The U.S. spends more on defense than anything else except Social Security. For FY 2014, the Federal government anticipates it will spend $618 billion for defense, less than the $860 billion estimated for Social Security, but more than the $524 billion for Medicare. If there were no need for defense spending, the budget deficit
would be just $126 billion instead of $744 billion.
The U.S. military budget has many components that can make it confusing to determine exactly how much is being spent on defense. Here's how the Office of Management and Budget (OMB) breaks it out.
Defense Department Base Budget:
Military spending starts with the Department of Defense (DoD). For FY 2014, the DoD base budget
is $526.6 billion. This was $1.2 billion more than in FY 2013, but both are lower than the FY 2012 base budget of $530.4 billion. (Source: U.S. Office of Management and Budget, FY 2014 Budget
A Modern, Ready and Balanced Defense Department:
The Defense Department has cuts costs since 2012 by adopting several measures. First, it is shifting its focus somewhat from the Middle East to Asia. The DoD will upgrade the base in Guam, support four Littoral Combat Ships in Singapore, and maintain its Marine Air-Ground Task Forces in Japan, Guam, and Hawaii with the intent to rotate forces to Australia. Second, the DoD is beefing up its cyber security forces, and focusing on nuclear deterrence by spending more on the nuclear weapons complex and on nonproliferation.
Third, the Better Buying Power (BBP) initiative seeks to achieve better efficiencies in DoD purchases. It already reduced spending on the F-35 Joint Strike Fighter to $8.4 billion. It will achieve further savings by using the C-130 airlift aircraft rather than purchase the new C-27, and will not order any new Global Hawk Block 30 Unmanned Aerial Vehicles.
The Department will still maintain ready forces, with a 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 is planning to close unneeded military bases, but this won't achieve savings until FY 2016 IF this is even approved by Congress. Few elected officials are willing to risk losing local jobs caused by base closures in their states. (Source: Department of Defense FY 2014 Budget)
Overseas Contingency Operations:
In addition to the DoD base budget, $92.3 billion is budgeted in Overseas Contingency Operations (OCO) to fund the wind-down of the war in Afghanistan. Of this, $88.5 billion will go toward DoD and $3.8 billion toward the State Department. However, this is just a rough estimate for the time being, since the actual withdrawal date hasn't been announced yet. When it has, then a better estimate will be provided.
Nevertheless, it's still a savings from prior years, because military operations in Iraq ended. Total OCO is estimated to be $96.7 billion in FY 2013, while $126.5 billion was spent in FY 2012 and $159.4 billion in FY 2011. For spending back to 2001, see War on Terror Facts. (Source: OMB, FY 2014 Budget, Table S-11)
Other Agencies That Support U.S. Defense:
Another $25.4 billion was requested by other agencies for their activities that support the DoD. This includes $17.8 billion for the the Department of Energy's National Nuclear Security Administration; $4.9 billion for the Justice Department's FBI; $1.6 billion for Homeland Security, and $1 billion for other miscellaneous programs. (Source: OMB, FY 2014 Budget, Table S-11)
The True Cost of Defense:
In prior years, the Obama Administration also included the Veterans Administration and Homeland Security in its estimate of security spending. If all those are included, the true cost of defense is $745.2 billion. Here's the breakout:
- DoD Base Budget - $526.6 billion
- Overseas Contigency - $92.3 billion
- Other Agency's Defense-related Spending - $25.4 billion.
- VA - $63.5 billion.
- Homeland Security - $37.4 billion.
DoD Must Become More Efficient:
The FY 2014 budget assumes that sequestration
will be reversed by Congress sometime in 2013. That's unlikely. Therefore, the Defense Department needs to become more efficient. Otherwise, it will wind up paying 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 the 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)
Concerns About Cutbacks in Defense Spending:
Defense spending must be reduced by $487 billion over the next ten years thanks to the Budget Control Act that was passed by Congress in August 2011 to end the debt ceiling
crisis. Even though Congress mandated the budget reductions, many Congressmen say the cuts will jeopardize national security. They are particularly concerned about a cutback of about 100,000 troops, closure of domestic military bases, and termination of some weapons systems. (Source: Reuters, Lawmakers skeptical of cuts in 2013 defense budget
, February 15, 2012) Article updated April 10, 2013
Understand the Current Federal Budget:
Compare the FY 2014 Military Budget to Prior Years