Defense Budget for FY2003: Data 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.

Order Code RL31349 CRS Report for Congress Received through the CRS Web Defense Budget for FY2003: Data Summary March 29, 2002 Stephen Daggett Specialist in National Defense and Amy Belasco 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 defenserelated 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 Robert L. Goldich. 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 Robert L. Goldich. CRS Report RL31111, Missile Defense: the Current Debate, coordinated by Steven A. Hildreth and Amy F. Woolf. CRS Report RS20535, Navy Ship Procurement Rate and the Planned Size of the Navy: Background and Issues for Congress, by Ronald O'Rourke. CRS Report RS20643, Navy CVNX Aircraft Carrier Program: Background and Issues for Congress, by Ronald O'Rourke. CRS Report RS21059, Navy DD(X) Future Surface Combatant Program: Background and Issues for Congress, by Ronald O'Rourke. 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 Lawrence Kapp. CRS Issue Brief IB92115, Tactical Aircraft Modernization: Issues for Congress, by Christopher Bolkcom. CRS Report RL31187, Terrorism Funding: Congressional Debate on Emergency Supplemental Allocations, by Amy Belasco and Larry Q. Nowels. CRS Report RS21133, The Nuclear Posture Review: Overview and Emerging Issues, by Amy F. Woolf. CRS Issue Brief IB86103, V-22 Osprey Tilt-Rotor Aircraft, by Christopher Bolkcom. For an extensive discussion of the defense budget process, see CRS Report RL30002, A Defense Budget Primer, by Mary T. Tyszkiewicz and Stephen Daggett. 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) Fiscal Year: National Defense Budget Function Budget Authority Current year dollars Constant FY2002 dollars Real growth/decline Outlays Current year dollars Constant FY2003 dollars Real growth/decline Department of Defense Budget Authority Current year dollars Constant FY2003 dollars Real growth/decline Outlays Current year dollars Constant FY2003 dollars Real growth/decline Actual 1995 Actual 1996 Actual 1997 Actual 1998 Actual 1999 Actual 2000 Actual Estimate Request 2001 2002 2003 Proj. 2004 Proj. 2005 Proj. 2006 Proj. 2007 266.4 324.2 -0.9% 266.2 317.2 -2.2% 270.4 315.3 -0.6% 271.3 309.1 -2.0% 292.3 325.3 +5.2% 304.1 329.9 +1.4% 329.0 346.5 +5.0% 350.7 396.8 358.5 396.8 +3.5% +10.7% 405.6 396.1 -0.2% 426.6 406.5 +2.6% 447.7 416.2 +2.4% 469.8 426.1 +2.4% 271.0 329.1 -4.5% 265.2 315.5 -4.1% 270.4 313.8 -0.5% 268.4 304.8 -2.9% 274.9 306.3 +0.5% 294.5 319.5 +4.3% 308.5 324.9 +1.7% 348.0 355.2 +9.3% 379.0 379.0 +6.7% 393.8 384.5 +1.5% 413.5 394.2 +2.5% 428.5 398.4 +1.1% 442.5 401.1 +0.7% 255.7 311.3 -0.3% 254.6 303.3 -2.5% 258.0 300.8 -0.8% 258.6 294.6 -2.1% 278.6 310.0 +5.2% 290.5 315.1 +1.7% 313.0 329.6 +4.6% 333.0 378.6 340.4 378.6 +3.3% +11.2% 387.4 378.3 -0.1% 408.3 389.0 +2.8% 429.2 398.9 +2.5% 450.9 409.0 +2.5% 258.4 313.7 -4.4% 252.7 300.5 -4.2% 258.2 299.6 -0.3% 256.1 290.8 -2.9% 261.4 291.2 +0.2% 281.2 305.1 +4.8% 294.0 309.6 +1.5% 330.6 337.4 +9.0% 375.6 366.7 +1.6% 395.2 376.7 +2.7% 410.2 381.3 +1.2% 423.9 384.2 +0.8% 361.0 361.0 +7.0% 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) Fiscal Year: Actual 1995 Actual 1996 Department of Defense (military activities only) Military Personnel 71.6 69.8 Operation & Maintenance 93.8 93.7 Procurement 43.6 42.6 RDT&E 34.5 35.0 Military Construction 5.4 6.9 Family Housing 3.4 4.3 Other 3.4 2.4 Subtotal, Department of Defense 255.7 254.6 Department of Energy Atomic Energy Defense Activities 10.1 10.7 Other Agencies Defense-Related Activities 0.6 0.9 Total, National Defense 266.4 266.2 Actual 1997 Actual 1998 Actual 1999 Actual 2000 Actual Estimate Request 2001 2002 2003 70.3 92.4 43.0 36.4 5.7 4.1 6.1 258.0 69.8 97.2 44.8 37.1 5.5 3.8 0.3 258.6 70.6 105.0 51.1 38.3 5.4 3.6 4.6 278.6 73.8 108.8 55.0 38.7 5.1 3.5 5.6 290.5 76.9 117.7 62.6 41.7 5.5 3.7 4.9 313.0 82.0 129.8 61.1 48.6 6.6 4.1 0.9 333.0 11.4 11.7 12.6 12.4 14.4 1.0 1.0 1.1 1.2 270.4 271.3 292.3 304.1 Proj. Proj. 2004 Proj. 2005 Proj. 2006 2007 94.3 150.4 68.7 53.9 4.8 4.2 2.3 378.6 104.0 140.9 74.7 57.0 5.1 4.3 1.4 387.4 108.1 147.0 79.2 60.7 6.3 5.1 1.9 408.3 113.7 152.3 86.9 58.9 10.8 4.9 1.5 429.2 117.4 155.2 99.0 58.0 13.8 4.8 2.7 450.9 16.0 16.5 16.5 16.6 16.8 17.1 1.6 1.7 1.7 1.7 1.7 1.7 1.7 329.0 350.7 396.8 405.6 426.6 447.7 469.8 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) Fiscal Year: Actual 1995 Actual 1996 Department of Defense (military activities only) Military Personnel 70.8 66.7 Operation & Maintenance 90.9 88.7 Procurement 54.3 48.5 RDT&E 34.6 36.5 Military Construction 6.8 6.7 Family Housing 3.6 3.8 Other -2.6 1.8 Subtotal, DOD 258.4 252.7 Department of Energy Atomic Energy Defense Activities 11.8 11.6 Other Agencies Defense-Related Activities 0.8 0.9 Total, National Defense 271.0 265.2 Actual 1997 Actual 1998 Actual 1999 Actual 2000 Actual Estimate Request 2001 2002 2003 Proj. 2004 Proj. 2005 Proj. 2006 Proj. 2007 69.7 92.4 47.6 37.0 6.2 4.0 1.2 258.2 69.0 93.5 48.2 37.4 6.0 3.9 -1.9 256.1 69.5 96.4 48.8 37.4 5.5 3.7 0.1 261.4 76.0 105.9 51.7 37.6 5.1 3.4 1.6 281.2 74.0 114.0 55.0 40.6 5.0 3.5 1.9 294.0 81.2 133.6 59.6 45.1 5.7 3.8 1.7 330.6 92.8 143.5 62.3 50.8 6.0 3.9 1.7 361.0 102.1 146.2 65.3 52.3 4.7 3.9 1.1 375.6 107.1 147.0 75.0 56.2 4.5 4.0 1.3 395.2 112.8 146.8 81.8 57.6 5.5 4.4 1.4 410.2 116.6 147.9 87.6 57.4 7.8 4.4 2.1 423.9 11.3 11.3 12.4 12.2 13.0 15.9 16.3 16.5 16.6 16.7 16.9 0.9 1.1 1.1 1.1 1.5 1.6 1.7 1.7 1.7 1.7 1.7 270.4 268.4 274.9 294.5 308.5 348.0 379.0 393.8 413.5 428.5 442.5 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 1995 Army 63.3 % of DOD Total 24.8% Navy/Marine Corps 76.9 % of DOD Total 30.1% Air Force 73.9 % of DOD Total 28.9% Defense Wide 41.6 % of DOD Total 16.3% DOD Total 255.7 Fiscal Year: Actual 1996 64.5 25.4% 80.0 31.4% 73.0 28.7% 37.0 14.5% 254.4 Actual 1997 64.4 25.0% 79.5 30.8% 73.2 28.4% 40.8 15.8% 258.0 Actual 1998 64.0 24.8% 80.7 31.2% 76.3 29.5% 37.6 14.5% 258.6 Actual 1999 68.4 24.5% 84.0 30.2% 81.9 29.4% 44.3 15.9% 278.6 Actual 2000 73.2 25.2% 88.8 30.6% 83.1 28.6% 45.5 15.7% 290.5 Actual 2001 77.0 24.9% 95.5 30.8% 89.5 28.9% 47.9 15.4% 309.9 Est. 2002 80.8 24.5% 98.6 29.9% 94.2 28.6% 56.2 17.0% 329.9 Proj. 2003 90.8 24.0% 108.2 28.6% 106.9 28.2% 72.7 19.2% 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 28.6% Army 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) Budget Authority Military Personnel Operations & Maintenance Procurement Research, Development, Test, & Evaluation Military Construction Family Housing Stock Funds Allied Cash Contributions Total Budget Authority Outlays Military Personnel Operations & Maintenance Procurement Research, Development, Test, & Evaluation Military Construction Family Housing Stock Funds Allied Cash Contributions Total Outlays FY1990 FY1991 FY1992 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 Total 281 1,328 10 5,824 24,366 5,278 2,409 8,132 1,950 – – – – – – – – – – – – – – – – – – 8,514 33,826 7,238 9 – – 400 – 2,028 69 35 – 271 -43,154 -7,311 106 – – – -5,240 7,357 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 184 35 0 671 -48,394 2,074 267 1,033 1 5,382 16,212 -152 2,734 11,152 2,154 114 3,974 2,619 – 1,142 1,369 – 147 729 – 51 378 – 21 44 – 4 17 8,497 33,736 7,159 5 – – 156 – 1,462 40 10 – -1,778 -43,154 -23,440 76 13 – 1,348 -5,240 12,237 45 7 – 429 – 7,188 11 2 – 259 – 2,783 4 2 – 166 – 1,048 1 1 – 79 – 510 – – – 11 – 76 – – – – – 21 182 35 0 670 -48,394 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) Fiscal Year Military Personnel Operation and Maintenance Procurement RDT&E Military Construction Family Housing Other Subtotal, Department of Defense Dept. of Energy Defense-Related Other Defense-Related Total, National Defense Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual 1976 1980 1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 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 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 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 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 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 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 -0.5 1.1 7.0 -1.0 1.5 4.6 3.5 3.6 3.8 2.7 6.6 0.4 4.8 300.2 310.6 461.7 402.6 376.5 357.2 339.2 312.2 311.3 303.3 300.8 294.6 310.0 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 0.5 0.5 0.8 0.8 1.5 1.3 2.3 1.3 0.7 1.1 1.2 1.2 1.3 306.0 317.6 474.3 416.8 393.3 374.0 356.8 327.0 324.2 317.2 315.3 309.1 325.3 CRS-13 Table 6. – continued (constant FY2003 dollars in billions) Fiscal Year Military Personnel Operation and Maintenance Procurement RDT&E Military Construction Family Housing Other Subtotal, Department of Defense Dept. of Energy Defense-Related Other Defense-Related Total, National Defense Actual 2000 83.2 118.5 57.7 40.8 5.4 3.7 5.8 315.1 13.5 1.3 329.9 Actual 2001 83.9 123.3 64.7 43.2 5.7 3.8 5.0 329.6 15.2 1.7 346.5 Est. 2002 84.8 132.4 62.1 49.3 6.7 4.1 0.9 340.4 16.4 1.8 358.5 Proj. 2003 94.3 150.4 68.7 53.9 4.8 4.2 2.3 378.6 16.5 1.7 396.8 Proj. 2004 100.9 137.4 73.4 56.0 5.0 4.2 1.3 378.3 16.1 1.7 396.1 Proj. 2005 101.7 139.7 76.4 58.5 6.1 4.9 1.8 389.0 15.8 1.6 406.5 Proj. 2006 103.7 141.0 82.2 55.6 10.2 4.6 1.5 398.9 15.7 1.6 416.2 Proj. 2007 103.9 139.8 91.9 53.7 12.7 4.5 2.5 409.0 15.5 1.6 426.1 Real Real Real Real Growth/ Growth/ Growth/ Growth/ Decline Decline Decline Decline FY76-85 FY85-90 FY90-98 FY98-03 +5% 0% -31% +11% +49% -4% -9% +36% +136% -29% -52% +42% +79% -2% -14% +34% +36% -23% -8% -20% +20% -7% +3% +2% NA NA NA NA +54% -13% -27% +29% +123% +13% -0% +23% +76% +4% +37% +49% +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 2000 Air Force Marine Corps 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) Fiscal Year: Army Navy Marine Corps Air Force Total Active Selected Reserves Total Civilians (FTEs) Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual 1981 1985 1987 1989 1991 1993 1995 1997 1999 2000 2001 781 781 781 770 725 572 509 492 479 482 481 540 571 587 593 571 510 435 396 373 373 378 191 198 200 197 195 178 174 174 173 173 173 570 602 607 571 511 444 400 378 361 356 354 2,082 2,151 2,174 2,130 2,002 1,705 1,518 1,440 1,386 1,384 1,385 851 1,188 1,151 1,171 1,138 1,058 946 902 877 865 869 947 1,029 1,032 1,023 969 932 822 746 681 660 650 Est. 2002 480 376 173 359 1,387 864 635 Proj. 2003 480 376 175 359 1,390 865 627 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 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1,459 3,249 3,636 3,555 3,302 2,935 2,806 2,795 2,600 2,504 2,475 2,483 2,808 2,700 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 2,688 2,656 3,094 3,377 3,548 3,460 3,065 2,714 2,322 2,252 2,161 2,127 2,081 2,073 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 2,061 2,024 2,050 2,082 2,108 2,123 2,138 2,151 2,169 2,174 2,138 2,130 2,069 2,002 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1,808 1,705 1,610 1,518 1,472 1,440 1,406 1,386 1,384 1,385 1,387 1,390 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 Fiscal Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Army Divisions Active Reserve 16 8 16 8 16 8 16 8 16 9 17 10 18 10 18 10 18 10 18 10 18 10 16 10 14 10 14 10 12 8 12 8 10 8 10 8 10 8 10 8 10 8 10 8 10 8 10 8 Marine Divisions Active Reserve 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 Naval Forces Carriersb Total Ships 13 477 13 491 14 513 14 514 14 524 14 542 14 556 15 569 15 566 15 567 15 546 15 526 14 466 13 434 12 387 11+1 373 11+1 365 11+1 357 11+1 333 11+1 317 11+1 316 11+1 316 11+1 315 11+1 308 Air Force Tactical Wingsa Active Reserve 26 11 26 11 26 12 25 12 25 12 25 12 25 12 25 12 25 12 25 12 24 12 22 13 16 13 16 11 13 9 13 8 13 7 13 7 13 7 13 7.2 13 7.6 12.6 7.6 12+ 7+ 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 Dianne E. Rennack, 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 Dianne E. Rennack, 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 Fiscal Year 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 Current Dollars – – – – – 39.2 44.0 9.0 9.5 10.9 16.5 57.8 67.5 56.9 38.7 32.9 35.0 39.4 40.1 45.1 44.3 45.1 50.2 52.1 51.6 50.6 64.4 73.1 77.2 78.5 75.3 72.7 76.4 79.1 81.5 86.2 97.3 110.2 117.2 126.5 143.9 180.0 216.5 245.0 265.2 294.7 289.1 Constant FY2003 Dollars – – – – – 612.9 558.1 115.5 108.8 127.8 175.8 470.5 570.4 497.0 361.2 306.8 306.4 329.4 318.5 335.7 324.8 328.2 359.1 364.9 348.4 333.5 387.7 423.1 430.5 420.5 380.9 347.4 333.8 318.8 302.4 292.1 306.1 318.3 313.9 312.3 317.8 354.7 393.3 425.5 445.0 474.3 455.6 Outlays Real Growth/ Decline Current Dollars Constant FY2003 Dollars Real Growth/ Decline – – – – – – -8.9% -79.3% -5.8% +17.5% +37.5% +167.7% +21.2% -12.9% -27.3% -15.1% -0.1% +7.5% -3.3% +5.4% -3.2% +1.0% +9.4% +1.6% -4.5% -4.3% +16.3% +9.1% +1.7% -2.3% -9.4% -8.8% -3.9% -4.5% -5.2% -3.4% +4.8% +4.0% -1.4% -0.5% +1.7% +11.6% +10.9% +8.2% +4.6% +6.6% -4.0% 1.7 6.4 25.7 66.7 79.1 83.0 42.7 12.8 9.1 13.2 13.7 23.6 46.1 52.8 49.3 42.7 42.5 45.4 46.8 49.0 48.1 49.6 52.3 53.4 54.8 50.6 58.1 71.4 81.9 82.5 81.7 78.9 79.2 76.7 79.3 86.5 89.6 97.2 104.5 116.3 134.0 157.5 185.3 209.9 227.4 252.7 273.4 26.2 97.0 352.8 844.3 1,031.9 1,118.3 574.2 157.3 107.7 149.1 154.6 237.6 423.7 469.9 447.0 385.3 364.1 368.9 360.4 360.2 353.1 352.5 372.8 377.1 373.3 341.6 365.2 422.1 460.0 448.6 416.2 379.6 351.9 320.8 307.2 300.1 290.6 293.0 293.3 302.4 310.2 324.5 347.0 374.8 390.0 414.5 436.0 – +269.8% +263.6% +139.3% +22.2% +8.4% -48.7% -72.6% -31.5% +38.4% +3.7% +53.7% +78.3% +10.9% -4.9% -13.8% -5.5% +1.3% -2.3% 0.0% -2.0% -0.2% +5.8% +1.2% -1.0% -8.5% +6.9% +15.6% +9.0% -2.5% -7.2% -8.8% -7.3% -8.8% -4.3% -2.3% -3.2% +0.8% +0.1% +3.1% +2.6% +4.6% +6.9% +8.0% +4.1% +6.3% +5.2% CRS-19 Budget Authority Fiscal Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Current Dollars 287.4 292.0 299.6 301.2 296.2 287.7 281.1 263.3 266.4 266.2 270.4 271.3 292.3 304.1 329.0 350.7 396.8 405.6 426.6 447.7 469.8 Constant FY2003 Dollars 440.9 432.2 426.7 416.8 393.3 374.0 356.8 327.0 324.2 317.2 315.3 309.1 325.3 329.9 346.5 358.5 396.8 396.1 406.5 416.2 427.5 Real Growth/ Decline -3.2% -2.0% -1.3% -2.3% -5.6% -4.9% -4.6% -8.3% -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 Dollars 282.0 290.4 303.6 297.9 296.7 286.1 283.9 278.9 271.0 265.2 270.4 268.4 274.9 294.5 308.5 348.0 379.0 393.8 413.5 428.5 442.5 Constant FY2003 Dollars 437.4 435.8 437.1 416.8 397.9 372.3 359.0 344.4 329.1 315.5 313.8 304.8 306.3 319.5 324.9 355.2 379.0 384.5 394.2 398.4 401.1 Real Growth/ Decline +0.3% -0.4% +0.3% -4.6% -4.5% -6.5% -3.5% -4.1% -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% 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) Fiscal Year 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 National Defense Outlays 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.6 7.1 13.5 4.0 2.6 0.9 0.7 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.6 0.5 0.7 0.9 0.9 1.0 1.1 1.7 6.4 25.7 66.7 79.1 134.0 157.5 185.3 209.9 227.4 252.7 273.4 282.0 290.4 303.6 Outlays GNP/ as % of Fiscal GDP GNP/GDP Year 35.3 0.8% 1945 35.8 0.8% 1946 39.4 0.7% 1947 39.6 0.7% 1948 38.6 0.8% 1949 40.0 0.7% 1950 48.3 0.6% 1951 60.4 1.0% 1952 76.4 9.3% 1953 84.0 16.1% 1954 91.5 4.4% 1955 69.6 3.7% 1956 74.1 1.3% 1957 85.1 0.8% 1958 84.7 0.8% 1959 93.1 0.6% 1960 97.0 0.6% 1961 94.9 0.6% 1962 97.0 0.7% 1963 103.1 0.7% 1964 97.4 0.8% 1965 83.7 0.9% 1966 67.5 1.0% 1967 57.4 1.1% 1968 61.2 0.9% 1969 69.7 1.0% 1970 78.5 1.2% 1971 87.8 1.1% 1972 89.0 1.2% 1973 89.0 1.2% 1974 96.7 1.7% 1975 114.0 5.6% 1976 144.2 17.8% 1977 180.1 37.0% 1978 209.0 37.9% 1979 2,732.1 4.9% 1995 3,061.6 5.1% 1996 3,228.6 5.7% 1997 3,440.5 6.1% 1998 3,839.4 5.9% 1999 4,136.6 6.1% 2000 4,401.4 6.2% 2001 4,647.0 6.1% 2002 5,014.7 5.8% 2003 9,824.4 3.1% 2004 National Defense Outlays 83.0 42.7 12.8 9.1 13.2 13.7 23.6 46.1 52.8 49.3 42.7 42.5 45.4 46.8 49.0 48.1 49.6 52.3 53.4 54.8 50.6 58.1 71.4 81.9 82.5 81.7 78.9 79.2 76.7 79.3 86.5 89.6 97.2 104.5 116.3 272.1 265.8 270.5 268.5 274.9 294.5 308.5 348.0 379.0 393.8 Outlays GNP/ as % of GDP GNP/GDP 221.3 37.5% 222.7 19.2% 234.6 5.5% 256.4 3.6% 271.5 4.8% 273.4 5.0% 321.0 7.3% 348.8 13.2% 373.4 14.1% 378.0 13.0% 395.2 10.8% 427.7 9.9% 450.7 10.1% 461.1 10.2% 492.1 10.0% 518.9 9.3% 531.8 9.3% 568.5 9.2% 599.7 8.9% 641.3 8.5% 687.9 7.4% 754.2 7.7% 813.5 8.8% 868.4 9.4% 949.2 8.7% 1,013.2 8.1% 1,081.4 7.3% 1,181.5 6.7% 1,308.1 5.9% 1,442.1 5.5% 1,559.8 5.5% 1,736.7 5.7% 1,971.3 5.6% 2,218.6 5.3% 2,503.8 5.2% 7,324.0 3.7% 7,694.6 3.5% 8,185.2 3.3% 8,663.9 3.1% 9,124.3 3.0% 9,744.3 3.0% 10,150.5 3.0% 10,361.6 3.4% 10,922.3 3.5% 11,525.8 3.4% CRS-21 Fiscal Year 1990 1991 1992 1993 1994 National Defense Outlays 299.3 273.3 298.4 291.1 281.6 Outlays GNP/ as % of GDP GNP/GDP 5,735.6 5.2% 5,930.4 4.6% 6,218.6 4.8% 6,558.4 4.4% 6,944.6 4.1% Fiscal Year 2005 2006 2007 National Outlays Defense GNP/ as % of Outlays GDP GNP/GDP 413.5 12,158.9 3.4% 428.5 12,803.3 3.3% 442.5 13,448.0 3.3% 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 Outlays 100 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) Fiscal Year 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Defense Discretionary Outlays 52.6 53.7 55.0 51.0 59.0 72.0 82.2 82.7 81.9 79.0 79.3 77.1 80.7 87.6 89.9 97.5 104.6 116.8 134.6 158.0 185.9 209.9 228.0 253.1 273.8 282.5 290.9 304.0 300.1 319.7 302.6 292.4 282.3 273.6 266.0 271.7 270.2 275.5 295.0 309.1 348.0 379.0 393.7 413.4 428.5 442.5 Non-Defense Discretionary Outlays 19.5 21.6 24.1 26.8 31.1 34.5 35.8 34.6 38.3 43.5 49.2 53.3 57.5 70.3 85.7 99.6 114.1 123.2 141.7 149.9 140.0 143.4 151.4 162.7 164.7 161.7 173.5 184.8 200.4 213.6 231.2 247.0 259.1 271.3 266.7 275.6 281.9 296.5 319.9 348.3 392.5 410.0 421.3 424.9 429.3 437.5 Mandatory Outlays 27.9 28.3 31.2 31.8 35.0 40.7 49.1 53.6 61.0 72.8 86.7 98.0 109.7 151.1 169.5 182.2 204.6 221.4 262.1 301.6 334.8 365.2 361.3 401.1 415.9 421.3 448.2 485.8 568.2 596.6 648.5 671.4 717.5 738.8 786.8 810.0 859.4 900.2 951.0 1,000.3 1,133.4 1,158.6 1,185.3 1,248.3 1,322.9 1,402.4 Net Interest 6.9 7.7 8.2 8.6 9.4 10.3 11.1 12.7 14.4 14.8 15.5 17.3 21.4 23.2 26.7 29.9 35.5 42.6 52.5 68.8 85.0 89.8 111.1 129.5 136.0 138.7 151.8 169.0 184.4 194.5 199.4 198.7 203.0 232.2 241.1 244.0 241.2 229.8 223.0 206.2 178.4 180.7 188.8 190.2 188.3 185.3 Total Federal Outlays 106.8 111.3 118.5 118.2 134.5 157.5 178.1 183.6 195.6 210.2 230.7 245.7 269.4 332.3 371.8 409.2 458.7 504.0 590.9 678.2 745.8 808.4 851.9 946.4 990.5 1,004.1 1,064.5 1,143.7 1,253.2 1,324.4 1,381.7 1,409.5 1,461.9 1,515.8 1,560.6 1,601.3 1,652.6 1,701.9 1,788.8 1,863.9 2,052.3 2,128.2 2,189.1 2,276.9 2,369.1 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) Fiscal Year 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Defense Non-Defense Discretionary Discretionary Outlays Outlays 49.3 48.2 46.4 43.1 43.9 45.7 46.2 45.0 41.9 37.6 34.4 31.4 30.0 26.4 24.2 23.8 22.8 23.2 22.8 23.3 24.9 26.0 26.8 26.7 27.6 28.1 27.3 26.6 23.9 24.1 21.9 20.7 19.3 18.0 17.0 17.0 16.3 16.2 16.5 16.6 17.0 17.8 18.0 18.2 18.1 17.9 18.3 19.4 20.3 22.7 23.1 21.9 20.1 18.8 19.6 20.7 21.3 21.7 21.3 21.2 23.1 24.3 24.9 24.4 24.0 22.1 18.8 17.7 17.8 17.2 16.6 16.1 16.3 16.2 16.0 16.1 16.7 17.5 17.7 17.9 17.1 17.2 17.1 17.4 17.9 18.7 19.1 19.3 19.2 18.7 18.1 17.7 Mandatory Outlays 26.1 25.4 26.3 26.9 26.0 25.8 27.6 29.2 31.2 34.6 37.6 39.9 40.7 45.5 45.6 44.5 44.6 43.9 44.4 44.5 44.9 45.2 42.4 42.4 42.0 42.0 42.1 42.5 45.3 45.0 46.9 47.6 49.1 48.7 50.4 50.6 52.0 52.9 53.2 53.7 55.2 54.4 54.1 54.8 55.8 56.8 Net Interest 6.5 6.9 6.9 7.3 7.0 6.5 6.2 6.9 7.4 7.0 6.7 7.0 7.9 7.0 7.2 7.3 7.7 8.5 8.9 10.1 11.4 11.1 13.0 13.7 13.7 13.8 14.3 14.8 14.7 14.7 14.4 14.1 13.9 15.3 15.4 15.2 14.6 13.5 12.5 11.1 8.7 8.5 8.6 8.4 7.9 7.5 Defense Share Discretionary 73.0 71.3 69.5 65.6 65.5 67.6 69.7 70.5 68.1 64.5 61.7 59.1 58.4 55.4 51.2 49.5 47.8 48.7 48.7 51.3 57.0 59.4 60.1 60.9 62.4 63.6 62.6 62.2 59.9 59.9 56.7 54.2 52.1 50.2 49.9 49.7 48.9 48.2 48.0 47.0 47.0 48.0 48.3 49.3 50.0 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 Mandatory Non-Defense Discretionary Defense Discretionary 2,000 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 FY1988, 1/87 FY1989, 2/88 Reagan FY1990 Bush FY1990 FY1991, 1/90 FY1992, 2/91 FY1993, 1/92 FY1994, 3/93 FY1995, 2/94 FY1996, 2/95 FY1997, 3/96 FY1998, 2/97 FY1999, 2/98 FY2000, 2/99 FY2001, 2/00 FY2002, 6/01 FY2003, 2/02 312 282 279 279 279 279 279 279 279 279 279 279 279 279 279 279 279 279 332 303 283 284 284 284 284 284 284 284 284 284 284 284 284 284 284 284 354 323 291 290 290 290 291 291 291 291 291 291 291 291 291 291 291 291 375 344 307 306 296 289 291 291 291 291 291 291 291 293 293 293 293 293 396 365 324 321 311 295 280 298 284 284 284 284 284 276 276 276 276 276 387 342 336 322 300 278 269 275 275 275 275 275 282 282 282 282 282 360 351 336 304 278 268 259 267 267 267 267 267 267 267 267 267 366 350 308 278 268 251 249 251 251 251 251 251 251 251 251 312 281 270 248 252 253 256 256 256 256 256 256 256 283 270 240 243 246 252 252 254 254 254 254 255 287 275 233 240 243 243 250 258 258 258 258 258 241 247 248 248 251 255 259 259 259 259 253 256 254 256 257 263 278 278 279 266 262 263 263 267 280 280 290 277 270 270 271 286 291 301 313 277 277 274 288 295 328 333 284 299 301 337 379 308 308 346 387 319 316 356 408 366 429 451 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: Country United States China — Mainland Russia France Japan United Kingdom Germany Italy Saudi Arabia Korea, South Brazil China — Taiwan India Israel Australia Canada Turkey Spain Netherlands Korea, North Singapore Poland Sweden Greece Indonesia Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 US Dept. of State: WMEAT 1998 Defense Expenditures % (1997 data) GDP 276,300 3.3% 74,910 2.2% 41,730 5.8% 41,520 3.0% 40,840 1.0% 35,290 2.8% 32,870 1.6% 22,720 2.0% 21,150 14.4% 15,020 3.4% 14,150 1.8% 13,060 4.6% 10,850 2.8% 9,335 9.7% 8,463 2.2% 7,800 1.3% 7,792 4.0% 7,670 1.5% 6,839 1.9% 6,000 27.5% 5,664 5.7% 5,598 2.3% 5,550 2.5% 5,533 4.6% 4,812 2.3% Military Balance 2001-2002 Defense Expenditures (2000 data) 291,200 42,000 60,000 35,000 45,600 34,600 28,800 21,000 18,700 12,800 17,900 17,600 14,700 9,500 7,100 8,100 10,800 7,200 6,500 2,100 4,800 3,300 5,300 5,600 1,500 % GDP 3.0% 5.4% 5.0% 2.6% 1.0% 2.4% 1.6% 2.0% 10.1% 2.8% 2.8% 5.6% 3.1% 8.9% 1.9% 1.2% 5.2% 1.3% 1.9% 13.9% 4.9% 2.0% 2.2% 4.9% 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, inflationadjusted 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, 2 For a complete glossary of defense budget terms, see CRS Report RL30002, A Defense Budget Primer by Mary T. Tyszkiewicz and Stephen Daggett. 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 all Congressional staff. The reports are not classified, and Members of Congress routinely make individual reports available to the public. 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