For other versions of this document, see http://wikileaks.org/wiki/CRS-RL32468 ------------------------------------------------------------------------------ Order Code RL32468 CRS Report for Congress Received through the CRS Web FY2005 Defense Budget: Frequently Asked Questions July 12, 2004 Jeffrey Chamberlin Analyst in National Defense Foreign Affairs, Defense, and Trade Division Congressional Research Service ~ The Library of Congress FY2005 Defense Budget: Frequently Asked Questions Summary This report is designed to provide facts and figures about the United States defense budget in order to help answer frequently asked questions about defense spending. The answers to these questions are based on analysis of recent and historical trends in the defense budget up to and including the fiscal year (FY) 2005 budget request. Using figures taken primarily from the White House Office of Management and Budget's (OMB's) Budget of the United States Government, Fiscal Year 2005: Historical Tables (February 2004), this report answers frequently asked questions that fall within four categories: (1) trends in defense spending over time, from World War II through OMB's FY2009 budget projections (questions 1, 2, 3, and 4); (2) the impact of defense on the economy (questions 5, 6, and 7); (3) costs of wars and supplemental appropriations (questions 8 and 9); (4) trends in force structure (questions 10, 11, and 12). The fifth section of the report consists of additional, more general budget data tables and a glossary of frequently used budget terms. This report will be updated as necessary. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Key Budget Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Budget Authority, Obligations, and Outlays . . . . . . . . . . . . . . . . . . . . . 2 The "050" vs. the "051" Budget Function . . . . . . . . . . . . . . . . . . . . . . . 2 Current and Constant Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Discretionary and Mandatory Spending . . . . . . . . . . . . . . . . . . . . . . . . . 3 Part I: Trends in Defense Spending Over Time . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Question 1: What Are the Recent, Historic, and Projected Trends in Budget Authority and Outlays for National Defense? . . . . . . . . . . . . . . 3 Question 2: What Are the Recent Trends in Budget Authority for Each Defense Appropriations Title? . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Question 3: What Are the Historical Trends in Defense's Share of Total Federal Outlays? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Question 4: What Are the Historical Trends in Defense's Share of Total Federal Discretionary Outlays? . . . . . . . . . . . . . . . . . . . . . . . . . 13 Part II: The Impact of Defense on the Economy . . . . . . . . . . . . . . . . . . . . . . . . . 14 Question 5: What Are the Historical Trends in U.S. Defense Outlays as a Percentage of Gross Domestic Product (GDP)? . . . . . . . . . . . . . . 14 Question 6: What Are the Historical Trends in Different Categories of Federal Spending as a Percentage of GDP? . . . . . . . . . . . . . . . . . . . . . 15 Question 7: How Do U.S. Defense Outlays Compare to Those of Other Countries, Both in Dollars and as a Percentage of GDP? . . . . . 16 Part III: Costs of Wars and Defense Supplementals . . . . . . . . . . . . . . . . . . . . . . 17 Question 8: How Much Has Congress Enacted in Defense Supplemental Appropriations since September 11, 2001? . . . . . . . . . . . . . . . . . . . . . 17 Question 9: How Much Has Each Major War in the History of the United States Cost? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Part IV: Trends in Force Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Question 10: What Have Been the Recent Trends in U.S. Military Personnel Levels? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Question 11: What Are the Recent Trends in U.S. Military Force Structure? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Question 12: How Much Budget Authority Has Been Provided to Each Service in Recent Years? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Part V: Appendix and Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 CRS Defense Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 List of Figures Figure 1. National Defense Budget Authority and Outlays, FY1947-FY2009 . . . 3 Figure 2. National Defense Budget Authority and Outlays, FY1997-FY2009 . . . 4 Figure 3. Department of Defense Budget Authority by Appropriations Title, FY1976-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Figure 4. Shares of Total Federal Outlays by Type of Spending, FY1962-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Figure 5. Defense and Non-Defense Discretionary Outlays as a Share of Total Federal Discretionary Outlays, FY1962-FY2009 . . . . . . . . . . . . . . . . 13 Figure 6. GDP and Defense's Share of GDP, FY1962-FY2005 . . . . . . . . . . . . 14 Figure 7. Federal Spending by Category as a Percentage of GDP, FY1962-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Figure 8. Regular and Supplemental Defense Appropriations, FY2001-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Figure 9. Active Duty and Selected Reserve End-Strength, Selected Years, FY1989-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Figure 10. Department of Defense Budget Authority by Service, FY2005 Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 List of Tables Table 1. National Defense Budget Function and Department of Defense Budget, FY1997-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Table 2. National Defense Budget Function Trends by Appropriations Title, Budget Authority, FY1997-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Table 3. National Defense Budget Function by Appropriations Title, Budget Authority, Selected Years, FY1976-FY2005 . . . . . . . . . . . . . . . . . 10 Table 4. National Defense Budget Function Outlays by Appropriations Title, FY1997-2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Table 5. Defense Spending of Top 25 Countries . . . . . . . . . . . . . . . . . . . . . . . . 16 Table 6. Regular and Supplemental Appropriations for the National Defense Budget Function, FY2001-2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Table 7. Costs of Major U.S. Wars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Table 8. Department of Defense Personnel Levels, Selected Years . . . . . . . . . . 22 Table 9. U.S. Military Force Structure, FY1980-2005 . . . . . . . . . . . . . . . . . . . . 23 Table 10. Department of Defense Budget Authority by Service, FY1995-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Table 11. Real Growth/Decline in National Defense Budget Authority and Outlays, FY1940-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Table 12. National Defense Outlays as a Percentage of GDP, FY1910-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Table 13. Allocation of Federal Outlays by Budget Enforcement Act Category, FY1962-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Table 14. Percentage Allocation of Federal Outlays by Budget Enforcement Act Category, FY1962-FY2009 . . . . . . . . . . . . . . . . . 30 FY2005 Defense Budget: Frequently Asked Questions Introduction This report is designed to answer Congress's most frequently asked questions and provide essential facts and figures about the defense budget. It includes figures from the president's fiscal year (FY) 2005 budget request and provides brief analyses of recent and historical trends in the defense budget. Each frequently asked question about the defense budget falls within one of the following four sections in this report: (1) trends in defense spending over time, from World War II through OMB's FY2009 budget projections (questions 1, 2, 3, and 4); (2) the impact of defense on the economy (questions 5, 6, and 7); (3) costs of wars and supplemental appropriations (questions 8 and 9); (4) trends in force structure (questions 10, 11, and 12); The fifth section of the report consists of additional data tables with historical budget authority and outlay figures, and a glossary of frequently used budget terms. Most of the figures used in this report are taken from annual budget documents prepared by the Office of Management and Budget (OMB).1 It is important to note that OMB figures for budget authority and outlays through FY2004 include both regular and supplemental appropriations. As a result, budget authority and outlay totals for FY2003 and FY2004, which included significant supplemental appropriations, are sometimes larger than totals for FY2005, which represent the president's FY2005 request and do not include any FY2005 supplemental appropriations. In addition, please note that the budget authority and estimated outlay figures for the president's FY2005 request include the $25 billion budget amendment for Iraq and Afghanistan submitted by the president to Congress on May 12, 2004. Outlay estimates provided by the Congressional Budget Office (CBO) for the $25 billion amendment are added to OMB outlay projections for FY2006- FY2009 included in this report. Please note as well that all figures provided for FY2006 through FY2009 in this report are either OMB, CBO, or Department of Defense projections, and represent neither congressional appropriations nor the President's request. 1 Most figures are from the Office of Management and Budget, Budget of the United States Government, Fiscal Year 2005: Historical Tables, February 2004. CRS-2 Key Budget Terminology The federal budget has its own unique vocabulary, a basic understanding of which is essential to understand the significance of defense budget figures and trends. The following budget terms, which will be used often in this report, are frequently used, yet sometimes misunderstood. Budget Authority, Obligations, and Outlays. When Congress appropriates money, it provides agencies with "budget authority." Budget authority gives an agency the legal authority to obligate money for the provision of goods or services. Appropriations are the most common, but not the only, type of budget authority.2 Obligations then occur, for example, when agencies enter into contracts, submit purchase orders, and employ personnel. When those obligations are liquidated -- or in simpler terms, when the "check is written" and the performance of an obligation is paid for -- outlays occur. The term "defense spending" technically refers to outlays, although budget authority and outlays are frequently confused in budget discussions. The "050" vs. the "051" Budget Function. The federal budget is divided into several functions, including the National Defense Budget Function, or "050" function. The 050 function consists of three sub-functions -- Department of Defense (051), atomic energy defense activities (053), and defense-related activities in other agencies (054). Thus, "national defense" spending consists of more than just the Department of Defense's annual expenditures. Although the majority of the 050 function consists of the Department of Defense (051) function, the 050 function also consists of billions of dollars ($16.75 billion in FY2004) appropriated to the Department of Energy for atomic energy defense activities. This report contains figures for both the 050 and 051 functions, depending on which is most useful to the reader. Current and Constant Dollars. The cost of goods or services in current dollars is the value of such goods or services in terms of prices current at the time of purchase. For example, FY1985 national defense outlays in current dollars represent the amount spent on national defense in FY1985 according to what the dollar was worth in FY1985. Current dollars may also be referred to as "then-year" dollars. The cost of goods or services in constant dollars is the value adjusted to eliminate the effects of changes in prices (usually due to inflation). Constant dollars, expressed in terms of a particular reference year (normally the current budget year), 2 Other types include borrowing authority and contract authority -- for further explanation of these terms, see Allen Schick, The Federal Budget: Politics, Policy, Process (Washington, D.C.: Brookings Institution Press, 2000). CRS-3 are determined by dividing current dollars by a deflator based on the prices in the reference year. Constant dollars are used to measure the growth rates of programs over time independently of the effects of inflation. For this reason, figures in this report measuring trends in the defense budget use constant-dollar figures. Discretionary and Mandatory Spending. Within the federal budget, budget authority is classified as either discretionary or mandatory. Generally, budget authority is discretionary if provided by Congress in appropriations acts and mandatory if provided in permanent authorizing law (examples include Social Security, Medicare, and federal employee retirement). However, a portion of mandatory budget authority, including Medicaid and certain veterans' programs, is funded in annual appropriations acts. Discretionary budget authority must be renewed annually, while most mandatory budget authority is available automatically each year without legislative action by Congress. Outlays are also classified as discretionary or mandatory according to the classification of the budget authority from which they flow. Part I: Trends in Defense Spending Over Time The following section (questions 1, 2, 3, and 4) provides figures and an analysis of trends in defense spending over time. Question 1: What Are the Recent, Historic, and Projected Trends in Budget Authority and Outlays for National Defense? Figure 1. National Defense Budget Authority and Outlays, FY1947-FY2009 (constant FY2005 dollars in billions) Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2005: Historical Tables, February 2004, pp. 53-58, 82-85, [http://www.whitehouse.gov/omb/budget/ fy2005/pdf/hist.pdf]. Figures for FY2006-FY2009 are projected; CBO estimated outlays for the $25 billion budget amendment for Iraq and Afghanistan are included in FY2005-FY2009 outlay figures. CRS-4 Figure 1 shows the pattern of budget authority and outlays since World War II. Since 1947, there have been four periods of significant increases in budget authority and outlays -- the Korean War, the Vietnam War, the Reagan era military build-up, and the post-9/11 defense spending increases. Each period to date has been followed by a period of significant decreases in budget authority and outlays. Following the end of the Cold War and the disappearance of the Soviet threat, some observers believed that this cyclical pattern in budget authority and outlays would end with a long, or even permanent, decline in defense spending.3 However, the events of September 11, 2001, and the subsequent wars in Afghanistan, Iraq, and the ongoing Global War on Terrorism ended the decline in budget authority and outlays that had continued through most of the 1990s. Figure 2 shows recent trends in budget authority and outlays from FY1997 through projected totals for FY2009. Table 1, below, shows budget authority and outlays in current and constant FY2005 dollars for both the national defense budget function (the "050" function) and the Department of Defense budget (the "051" function) from FY1997 through FY2009. Figure 2. National Defense Budget Authority and Outlays, FY1997-FY2009 (constant FY2005 dollars in billions) Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2005: Historical Tables, February 2004, pp. 58-59, 84-85, [http://www.whitehouse.gov/omb/budget/ fy2005/pdf/hist.pdf]. Figures for FY2006-FY2009 are projected; CBO outlay estimates for the $25 billion budget amendment for Iraq and Afghanistan are included in FY2005-FY2009 outlay figures. FY1998 was the final year of a period of decline in budget authority and outlays that began in FY1986. From FY1999 through FY2001, budget authority and outlays increased modestly in real terms, by 8.6% and 4.8%, respectively. From FY2001 through FY2004, budget authority increased by 27.7% and outlays increased by 3 Colonel Joe Conley, "Impacts of Declining Budgets and Defense Mergers on the Department of Defense," U.S. Army War College, Carlisle Barracks, PA, April 2002, p.3. CRS-5 37.7%. The Bush Administration's regular FY2005 national defense budget request of $423.1 billion, when combined with the administration's $25 billion budget amendment for Iraq and Afghanistan submitted to Congress on May 12, 2004 and a supplemental request that is expected early in calendar year 2005, will most likely exceed FY2004 budget authority. CRS-6 Table 1. National Defense Budget Function and Department of Defense Budget, FY1997-FY2009 (current and constant FY2005 dollars in billions) Actual Actual Actual Actual Actual Actual Actual Est. Req. Proj. Proj. Proj. Proj. Fiscal Year: 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 National Defense Budget Function Budget Authority Current year dollars 270.4 271.3 292.3 304.1 335.5 362.1 456.2 460.5 448.1 444.0 464.8 485.8 508.2 Constant FY2005 dollars 330.3 323.1 339.5 344.2 368.9 387.6 476.0 469.7 448.1 433.7 443.0 451.5 460.5 Real growth/decline -0.7% -2.2% 5.1% 1.4% 7.2% 5.1% 22.8% -1.3% -4.6% -3.2% 2.1% 1.9% 2.0% Outlays Current year dollars 270.5 268.5 274.9 294.5 305.5 348.6 404.9 453.7 469.4 441.0 447.9 467.4 487.4 Constant FY2005 dollars 328.9 318.9 320.3 333.5 335.6 372.3 422.5 462.1 469.4 431.3 427.9 435.7 443.2 Real growth/decline -0.6% -3.0% 0.4% 4.1% 0.6% 10.9% 13.5% 9.4% 1.6% -8.1% -0.8% 1.8% 1.7% Department of Defense Budget Authority Current year dollars 257.9 258.5 278.5 290.4 319.4 345.0 437.9 441.7 427.6 423.7 444.9 466.8 488.9 Constant FY2005 dollars 315.2 307.9 323.5 328.8 351.3 369.2 456.9 450.5 427.6 413.8 424.1 433.8 443.0 Real growth/decline -0.8% -2.3% 5.1% 1.6% 6.8% 5.1% 23.8% -1.4% -5.1% -3.2% 2.5% 2.3% 2.1% Outlays Current year dollars 258.3 256.1 261.3 281.2 291.0 332.0 387.3 434.8 448.4 420.5 427.7 447.9 468.1 Constant FY2005 dollars 314.1 304.2 304.4 318.4 319.7 354.6 404.0 442.9 448.4 411.3 408.6 417.5 425.6 Real growth/decline -0.5% -3.2% 0.1% 4.6% 0.4% 10.9% 13.9% 9.6% 1.2% -8.3% -0.7% 2.2% 1.9% Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2005: Historical Tables, February 2004, pp. 58-59, 84-85, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf]. FY2005 Dept. of Defense deflators used for conversions to constant FY2005 dollars. Note: FY2005-FY2009 outlay figures include unpublished CBO outlay estimates for the $25 billion amendment to the FY2005 request submitted by the Administration to Congress on May 12, 2004. CRS-7 Question 2: What Are the Recent Trends in Budget Authority for Each Defense Appropriations Title? Figure 3. Department of Defense Budget Authority by Appropriations Title, FY1976-FY2005 200 Operations and Military Personnel Maintenance 150 100 Procurement 50 R,D,T&E 0 1976 1981 1986 1991 1996 2001 Source: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, pp. 82-85, [http://www.whitehouse.gov/omb/budget/ fy2005/pdf/hist.pdf]; FY2005 deflators from DOD Comptroller. Note: Figures for FY2005 do not include the $25 billion budget amendment for Iraq and Afghanistan submitted by the Bush Administration to Congress on May 12, 2004, as the Administration's amendment did not allocate funds by appropriation title. As shown in Figure 3, budget authority for procurement has varied far more than that of the other appropriations titles since FY1976. When national defense budget authority increased during this period -- especially during the Reagan-era build-up -- procurement budget authority increased sharply. On the other hand, when national defense budget authority was reduced significantly after the Cold War, procurement funding faced much deeper cuts than military personnel, operations and maintenance (O&M), and research, development, test, and evaluation (R,D,T&E). Tables 2, 3, and 4 list recent budget authority in current year and constant year dollars, and outlay levels in current year dollars for each of these appropriations titles, respectively. Budget authority for military personnel also declined considerably after the Cold War, due largely to the drawdown in active duty and selected reserve personnel that took place from 1989 to 1999. On the other hand, the O&M and R,D,T&E titles have, until recently, been funded at relatively steady levels during periods of overall increases and decreases in national defense budget authority. Since FY2002, budget authority for each appropriations title has increased sharply, in part as a result of the wars in Iraq and Afghanistan and enhanced security for defense installations. Supplemental appropriations in FY2003 and FY2004 were CRS-8 a major cause of the sharp increases in military personnel and O&M budget authority. Procurement and R,D,T&E have increased steadily in regular appropriations since FY1997, and have also received some additional funding in recent supplemental appropriations. CRS-9 Table 2. National Defense Budget Function Trends by Appropriations Title, Budget Authority, FY1997-FY2009 (current year dollars in billions) Actual Actual Actual Actual Actual Actual Actual Est. Req. Proj. Proj. Proj. Proj. Fiscal Year: 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Department of Defense (military activities only) Military Personnel 70.3 69.8 70.6 73.8 76.9 87.0 109.1 117.7 106.3 110.9 114.7 118.4 122.1 Operation & Maintenance 92.4 97.2 105.0 108.8 115.8 133.2 178.3 168.5 141.2 146.8 151.8 156.9 164.6 Procurement 43.0 44.8 51.1 55.0 62.6 62.7 78.5 80.9 74.9 80.4 90.6 105.1 114.0 RDT&E 36.4 37.1 38.3 38.7 41.6 48.7 58.1 64.7 68.9 71.0 70.7 71.6 70.7 Military Construction 5.7 5.5 5.4 5.1 5.4 6.6 6.7 6.0 5.3 8.8 12.1 10.8 10.2 Family Housing 4.1 3.8 3.6 3.5 3.7 4.0 4.2 3.8 4.2 4.6 4.5 3.6 3.5 Other 6.1 0.3 4.6 5.6 13.5 2.7 3.0 0.2 1.7 1.1 0.5 0.3 3.8 a Budget Amendment 25.0 Subtotal, Department of 258.0 258.6 278.6 290.5 319.5 345.0 437.9 441.7 427.6 423.7 444.9 466.8 488.9 Defense Department of Energy Atomic Energy Defense 11.4 11.7 12.6 12.4 14.4 15.3 16.4 16.8 17.2 18.1 17.6 16.7 16.9 Activities Other Agencies Defense-Related Activities 1.0 1.0 1.1 1.2 1.6 1.8 2.0 2.1 3.2 2.3 2.3 2.4 2.4 Total, National Defense 270.4 271.3 292.3 304.1 335.5 362.1 456.2 460.5 448.1 444.0 464.8 485.8 508.2 Sources: Figures through FY2005 taken from the Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, pp.84-85, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf]. Projected figures for FY2006-FY2009 for the Department of Defense taken from National Defense Budget Estimates for FY2005, Office of the Undersecretary of Defense (Comptroller), March 2004, p. 115, [http://www.defenselink.mil/comptroller/defbudget/fy2005/fy2005_greenbook.pdf]. a $25 billion amendment to the FY2005 request, for Iraq and Afghanistan, submitted by the Bush administration to Congress on May 12, 2004, [http://www.whitehouse.gov/omb/budget/amendments/amendment_5_12_04.pdf]. The Administration did not allocate the $25 billion by appropriations title, so in this table the amendment is reflected separately from the appropriations titles but as part of the Department of Defense subtotal and national defense total. CRS-10 Table 3. National Defense Budget Function by Appropriations Title, Budget Authority, Selected Years, FY1976-FY2005 (constant FY2005 dollars in billions) Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Est. Req. Fiscal Year 1976 1980 1985 1990 1997 1998 1999 2000 2001 2002 2003 2004 2005 Department of Defense (military activities only) Military Personnel 125.8 118.8 133.0 132.7 95.3 90.7 89.1 88.9 89.7 95.9 115.6 120.9 106.3 Operation & Maintenance 90.0 99.7 132.7 127.1 113.8 116.3 122.5 124.5 127.7 143.2 186.3 171.8 141.2 Procurement 63.0 71.9 146.3 103.3 47.5 49.1 55.3 58.6 66.1 65.4 80.8 82.2 74.9 RDT&E 27.3 27.2 48.6 47.5 40.8 41.1 41.9 41.6 44.1 50.9 59.8 65.6 68.9 Military Construction 6.3 4.4 8.6 6.6 6.4 6.1 5.9 5.5 5.8 7.0 6.9 6.0 5.3 Family Housing 3.7 3.0 4.4 4.1 4.6 4.2 3.9 3.8 3.9 4.2 4.3 3.9 4.2 Other -0.5 1.1 7.1 -1.0 6.7 0.4 4.9 5.9 14.2 2.8 3.1 0.2 1.7 a Budget Amendment 25.0 Subtotal, Department of 315.6 326.2 480.8 420.4 315.2 307.9 323.5 328.8 351.3 369.2 456.9 450.5 427.6 Defense Department of Energy Atomic Energy Defense 5.6 6.9 12.3 13.9 13.9 13.9 14.6 14.1 15.8 16.4 17.1 17.1 17.2 Activities Other Agencies Defense-Related Activities 0.5 0.5 0.8 0.9 1.2 1.2 1.3 1.4 1.8 1.9 2.0 2.1 3.2 Total, National Defense 321.6 333.6 493.9 435.2 330.3 323.1 339.5 344.2 368.9 387.6 476.0 469.7 448.1 Sources: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, pp. 82-85, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf]; FY2005 deflators from Department of Defense Comptroller. a $25 billion amendment to the FY2005 request, for Iraq and Afghanistan, submitted by the Bush administration to Congress on May 12, 2004, [http://www.whitehouse.gov/omb/budget/amendments/amendment_5_12_04.pdf]. The Administration did not allocate the $25 billion by appropriations title, so in this table the amendment is reflected separately from the appropriations titles but as part of the Department of Defense subtotal and national defense total. CRS-11 Table 4. National Defense Budget Function Outlays by Appropriations Title, FY1997-2009 (current year dollars in billions) Actual Actual Actual Actual Actual Actual Actual Est. Req. Proj. Proj. Proj. Proj. Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Department of Defense (military activities only) Military Personnel 69.7 69.0 69.5 76.0 74.0 86.8 106.7 117.3 108.9 110.4 111.4 117.8 121.6 Operation & Maintenance 92.4 93.4 96.3 105.8 112.0 130.0 151.4 165.7 163.9 147.0 151.2 155.8 161.9 Procurement 47.7 48.2 48.8 51.7 55.0 62.5 67.9 77.7 78.2 78.4 81.8 89.1 98.6 RDT&E 37.0 37.4 37.4 37.6 40.4 44.4 53.1 60.6 66.2 69.0 70.1 70.7 70.5 Military Construction 6.2 6.0 5.5 5.1 5.0 5.1 5.9 6.2 6.0 6.0 7.6 9.7 10.0 Family Housing 4.0 3.9 3.7 3.4 3.5 3.7 3.8 3.9 4.0 4.1 4.3 4.4 4.5 Other 1.2 -1.9 0.6 1.6 1.1 -0.5 -1.5 3.4 2.4 0.6 0.3 0.1 0.8 a Budget Amendment 18.8 4.9 0.8 0.3 0.2 Subtotal, Department of 258.3 256.1 261.3 281.2 291.0 332.0 387.3 434.8 448.4 415.5 426.9 447.6 467.9 Defense Department of Energy Atomic Energy Defense 11.3 11.3 12.2 12.1 12.9 14.8 16.0 16.6 17.7 18.4 17.9 17.1 16.9 Activities Other Agencies Defense-Related Activities 1.0 1.1 1.4 1.2 1.6 1.8 1.6 2.3 3.3 2.2 2.3 2.4 2.4 467.1 Total, National Defense 270.5 268.5 274.9 294.5 305.5 348.6 404.9 453.7 469.4 436.1 447.0 487.2 Sources: Figures through FY2005 taken from Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, pp. 58-59, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf]. Figures for FY2005 do not include the $25 billion budget amendment for Iraq and Afghanistan submitted by the Bush Administration to Congress on May 12, 2004. Projected figures for FY2006-FY2009 for the Department of Defense taken from National Defense Budget Estimates for FY2005, Office of the Undersecretary of Defense (Comptroller), March 2004, p.133, [http://www.defenselink.mil/comptroller/defbudget/fy2005/fy2005_greenbook.pdf.] a Based on unpublished CBO outlay estimates of the $25 billion amendment to the FY2005 request, for Iraq and Afghanistan, submitted by the Bush administration to Congress on May 12, 2004, [http://www.whitehouse.gov/omb/budget/amendments/amendment_5_12_04.pdf]. CRS-12 Question 3: What Are the Historical Trends in Defense's Share of Total Federal Outlays? Figure 4. Shares of Total Federal Outlays by Type of Spending, FY1962-FY2009 Source: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, pp. 127-128, [http://www.whitehouse.gov/omb/ budget/fy2005/pdf/hist.pdf]; FY2005 deflators from DOD Comptroller. Notes: See p. 3 for definitions of mandatory and discretionary budget authority and outlays. Figure 4 reveals two important long-term trends. The first trend is the decline of defense discretionary outlays as a percentage of total federal outlays since FY1962. In FY1962, defense discretionary represented 49.2%, or almost half, of total federal outlays, while in FY2003 its share of total federal outlays declined to 18.8%. Defense discretionary outlays have declined consistently as a percentage of federal outlays in large part because of a second trend: the rapid increase of mandatory outlays, mostly for major "entitlement" programs. Between FY1962 and FY2004, mandatory outlays rose by 833% while defense outlays rose by 30% in real terms.4 The share of federal outlays of mandatory programs increased from 26.1% in FY1962 to 54.1% in FY2004 and is projected to reach 56.5% by FY2009. 4 Percent growth in mandatory outlays and defense outlays between FY1962 and FY2004 is measured in constant FY2000 dollars using figures from the Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, p. 126, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf]. CRS-13 Question 4: What Are the Historical Trends in Defense's Share of Total Federal Discretionary Outlays? Figure 5. Defense and Non-Defense Discretionary Outlays as a Share of Total Federal Discretionary Outlays, FY1962-FY2009 Source: Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, [http://www.whitehouse.gov/omb/budget/fy2005/ pdf/hist.pdf]; p.127. Note: See p. 3 for definition of discretionary budget authority and outlays. Defense discretionary outlays have declined from almost 75% of total discretionary outlays in FY1962 to just under 50% of total discretionary outlays in FY2003. This steady decline was interrupted significantly by the Reagan build-up of the 1980s, during which time defense discretionary outlays rose from 50.1% of total discretionary outlays in FY1981 to 62% in FY1987. Since FY1995, defense discretionary outlays have remained between 47% and 50% of total discretionary outlays, although this percentage has increased from 47.1% in FY2001 to 49.7% in FY2004. Under current projections, defense will rise to 51.4% of total discretionary outlays by FY2009. CRS-14 Part II: The Impact of Defense on the Economy The following section (questions 5, 6, and 7) looks at the impact of defense on the economy, measured in terms of defense outlays and federal outlays as a percentage of gross domestic product (GDP), and compares U.S. defense outlays to those of foreign countries. Question 5: What Are the Historical Trends in U.S. Defense Outlays as a Percentage of Gross Domestic Product (GDP)? Figure 6. GDP and Defense's Share of GDP, FY1962-FY2005 (constant FY2005 dollars in trillions / percent of GDP) Source: GDP deflators and figures from the Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, [http://www. whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf], pp. 128, 184. Advocates of higher defense spending frequently cite defense's declining percentage of GDP to argue that the nation can afford more for defense. These observers note that even with recent increases, defense spending is still at relatively low levels historically as a percentage of GDP, as shown in Figure 6. Whereas defense spending reached 9.5% of GDP in FY1968 and 6.2% of GDP in FY1986 at the height of the Reagan build-up, it equaled only 3.9% of GDP in FY2004.5 Others' counterargument, however, is that defense spending as a percentage of GDP is as much dependent on the level of GDP growth as it is dependent on the level of defense spending growth. Since 1962, GDP has grown 306% in real terms while 5 See Table 12 in the Appendix for the data that correspond to Figures 6 and 7. CRS-15 defense outlays have risen 30% during the same period.6 Therefore, some say, the story of defense's decline as a percentage of GDP is as much a story of the rapid growth of the U.S. economy as it is a story of declining defense spending. Question 6: What Are the Historical Trends in Different Categories of Federal Spending as a Percentage of GDP? It should be noted that the trend in defense outlays is part of a broader long-term trend in the federal budget, in which both defense and non-defense discretionary outlays have declined as shares of GDP while mandatory outlays have increased. As Figure 7 below shows, total federal spending has been remarkably stable at about 20% of GDP over the past 40 years. Figure 7. Federal Spending by Category as a Percentage of GDP, FY1962-FY2005 Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2005: Historical Tables, February 2004, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/ hist.pdf], p. 128. 6 Percent growth in GDP and defense outlays between FY1962 and FY2004 is measured in constant FY2000 dollars using figures from the Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, pp. 126, 184-185, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf]. CRS-16 Question 7: How Do U.S. Defense Outlays Compare to Those of Other Countries, Both in Dollars and as a Percentage of GDP? Table 5 ranks the top 25 countries in defense spending and lists the share of GDP that each country devotes to defense. Table 5. Defense Spending of Top 25 Countries (current year U.S. dollars in millions) Country Rank WMEATa IISS Military Balanceb 1999-2000 2003-2004 Defense % Defense % Expenditures GDP Expenditures GDP (1999 Data) (2002 Data) United States 1 281,000 3.0% 348,500 3.3% China -- Mainland 2 88,900 2.2% 51,000 4.1% Japan 3 43,200 1.0% 39,500 1.0% France 4 38,900 2.7% 40,200 2.5% United Kingdom 5 36,500 2.5% 37,300 2.4% Russia 6 35,000 5.6% 50,800 4.8% Germany 7 32,600 1.6% 33,300 1.5% Italy 8 23,700 2.0% 25,600 1.9% Saudi Arabia 9 21,200 14.9% 22,200 12.0% China -- Taiwan 10 15,200 5.2% 7,900 2.7% South Korea 11 11,600 2.9% 13,300 2.8% India 12 11,300 2.5% 13,800 2.7% Turkey 13 9,950 5.3% 9,200 5.1% Brazil 14 9,920 1.9% 10,200 2.3% Israel 15 8,700 8.8% 9,900 9.7% Canada 16 8,320 1.4% 8,200 1.1% Spain 17 7,560 1.3% 8,700 1.2% Australia 18 7,060 1.8% 8,000 2.0% Netherlands 19 7,030 1.8% 7,700 1.6% Iran 20 6,880 2.9% 5,100 4.6% Poland 21 6,690 2.1% 3,600 1.9% Greece 22 6,060 4.7% 6,500 4.4% Sweden 23 5,330 2.3% 4,200 1.7% Dem. Rep. of Congo 24 5,150 14.4% 1,000 21.7% Ukraine 25 5,110 3.0% 5,000 2.2% Source: Data from the International Institute of Strategic Studies (IISS) and the U.S. Dept. of State. a U.S. Department of State, World Military Expenditures and Arms Transfers (WMEAT), Washington, February 2003; countries are ranked according to WMEAT figures. b International Institute for Strategic Studies (IISS), The Military Balance: 2003-2004 (Oxford University Press, 2003). CRS-17 Part III: Costs of Wars and Defense Supplementals The following section (questions 8 and 9) provides figures and analysis on the costs of wars and recent supplemental appropriations for the Department of Defense. Question 8: How Much Has Congress Enacted in Defense Supplemental Appropriations since September 11, 2001? Figure 8. Regular and Supplemental Defense Appropriations, FY2001-FY2005 (current year dollars in billions) Source: House Appropriations Committee tables. Note: FY2005 figures include the $25 billion amendment to the FY2005 request, for Iraq and Afghanistan, submitted by the Bush Administration to Congress on May 12, 2004, [http://www. whitehouse.gov/omb/budget/amendments/amendment_5_12_04.pdf]. Congress enacted a total of $165.63 billion7 in supplemental appropriations for defense from FY2001 through FY2004. More than half of this $165.63 billion was enacted in FY2003 and FY2004 emergency supplemental appropriations, which funded the wars in Iraq and Afghanistan.8 As shown in Figure 8, the combination 7 Total excludes $5.834 billion appropriated by Congress in P.L. 107-20, FY2001 non- emergency supplemental appropriations, enacted before September 11, 2001; total also reflects the $3.49 billion recission in P.L. 108-87, FY2004 DoD regular appropriations, of funds appropriated in P.L. 108-11, FY2003 emergency supplemental appropriations. 8 For a detailed analysis, see CRS Report RL32090, FY2004 Supplemental Appropriations for Iraq, Afghanistan, and the Global War on Terrorism: Military Operations and Reconstruction Assistance, by Stephen Daggett, Larry Nowels, Curt Tarnoff, and Rhoda CRS-18 of increased supplemental and regular appropriations has resulted in a significant increase in overall defense appropriations for the last four fiscal years. Table 6 lists administration requests and the enacted levels of regular and supplemental appropriations for defense since FY2001. For FY2005, Figure 8 includes the $25 billion budget amendment requested by the president on May 12, 2004 to cover the costs of Iraq and Afghanistan for part of FY2005. 8 (...continued) Margesson. CRS-19 Table 6. Regular and Supplemental Appropriations for the National Defense Budget Function, FY2001-2005 (current year dollars in millions) Request Enacted Difference FY2001 Regular Appropriations 305,312.9 309,974.0 +4,661.1 Supplemental Appropriations: Non-emergency supplemental H.R. 2216, P.L. 107-20a 5,841.0 5,834.0 -7.0 Emergency supplemental H.R. 2228, P.L. 107-38 14,041.0 14,041.0 0.0 TOTAL FY2001 325,194.9 329,849.0 +4,654.1 FY2002 Regular Appropriations 343,435.0 343,429.0 -6.0 Supplemental Appropriations Emergency Terrorism Response, H.R. 3338, P.L. 107-117 7,467.0 3,867.0 -3,600.0 Emergency supplemental, H.R. 4775, P.L. 107-206 14,022.0 13,370.0 -652.0 TOTAL FY2002 364,924.0 360,666.0 -4,258.0 FY2003 Regular Appropriations 392,837.0 382,027.0 -10,809.0 Supplemental Appropriations Consolidated Appropriations Resolution, H.J.Res2 0 10,000.0 +10,000.0 Emergency supplemental, H.R. 1559, P.L. 108-11 62,587.0 62,583.0 -4.0 b Rescission of funds from P.L. 108-11 -3,490.0 TOTAL FY2003 455,424.0 451,120.0 -4,304.0 FY2004 Regular Appropriations 400,476.0 398,688.0 -1,788.0 Supplemental Appropriations Emergency supplemental, H.R. 3289, P.L. 108-106 65,560.0 65,251.0 -309.0 TOTAL FY2004 466,036.0 463,939.0 -2,097.0 FY2005 (Request) Regular Appropriationsc 448,098.0 Budget Amendment 25,000.0 TOTAL FY2005 473,098.0 Source: Conference Reports for each bill and House Appropriations Tables as printed in the Congressional Record. Total for FY2005 include the $25 billion budget amendment for Iraq and Afghanistan submitted by the Bush Administration to Congress on May 12, 2004. a Enacted before September 11, 2001. b Congress rescinded $3.49 billion from P.L. 108-11 (FY2003 emergency supplemental) in the FY2004 Department of Defense appropriations act (P.L. 108-87). This rescission reduces the funding scored in FY2004 but reduces the resources available in the FY2003 emergency supplemental. c Total includes $25.0 billion budget amendment for Iraq and Afghanistan submitted by the Bush administration to Congress on May 12, 2004. CRS-20 Question 9: How Much Has Each Major War in the History of the United States Cost? Table 7 lists the costs of each major war in United States' history in current and constant FY2005 dollars. Table 7. Costs of Major U.S. Wars (amounts in millions and billions of dollars) American Revolution Current Year $120 million Constant FY2005 $ $3,315 million War of 1812 Current Year $89 million Constant FY2005 $ $1,043 million Mexican War Current Year $82 million Constant FY2005 $ $1,841 million Civil War: Union Current Year $2,300 million Constant FY2005 $ $52,165 million Civil War: Confederacy Current Year $1,000 million Constant FY2005 $ $22,707 million Spanish American War Current Year $270 million Constant FY2005 $ $6,750 million World War Ia Current Year $33 billion Constant FY2005 $ $613 billion World War II Current Year $360 billion Constant FY2005 $ $5,008 billion Korea Current Year $50 billion Constant FY2005 $ $426 billion Vietnam Current Year $111 billion Constant FY2005 $ $609 billion Persian Gulf War (1991)b Current Year $61 billion Constant FY2005 $ $86 billion Sources and Notes: American Revolution through Korean War Costs from the Statistical Abstract of the United States, 1994; deflators and all other data from the Office of the Under Secretary of Defense (Comptroller). Costs for the American Revolution through the Korean War were converted to constant FY2005 dollars from figures cited in the Statistical Abstract. a World War I figures include the amount of war loans to allies, which totaled between $9.4 and $9.5 billion in current year dollars, or 28%-29% of the total cost. b Most Persian Gulf War costs were offset by allied contributions or were absorbed by DOD. Net costs to U.S. taxpayers totaled $4.7 billion in current year dollars, or 7.7% of the total cost. Source: Department of Defense Annual Report to Congress, January 1993. CRS-21 Part IV: Trends in Force Structure The following section (questions 10, 11, and 12) provides figures and analysis on U.S. military personnel levels, force structure, and budget authority by service. Question 10: What Have Been the Recent Trends in U.S. Military Personnel Levels? Figure 9. Active Duty and Selected Reserve End-Strength, Selected Years, FY1989-FY2005 Sources: See Table 8 sources on following page. As shown in Figure 9 and in Tables 8 and 9, the United States military experienced a sharp drawdown in military personnel and forces that began in the late 1980s and ended, for the most part, by FY1999. The decision to decrease both active duty and selected reserve forces reflected the disappearance of the Soviet threat and congressional efforts to reduce budget deficits in the 1990s. Although Congress has enacted significant increases in funding for national defense, and military forces have been deployed in large numbers abroad since March 2003, the force structure has remained stable. In response to the demands of military operations in Iraq and Afghanistan, the Secretary of Defense has temporarily increased active-duty end strength temporarily by 30,000 troops, exercising authority that allows the President to waive authorized end strength ceilings in national emergencies. CRS-22 Table 8. Department of Defense Personnel Levels, Selected Years (end strength /civilian employees in thousands)a Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Est. Proj. Fiscal Year: 1981 1985 1989 1991 1993 1995 1997 1999 2001 2002 2003 2004 2005 Army 781 781 770 725 572 509 492 479 481 487 499 482 482 Navy 540 571 593 571 510 435 396 373 378 383 382 374 366 Marine Corps 191 198 197 195 178 174 174 173 173 174 178 175 175 Air Force 570 602 571 511 444 400 378 361 354 368 375 359 360 Total Active 2,082 2,151 2,130 2,002 1,705 1,518 1,440 1,386 1,385 1,412 1,434 1,391 1,383 Selected Reserves 851 1,188 1,171 1,138 1,058 946 902 877 869 874 875 863 861 Total Civilians 984 1,107 1,075 1,013 891 802 723 666 647 645 636 648 651 Sources: Active duty force levels and selected reserve levels for FY2003-FY2005 from Department of Defense, Undersecretary of Defense Comptroller, National Defense Budget Estimate for FY2005, March 2004, pp. 33, 212-213, [http://www.defenselink.mil/comptroller/defbudget/fy2005/fy2005_greenbook.pdf]. Selected reserve levels for prior years from U.S. Department of Defense, Manpower Requirements Report, FY1998, July 1998 and prior years; and from Office of Management and Budget, Budget of the United States Government for FY2002: Appendix, April 2001 and prior years. Civilian levels from Office of Management and Budget, Historical Tables: Budget of the United States Government for FY2005, February 2004, pp. 295-296, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf]. a End strength refers to the number of military personnel on board on the last day of a fiscal year. Selected reserves do not include Standby Reserve, Individual Ready Reserve, and Inactive National Guard. Totals may not add due to rounding. CRS-23 Question 11: What Are the Recent Trends in U.S. Military Force Structure? Table 9 lists the force structure for each service from FY1980 though FY2005. Table 9. U.S. Military Force Structure, FY1980-2005 Fiscal Army Marine Air Force Year Divisions Divisions Naval Forces Tactical Wings Active Reserve Active Reserve Carriers Total Active Reserve 1980 16 8 3 1 13 477 26 11 1981 16 8 3 1 13 491 26 11 1982 16 8 3 1 14 513 26 12 1983 16 8 3 1 14 514 25 12 1984 16 9 3 1 14 524 25 12 1985 17 10 3 1 14 542 25 12 1986 18 10 3 1 14 556 25 12 1987 18 10 3 1 15 569 25 12 1988 18 10 3 1 15 566 25 12 1989 18 10 3 1 15 567 25 12 1990 18 10 3 1 15 546 24 12 1991 16 10 3 1 15 526 22 13 1992 14 10 3 1 14 466 16 13 1993 14 10 3 1 13 434 16 11 1994 12 8 3 1 12 387 13 9 1995 12 8 3 1 11+1 373 13 8 1996 10 8 3 1 11+1 365 13 7 1997 10 8 3 1 11+1 357 13 7 1998 10 8 3 1 11+1 333 13 7 1999 10 8 3 1 11+1 317 13 7.2 2000 10 8 3 1 11+1 316 13 7.6 2001 10 8 3 1 11+1 316 12.6 7.6 2002 10 8 3 1 11+1 315 12+ 7+ 2003 10 8 3 1 11+1 296 12+ 7+ 2004 10 8 3 1 11+1 292 12+ 7+ 2005 10 8 3 1 11+1 290 12+ 7+ Sources: [http://www.defenselink.mil/pubs/almanac/]; U.S. Navy, Highlights of the Department of the Navy FY2005 Budget, [http://navweb.secnav.navy.mil]; briefing materials accompanying the FY2005 budget request and similar materials provided in prior years; CRS Report 90-401, U.S./Soviet Military Balance: Statistical Trends, 1980-1989, RCO, by John M. Collins and Dianne E. Rennack; CRS Report 91-672, U.S. Armed Forces: Statistical Trends, 1985-1990, by John M. Collins and Dianne E. Rennack; U.S. Department of the Navy (Program Information Center), Listing of U.S. Naval Ship Battle Forces as of 30 September 1993, Washington 1993 and previous editions. Notes: Figures for FY2004 and FY2005 are Administration projections. a Air Force figures do not include a wing of F-117 aircraft prior to FY1990. b Carrier figures exclude one auxiliary training carrier for FY1980-92 but include one operational reserve training carrier (shown as "+1") since FY1995. CRS-24 Question 12: How Much Budget Authority Has Been Provided to Each Service in Recent Years? Table 10 shows Department of Defense budget authority by service from FY1995-FY2005, and Figure 10 shows the Administration's FY2005 request by service as a percent of total Department of Defense budget authority. Table 10. Department of Defense Budget Authority by Service, FY1995- FY2005 (current year dollars in billions/percent of total) Actual Actual Actual Actual Actual Actual Actual Actual Actual Est. Proj. Fiscal Year: 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Army 63.3 64.5 64.4 64.0 68.4 73.2 77.0 85.9 121.1 132.9 97.0 % of DOD Total 24.8% 25.4% 25.0% 24.8% 24.5% 25.2% 24.9% 24.9% 27.7% 30.1% 24.1% Navy/Marines 76.9 80.0 79.5 80.7 84.0 88.8 95.5 102.4 124.0 120.3 119.2 % of DOD Total 30.1% 31.4% 30.8% 31.2% 30.2% 30.6% 30.8% 29.6% 28.3% 27.2% 29.6% Air Force 73.9 73.0 73.2 76.3 81.9 83.1 89.5 100.2 125.2 124.0 120.4 % of DOD Total 28.9% 28.7% 28.4% 29.5% 29.4% 28.6% 28.9% 29.0% 28.6% 28.1% 29.9% Defense Wide 41.6 37.0 40.8 37.6 44.3 45.5 47.9 57.1 67.4 64.5 66.0 % of DOD Total 16.3% 14.5% 15.8% 14.5% 15.9% 15.7% 15.4% 16.5% 15.4% 14.6% 16.4% DOD Total 255.7 254.4 258.0 258.6 278.6 290.5 309.9 345.6 437.7 441.7 402.6 Figure 10. Department of Defense Budget Authority by Service, FY2005 Request Source: Department of Defense Comptroller, National Defense Budget Estimates for FY2005, April 2004, [http://www.defenselink.mil/comptroller/defbudget/fy2005/fy2005_greenbook.pdf]. CRS-25 Part V: Appendix and Glossary Part V provides additional data tables and a glossary of frequently used defense budget terms. Table 11 provides the real growth/decline in national defense budget authority and outlays from FY1940 to FY2009, in both current and constant FY2005 dollars. Table 12 lists national defense outlays as a percentage of GDP from FY1910 to FY2009. The amounts of defense discretionary spending, non-defense discretionary spending, mandatory spending, and net interest that make up total federal outlays from FY1962 to FY2009 are shown in Table 13, while Table 14 shows each of these four categories as a percentage of total federal outlays from FY1962 to FY2009. CRS-26 Table 11. Real Growth/Decline in National Defense Budget Authority and Outlays, FY1940-FY2009 (current and constant FY2005 dollars in billions) BUDGET AUTHORITY OUTLAYS FISCAL YEAR Current Constant Real Current Constant Real Dollars FY2005 Growth/ Dollars FY2005 Growth/ Dollars Decline Dollars Decline 1940 1.7 30.0 1941 6.4 97.9 226.8% 1942 25.7 329.7 236.7% 1943 66.7 806.5 144.6% 1944 79.1 1,055.0 30.8% 1945 39.2 740.8 83.0 1,202.4 14.0% 1946 44.0 637.7 -13.9% 42.7 647.7 -46.1% 1947 9.0 138.4 -78.3% 12.8 182.7 -71.8% 1948 9.5 122.5 -11.5% 9.1 125.2 -31.5% 1949 10.9 149.0 21.60% 13.2 173.5 38.5% 1950 16.5 187.2 25.6% 13.7 170.3 -1.9% 1951 57.8 488.8 161.1% 23.6 261.0 53.3% 1952 67.5 594.3 21.6% 46.1 451.0 72.8% 1953 56.9 522.8 -12.0% 52.8 497.7 10.4% 1954 38.7 383.5 -26.7% 49.3 473.3 -4.9% 1955 32.9 326.7 -14.8% 42.7 408.1 -13.8% 1956 35.0 325.1 -0.5% 42.5 385.5 -5.5% 1957 39.4 348.8 7.3% 45.4 390.6 1.3% 1958 40.1 335.8 -3.7% 46.8 380.9 -2.5% 1959 45.1 352.8 5.1% 49.0 380.0 -0.3% 1960 44.3 340.8 -3.4% 48.1 370.8 -2.4% 1961 45.1 344.5 1.1% 49.6 369.9 -0.2% 1962 50.2 376.6 9.3% 52.3 390.9 5.7% 1963 52.1 382.6 1.6% 53.4 395.3 1.1% 1964 51.6 365.7 -4.4% 54.8 391.1 -1.0% 1965 50.6 350.6 -4.1% 50.6 359.0 -8.2% 1966 64.4 405.6 15.7% 58.1 383.1 6.7% 1967 73.1 442.8 9.2% 71.4 441.9 15.4% 1968 77.2 450.8 1.8% 81.9 480.8 8.8% 1969 78.5 440.8 -2.2% 82.5 469.5 -2.3% 1970 75.3 401.0 -9.0% 81.7 436.2 -7.1% 1971 72.7 365.7 -8.8% 78.9 398.1 -8.7% 1972 76.4 351.6 -3.9% 79.2 369.3 -7.2% 1973 79.1 335.6 -4.6% 76.7 336.9 -8.8% 1974 81.5 318.2 -5.2% 79.3 322.4 -4.3% 1975 86.2 307.6 -3.3% 86.5 315.0 -2.3% 1976 97.3 321.6 4.6% 89.6 305.1 -3.1% 1977 110.2 334.5 4.0% 97.2 307.4 0.8% 1978 117.2 329.8 -1.4% 104.5 307.5 0.0% 1979 126.5 328.1 -0.5% 116.3 316.9 3.1% 1980 143.9 333.6 1.7% 134.0 324.9 2.5% 1981 180.0 370.8 11.1% 157.5 339.5 4.5% 1982 216.5 410.0 10.6% 185.3 362.6 6.8% 1983 245.0 442.7 8.0% 209.9 391.0 7.8% 1984 265.2 462.5 4.5% 227.4 406.7 4.0% 1985 294.7 493.9 6.8% 252.7 433.2 6.5% 1986 289.1 474.9 -3.8% 273.4 455.1 5.0% 1987 287.4 460.2 -3.1% 282.0 456.5 0.3% CRS-27 BUDGET AUTHORITY OUTLAYS FISCAL YEAR Current Constant Real Current Constant Real Dollars FY2005 Growth/ Dollars FY2005 Growth/ Dollars Decline Dollars Decline 1988 292.0 451.3 -1.9% 290.4 454.9 -0.4% 1989 299.6 445.5 -1.3% 303.6 456.0 0.3% 1990 301.2 435.2 -2.3% 297.9 435.3 -4.5% 1991 296.2 411.5 -5.4% 296.7 417.1 -4.2% 1992 287.7 390.8 -5.0% 286.1 389.0 -6.7% 1993 281.1 374.2 -4.2% 283.9 376.1 -3.3% 1994 263.3 343.2 -8.3% 278.9 360.8 -4.1% 1995 266.4 340.0 -0.9% 271.0 345.0 -4.4% 1996 266.2 332.5 -2.2% 265.2 331.0 -4.1% 1997 270.4 330.3 -0.7% 270.5 328.9 -0.6% 1998 271.3 323.1 -2.2% 268.5 318.9 -3.0% 1999 292.3 339.5 5.1% 274.9 320.3 0.4% 2000 304.1 344.2 1.4% 294.5 333.5 4.1% 2001 335.5 368.9 7.2% 305.5 335.6 0.6% 2002 362.1 387.6 5.1% 348.6 372.3 10.9% 2003 456.2 476.0 22.8% 404.9 422.5 13.5% 2004 460.5 469.7 -1.3% 453.7 462.1 9.4% 2005 448.1 448.1 -4.6% 469.4 469.4 1.6% 2006 444.0 433.7 -3.2% 441.0 431.3 -8.1% 2007 464.8 443.0 2.1% 447.9 427.9 -0.8% 2008 485.8 451.5 1.9% 467.4 435.7 1.8% 2009 508.2 460.5 2.0% 487.4 443.2 1.7% Sources: Current dollar budget authority figures for FY1940-FY1975 from Department of Defense Comptroller, National Defense Budget Estimates for FY1982, March 1983; all other current dollar figures from U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, [http://www.whitehouse.gov/omb/budget/fy2005/ pdf/hist.pdf]; constant dollar figures calculated by CRS using FY2005 deflators from Department of Defense Comptroller. Note: CBO outlay estimates for $25 billion budget amendment for Iraq and Afghanistan included in FY2005 outlay figures. FY2006-FY2009 outlay estimates for the amendment were not available at the printing of this report. CRS-28 Table 12. National Defense Outlays as a Percentage of GDP, FY1910-FY2009 (current year dollars in billions) National Outlays National Outlays Fiscal GNP/ Fiscal GNP/ Defense as % of Defense as % of Year GDPa Year GDP Outlays GNP/GDP Outlays GNP/GDP 1910 0.3 35.3 0.8% 1960 48.1 518.9 9.3% 1911 0.3 35.8 0.8% 1961 49.6 529.9 9.4% 1912 0.3 39.4 0.7% 1962 52.3 567.8 9.2% 1913 0.3 39.6 0.7% 1963 53.4 599.2 8.9% 1914 0.3 38.6 0.8% 1964 54.8 641.4 8.5% 1915 0.3 40.0 0.7% 1965 50.6 687.5 7.4% 1916 0.3 48.3 0.6% 1966 58.1 755.8 7.7% 1917 0.6 60.4 1.0% 1967 71.4 810.2 8.8% 1918 7.1 76.4 9.3% 1968 81.9 868.5 9.4% 1919 13.5 84.0 16.1% 1969 82.5 948.3 8.7% 1920 4.0 91.5 4.4% 1970 81.7 1,012.9 8.1% 1921 2.6 69.6 3.7% 1971 78.9 1,080.3 7.3% 1922 0.9 74.1 1.3% 1972 79.2 1,176.9 6.7% 1923 0.7 85.1 0.8% 1973 76.7 1,311.0 5.9% 1924 0.6 84.7 0.8% 1974 79.3 1,438.9 5.5% 1925 0.6 93.1 0.6% 1975 86.5 1,560.8 5.5% 1926 0.6 97.0 0.6% 1976 89.6 1,738.8 5.7% 1927 0.6 94.9 0.6% 1977 97.2 1,974.4 5.6% 1928 0.7 97.0 0.7% 1978 104.5 2,218.3 5.3% 1929 0.7 103.1 0.7% 1979 116.3 2,502.4 5.2% 1930 0.7 97.4 0.8% 1980 134.0 2,725.4 4.9% 1931 0.7 83.8 0.9% 1981 157.5 3,058.6 5.1% 1932 0.7 67.6 1.0% 1982 185.3 3,225.5 5.7% 1933 0.6 57.6 1.1% 1983 209.9 3,442.7 6.1% 1934 0.5 61.2 0.9% 1984 227.4 3,846.7 5.9% 1935 0.7 69.6 1.0% 1985 252.7 4,148.9 6.1% 1936 0.9 78.5 1.2% 1986 273.4 4,406.7 6.2% 1937 0.9 87.8 1.1% 1987 282.0 4,654.4 6.1% 1938 1.0 89.0 1.2% 1988 290.4 5,011.9 5.8% 1939 1.1 89.1 1.2% 1989 303.6 5,401.7 3.1% 1940 1.7 96.8 1.7% 1990 299.3 5,737.0 5.2% 1941 6.4 114.1 5.6% 1991 273.3 5,934.2 4.6% 1942 25.7 144.3 17.8% 1992 298.4 6,240.6 4.8% 1943 66.7 180.3 37.0% 1993 291.1 6,578.4 4.4% 1944 79.1 209.2 37.9% 1994 281.6 6,964.2 4.1% 1945 83.0 221.3 37.5% 1995 272.1 7,325.1 3.7% 1946 42.7 222.7 19.2% 1996 265.8 7,697.4 3.5% 1947 12.8 233.2 5.5% 1997 270.5 8,186.6 3.3% 1948 9.1 256.7 3.6% 1998 268.5 8,626.3 3.1% 1949 13.2 271.3 4.8% 1999 274.9 9,127.0 3.0% 1950 13.7 273.2 5.0% 2000 294.5 9,708.4 3.0% 1951 23.6 320.3 7.3% 2001 305.5 10,040.7 3.0% 1952 46.1 348.7 13.2% 2002 348.6 10,373.4 3.4% 1953 52.8 372.6 14.1% 2003 404.9 10,828.3 3.7% 1954 49.3 377.1 13.1% 2004 453.7 11,466.0 3.9% 1955 42.7 395.9 10.8% 2005 469.4 12,042.4 3.9% 1956 42.5 427.0 9.9% 2006 441.0 12,641.1 3.5% 1957 45.4 450.9 10.1% 2007 447.9 13,279.1 3.4% 1958 46.8 460.0 10.2% 2008 467.4 13,972.6 3.3% 1959 49.0 490.2 10.0% 2009 487.4 14,701.6 3.3% Sources: Outlays, FY1910-FY1939, and GNP/GDP, FY1910-FY1939, from U.S. Department of Commerce, Historical Statistics of the United States (Washington: GPO, 1975); outlays, FY1940- FY2009, and GDP, FY1940-FY2009, from U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, pp. 110, 184-185. a Figures for FY1910-FY1929 were calculated in gross national product (GNP) rather than GDP. CRS-29 Table 13. Allocation of Federal Outlays by Budget Enforcement Act Category, FY1962-FY2009 (current year dollars in billions) Defense Non-Defense Fiscal Mandatory Total Federal Discretionary Discretionary Net Interest Year Outlays Outlays Outlays Outlays 1962 52.6 19.5 27.9 6.9 106.8 1963 53.7 21.6 28.3 7.7 111.3 1964 55.0 24.1 31.2 8.2 118.5 1965 51.0 26.8 31.8 8.6 118.2 1966 59.0 31.1 35.0 9.4 134.5 1967 72.0 34.5 40.7 10.3 157.5 1968 82.2 35.8 49.1 11.1 178.1 1969 82.7 34.6 53.6 12.7 183.6 1970 81.9 38.3 61.0 14.4 195.6 1971 79.0 43.5 72.8 14.8 210.2 1972 79.3 49.2 86.7 15.5 230.7 1973 77.1 53.3 98.0 17.3 245.7 1974 80.7 57.5 109.7 21.4 269.4 1975 87.6 70.3 151.1 23.2 332.3 1976 89.9 85.7 169.5 26.7 371.8 1977 97.5 99.6 182.2 29.9 409.2 1978 104.6 114.1 204.6 35.5 458.7 1979 116.8 123.2 221.4 42.6 504.0 1980 134.6 141.7 262.1 52.5 590.9 1981 158.0 149.9 301.6 68.8 678.2 1982 185.9 140.0 334.8 85.0 745.7 1983 209.9 143.4 365.2 89.8 808.4 1984 228.0 151.4 361.3 111.1 851.9 1985 253.1 162.7 401.1 129.5 946.4 1986 273.8 164.7 415.9 136.0 990.4 1987 282.5 161.7 421.3 138.6 1,004.1 1988 290.9 173.5 448.2 151.8 1,064.5 1989 304.0 184.8 485.8 169.0 1,143.6 1990 300.1 200.4 568.2 184.3 1,253.2 1991 319.7 213.6 596.6 194.4 1,324.4 1992 302.6 231.2 648.5 199.3 1,381.7 1993 292.4 247.0 671.4 198.7 1,409.5 1994 282.3 259.1 717.5 202.9 1,461.9 1995 273.6 271.3 738.8 232.1 1,515.8 1996 266.0 266.7 786.8 241.1 1,560.5 1997 271.7 275.6 810.0 244.0 1,601.2 1998 270.2 281.9 859.4 241.1 1,652.6 1999 275.5 296.5 900.1 229.8 1,701.9 2000 295.0 319.9 951.0 223.0 1,788.8 2001 306.1 343.3 1,008.3 206.2 1,863.8 2002 348.9 385.4 1,105.7 171.0 2,011.0 2003 404.9 420.8 1,178.9 153.1 2,157.6 2004 451.6 456.6 1,254.4 156.3 2,318.8 2005 467.0 465.8 1,307.9 177.9 2,399.8 2006 434.6 457.7 1,367.6 213.4 2,473.3 2007 445.6 458.8 1,441.5 246.2 2,592.1 2008 465.5 457.4 1,526.7 274.6 2,724.3 2009 485.6 456.7 1,612.0 299.1 2,853.5 Source: Office of Management and Budget: Budget of the United States Government, Fiscal Year 2005: Historical Tables, February 2004, p. 125, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/ hist.pdf]. CRS-30 Table 14. Percentage Allocation of Federal Outlays by Budget Enforcement Act Category, FY1962-FY2009 (percentage of total outlays) Defense Non-Defense Defense Fiscal Mandatory Net Discretionary Discretionary Share Year Outlays Interest Outlays Outlays Discretionary 1962 49.2 18.3 26.1 6.4 73.0 1963 48.3 19.4 25.4 7.0 71.3 1964 46.4 20.3 26.3 6.9 69.5 1965 43.1 22.6 26.9 7.3 65.6 1966 43.9 23.2 26.0 7.0 65.5 1967 45.7 21.9 25.9 6.5 67.6 1968 46.1 20.1 27.5 6.2 69.7 1969 45.0 18.8 29.2 6.9 70.5 1970 41.9 19.6 31.2 7.4 68.1 1971 37.6 20.7 34.6 7.1 64.5 1972 34.4 21.3 37.6 6.7 61.7 1973 31.4 21.7 39.9 7.1 59.1 1974 30.0 21.3 40.7 8.0 58.4 1975 26.4 21.2 45.5 7.0 55.4 1976 24.2 23.1 45.6 7.2 51.2 1977 23.8 24.3 44.5 7.3 49.5 1978 22.8 24.9 44.6 7.7 47.8 1979 23.2 24.4 43.9 8.5 48.7 1980 22.8 24.0 44.4 8.9 48.7 1981 23.3 22.1 44.5 10.1 51.3 1982 24.9 18.8 44.9 11.4 57.0 1983 26.0 17.7 45.2 11.1 59.4 1984 26.8 17.8 42.4 13.0 60.1 1985 26.7 17.2 42.4 13.7 60.9 1986 27.6 16.6 42.0 13.7 62.4 1987 28.1 16.1 42.0 13.8 63.6 1988 27.3 16.3 42.1 14.3 62.6 1989 26.6 16.2 42.5 14.8 62.2 1990 24.0 16.0 45.3 14.7 59.9 1991 24.1 16.1 45.0 14.7 59.9 1992 21.9 16.7 46.9 14.4 56.7 1993 20.7 17.5 47.6 14.1 54.2 1994 19.3 17.7 49.1 13.9 52.1 1995 18.0 17.9 48.7 15.3 50.2 1996 17.0 17.1 50.4 15.4 49.9 1997 17.0 17.2 50.6 15.2 49.7 1998 16.4 17.1 52.0 14.6 48.9 1999 16.2 17.4 52.9 13.5 48.2 2000 16.5 17.9 53.2 12.5 48.0 2001 16.4 18.4 54.1 11.1 47.1 2002 17.4 19.2 55.0 8.5 47.5 2003 18.8 19.5 54.6 7.1 49.0 2004 19.5 19.7 54.1 6.7 49.7 2005 18.7 19.4 54.5 7.4 49.1 2006 17.6 18.5 55.3 8.6 48.7 2007 17.2 17.7 55.6 9.5 49.3 2008 17.1 16.8 56.0 10.1 50.4 2009 17.0 16.0 56.5 10.5 51.5 Source: Office of Management and Budget: Budget of the United States Government, Fiscal Year 2005: Historical Tables, February 2004, p. 127, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/ hist.pdf]. CRS-31 Glossary The definitions that follow are taken from Office of Management and Budget and Department of Defense publications. Accrual Accounting -- as applied to military retired pay, a method of recording costs designed to reflect the liability of the federal government for the future retirement costs of military personnel currently on active or reserve duty. First used in FY1985 in DOD, this method of accounting represents a change from the earlier practice in which the cost of military retirement was measured in terms of actual payments to current retirees. Appropriation -- one form of budget authority provided by Congress for the funding of an agency, department, or program for a given amount of time. An appropriation provides funds for purposes specifically designated by Congress. Funds will not necessarily all be spent in the year in which they are initially provided. Authorization -- establishes or maintains a government program or agency by defining its scope. Authorizing legislation is normally a prerequisite for appropriations and may set specific limits on the amount that may be appropriated for the specified program or agency. An authorization, however, does not make money available, and sometimes appropriations are made without having been authorized. Budget Authority -- legal authority for an agency to enter into obligations for the provision of goods or services. It may be available for one or more years. An appropriation is one form of budget authority. Current/Constant Dollars -- the cost of goods or services in current dollars is the value in terms of prices current at the time of purchase -- current dollars are also referred to simply as "dollars" or as "then-year dollars." The cost of goods or services in constant dollars is the value adjusted to eliminate the effects of changes in prices (usually due to inflation). Constant dollars, expressed in terms of a selected reference year (generally the most recent fiscal year), are determined by dividing current dollars by a "deflator" based on the prices in the reference year. Constant dollars are used to assess changes in funding of programs independently of the effects of inflation. Growth rates in constant, inflation-adjusted dollars are referred to as "real growth" rates. Deficit -- in the federal budget, the amount by which total federal budget outlays for a given fiscal year exceed total federal revenues for that year. Fiscal Year -- a fiscal year in the federal government begins on October 1 and ends on September 30 and is designated by the calendar year in which it ends. Thus, FY2005 begins on October 1, 2004 and will end on September 30, 2005. (Note that the federal fiscal year ran from July 1 to June 30 until FY1977.) CRS-32 National Defense Budget Function -- one of the categories of the federal budget. It consists of the Department of Defense (DOD) budget, which funds all direct DOD military programs, and a number of defense-related activities administered by other agencies. These activities include atomic energy defense activities funded through the Department of Energy, civil defense programs administered by the Federal Emergency Management Agency, and the Selective Service System. The DOD budget constitutes more than 95% of the National Defense Budget Function. Obligation -- an order placed, contract awarded, service agreement undertaken, or other commitments made by federal agencies during a given period which will require outlays during the same or some future period. Outlays -- money spent by a federal agency from funds provided by Congress. Outlays in a given fiscal year are a result of obligations that in turn follow the provision of budget authority. Unexpended Funds -- budget authority that has been appropriated by Congress, but remains unspent, representing future outlays. Unexpended funds, whether obligated or as yet unobligated, are formally appropriated by Congress for specific programs. Unobligated Funds -- budget authority that has been appropriated by Congress for specific programs but that has not yet been pledged or obligated by contract. CRS-33 CRS Defense Reports CRS annually prepares a number of issue briefs and reports on specific weapons systems and other defense issues that impact the defense budget. For updated lists of CRS products on defense-related issues, congressional offices should go to [http://www.crs.gov/products/browse/is-defense.shtml]. Selected defense-related products include: CRS Report RL32305, Authorization and Appropriations for FY2005: Defense, by Stephen Daggett and Amy Belasco. CRS Issue Brief IB85159, Military Retirement: Major Legislative Issues, by Robert L. Goldich. CRS Issue Brief IB93103, Military Medical Care Services: Questions and Answers, by Richard A. Best, Jr. CRS Issue Brief IB10089, Military Pay and Benefits: Key Questions and Answers, by Robert L. Goldich. CRS Report RS20851, Naval Transformation: Background and Issues for Congress, by Ronald O'Rourke. CRS Report RS21059, Navy DD(X) Destroyer Program: Background and Issues for Congress, by Ronald O'Rourke. CRS Report RS21195, Evolutionary Acquisition and Spiral Development in DoD Programs: Policy Issues for Congress, by Gary J. Pagliano and Ronald O'Rourke. CRS Issue Brief IB92115, Tactical Aircraft Modernization: Issues for Congress, by Christopher Bolkcom. CRS Report RL31872, Unmanned Aerial Vehicles: Background and Issues for Congress, by Christopher Bolkcom. CRS Report RS20859, Air Force Transformation, by Christopher Bolkcom. CRS Report RL30802, Reserve Component Personnel Issues: Questions and Answers, by Lawrence Kapp. CRS Report RL32141, Funding for Military and Peacekeeping Operations: Recent History and Precedents, by Jeffrey Chamberlin. CRS Report RL32321, Policing in Peacekeeping and Related Stability Operations: Problems and Proposed Solutions, by Nina M. Serafino. CRS Report RS21822, Military Base Closures: DoD's 2005 Internal Selection Process, by Daniel Else ------------------------------------------------------------------------------ For other versions of this document, see http://wikileaks.org/wiki/CRS-RL32468