  $197.5    N.A.   N.A.  
2009   $513.6  $145.9  $149.2  $808.7 Surge in Afghanistan.  
2010  $530.1  $167.3  $159.5  $852.2  
2011  $528.1  $159.4  $165.0  $862.7 Iraq War ends.
2012  $530.4  $126.5  $159.3  $816.2 Afghan troop withdrawal.
2013   $495.5   $93.0  $163.8  $752.3 Sequestration
2014 Enacted $496.0   $91.9  $168.6  $756.5 Afghan wind-down.
2015 Budget $495.6  $85.4  $175.4  $756.4  

Article updated April 5, 2014

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