Defense Budget for FY2003: Data Summary

Defense Budget for FY2003: Data Summary

Order Code RL31349
CRS Report for Congress
Received through the CRS Web
Defense Budget for FY2003:
Data Summary
March 29, 2002
/name redacted/
Specialist in National Defense
and
/name redacted/
Consultant
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

Defense Budget for FY2003:
Data Summary
Summary
This report is designed to be a readily accessible source of facts and figures on
the FY2003 defense budget. Part I presents basic data on the national defense budget
request, including figures on budget authority and outlays for the Department of
Defense and for the national defense budget function. Part II shows trends in overall
defense spending, including figures on the growth and decline of defense spending,
on defense outlays as a share of federal expenditures, on defense outlays as a share
of gross domestic product, and on foreign military spending. Part III defines key
defense budget terms.
To illustrate trends in the regular defense program, most of the data included in
this report exclude costs of Operation Desert Shield/Desert Storm, which was largely
financed by allied contributions.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Part I: The FY2003 Defense Budget Request . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Part II: Trends in Defense Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Part III: Definitions of Budget Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
List of Figures
Figure 1: DOD Budget Authority by Service, FY2003 Request . . . . . . . . . . . . . 9
Figure 2: DOD Budget Authority by Title, FY1985-2007 . . . . . . . . . . . . . . . . 14
Figure 3: Active Duty End-Strength by Service, Selected Years, FY1987-2003 14
Figure 4: Active Duty End-Strength, FY1950-2003 . . . . . . . . . . . . . . . . . . . . . 16
Figure 5: National Defense Outlays, FY1910-2007 . . . . . . . . . . . . . . . . . . . . . 22
Figure 6: National Defense Budget Authority and Outlays, FY1947-2007 . . . . 22
Figure 7: National Defense Outlays, Percentage of GDP/GNP, FY1910-2007 . 23
Figure 8: National Defense Outlays, Percentage of GDP, FY1947-2007 . . . . . 23
Figure 9: National Defense Outlays, Percentage of Federal Outlays,
FY1940-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Figure 10: Federal Outlays by Budget Enforcement Act Category,
FY1962-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
List of Tables
Table 1. National Defense Budget Function and Department of Defense
Budget, FY1995-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 2. National Defense Budget Function by Appropriations Title,
Budget Authority, FY1995-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 3. National Defense Budget Function by Appropriations Title,
Outlays, FY1995-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 4. Department of Defense Budget Authority by Service, FY1994-2003 . . 9
Table 5. Operation Desert Shield/Desert Storm Budget Authority and
Outlays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 6. National Defense Budget Authority Trends by Appropriations
Title, FY1976-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 7. Department of Defense Personnel Levels, Selected Years . . . . . . . . . 15
Table 8. Department of Defense Active Duty Personnel Levels,
FY1950-2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 9. U.S. Military Force Structure, FY1980-2003 . . . . . . . . . . . . . . . . . . 17
Table 10. Real Growth/Decline in National Defense Funding, FY1940-2007 . . 18
Table 11. National Defense Outlays as a Percentage of GNP/GDP,
FY1910-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table 12. Allocation of Federal Outlays by Budget Enforcement Act
Category, FY1962-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Table 13. Allocation of Federal Outlays by Budget Enforcement Act
Category, FY1962-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table 14. Trends in Department of Defense Future-Years Defense Plans . . . . . 27
Table 15. Defense Spending by Top 25 Foreign Nations . . . . . . . . . . . . . . . . . 28

Defense Budget for FY2003:
Data Summary
Introduction
This report is designed to be a readily accessible source of facts and figures on
the FY2003 defense budget. Part I provides basic data on the Administration’s
FY2003 national defense budget request, submitted on February 4, 2002. It includes
data on budget authority and outlays for the Department of Defense (DOD) and for
the national defense budget function (Function 050). Part II shows trends in overall
defense spending, in personnel levels, and in military force structure. It includes data
showing the growth and decline of defense spending over time, defense outlays as a
share of total federal expenditures, and defense outlays as a share of gross domestic
product. It also includes a table showing military spending by foreign nations. Part
III defines key defense budget terms.
Data showing long term spending trends can be interpreted in different ways.
For example, while defense outlays are at historically low levels as a percentage of
total federal outlays, this trend is more a reflection of increases in federal entitlement
programs – notably the escalating costs of Medicare and Social Security – than
decreases in defense spending. Also, while defense outlays as a percentage of GDP
are at their lowest levels since World War II, in constant dollar terms they remain
comparable to average peacetime defense outlays during the Cold War.
Most of the data used in this report are taken from annual budget documents
prepared by the Office of Management and Budget (OMB). These data have several
features that users of this report should be aware of.
! First, figures represent the Administration’s request to Congress, including
requested changes in standing legislation, such as this year’s request for
changes in accounting for retirement benefits;
! Second, OMB sometimes adjusts figures for prior year budgets for purposes
of comparison with proposed budgets; and
! Third, the data show estimates of funding in years prior to the budget year
(FY2003) according to OMB conventions for “scoring” of funding, which may
differ from those used by the Congressional Budget Office or the Department
of Defense.

CRS-2
This year, all of these features of the OMB data have some quite significant
effects on estimated and projected funding for defense and other parts of the budget.
Major adjustments include:
(1) Financing of benefits for military and civilian personnel on an accrual
basis: Most federal retirement benefits, including benefits for uniformed military
personnel and DOD civilian personnel, have long been funded on the basis of “accrual
accounting,” in which the cost of future benefits for current employees is charged to
the employing agency as the benefits are accrued. Under accrual accounting
procedures, federal agencies pay the actuarily determined cost of future benefits into
a trust fund. Payments to retirees are then charged to the fund, not to the agency.
In the FY2003 and FY2004 defense budgets, three substantial adjustments involving
accrual accounting have a large effect on reported budget totals. These are:
! Accrual accounting for over-65 health care benefits for uniformed
personnel: The FY2001 Defense Authorization Act included a provision,
known as “Tricare-for-Life,” that guarantees DOD-provided health care to
over-65 military retirees and their dependents. Beginning in FY2003, these
benefits are being funded on an accrual basis. This results in (1) an increase of
$8.1 billion in FY2003 in the military personnel accounts to reflect the accrual
cost of future benefits for current uniformed personnel and (2) a reduction of
$5.6 billion in operation and maintenance accounts to reflect a payment from
the health care trust fund to DOD for providing care to over-65 retirees.
! Accrual accounting for all civilian personnel retirement pension and
health benefits: While most federal civilian retirement benefits are funded on
an accrual basis, a small part is not. Now the Administration is proposing to
fund all retirement benefits on an accrual basis. In FY2003, the proposed
change results in an increase of $3.3 billion (both in budget authority and in
outlays) in the Department of Defense budget.
! Accrual accounting for under-65 health care benefits for uniformed
personnel: Beginning in FY2004, the Administration is also proposing to
finance health care benefits for under-65 military retirees on an accrual basis,
in which, again, DOD would pay into a trust fund the cost of future benefits
for current employees and would receive reimbursement from the fund for
costs of under-65 retiree health care that it provides. Both the contributions
to the fund and reimbursements from the fund are reflected in budget
projections from FY2004 on.
(2) Adjustment of prior year budget figures for accrual accounting: OMB
has adjusted FY2001 and FY2002 figures – though not figures for earlier years – to
be comparable to the new, proposed treatment of civilian retirement and health
benefits. Thus, OMB figures include $3.0 billion in FY2001 and $3.2 billion in
FY2002 Department of Defense budget totals (both in budget authority and in
outlays) for increased civilian retirement accrual even though this accounting
procedure was not in place in those years.
(3) Fiscal year scoring of funding provided by the Emergency Terrorism
Response supplemental appropriations act: Congress and the executive branch

CRS-3
sometimes count or “score” appropriations differently. This year, there are major
differences in how OMB and the Congressional Budget Office (CBO) show the
allocation of funds provided in the Emergency Terrorism Response supplemental
appropriations measure that Congress approved on September 14, 2001. In all,
Congress appropriated $40 billion for responding to the September 11 terrorist
attacks, including $20 billion that was made available to agencies after the President
notified Congress how the funds would be distributed and a second $20 billion that
was made available only after Congress allocated the funds in a subsequent
appropriations act. Of the $40 billion total, $17.5 billion was allocated to the Defense
Department, of which $14.0 billion was from the first $20 billion and $3.5 billion from
the second $20 billion. An additional $374 million was allocated to the Department
of Energy for defense-related activities, of which $5 million came from the initial $20
billion and $369 million from the second. These amounts are part of the national
defense budget function. CBO and OMB differ in allocating these funds –
! CBO scoring conventions: CBO scores funds by fiscal year according to the
date when Congress makes funds available to the executive branch. Thus,
CBO allocates all of the initial $20 billion in supplemental funding to FY2001,
when the original appropriation was enacted, while it allocates all of the second
$20 billion to FY2002, which is when Congress approved a subsequent
appropriations measure distributing the funds among federal agencies. Under
this convention, CBO shows $14.0 billion of supplemental funds in the
Department of Defense budget for FY2001 and $3.5 billion in the budget for
FY2002 (all in budget authority).
! OMB scoring conventions: OMB, however, normally allocates funds by
fiscal year based on when the executive branch actually releases money to the
agencies. Following that rule, OMB allocates $4.3 billion to DOD in FY2001
because the President had sent two notifications to Congress distributing that
amount to DOD before the end of the fiscal year on September 30, 2001.
OMB allocates the $3.5 billion that Congress provided for DOD in the second
$20 billion to FY2002. OMB did not, however, include in either year’s DOD
budget the remaining $9.8 billion that was allocated to DOD out of the initial
$20 billion in supplemental funding. Instead, OMB shows those funds in the
Emergency Response Fund, a government-wide account into which the funds
were initially appropriated. Although OMB released all but a small amount of
the initial $20 billion before the budget was released on February 4, it does not
show funds released after September 30, 2001, in agency totals.
This report relies primarily on OMB data, so the figures shown here follow
OMB’s scoring conventions.
CRS annually prepares a number of issue briefs and reports on specific weapon
programs and other defense issues. For up-to-date 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-4
CRS Issue Brief IB10062, Defense Research: DOD’s Research, Development, Test
and Evaluation Program, by John Dimitri Moteff.
CRS Issue Brief IB10089, Military Pay and Benefits: Key Questions and Answers,
by (name redacted).
CRS Issue Brief IB93103, Military Medical Care Services: Questions and Answers,
by Richard A. Best, Jr.
CRS Issue Brief IB85159, Military Retirement: Major Legislative Issues, by (name
redacted).
CRS Report RL31111, Missile Defense: the Current Debate, coordinated by (name
redacted) and (name redacted).
CRS Report RS20535, Navy Ship Procurement Rate and the Planned Size of the
Navy: Background and Issues for Congress, by (name redacted).
CRS Report RS20643, Navy CVNX Aircraft Carrier Program: Background and
Issues for Congress, by (name redacted).
CRS Report RS21059, Navy DD(X) Future Surface Combatant Program:
Background and Issues for Congress, by (name redacted).
CRS Issue Brief IB94040, Peacekeeping: Issues of U.S. Military Involvement, by
Nina Maria Serafino.
CRS Report RL31297, Recruiting and Retention in the Active Component Military,
by (name redacted).
CRS Issue Brief IB92115, Tactical Aircraft Modernization: Issues for Congress, by
(name redacted).
CRS Report RL31187, Terrorism Funding: Congressional Debate on Emergency
Supplemental Allocations, by (name redacted) and Larry Q. Nowels.
CRS Report RS21133, The Nuclear Posture Review: Overview and Emerging Issues,
by (name redacted).
CRS Issue Brief IB86103, V-22 Osprey Tilt-Rotor Aircraft, by (name redacted).
For an extensive discussion of the defense budget process, see CRS Report
RL30002, A Defense Budget Primer, by (nam e r edacted)
and (name r edacted).

CRS-5
Part I: The FY2003 Defense Budget Request
The following section provides basic data on the FY2003 defense budget
request. Table 1 provides data on the national defense budget function and the
Department of Defense budget, including figures for budget authority and outlays in
current and constant dollars and percentages of real growth. For a definition of terms,
see the glossary at the end of this report.
Tables 2 and 3 show, respectively, budget authority and outlay figures for the
national defense budget function broken down by appropriations title.
Table 4 shows DOD budget authority broken down by military component —
i.e., the military services. Figure 1 graphically displays shares of DOD budget
authority by service for the FY2003 budget request.
Table 5 shows budget authority and outlays associated with Operation Desert
Shield/Desert Storm. In order to reflect accurately trends in defense funding, most
of the data in this report have been adjusted to exclude costs associated with the
Persian Gulf War, since that conflict was largely financed by U.S. allies. Table 5
allows the reader to compare the adjusted data published in this report with
unadjusted data published elsewhere.

CRS-6
Table 1. National Defense Budget Function and Department of Defense Budget, FY1995-2007
(current and constant FY2003 dollars in billions)
Actual
Actual
Actual
Actual
Actual
Actual
Actual Estimate Request
Proj.
Proj.
Proj.
Proj.
Fiscal Year:
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
National Defense Budget Function
Budget Authority
Current year dollars
266.4
266.2
270.4
271.3
292.3
304.1
329.0
350.7
396.8
405.6
426.6
447.7
469.8
Constant FY2002 dollars
324.2
317.2
315.3
309.1
325.3
329.9
346.5
358.5
396.8
396.1
406.5
416.2
426.1
Real growth/decline
-0.9%
-2.2%
-0.6%
-2.0%
+5.2%
+1.4%
+5.0%
+3.5% +10.7%
-0.2%
+2.6%
+2.4%
+2.4%
Outlays
Current year dollars
271.0
265.2
270.4
268.4
274.9
294.5
308.5
348.0
379.0
393.8
413.5
428.5
442.5
Constant FY2003 dollars
329.1
315.5
313.8
304.8
306.3
319.5
324.9
355.2
379.0
384.5
394.2
398.4
401.1
Real growth/decline
-4.5%
-4.1%
-0.5%
-2.9%
+0.5%
+4.3%
+1.7%
+9.3%
+6.7%
+1.5%
+2.5%
+1.1%
+0.7%
Department of Defense
Budget Authority
Current year dollars
255.7
254.6
258.0
258.6
278.6
290.5
313.0
333.0
378.6
387.4
408.3
429.2
450.9
Constant FY2003 dollars
311.3
303.3
300.8
294.6
310.0
315.1
329.6
340.4
378.6
378.3
389.0
398.9
409.0
Real growth/decline
-0.3%
-2.5%
-0.8%
-2.1%
+5.2%
+1.7%
+4.6%
+3.3% +11.2%
-0.1%
+2.8%
+2.5%
+2.5%
Outlays
Current year dollars
258.4
252.7
258.2
256.1
261.4
281.2
294.0
330.6
361.0
375.6
395.2
410.2
423.9
Constant FY2003 dollars
313.7
300.5
299.6
290.8
291.2
305.1
309.6
337.4
361.0
366.7
376.7
381.3
384.2
Real growth/decline
-4.4%
-4.2%
-0.3%
-2.9%
+0.2%
+4.8%
+1.5%
+9.0%
+7.0%
+1.6%
+2.7%
+1.2%
+0.8%
Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003 , February 2002. Deflators and
data on Desert Shield/Desert Storm budget authority and outlays from DOD Comptroller.
Notes: Figures exclude Operation Desert Shield/Desert Storm costs and receipts, which affects outlay amounts from FY1995-1998. This and other tables in this
report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health
care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees beginning
in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also reflect OMB
scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact
of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-7
Table 2. National Defense Budget Function by Appropriations Title, Budget Authority, FY1995-2007
(current year dollars in billions)
Actual
Actual
Actual
Actual
Actual
Actual
Actual Estimate Request
Proj.
Proj.
Proj.
Proj.
Fiscal Year:
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Department of Defense (military activities only)
Military Personnel
71.6
69.8
70.3
69.8
70.6
73.8
76.9
82.0
94.3
104.0
108.1
113.7
117.4
Operation & Maintenance
93.8
93.7
92.4
97.2
105.0
108.8
117.7
129.8
150.4
140.9
147.0
152.3
155.2
Procurement
43.6
42.6
43.0
44.8
51.1
55.0
62.6
61.1
68.7
74.7
79.2
86.9
99.0
RDT&E
34.5
35.0
36.4
37.1
38.3
38.7
41.7
48.6
53.9
57.0
60.7
58.9
58.0
Military Construction
5.4
6.9
5.7
5.5
5.4
5.1
5.5
6.6
4.8
5.1
6.3
10.8
13.8
Family Housing
3.4
4.3
4.1
3.8
3.6
3.5
3.7
4.1
4.2
4.3
5.1
4.9
4.8
Other
3.4
2.4
6.1
0.3
4.6
5.6
4.9
0.9
2.3
1.4
1.9
1.5
2.7
Subtotal, Department of Defense
255.7
254.6
258.0
258.6
278.6
290.5
313.0
333.0
378.6
387.4
408.3
429.2
450.9
Department of Energy
Atomic Energy Defense Activities
10.1
10.7
11.4
11.7
12.6
12.4
14.4
16.0
16.5
16.5
16.6
16.8
17.1
Other Agencies
Defense-Related Activities
0.6
0.9
1.0
1.0
1.1
1.2
1.6
1.7
1.7
1.7
1.7
1.7
1.7
Total, National Defense
266.4
266.2
270.4
271.3
292.3
304.1
329.0
350.7
396.8
405.6
426.6
447.7
469.8
Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002; except Title level
detail for FY2004-2007 from Office of Management and Budget, Analytical Perspectives: Budget of the United States Government, Fiscal Year 2003, February
2002.
Notes: This and other tables in this report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1)
enacted accrual accounting for health care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for
under-65 military retirees beginning in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003.
Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001.
For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-8
Table 3. National Defense Budget Function by Appropriations Title, Outlays, FY1995-2007
(current year dollars in billions)
Actual
Actual
Actual
Actual
Actual
Actual
Actual Estimate Request
Proj.
Proj.
Proj.
Proj.
Fiscal Year:
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Department of Defense (military activities only)
Military Personnel
70.8
66.7
69.7
69.0
69.5
76.0
74.0
81.2
92.8
102.1
107.1
112.8
116.6
Operation & Maintenance
90.9
88.7
92.4
93.5
96.4
105.9
114.0
133.6
143.5
146.2
147.0
146.8
147.9
Procurement
54.3
48.5
47.6
48.2
48.8
51.7
55.0
59.6
62.3
65.3
75.0
81.8
87.6
RDT&E
34.6
36.5
37.0
37.4
37.4
37.6
40.6
45.1
50.8
52.3
56.2
57.6
57.4
Military Construction
6.8
6.7
6.2
6.0
5.5
5.1
5.0
5.7
6.0
4.7
4.5
5.5
7.8
Family Housing
3.6
3.8
4.0
3.9
3.7
3.4
3.5
3.8
3.9
3.9
4.0
4.4
4.4
Other
-2.6
1.8
1.2
-1.9
0.1
1.6
1.9
1.7
1.7
1.1
1.3
1.4
2.1
Subtotal, DOD
258.4
252.7
258.2
256.1
261.4
281.2
294.0
330.6
361.0
375.6
395.2
410.2
423.9
Department of Energy
Atomic Energy Defense Activities
11.8
11.6
11.3
11.3
12.4
12.2
13.0
15.9
16.3
16.5
16.6
16.7
16.9
Other Agencies
Defense-Related Activities
0.8
0.9
0.9
1.1
1.1
1.1
1.5
1.6
1.7
1.7
1.7
1.7
1.7
Total, National Defense
271.0
265.2
270.4
268.4
274.9
294.5
308.5
348.0
379.0
393.8
413.5
428.5
442.5
Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002; except Title level
detail for FY2004-2007 from Office of Management and Budget, Analytical Perspectives: Budget of the United States Government, Fiscal Year 2003, February
2002. Deflators and data on Desert Shield/Desert Storm outlays from DOD Comptroller.
Notes: Figures exclude Operation Desert Shield/Desert Storm costs and receipts, which affects data from FY1995-1998. This and other tables in this report use
OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care benefits
for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees beginning in FY2004;
and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also reflect OMB scoring
of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual
accounting and of budget scoring conventions, see the Introduction, above.

CRS-9
Table 4. Department of Defense Budget Authority by Service,
FY1994-2003
(current year dollars in billions)
Actual Actual Actual Actual Actual Actual Actual
Est.
Proj.
Fiscal Year:
1995
1996
1997
1998
1999
2000
2001
2002
2003
Army
63.3
64.5
64.4
64.0
68.4
73.2
77.0
80.8
90.8
% of DOD Total
24.8% 25.4% 25.0% 24.8% 24.5% 25.2% 24.9% 24.5% 24.0%
Navy/Marine Corps
76.9
80.0
79.5
80.7
84.0
88.8
95.5
98.6
108.2
% of DOD Total
30.1% 31.4% 30.8% 31.2% 30.2% 30.6% 30.8% 29.9% 28.6%
Air Force
73.9
73.0
73.2
76.3
81.9
83.1
89.5
94.2
106.9
% of DOD Total
28.9% 28.7% 28.4% 29.5% 29.4% 28.6% 28.9% 28.6% 28.2%
Defense Wide
41.6
37.0
40.8
37.6
44.3
45.5
47.9
56.2
72.7
% of DOD Total
16.3% 14.5% 15.8% 14.5% 15.9% 15.7% 15.4% 17.0% 19.2%
DOD Total
255.7
254.4
258.0
258.6
278.6
290.5
309.9
329.9
378.6
Source: Department of Defense Comptroller, National Defense Budget Estimates for FY2003, March
2002.
Notes: Totals may not add due to rounding. Total is discretionary DOD budget authority. FY2002
and FY2003 Defense-Wide amounts include Defense Emergency Response Fund.
Figure 1: DOD Budget Authority by Service, FY2003 Request
Navy/Marine
Army
28.6%
24.0%
Defense-Wide
19.2%
Air Force
28.2%

CRS-10
Table 5. Operation Desert Shield/Desert Storm Budget Authority and Outlays
(current year dollars in millions)
FY1990
FY1991
FY1992
FY1993
FY1994
FY1995
FY1996
FY1997
FY1998
Total
Budget Authority
Military Personnel
281
5,824
2,409
–
–
–
–
–
–
8,514
Operations & Maintenance
1,328
24,366
8,132
–
–
–
–
–
–
33,826
Procurement
10
5,278
1,950
–
–
–
–
–
–
7,238
Research, Development,
Test, & Evaluation
9
69
106
–
–
–
–
–
–
184
Military Construction
–
35
–
–
–
–
–
–
–
35
Family Housing
–
–
–
–
–
–
–
–
–
0
Stock Funds
400
271
–
–
–
–
–
–
–
671
Allied Cash Contributions
–
-43,154
-5,240
–
–
–
–
–
–
-48,394
Total Budget Authority
2,028
-7,311
7,357
–
–
–
–
–
–
2,074
Outlays
Military Personnel
267
5,382
2,734
114
–
–
–
–
–
8,497
Operations & Maintenance
1,033
16,212
11,152
3,974
1,142
147
51
21
4
33,736
Procurement
1
-152
2,154
2,619
1,369
729
378
44
17
7,159
Research, Development,
Test, & Evaluation
5
40
76
45
11
4
1
–
–
182
Military Construction
–
10
13
7
2
2
1
–
–
35
Family Housing
–
–
–
–
–
–
–
–
–
0
Stock Funds
156
-1,778
1,348
429
259
166
79
11
–
670
Allied Cash Contributions
–
-43,154
-5,240
–
–
–
–
–
–
-48,394
Total Outlays
1,462
-23,440
12,237
7,188
2,783
1,048
510
76
21
1,885
Source: Department of Defense Comptroller.
Notes: Totals may not add due to rounding. Totals in this table represent only cash outlays and receipts. DOD estimates that the total cost of Operation
Desert Shield/Desert Storm was $61.1 billion, including activities supported through allied in-kind assistance and material losses not replaced.

CRS-11
Part II: Trends in Defense Spending
Part II provides data on trends in the defense budget that may be of particular
interest to Congress. In assessing trends, current levels of spending are often
compared to the peak levels reached during the defense buildup of the 1980s.
FY1985 was the peak year in budget authority for national defense, FY1987 was the
peak in the number of military personnel, and FY1989 was the peak in outlays.
Table 6 shows budget authority by appropriations title for selected years for the
period FY1976 through FY2007 in inflation-adjusted dollars and calculates
cumulative real growth or decline over the selected parts of that period. Figure 2
graphically shows trends in budget authority by title from FY1985 to FY2007.
Table 7 shows the trend in personnel levels for active duty forces, reserve
forces, and DOD civilians for FY1981 and selected years thereafter. Figure 3
illustrates the trend in active duty military personnel levels. Table 8 and Figure 4
show total active duty end-strength levels from FY1950-2003.
Table 9 shows the trend in major elements of force structure (Army and Marine
Corps divisions, Air Force tactical air wings, and Navy ships) for FY1980-2003.
Table 10 shows the trend in total national defense budget authority and outlays
in current and constant FY2003 dollars from FY1940 to FY2007.
Table 11 tracks national defense outlays as a share of gross national product
(GNP) and gross domestic product (GDP) from FY1910 to FY2007.
Figure 5 illustrates the trend in national defense outlays in constant FY2003
dollars from FY1910 to FY2007.
Figure 6 illustrates trends in national defense budget authority and outlays in
constant FY2003 dollars from FY1947 to FY2007.
Figures 7 and 8 illustrate trends in national defense outlays as a percentage of
GNP/GDP from FY1910 to FY2007 and as a percentage of GDP from FY1947 to
FY2007.
Table 12 shows the allocation of outlays by budget enforcement act category in
the federal budget in current year dollars, and Table 13 and Figure 9 show the same
data as percentages of total federal outlays. Figure 10 shows the allocation of federal
outlays in constant FY2003 dollars.
Table 14 follows the trend in DOD five- and six-year defense plans since 1987.
Finally, Table 15 shows defense spending of the top 25 foreign nations.

CRS-12
Table 6. National Defense Budget Authority Trends by Appropriations Title, FY1976-2007
(constant FY2003 dollars in billions)
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Fiscal Year
1976
1980
1985
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
Military Personnel
117.9
111.3
123.4
123.2
117.9
114.8
105.8
96.9
94.9
90.5
88.6
84.8
83.2
Operation and Maintenance
85.3
94.4
126.9
121.5
120.2
110.5
113.8
110.2
114.3
111.6
107.9
110.5
116.7
Procurement
61.0
69.7
144.0
101.8
81.4
72.5
61.4
50.4
49.0
47.1
47.0
48.5
54.5
RDT&E
26.7
26.7
47.8
46.7
45.0
44.0
44.7
40.1
39.3
39.0
40.0
40.3
41.1
Military Construction
6.2
4.3
8.4
6.5
6.4
6.3
5.4
6.9
6.2
7.7
6.3
6.0
5.8
Family Housing
3.6
3.0
4.3
4.0
4.1
4.5
4.6
4.0
3.8
4.7
4.5
4.1
3.8
Other
-0.5
1.1
7.0
-1.0
1.5
4.6
3.5
3.6
3.8
2.7
6.6
0.4
4.8
Subtotal, Department of Defense
300.2
310.6
461.7
402.6
376.5
357.2
339.2
312.2
311.3
303.3
300.8
294.6
310.0
Dept. of Energy Defense-Related
5.3
6.6
11.8
13.4
15.4
15.6
15.3
13.5
12.3
12.7
13.2
13.3
14.0
Other Defense-Related
0.5
0.5
0.8
0.8
1.5
1.3
2.3
1.3
0.7
1.1
1.2
1.2
1.3
Total, National Defense
306.0
317.6
474.3
416.8
393.3
374.0
356.8
327.0
324.2
317.2
315.3
309.1
325.3

CRS-13
Table 6. – continued
(constant FY2003 dollars in billions)
Real
Real
Real
Real
Growth/ Growth/ Growth/ Growth/
Actual
Actual
Est.
Proj.
Proj.
Proj.
Proj.
Proj.
Decline
Decline
Decline
Decline
Fiscal Year
2000
2001
2002
2003
2004
2005
2006
2007 FY76-85 FY85-90 FY90-98 FY98-03
Military Personnel
83.2
83.9
84.8
94.3
100.9
101.7
103.7
103.9
+5%
0%
-31%
+11%
Operation and Maintenance
118.5
123.3
132.4
150.4
137.4
139.7
141.0
139.8
+49%
-4%
-9%
+36%
Procurement
57.7
64.7
62.1
68.7
73.4
76.4
82.2
91.9
+136%
-29%
-52%
+42%
RDT&E
40.8
43.2
49.3
53.9
56.0
58.5
55.6
53.7
+79%
-2%
-14%
+34%
Military Construction
5.4
5.7
6.7
4.8
5.0
6.1
10.2
12.7
+36%
-23%
-8%
-20%
Family Housing
3.7
3.8
4.1
4.2
4.2
4.9
4.6
4.5
+20%
-7%
+3%
+2%
Other
5.8
5.0
0.9
2.3
1.3
1.8
1.5
2.5
NA
NA
NA
NA
Subtotal, Department of Defense
315.1
329.6
340.4
378.6
378.3
389.0
398.9
409.0
+54%
-13%
-27%
+29%
Dept. of Energy Defense-Related
13.5
15.2
16.4
16.5
16.1
15.8
15.7
15.5
+123%
+13%
-0%
+23%
Other Defense-Related
1.3
1.7
1.8
1.7
1.7
1.6
1.6
1.6
+76%
+4%
+37%
+49%
Total, National Defense
329.9
346.5
358.5
396.8
396.1
406.5
416.2
426.1
+55%
-12%
-26%
+28%
Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002; except Title level
figures for FY2004-2007 from Office of Management and Budget, Analytical Perspectives: Budget of the United States Government, Fiscal Year 2003, February
2002. Deflators and data on Desert Shield/Desert Storm costs and receipts from DOD Comptroller.
Notes: Data for FY1990-92 exclude Desert Shield/Desert Storm costs and receipts (see Table 5, above). Totals may not add due to rounding. This and other tables
in this report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for
health care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees
beginning in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also
reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation
of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-14
Figure 2: DOD Budget Authority by Title, FY1985-2007
160
140
Operation & Maintenance
120
100
Military Personnel
80
Procurement
60
40
RDT&E
20
0
1985
1990
1995
2000
2005
Figure 3: Active Duty End-Strength by Service,
Selected Years, FY1987-2003
2500
Air Force
Marine Corps
2000
Navy
Army
1500
1000
500
0
1987 1989 1991 1993 1995 1997 1999 2000 2001 2002 2003

CRS-15
Table 7. Department of Defense Personnel Levels, Selected Years
(end strength/ full-time equivalents in thousands)
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Est.
Proj.
Fiscal Year:
1981
1985
1987
1989
1991
1993
1995
1997
1999
2000
2001
2002
2003
Army
781
781
781
770
725
572
509
492
479
482
481
480
480
Navy
540
571
587
593
571
510
435
396
373
373
378
376
376
Marine Corps
191
198
200
197
195
178
174
174
173
173
173
173
175
Air Force
570
602
607
571
511
444
400
378
361
356
354
359
359
Total Active
2,082
2,151
2,174
2,130
2,002
1,705
1,518
1,440
1,386
1,384
1,385
1,387
1,390
Selected Reserves
851
1,188
1,151
1,171
1,138
1,058
946
902
877
865
869
864
865
Total Civilians (FTEs)
947
1,029
1,032
1,023
969
932
822
746
681
660
650
635
627
Sources: Active and reserve force levels for FY2001-FY2003 from Office of Management and Budget, Budget of the United States Government for
FY2003: Appendix, February 2002; active duty force levels for prior years from Department of Defense, Undersecretary of Defense Comptroller,
National Defense Budget Estimate for FY2002, August 2001; reserve force 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 FTE levels from Office of Management and Budget, Historical Tables: Budget of the United
States Government for FY2003, February 2002.
Notes: Figures reflect end-strength for active and reserve forces and full time equivalent (FTE) employment levels for civilians. End-strength represents
force levels at the end of each fiscal year. Selected reserves do not include Standby Reserve, Individual Ready Reserve, and Inactive National Guard.
Totals may not add due to rounding. Active duty totals do not include full time Guard and Reserve.

CRS-16
Table 8. Department of Defense Active Duty Personnel
Levels, FY1950-2003
(end-strength in thousands)
1950
1,459
1964
2,688
1978
2,061
1992
1,808
1951
3,249
1965
2,656
1979
2,024
1993
1,705
1952
3,636
1966
3,094
1980
2,050
1994
1,610
1953
3,555
1967
3,377
1981
2,082
1995
1,518
1954
3,302
1968
3,548
1982
2,108
1996
1,472
1955
2,935
1969
3,460
1983
2,123
1997
1,440
1956
2,806
1970
3,065
1984
2,138
1998
1,406
1957
2,795
1971
2,714
1985
2,151
1999
1,386
1958
2,600
1972
2,322
1986
2,169
2000
1,384
1959
2,504
1973
2,252
1987
2,174
2001
1,385
1960
2,475
1974
2,161
1988
2,138
2002
1,387
1961
2,483
1975
2,127
1989
2,130
2003
1,390
1962
2,808
1976
2,081
1990
2,069
1963
2,700
1977
2,073
1991
2,002
Sources: FY2001-FY2003 from Office of Management and Budget, Budget of the
United States Government for FY2003: Appendix, February 2002; FY1950-2000
from Under Secretary of Defense Comptroller, National Defense Budget Estimates
for FY2002, June 2001.
Figure 4: Active Duty End-Strength, FY1950-2003
4,000
3,000
2,000
1,000
0
1950
1960
1970
1980
1990
2000

CRS-17
Table 9. U.S. Military Force Structure, FY1980-2003
Air Force
Fiscal
Army Divisions
Marine Divisions
Naval Forces
Tactical Wingsa
Year
Active
Reserve
Active
Reserve
Carriersb
Total Ships
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
308
12+
7+
Sources: U.S. Navy, Highlights of the Department of the Navy FY2003 Budget, February 2002; U.S. Department of
Defense, briefing materials accompanying the FY2002 budget request (mimeo), June 2001 and similar materials
provided in prior years. U.S. Library of Congress, Congressional Research Service, U.S./Soviet Military Balance:
Statistical Trends, 1980-1989, CRS Report 90-401 RCO, by John M. Collins and (name redacted),
Aug. 6, 1990.
U.S. Library of Congress, Congressional Research Service, U.S. Armed Forces: Statistical Trends, 1985-1990, CRS
Report 91-672 RCO, by John M. Collins and (name redacted),
Sep. 6. 1991. 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 FY2002 and FY2003 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-18
Table 10. Real Growth/Decline in National Defense
Funding, FY1940-2007
(current and constant FY2003 dollars in billions)
Budget Authority
Outlays
Fiscal
Year
Constant
Real
Constant
Real
Current
FY2003
Growth/
Current
FY2003
Growth/
Dollars
Dollars
Decline
Dollars
Dollars
Decline
1940
–
–
–
1.7
26.2
–
1941
–
–
–
6.4
97.0
+269.8%
1942
–
–
–
25.7
352.8
+263.6%
1943
–
–
–
66.7
844.3
+139.3%
1944
–
–
–
79.1
1,031.9
+22.2%
1945
39.2
612.9
–
83.0
1,118.3
+8.4%
1946
44.0
558.1
-8.9%
42.7
574.2
-48.7%
1947
9.0
115.5
-79.3%
12.8
157.3
-72.6%
1948
9.5
108.8
-5.8%
9.1
107.7
-31.5%
1949
10.9
127.8
+17.5%
13.2
149.1
+38.4%
1950
16.5
175.8
+37.5%
13.7
154.6
+3.7%
1951
57.8
470.5
+167.7%
23.6
237.6
+53.7%
1952
67.5
570.4
+21.2%
46.1
423.7
+78.3%
1953
56.9
497.0
-12.9%
52.8
469.9
+10.9%
1954
38.7
361.2
-27.3%
49.3
447.0
-4.9%
1955
32.9
306.8
-15.1%
42.7
385.3
-13.8%
1956
35.0
306.4
-0.1%
42.5
364.1
-5.5%
1957
39.4
329.4
+7.5%
45.4
368.9
+1.3%
1958
40.1
318.5
-3.3%
46.8
360.4
-2.3%
1959
45.1
335.7
+5.4%
49.0
360.2
0.0%
1960
44.3
324.8
-3.2%
48.1
353.1
-2.0%
1961
45.1
328.2
+1.0%
49.6
352.5
-0.2%
1962
50.2
359.1
+9.4%
52.3
372.8
+5.8%
1963
52.1
364.9
+1.6%
53.4
377.1
+1.2%
1964
51.6
348.4
-4.5%
54.8
373.3
-1.0%
1965
50.6
333.5
-4.3%
50.6
341.6
-8.5%
1966
64.4
387.7
+16.3%
58.1
365.2
+6.9%
1967
73.1
423.1
+9.1%
71.4
422.1
+15.6%
1968
77.2
430.5
+1.7%
81.9
460.0
+9.0%
1969
78.5
420.5
-2.3%
82.5
448.6
-2.5%
1970
75.3
380.9
-9.4%
81.7
416.2
-7.2%
1971
72.7
347.4
-8.8%
78.9
379.6
-8.8%
1972
76.4
333.8
-3.9%
79.2
351.9
-7.3%
1973
79.1
318.8
-4.5%
76.7
320.8
-8.8%
1974
81.5
302.4
-5.2%
79.3
307.2
-4.3%
1975
86.2
292.1
-3.4%
86.5
300.1
-2.3%
1976
97.3
306.1
+4.8%
89.6
290.6
-3.2%
1977
110.2
318.3
+4.0%
97.2
293.0
+0.8%
1978
117.2
313.9
-1.4%
104.5
293.3
+0.1%
1979
126.5
312.3
-0.5%
116.3
302.4
+3.1%
1980
143.9
317.8
+1.7%
134.0
310.2
+2.6%
1981
180.0
354.7
+11.6%
157.5
324.5
+4.6%
1982
216.5
393.3
+10.9%
185.3
347.0
+6.9%
1983
245.0
425.5
+8.2%
209.9
374.8
+8.0%
1984
265.2
445.0
+4.6%
227.4
390.0
+4.1%
1985
294.7
474.3
+6.6%
252.7
414.5
+6.3%
1986
289.1
455.6
-4.0%
273.4
436.0
+5.2%

CRS-19
Budget Authority
Outlays
Fiscal
Year
Constant
Real
Constant
Real
Current
FY2003
Growth/
Current
FY2003
Growth/
Dollars
Dollars
Decline
Dollars
Dollars
Decline
1987
287.4
440.9
-3.2%
282.0
437.4
+0.3%
1988
292.0
432.2
-2.0%
290.4
435.8
-0.4%
1989
299.6
426.7
-1.3%
303.6
437.1
+0.3%
1990
301.2
416.8
-2.3%
297.9
416.8
-4.6%
1991
296.2
393.3
-5.6%
296.7
397.9
-4.5%
1992
287.7
374.0
-4.9%
286.1
372.3
-6.5%
1993
281.1
356.8
-4.6%
283.9
359.0
-3.5%
1994
263.3
327.0
-8.3%
278.9
344.4
-4.1%
1995
266.4
324.2
-0.9%
271.0
329.1
-4.5%
1996
266.2
317.2
-2.2%
265.2
315.5
-4.1%
1997
270.4
315.3
-0.6%
270.4
313.8
-0.5%
1998
271.3
309.1
-2.0%
268.4
304.8
-2.9%
1999
292.3
325.3
+5.2%
274.9
306.3
+0.5%
2000
304.1
329.9
+1.4%
294.5
319.5
+4.3%
2001
329.0
346.5
+5.0%
308.5
324.9
+1.7%
2002
350.7
358.5
+3.5%
348.0
355.2
+9.3%
2003
396.8
396.8
+10.7%
379.0
379.0
+6.7%
2004
405.6
396.1
-0.2%
393.8
384.5
+1.5%
2005
426.6
406.5
+2.6%
413.5
394.2
+2.5%
2006
447.7
416.2
+2.4%
428.5
398.4
+1.1%
2007
469.8
427.5
+2.4%
442.5
401.1
+0.7%
Sources: Current dollar FY1940-1975 budget authority figures 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 2003, February 2002; constant dollar figures calculated by CRS using
deflators from Department of Defense Comptroller; figures on Desert Shield/Desert Storm costs and
receipts from Department of Defense Comptroller.
Notes: This and other tables in this report use OMB data which reflect enacted and proposed changes
in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care
benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health
care benefits for under-65 military retirees beginning in FY2004; and (3) proposed accrual accounting
for all civilian retirement benefits beginning in FY2003. Data in these tables also reflect OMB scoring
of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in
September 2001. For an explanation of the impact of accrual accounting and of budget scoring
conventions, see the Introduction, above. Figures for FY1990 and beyond exclude costs and receipts
of Operation Desert Shield/Desert Storm. Figures prior to FY1976 are from DOD data that have not
been revised to reflect accrual accounting for military retirement in years prior to its adoption in
FY1985. Figures from FY1976 on have been revised by OMB to reflect accrual accounting.

CRS-20
Table 11. National Defense Outlays as a Percentage of
GNP/GDP, FY1910-2007
(current year dollars in billions)
National
Outlays
National
Outlays
Fiscal
Defense
GNP/
as % of
Fiscal
Defense
GNP/
as % of
Year
Outlays
GDP
GNP/GDP
Year
Outlays
GDP
GNP/GDP
1910
0.3
35.3
0.8%
1945
83.0
221.3
37.5%
1911
0.3
35.8
0.8%
1946
42.7
222.7
19.2%
1912
0.3
39.4
0.7%
1947
12.8
234.6
5.5%
1913
0.3
39.6
0.7%
1948
9.1
256.4
3.6%
1914
0.3
38.6
0.8%
1949
13.2
271.5
4.8%
1915
0.3
40.0
0.7%
1950
13.7
273.4
5.0%
1916
0.3
48.3
0.6%
1951
23.6
321.0
7.3%
1917
0.6
60.4
1.0%
1952
46.1
348.8
13.2%
1918
7.1
76.4
9.3%
1953
52.8
373.4
14.1%
1919
13.5
84.0
16.1%
1954
49.3
378.0
13.0%
1920
4.0
91.5
4.4%
1955
42.7
395.2
10.8%
1921
2.6
69.6
3.7%
1956
42.5
427.7
9.9%
1922
0.9
74.1
1.3%
1957
45.4
450.7
10.1%
1923
0.7
85.1
0.8%
1958
46.8
461.1
10.2%
1924
0.6
84.7
0.8%
1959
49.0
492.1
10.0%
1925
0.6
93.1
0.6%
1960
48.1
518.9
9.3%
1926
0.6
97.0
0.6%
1961
49.6
531.8
9.3%
1927
0.6
94.9
0.6%
1962
52.3
568.5
9.2%
1928
0.7
97.0
0.7%
1963
53.4
599.7
8.9%
1929
0.7
103.1
0.7%
1964
54.8
641.3
8.5%
1930
0.7
97.4
0.8%
1965
50.6
687.9
7.4%
1931
0.7
83.7
0.9%
1966
58.1
754.2
7.7%
1932
0.7
67.5
1.0%
1967
71.4
813.5
8.8%
1933
0.6
57.4
1.1%
1968
81.9
868.4
9.4%
1934
0.5
61.2
0.9%
1969
82.5
949.2
8.7%
1935
0.7
69.7
1.0%
1970
81.7
1,013.2
8.1%
1936
0.9
78.5
1.2%
1971
78.9
1,081.4
7.3%
1937
0.9
87.8
1.1%
1972
79.2
1,181.5
6.7%
1938
1.0
89.0
1.2%
1973
76.7
1,308.1
5.9%
1939
1.1
89.0
1.2%
1974
79.3
1,442.1
5.5%
1940
1.7
96.7
1.7%
1975
86.5
1,559.8
5.5%
1941
6.4
114.0
5.6%
1976
89.6
1,736.7
5.7%
1942
25.7
144.2
17.8%
1977
97.2
1,971.3
5.6%
1943
66.7
180.1
37.0%
1978
104.5
2,218.6
5.3%
1944
79.1
209.0
37.9%
1979
116.3
2,503.8
5.2%
1980
134.0
2,732.1
4.9%
1995
272.1
7,324.0
3.7%
1981
157.5
3,061.6
5.1%
1996
265.8
7,694.6
3.5%
1982
185.3
3,228.6
5.7%
1997
270.5
8,185.2
3.3%
1983
209.9
3,440.5
6.1%
1998
268.5
8,663.9
3.1%
1984
227.4
3,839.4
5.9%
1999
274.9
9,124.3
3.0%
1985
252.7
4,136.6
6.1%
2000
294.5
9,744.3
3.0%
1986
273.4
4,401.4
6.2%
2001
308.5
10,150.5
3.0%
1987
282.0
4,647.0
6.1%
2002
348.0
10,361.6
3.4%
1988
290.4
5,014.7
5.8%
2003
379.0
10,922.3
3.5%
1989
303.6
9,824.4
3.1%
2004
393.8
11,525.8
3.4%

CRS-21
National
Outlays
National
Outlays
Fiscal
Defense
GNP/
as % of
Fiscal
Defense
GNP/
as % of
Year
Outlays
GDP
GNP/GDP
Year
Outlays
GDP
GNP/GDP
1990
299.3
5,735.6
5.2%
2005
413.5
12,158.9
3.4%
1991
273.3
5,930.4
4.6%
2006
428.5
12,803.3
3.3%
1992
298.4
6,218.6
4.8%
2007
442.5
13,448.0
3.3%
1993
291.1
6,558.4
4.4%
1994
281.6
6,944.6
4.1%
Sources: Outlays, FY1910-1939, and GNP, FY1910-1929, from U.S. Department of Commerce,
Historical Statistics of the United States, Washington: GPO, 1975; outlays, FY1940-2007, and GDP,
FY1930-2007, from U.S. Office of Management and Budget, Historical Tables: Budget of the United
States Government, Fiscal Year 2003, February 2002.
Notes: This and other tables in this report use OMB data that reflect enacted and proposed changes
in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care
benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for
health care benefits for under-65 military retirees beginning in FY2004; and (3) proposed accrual
accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in
these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response
supplemental appropriations act approved in September 2001. For an explanation of the impact of
accrual accounting and of budget scoring conventions, see the Introduction, above. For this and
following tables, national defense outlay figures for FY1990 and beyond do not exclude Operation
Desert Shield/Desert Storm costs and receipts, since the amounts involved cannot be separated from
national economic activity or from total federal outlays. GNP before 1930, GDP thereafter.

CRS-22
Figure 5: National Defense Outlays, FY1910-2007
1,200
1,000
800
600
400
200
0
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
Figure 6: National Defense Budget Authority and
Outlays, FY1947-2007
600
500
400
300
200
Budget Authority
100
Outlays
0
1947
1957
1967
1977
1987
1997
2007

CRS-23
Figure 7: National Defense Outlays,
Percentage of GDP/GNP, FY1910-2007
40%
30%
20%
10%
0%
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
Figure 8: National Defense Outlays,
Percentage of GDP, FY1947-2007
16%
14%
12%
10%
8%
6%
4%
2%
0%
1950
1960
1970
1980
1990
2000

CRS-24
Table 12. Allocation of Federal Outlays by Budget Enforcement
Act Category, FY1962-2007
(current year dollars in billions)
Defense
Non-Defense
Fiscal
Discretionary
Discretionary
Mandatory
Net
Total Federal
Year
Outlays
Outlays
Outlays
Interest
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
745.8
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
990.5
1987
282.5
161.7
421.3
138.7
1,004.1
1988
290.9
173.5
448.2
151.8
1,064.5
1989
304.0
184.8
485.8
169.0
1,143.7
1990
300.1
200.4
568.2
184.4
1,253.2
1991
319.7
213.6
596.6
194.5
1,324.4
1992
302.6
231.2
648.5
199.4
1,381.7
1993
292.4
247.0
671.4
198.7
1,409.5
1994
282.3
259.1
717.5
203.0
1,461.9
1995
273.6
271.3
738.8
232.2
1,515.8
1996
266.0
266.7
786.8
241.1
1,560.6
1997
271.7
275.6
810.0
244.0
1,601.3
1998
270.2
281.9
859.4
241.2
1,652.6
1999
275.5
296.5
900.2
229.8
1,701.9
2000
295.0
319.9
951.0
223.0
1,788.8
2001
309.1
348.3
1,000.3
206.2
1,863.9
2002
348.0
392.5
1,133.4
178.4
2,052.3
2003
379.0
410.0
1,158.6
180.7
2,128.2
2004
393.7
421.3
1,185.3
188.8
2,189.1
2005
413.4
424.9
1,248.3
190.2
2,276.9
2006
428.5
429.3
1,322.9
188.3
2,369.1
2007
442.5
437.5
1,402.4
185.3
2,467.7
Source: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government,
Fiscal Year 2003, February 2002.
Note: National defense outlay figures do not exclude Desert Shield/Desert Storm costs and receipts. This and
other tables in this report use OMB data which reflect enacted and proposed changes in accrual accounting for
retirement benefits after FY2003. Data in these tables also reflect OMB scoring of funds provided in the
Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an
explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-25
Table 13. Allocation of Federal Outlays by
Budget Enforcement Act Category, FY1962-2007
(percentage of total outlays)
Defense
Non-Defense
Defense
Fiscal
Discretionary Discretionary
Mandatory
Net
Share
Year
Outlays
Outlays
Outlays
Interest
Discretionary
1962
49.3
18.3
26.1
6.5
73.0
1963
48.2
19.4
25.4
6.9
71.3
1964
46.4
20.3
26.3
6.9
69.5
1965
43.1
22.7
26.9
7.3
65.6
1966
43.9
23.1
26.0
7.0
65.5
1967
45.7
21.9
25.8
6.5
67.6
1968
46.2
20.1
27.6
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
7.0
64.5
1972
34.4
21.3
37.6
6.7
61.7
1973
31.4
21.7
39.9
7.0
59.1
1974
30.0
21.3
40.7
7.9
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
23.9
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
16.3
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
16.6
18.7
53.7
11.1
47.0
2002
17.0
19.1
55.2
8.7
47.0
2003
17.8
19.3
54.4
8.5
48.0
2004
18.0
19.2
54.1
8.6
48.3
2005
18.2
18.7
54.8
8.4
49.3
2006
18.1
18.1
55.8
7.9
50.0
2007
17.9
17.7
56.8
7.5
50.3
Source: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government,
Fiscal Year 2003, February 2002.
Note: National defense outlay figures do not exclude Desert Shield/Desert Storm costs and receipts. This and
other tables in this report use OMB data which reflect enacted and proposed changes in accrual accounting for
retirement benefits after FY2003. Data in these tables also reflect OMB scoring of funds provided in the
Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an
explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-26
Figure 9: National Defense Outlays,
Percentage of Federal Outlays, FY1940-2007
100%
80%
60%
40%
20%
0%
1940
1950
1960
1970
1980
1990
2000
Figure 10: Federal Outlays by Budget Enforcement Act Category,
FY1962-2007
2,500
Net Interest
2,000
Mandatory
Non-Defense Discretionary
Defense Discretionary
1,500
1,000
500
0
1962
1967
1972
1977
1982
1987
1992
1997
2002
2007

CRS-27
Table 14. Trends in Department of Defense Future-Years Defense Plans
(budget authority, current year dollars in billions)
Admin. Request
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
FY1987, 2/86
312
332
354
375
396
FY1988, 1/87
282
303
323
344
365
387
FY1989, 2/88
279
283
291
307
324
342
360
Reagan FY1990
279
284
290
306
321
336
351
366
Bush FY1990
279
284
290
296
311
322
336
350
FY1991, 1/90
279
284
290
289
295
300
304
308
312
FY1992, 2/91
279
284
291
291
280
278
278
278
281
283
287
FY1993, 1/92
279
284
291
291
298
269
268
268
270
270
275
FY1994, 3/93
279
284
291
291
284
275
259
251
248
240
233
241
FY1995, 2/94
279
284
291
291
284
275
267
249
252
243
240
247
253
FY1996, 2/95
279
284
291
291
284
275
267
251
253
246
243
248
256
266
277
FY1997, 3/96
279
284
291
291
284
275
267
251
256
252
243
248
254
262
270
277
FY1998, 2/97
279
284
291
291
284
275
267
251
256
252
250
251
256
263
270
277
FY1999, 2/98
279
284
291
293
276
282
267
251
256
254
258
255
257
263
271
274
284
FY2000, 2/99
279
284
291
293
276
282
267
251
256
254
258
259
263
267
286
288
299
308
319
FY2001, 2/00
279
284
291
293
276
282
267
251
256
254
258
259
278
280
291
295
301
308
316
FY2002, 6/01
279
284
291
293
276
282
267
251
256
254
258
259
278
280
301
328
337
346
356
366
FY2003, 2/02
279
284
291
293
276
282
267
251
256
255
258
259
279
290
313
333
379
387
408
429
451
Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, FY2003, February 2002 and prior years; for FY2002 request, U.S. Office of
Management and Budget, “Policy Function and Category Summary,” mimeo, August 2001; for FY1994 request, U.S. Office of Management and Budget, Budget Baselines, Historical Data,
and Alternatives for the Future, January 1993.
Notes: Boldface denotes the future-year defense plan projected at the time of the budget submission. Figures for the budget year and following years reflect the Administration’s request and
future budget projections. Figures for the year immediately preceding the year for which funding is requested (e.g., FY2002 in the FY2003 request) represent the Administration’s estimate
of the amount enacted by Congress and may include proposed supplemental appropriations and rescissions. Figures for earlier years reflect changes to the enacted level due to congressional
action on supplemental appropriations and rescissions, transfers of budget authority from one year to another, and/or adjustments in contract authority for Working Capital Funds. The large
discrepancies in year-to-year estimates for FY1991 are due to substantial changes in accounting for Operation Desert Shield/Desert Storm. Figures in this table have not been adjusted to
exclude funding for Operation Desert Shield/Desert Storm. This and other tables in this report use OMB data which reflect enacted and proposed changes in accrual accounting for retirement
benefits after FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001.
For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-28
Table 15. Defense Spending by Top 25 Foreign Nations
(current year U.S. dollars in millions)
IISS:
US Dept. of State:
Military Balance
Country
Rank
WMEAT 1998
2001-2002
Defense
Defense
Expenditures
%
Expenditures
%
(1997 data)
GDP
(2000 data)
GDP
United States
1
276,300
3.3%
291,200
3.0%
China — Mainland
2
74,910
2.2%
42,000
5.4%
Russia
3
41,730
5.8%
60,000
5.0%
France
4
41,520
3.0%
35,000
2.6%
Japan
5
40,840
1.0%
45,600
1.0%
United Kingdom
6
35,290
2.8%
34,600
2.4%
Germany
7
32,870
1.6%
28,800
1.6%
Italy
8
22,720
2.0%
21,000
2.0%
Saudi Arabia
9
21,150
14.4%
18,700
10.1%
Korea, South
10
15,020
3.4%
12,800
2.8%
Brazil
11
14,150
1.8%
17,900
2.8%
China — Taiwan
12
13,060
4.6%
17,600
5.6%
India
13
10,850
2.8%
14,700
3.1%
Israel
14
9,335
9.7%
9,500
8.9%
Australia
15
8,463
2.2%
7,100
1.9%
Canada
16
7,800
1.3%
8,100
1.2%
Turkey
17
7,792
4.0%
10,800
5.2%
Spain
18
7,670
1.5%
7,200
1.3%
Netherlands
19
6,839
1.9%
6,500
1.9%
Korea, North
20
6,000
27.5%
2,100
13.9%
Singapore
21
5,664
5.7%
4,800
4.9%
Poland
22
5,598
2.3%
3,300
2.0%
Sweden
23
5,550
2.5%
5,300
2.2%
Greece
24
5,533
4.6%
5,600
4.9%
Indonesia
25
4,812
2.3%
1,500
1.0%
Sources: U.S. Department of State: Bureau of Arms Control, World Military Expenditures and
Arms Transfers: 1998, April 2000. International Institute for Strategic Studies, The Military
Balance 2001-2002, October 2001.
Notes: For information on a total of 167 countries and details on this data, see CRS Report RL30931,
Military Spending by Foreign Nations: Data from Selected Public Sources.
Military spending in this table is defined primarily by the NATO standard definition: cash outlays
of central governments to meet costs of national armed forces. This definition includes military
retired pay, which is excluded in the U.S. Office of Management and Budget’s definition of DOD
outlays. Therefore, the U.S. outlay numbers may be higher in this table than the reported DOD
outlay numbers in the rest of the report.

CRS-29
Part III: Definitions of Budget Terms2
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 an arbitrary reference year (e.g., Fiscal Year 2003 dollars), are determined
by dividing current dollars by a “deflator” based on the prices in the reference
year. Constant dollars are used to assess growth rates 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,
2For a complete glossary of defense budget terms, see CRS Report RL30002, A Defense
Budget Primer by (name redacted) and (name redacted).

CRS-30
FY2003 begins on October 1, 2002 and will end on September 30, 2003. (Note
that the federal fiscal year ran from July 1 to June 30 until FY1977.)
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 of 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.

EveryCRSReport.com
The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the
Library of Congress, charged with providing the United States Congress non-partisan advice on
issues that may come before Congress.
EveryCRSReport.com republishes CRS reports that are available to al Congressional staff. The
reports are not classified, and Members of Congress routinely make individual reports available to
the public.
Prior to our republication, we redacted names, phone numbers and email addresses of analysts
who produced the reports. We also added this page to the report. We have not intentional y made
any other changes to any report published on EveryCRSReport.com.
CRS reports, as a work of the United States government, are not subject to copyright protection in
the United States. Any CRS report may be reproduced and distributed in its entirety without
permission from CRS. However, as a CRS report may include copyrighted images or material from a
third party, you may need to obtain permission of the copyright holder if you wish to copy or
otherwise use copyrighted material.
Information in a CRS report should not be relied upon for purposes other than public
understanding of information that has been provided by CRS to members of Congress in
connection with CRS' institutional role.
EveryCRSReport.com is not a government website and is not affiliated with CRS. We do not claim
copyright on any CRS report we have republished.