FY2005 Defense Budget: Frequently Asked Questions

FY2005 Defense Budget: Frequently Asked Questions

Order Code RL32468
CRS Report for Congress
Received through the CRS Web
FY2005 Defense Budget:
Frequently Asked Questions
July 12, 2004
name redacted
Analyst in National Defense
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

FY2005 Defense Budget:
Frequently Asked Questions
Summary
This report is designed to provide facts and figures about the United States
defense budget in order to help answer frequently asked questions about defense
spending. The answers to these questions are based on analysis of recent and
historical trends in the defense budget up to and including the fiscal year (FY) 2005
budget request.
Using figures taken primarily from the White House Office of Management and
Budget’s (OMB’s) Budget of the United States Government, Fiscal Year 2005:
Historical Tables (February 2004), this report answers frequently asked questions
that fall within four categories:
(1) trends in defense spending over time, from World War II through OMB’s
FY2009 budget projections (questions 1, 2, 3, and 4);
(2) the impact of defense on the economy (questions 5, 6, and 7);
(3) costs of wars and supplemental appropriations (questions 8 and 9);
(4) trends in force structure (questions 10, 11, and 12).
The fifth section of the report consists of additional, more general budget data
tables and a glossary of frequently used budget terms.
This report will be updated as necessary.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Key Budget Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Budget Authority, Obligations, and Outlays . . . . . . . . . . . . . . . . . . . . . 2
The “050” vs. the “051” Budget Function . . . . . . . . . . . . . . . . . . . . . . . 2
Current and Constant Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Discretionary and Mandatory Spending . . . . . . . . . . . . . . . . . . . . . . . . . 3
Part I: Trends in Defense Spending Over Time . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Question 1: What Are the Recent, Historic, and Projected Trends in
Budget Authority and Outlays for National Defense? . . . . . . . . . . . . . . 3
Question 2: What Are the Recent Trends in Budget Authority for
Each Defense Appropriations Title? . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Question 3: What Are the Historical Trends in Defense’s Share of
Total Federal Outlays? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Question 4: What Are the Historical Trends in Defense’s Share of
Total Federal Discretionary Outlays? . . . . . . . . . . . . . . . . . . . . . . . . . 13
Part II: The Impact of Defense on the Economy . . . . . . . . . . . . . . . . . . . . . . . . . 14
Question 5: What Are the Historical Trends in U.S. Defense Outlays
as a Percentage of Gross Domestic Product (GDP)? . . . . . . . . . . . . . . 14
Question 6: What Are the Historical Trends in Different Categories of
Federal Spending as a Percentage of GDP? . . . . . . . . . . . . . . . . . . . . . 15
Question 7: How Do U.S. Defense Outlays Compare to Those of
Other Countries, Both in Dollars and as a Percentage of GDP? . . . . . 16
Part III: Costs of Wars and Defense Supplementals . . . . . . . . . . . . . . . . . . . . . . 17
Question 8: How Much Has Congress Enacted in Defense Supplemental
Appropriations since September 11, 2001? . . . . . . . . . . . . . . . . . . . . . 17
Question 9: How Much Has Each Major War in the History of the
United States Cost? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Part IV: Trends in Force Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Question 10: What Have Been the Recent Trends in U.S. Military
Personnel Levels? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Question 11: What Are the Recent Trends in U.S. Military Force
Structure? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Question 12: How Much Budget Authority Has Been Provided to
Each Service in Recent Years? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Part V: Appendix and Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
CRS Defense Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

List of Figures
Figure 1. National Defense Budget Authority and Outlays, FY1947-FY2009 . . . 3
Figure 2. National Defense Budget Authority and Outlays, FY1997-FY2009 . . . 4
Figure 3. Department of Defense Budget Authority by Appropriations Title,
FY1976-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Figure 4. Shares of Total Federal Outlays by Type of Spending,
FY1962-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Figure 5. Defense and Non-Defense Discretionary Outlays as a Share of
Total Federal Discretionary Outlays, FY1962-FY2009 . . . . . . . . . . . . . . . . 13
Figure 6. GDP and Defense’s Share of GDP, FY1962-FY2005 . . . . . . . . . . . . 14
Figure 7. Federal Spending by Category as a Percentage of GDP,
FY1962-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 8. Regular and Supplemental Defense Appropriations,
FY2001-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Figure 9. Active Duty and Selected Reserve End-Strength, Selected Years,
FY1989-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Figure 10. Department of Defense Budget Authority by Service,
FY2005 Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
List of Tables
Table 1. National Defense Budget Function and Department of Defense Budget,
FY1997-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 2. National Defense Budget Function Trends by Appropriations Title,
Budget Authority, FY1997-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 3. National Defense Budget Function by Appropriations Title,
Budget Authority, Selected Years, FY1976-FY2005 . . . . . . . . . . . . . . . . . 10
Table 4. National Defense Budget Function Outlays by
Appropriations Title, FY1997-2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 5. Defense Spending of Top 25 Countries . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 6. Regular and Supplemental Appropriations for the National Defense
Budget Function, FY2001-2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Table 7. Costs of Major U.S. Wars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table 8. Department of Defense Personnel Levels, Selected Years . . . . . . . . . . 22
Table 9. U.S. Military Force Structure, FY1980-2005 . . . . . . . . . . . . . . . . . . . . 23
Table 10. Department of Defense Budget Authority by Service,
FY1995-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 11. Real Growth/Decline in National Defense Budget Authority and
Outlays, FY1940-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Table 12. National Defense Outlays as a Percentage of GDP,
FY1910-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table 13. Allocation of Federal Outlays by Budget Enforcement Act
Category, FY1962-FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Table 14. Percentage Allocation of Federal Outlays by
Budget Enforcement Act Category, FY1962-FY2009 . . . . . . . . . . . . . . . . . 30

FY2005 Defense Budget:
Frequently Asked Questions
Introduction

This report is designed to answer Congress’s most frequently asked questions
and provide essential facts and figures about the defense budget. It includes figures
from the president’s fiscal year (FY) 2005 budget request and provides brief analyses
of recent and historical trends in the defense budget.
Each frequently asked question about the defense budget falls within one of the
following four sections in this report:
(1) trends in defense spending over time, from World War II through OMB’s
FY2009 budget projections (questions 1, 2, 3, and 4);
(2) the impact of defense on the economy (questions 5, 6, and 7);
(3) costs of wars and supplemental appropriations (questions 8 and 9);
(4) trends in force structure (questions 10, 11, and 12);
The fifth section of the report consists of additional data tables with historical
budget authority and outlay figures, and a glossary of frequently used budget terms.
Most of the figures used in this report are taken from annual budget documents
prepared by the Office of Management and Budget (OMB).1 It is important to note
that OMB figures for budget authority and outlays through FY2004 include both
regular and supplemental appropriations. As a result, budget authority and outlay
totals for FY2003 and FY2004, which included significant supplemental
appropriations, are sometimes larger than totals for FY2005, which represent the
president’s FY2005 request and do not include any FY2005 supplemental
appropriations. In addition, please note that the budget authority and estimated
outlay figures for the president’s FY2005 request include the $25 billion budget
amendment for Iraq and Afghanistan submitted by the president to Congress on May
12, 2004. Outlay estimates provided by the Congressional Budget Office (CBO) for
the $25 billion amendment are added to OMB outlay projections for FY2006-
FY2009 included in this report.
Please note as well that all figures provided for FY2006 through FY2009 in this
report are either OMB, CBO, or Department of Defense projections, and represent
neither congressional appropriations nor the President’s request.
1Most figures are from the Office of Management and Budget, Budget of the United States
Government, Fiscal Year 2005: Historical Tables, February 2004.

CRS-2
Key Budget Terminology
The federal budget has its own unique vocabulary, a basic understanding of
which is essential to understand the significance of defense budget figures and trends.
The following budget terms, which will be used often in this report, are frequently
used, yet sometimes misunderstood.
Budget Authority, Obligations, and Outlays. When Congress
appropriates money, it provides agencies with “budget authority.” Budget authority
gives an agency the legal authority to obligate money for the provision of goods or
services. Appropriations are the most common, but not the only, type of budget
authority.2
Obligations then occur, for example, when agencies enter into contracts, submit
purchase orders, and employ personnel. When those obligations are liquidated — or
in simpler terms, when the “check is written” and the performance of an obligation
is paid for — outlays occur.
The term “defense spending” technically refers to outlays, although budget
authority and outlays are frequently confused in budget discussions.
The “050” vs. the “051” Budget Function. The federal budget is divided
into several functions, including the National Defense Budget Function, or “050”
function. The 050 function consists of three sub-functions — Department of Defense
(051), atomic energy defense activities (053), and defense-related activities in other
agencies (054).
Thus, “national defense” spending consists of more than just the Department of
Defense’s annual expenditures. Although the majority of the 050 function consists
of the Department of Defense (051) function, the 050 function also consists of
billions of dollars ($16.75 billion in FY2004) appropriated to the Department of
Energy for atomic energy defense activities.
This report contains figures for both the 050 and 051 functions, depending on
which is most useful to the reader.
Current and Constant Dollars. The cost of goods or services in current
dollars is the value of such goods or services in terms of prices current at the time of
purchase. For example, FY1985 national defense outlays in current dollars represent
the amount spent on national defense in FY1985 according to what the dollar was
worth in FY1985. Current dollars may also be referred to as “then-year” dollars.
The cost of goods or services in constant dollars is the value adjusted to
eliminate the effects of changes in prices (usually due to inflation). Constant dollars,
expressed in terms of a particular reference year (normally the current budget year),
2Other types include borrowing authority and contract authority — for further explanation
of these terms, see Allen Schick, The Federal Budget: Politics, Policy, Process
(Washington, D.C.: Brookings Institution Press, 2000).

CRS-3
are determined by dividing current dollars by a deflator based on the prices in the
reference year.
Constant dollars are used to measure the growth rates of programs over time
independently of the effects of inflation. For this reason, figures in this report
measuring trends in the defense budget use constant-dollar figures.
Discretionary and Mandatory Spending. Within the federal budget,
budget authority is classified as either discretionary or mandatory. Generally, budget
authority is discretionary if provided by Congress in appropriations acts and
mandatory if provided in permanent authorizing law (examples include Social
Security, Medicare, and federal employee retirement). However, a portion of
mandatory budget authority, including Medicaid and certain veterans’ programs, is
funded in annual appropriations acts.
Discretionary budget authority must be renewed annually, while most mandatory
budget authority is available automatically each year without legislative action by
Congress. Outlays are also classified as discretionary or mandatory according to the
classification of the budget authority from which they flow.
Part I: Trends in Defense Spending Over Time
The following section (questions 1, 2, 3, and 4) provides figures and an analysis
of trends in defense spending over time.
Question 1: What Are the Recent, Historic, and Projected
Trends in Budget Authority and Outlays for National
Defense?
Figure 1. National Defense Budget
Authority and Outlays, FY1947-FY2009
(constant FY2005 dollars in billions)
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2005: Historical Tables, February 2004, pp. 53-58, 82-85, [http://www.whitehouse.gov/omb/budget/
fy2005/pdf/hist.pdf]. Figures for FY2006-FY2009 are projected; CBO estimated outlays for the $25
billion budget amendment for Iraq and Afghanistan are included in FY2005-FY2009 outlay figures.

CRS-4
Figure 1 shows the pattern of budget authority and outlays since World War II.
Since 1947, there have been four periods of significant increases in budget authority
and outlays — the Korean War, the Vietnam War, the Reagan era military build-up,
and the post-9/11 defense spending increases. Each period to date has been followed
by a period of significant decreases in budget authority and outlays.
Following the end of the Cold War and the disappearance of the Soviet threat,
some observers believed that this cyclical pattern in budget authority and outlays
would end with a long, or even permanent, decline in defense spending.3 However,
the events of September 11, 2001, and the subsequent wars in Afghanistan, Iraq, and
the ongoing Global War on Terrorism ended the decline in budget authority and
outlays that had continued through most of the 1990s.
Figure 2 shows recent trends in budget authority and outlays from FY1997
through projected totals for FY2009. Table 1, below, shows budget authority and
outlays in current and constant FY2005 dollars for both the national defense budget
function (the “050” function) and the Department of Defense budget (the “051”
function) from FY1997 through FY2009.
Figure 2. National Defense Budget
Authority and Outlays, FY1997-FY2009
(constant FY2005 dollars in billions)
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2005: Historical Tables, February 2004, pp. 58-59, 84-85, [http://www.whitehouse.gov/omb/budget/
fy2005/pdf/hist.pdf]. Figures for FY2006-FY2009 are projected; CBO outlay estimates for the $25
billion budget amendment for Iraq and Afghanistan are included in FY2005-FY2009 outlay figures.
FY1998 was the final year of a period of decline in budget authority and outlays
that began in FY1986. From FY1999 through FY2001, budget authority and outlays
increased modestly in real terms, by 8.6% and 4.8%, respectively. From FY2001
through FY2004, budget authority increased by 27.7% and outlays increased by
3Colonel Joe Conley, “Impacts of Declining Budgets and Defense Mergers on the
Department of Defense,” U.S. Army War College, Carlisle Barracks, PA, April 2002, p.3.

CRS-5
37.7%. The Bush Administration’s regular FY2005 national defense budget request
of $423.1 billion, when combined with the administration’s $25 billion budget
amendment for Iraq and Afghanistan submitted to Congress on May 12, 2004 and a
supplemental request that is expected early in calendar year 2005, will most likely
exceed FY2004 budget authority.

roj.
59,
itted
P
2009
508.2
460.5
2.0%
487.4
443.2
1.7%
488.9
443.0
2.1%
468.1
425.6
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m
roj.
P
2008
485.8
451.5
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467.4
435.7
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466.8
433.8
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447.9
417.5
2.2%
nstant FY2005
2004, pp. 58-
roj.
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2007
464.8
443.0
2.1%
447.9
427.9
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444.9
424.1
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427.7
408.6
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2005 request sub
February
ersions to co
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2006
444.0
433.7
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441.0
431.3
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413.8
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420.5
411.3
-8.3%
q.
ent to the FY
Re
2005
448.1
448.1
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469.4
469.4
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427.6
427.6
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448.4
448.4
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t.
storical Tables,
used for conv
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2004
ors
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453.7
462.1
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441.7
450.5
-1.4%
434.8
442.9
9.6%
al
tu
2003
456.2
476.0
404.9
422.5
437.9
456.9
387.3
404.0
ear 2005: Hi
Ac
22.8%
13.5%
23.8%
13.9%
al
tu
2002
362.1
387.6
5.1%
348.6
372.3
345.0
369.2
5.1%
332.0
354.6
Fiscal Y
Ac
10.9%
10.9%
al
tu
Dept. of Defense deflat
2001
ates for the $25 billion am
7.2%
0.6%
6.8%
0.4%
6
335.5
368.9
305.5
335.6
319.4
351.3
291.0
319.7
Ac
2005 dollars in billions)
Y
al
estim
CRS-
F
tu
FY2005
2000
304.1
344.2
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294.5
333.5
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290.4
328.8
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281.2
318.4
4.6%
Ac
f].
outlay
FY1997-FY2009
al
O
tu
1999
B
292.3
339.5
5.1%
274.9
320.3
0.4%
278.5
323.5
5.1%
261.3
304.4
0.1%
Ac
al
tu
1998
271.3
323.1
268.5
318.9
258.5
307.9
256.1
304.2
Ac
-2.2%
-3.0%
-2.3%
-3.2%
2005/pdf/hist.pd
(current and constant
al
unpublished C
tu
et/fy
1997
270.4
330.3
270.5
328.9
257.9
315.2
258.3
314.1
Budget of the United States Government,
Ac
-0.7%
-0.6%
-0.8%
-0.5%
12, 2004.
et,
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itehouse.g
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2009 outlay
Table 1. National Defense Budget Function and Department of Defense Budget,
Def
of Manag
FY

ense B
ear dollars
ear dollars
ear dollars
ear dollars
inistration to Cong
ear:
2005-
rowth/decline
rowth/decline
rowth/decline
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Office
dget Authority
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e: FY
iscal Y
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B
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Real g
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B
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Constant FY2005 dollars
Real g
Outlays
Current y
Constant FY2005 dollars
Real g
Source:
84-
dollars.
Not
by

CRS-7
Question 2: What Are the Recent Trends in Budget Authority
for Each Defense Appropriations Title?
Figure 3. Department of Defense Budget
Authority by Appropriations Title,
FY1976-FY2005
200
Operations and
Military Personnel
Maintenance
150
100
Procurement
50
R,D,T&E
0
1976
1981
1986
1991
1996
2001
Source: Office of Management and Budget, Historical Tables: Budget of the United States
Government, Fiscal Year 2005, February 2004, pp. 82-85, [http://www.whitehouse.gov/omb/budget/
fy2005/pdf/hist.pdf]; FY2005 deflators from DOD Comptroller.
Note: Figures for FY2005 do not include the $25 billion budget amendment for Iraq and Afghanistan
submitted by the Bush Administration to Congress on May 12, 2004, as the Administration’s
amendment did not allocate funds by appropriation title.
As shown in Figure 3, budget authority for procurement has varied far more
than that of the other appropriations titles since FY1976. When national defense
budget authority increased during this period — especially during the Reagan-era
build-up — procurement budget authority increased sharply. On the other hand,
when national defense budget authority was reduced significantly after the Cold War,
procurement funding faced much deeper cuts than military personnel, operations and
maintenance (O&M), and research, development, test, and evaluation (R,D,T&E).
Tables 2, 3, and 4 list recent budget authority in current year and constant year
dollars, and outlay levels in current year dollars for each of these appropriations
titles, respectively.
Budget authority for military personnel also declined considerably after the Cold
War, due largely to the drawdown in active duty and selected reserve personnel that
took place from 1989 to 1999. On the other hand, the O&M and R,D,T&E titles
have, until recently, been funded at relatively steady levels during periods of overall
increases and decreases in national defense budget authority.
Since FY2002, budget authority for each appropriations title has increased
sharply, in part as a result of the wars in Iraq and Afghanistan and enhanced security
for defense installations. Supplemental appropriations in FY2003 and FY2004 were

CRS-8
a major cause of the sharp increases in military personnel and O&M budget authority.
Procurement and R,D,T&E have increased steadily in regular appropriations since
FY1997, and have also received some additional funding in recent supplemental
appropriations.

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CRS-12
Question 3: What Are the Historical Trends in Defense’s
Share of Total Federal Outlays?
Figure 4. Shares of Total Federal Outlays by
Type of Spending, FY1962-FY2009
Source: Office of Management and Budget, Historical Tables: Budget of the United States
Government, Fiscal Year 2005, February 2004, pp. 127-128, [http://www.whitehouse.gov/omb/
budget/fy2005/pdf/hist.pdf]; FY2005 deflators from DOD Comptroller.
Notes: See p. 3 for definitions of mandatory and discretionary budget authority and outlays.
Figure 4 reveals two important long-term trends. The first trend is the decline
of defense discretionary outlays as a percentage of total federal outlays since FY1962.
In FY1962, defense discretionary represented 49.2%, or almost half, of total federal
outlays, while in FY2003 its share of total federal outlays declined to 18.8%.
Defense discretionary outlays have declined consistently as a percentage of
federal outlays in large part because of a second trend: the rapid increase of
mandatory outlays, mostly for major “entitlement” programs. Between FY1962 and
FY2004, mandatory outlays rose by 833% while defense outlays rose by 30% in real
terms.4 The share of federal outlays of mandatory programs increased from 26.1%
in FY1962 to 54.1% in FY2004 and is projected to reach 56.5% by FY2009.
4 Percent growth in mandatory outlays and defense outlays between FY1962 and FY2004
is measured in constant FY2000 dollars using figures from the Office of Management and
Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2005,
February 2004, p. 126, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf].

CRS-13
Question 4: What Are the Historical Trends in Defense’s
Share of Total Federal Discretionary Outlays?
Figure 5. Defense and Non-Defense
Discretionary Outlays as a Share of
Total Federal Discretionary Outlays,
FY1962-FY2009
Source: Office of Management and Budget, Historical Tables: Budget of the United States
Government, Fiscal Year 2005, February 2004, [http://www.whitehouse.gov/omb/budget/fy2005/
pdf/hist.pdf]; p.127.
Note: See p. 3 for definition of discretionary budget authority and outlays.
Defense discretionary outlays have declined from almost 75% of total
discretionary outlays in FY1962 to just under 50% of total discretionary outlays in
FY2003. This steady decline was interrupted significantly by the Reagan build-up
of the 1980s, during which time defense discretionary outlays rose from 50.1% of
total discretionary outlays in FY1981 to 62% in FY1987. Since FY1995, defense
discretionary outlays have remained between 47% and 50% of total discretionary
outlays, although this percentage has increased from 47.1% in FY2001 to 49.7% in
FY2004. Under current projections, defense will rise to 51.4% of total discretionary
outlays by FY2009.

CRS-14
Part II: The Impact of Defense on the Economy
The following section (questions 5, 6, and 7) looks at the impact of defense on
the economy, measured in terms of defense outlays and federal outlays as a
percentage of gross domestic product (GDP), and compares U.S. defense outlays to
those of foreign countries.
Question 5: What Are the Historical Trends in U.S. Defense
Outlays as a Percentage of Gross Domestic Product (GDP)?
Figure 6. GDP and Defense’s Share of GDP,
FY1962-FY2005
(constant FY2005 dollars in trillions / percent of GDP)
Source: GDP deflators and figures from the Office of Management and Budget, Historical Tables:
Budget of the United States Government, Fiscal Year 2005, February 2004, [http://www.
whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf], pp. 128, 184.
Advocates of higher defense spending frequently cite defense’s declining
percentage of GDP to argue that the nation can afford more for defense. These
observers note that even with recent increases, defense spending is still at relatively
low levels historically as a percentage of GDP, as shown in Figure 6. Whereas
defense spending reached 9.5% of GDP in FY1968 and 6.2% of GDP in FY1986 at
the height of the Reagan build-up, it equaled only 3.9% of GDP in FY2004.5
Others’ counterargument, however, is that defense spending as a percentage of
GDP is as much dependent on the level of GDP growth as it is dependent on the level
of defense spending growth. Since 1962, GDP has grown 306% in real terms while
5See Table 12 in the Appendix for the data that correspond to Figures 6 and 7.

CRS-15
defense outlays have risen 30% during the same period.6 Therefore, some say, the
story of defense’s decline as a percentage of GDP is as much a story of the rapid
growth of the U.S. economy as it is a story of declining defense spending.
Question 6: What Are the Historical Trends in Different
Categories of Federal Spending as a Percentage of GDP?
It should be noted that the trend in defense outlays is part of a broader long-term
trend in the federal budget, in which both defense and non-defense discretionary
outlays have declined as shares of GDP while mandatory outlays have increased. As
Figure 7 below shows, total federal spending has been remarkably stable at about
20% of GDP over the past 40 years.
Figure 7. Federal Spending by Category as
a Percentage of GDP, FY1962-FY2005
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2005: Historical Tables, February 2004, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/
hist.pdf], p. 128.
6 Percent growth in GDP and defense outlays between FY1962 and FY2004 is measured in
constant FY2000 dollars using figures from the Office of Management and Budget,
Historical Tables: Budget of the United States Government, Fiscal Year 2005, February
2004, pp. 126, 184-185, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf].

CRS-16
Question 7: How Do U.S. Defense Outlays Compare to Those
of Other Countries, Both in Dollars and as a Percentage of
GDP?
Table 5 ranks the top 25 countries in defense spending and lists the share of
GDP that each country devotes to defense.
Table 5. Defense Spending of Top 25 Countries
(current year U.S. dollars in millions)
Country
Rank
WMEATa
IISS Military Balanceb
1999-2000
2003-2004
Defense
%
Defense
%
Expenditures
GDP
Expenditures
GDP
(1999 Data)
(2002 Data)
United States
1
281,000
3.0%
348,500
3.3%
China — Mainland
2
88,900
2.2%
51,000
4.1%
Japan
3
43,200
1.0%
39,500
1.0%
France
4
38,900
2.7%
40,200
2.5%
United Kingdom
5
36,500
2.5%
37,300
2.4%
Russia
6
35,000
5.6%
50,800
4.8%
Germany
7
32,600
1.6%
33,300
1.5%
Italy
8
23,700
2.0%
25,600
1.9%
Saudi Arabia
9
21,200
14.9%
22,200
12.0%
China — Taiwan
10
15,200
5.2%
7,900
2.7%
South Korea
11
11,600
2.9%
13,300
2.8%
India
12
11,300
2.5%
13,800
2.7%
Turkey
13
9,950
5.3%
9,200
5.1%
Brazil
14
9,920
1.9%
10,200
2.3%
Israel
15
8,700
8.8%
9,900
9.7%
Canada
16
8,320
1.4%
8,200
1.1%
Spain
17
7,560
1.3%
8,700
1.2%
Australia
18
7,060
1.8%
8,000
2.0%
Netherlands
19
7,030
1.8%
7,700
1.6%
Iran
20
6,880
2.9%
5,100
4.6%
Poland
21
6,690
2.1%
3,600
1.9%
Greece
22
6,060
4.7%
6,500
4.4%
Sweden
23
5,330
2.3%
4,200
1.7%
Dem. Rep. of Congo
24
5,150
14.4%
1,000
21.7%
Ukraine
25
5,110
3.0%
5,000
2.2%
Source: Data from the International Institute of Strategic Studies (IISS) and the U.S. Dept. of State.
a U.S. Department of State, World Military Expenditures and Arms Transfers (WMEAT), Washington,
February 2003; countries are ranked according to WMEAT figures.
b International Institute for Strategic Studies (IISS), The Military Balance: 2003-2004 (Oxford
University Press, 2003).

CRS-17
Part III: Costs of Wars and Defense Supplementals
The following section (questions 8 and 9) provides figures and analysis on the
costs of wars and recent supplemental appropriations for the Department of Defense.
Question 8: How Much Has Congress Enacted in Defense
Supplemental Appropriations since September 11, 2001?
Figure 8. Regular and Supplemental
Defense Appropriations,
FY2001-FY2005
(current year dollars in billions)
Source: House Appropriations Committee tables.
Note: FY2005 figures include the $25 billion amendment to the FY2005 request, for Iraq and
Afghanistan, submitted by the Bush Administration to Congress on May 12, 2004, [http://www.
whitehouse.gov/omb/budget/amendments/amendment_5_12_04.pdf].
Congress enacted a total of $165.63 billion7 in supplemental appropriations for
defense from FY2001 through FY2004. More than half of this $165.63 billion was
enacted in FY2003 and FY2004 emergency supplemental appropriations, which
funded the wars in Iraq and Afghanistan.8 As shown in Figure 8, the combination
7 Total excludes $5.834 billion appropriated by Congress in P.L. 107-20, FY2001 non-
emergency supplemental appropriations, enacted before September 11, 2001; total also
reflects the $3.49 billion recission in P.L. 108-87, FY2004 DoD regular appropriations, of
funds appropriated in P.L. 108-11, FY2003 emergency supplemental appropriations.
8For a detailed analysis, see CRS Report RL32090, FY2004 Supplemental Appropriations
for Iraq, Afghanistan, and the Global War on Terrorism: Military Operations and
Reconstruction Assistance, by (name redacted), (name redacted), (name redacted), and Rhoda

CRS-18
of increased supplemental and regular appropriations has resulted in a significant
increase in overall defense appropriations for the last four fiscal years. Table 6 lists
administration requests and the enacted levels of regular and supplemental
appropriations for defense since FY2001. For FY2005, Figure 8 includes the $25
billion budget amendment requested by the president on May 12, 2004 to cover the
costs of Iraq and Afghanistan for part of FY2005.
8(...continued)
Margesson.

CRS-19
Table 6. Regular and Supplemental Appropriations for the National Defense
Budget Function, FY2001-2005
(current year dollars in millions)
Request
Enacted
Difference
FY2001
Regular Appropriations
305,312.9
309,974.0
+4,661.1
Supplemental Appropriations:
Non-emergency supplemental H.R. 2216, P.L. 107-20a
5,841.0
5,834.0
-7.0
Emergency supplemental H.R. 2228, P.L. 107-38
14,041.0
14,041.0
0.0
TOTAL FY2001
325,194.9
329,849.0
+4,654.1
FY2002
Regular Appropriations
343,435.0
343,429.0
-6.0
Supplemental Appropriations
Emergency Terrorism Response, H.R. 3338, P.L. 107-117
7,467.0
3,867.0
-3,600.0
Emergency supplemental, H.R. 4775, P.L. 107-206
14,022.0
13,370.0
-652.0
TOTAL FY2002
364,924.0
360,666.0
-4,258.0
FY2003
Regular Appropriations
392,837.0
382,027.0
-10,809.0
Supplemental Appropriations
Consolidated Appropriations Resolution, H.J.Res2
0
10,000.0
+10,000.0
Emergency supplemental, H.R. 1559, P.L. 108-11
62,587.0
62,583.0
-4.0
Rescission of funds from P.L. 108-11b
-3,490.0
TOTAL FY2003
455,424.0
451,120.0
-4,304.0
FY2004
Regular Appropriations
400,476.0
398,688.0
-1,788.0
Supplemental Appropriations
Emergency supplemental, H.R. 3289, P.L. 108-106
65,560.0
65,251.0
-309.0
TOTAL FY2004
466,036.0
463,939.0
-2,097.0
FY2005 (Request)
Regular Appropriationsc
448,098.0
Budget Amendment
25,000.0
TOTAL FY2005
473,098.0
Source: Conference Reports for each bill and House Appropriations Tables as printed in the Congressional Record.
Total for FY2005 include the $25 billion budget amendment for Iraq and Afghanistan submitted by the Bush
Administration to Congress on May 12, 2004.
a Enacted before September 11, 2001.
b Congress rescinded $3.49 billion from P.L. 108-11 (FY2003 emergency supplemental) in the FY2004 Department of
Defense appropriations act (P.L. 108-87). This rescission reduces the funding scored in FY2004 but reduces the
resources available in the FY2003 emergency supplemental.
c Total includes $25.0 billion budget amendment for Iraq and Afghanistan submitted by the Bush administration to
Congress on May 12, 2004.

CRS-20
Question 9: How Much Has Each Major War in the History of
the United States Cost?
Table 7 lists the costs of each major war in United States’ history in current and
constant FY2005 dollars.
Table 7. Costs of Major U.S. Wars
(amounts in millions and billions of dollars)
American Revolution
Current Year
$120
million
Constant FY2005 $
$3,315
million
War of 1812
Current Year
$89
million
Constant FY2005 $
$1,043
million
Mexican War
Current Year
$82
million
Constant FY2005 $
$1,841
million
Civil War: Union
Current Year
$2,300
million
Constant FY2005 $
$52,165
million
Civil War: Confederacy
Current Year
$1,000
million
Constant FY2005 $
$22,707
million
Spanish American War
Current Year
$270
million
Constant FY2005 $
$6,750
million
World War Ia
Current Year
$33
billion
Constant FY2005 $
$613
billion
World War II
Current Year
$360
billion
Constant FY2005 $
$5,008
billion
Korea
Current Year
$50
billion
Constant FY2005 $
$426
billion
Vietnam
Current Year
$111
billion
Constant FY2005 $
$609
billion
Persian Gulf War (1991)b
Current Year
$61
billion
Constant FY2005 $
$86
billion
Sources and Notes: American Revolution through Korean War Costs from the Statistical Abstract
of the United States, 1994; deflators and all other data from the Office of the Under Secretary of
Defense (Comptroller). Costs for the American Revolution through the Korean War were converted
to constant FY2005 dollars from figures cited in the Statistical Abstract.
a World War I figures include the amount of war loans to allies, which totaled between $9.4 and $9.5
billion in current year dollars, or 28%-29% of the total cost.
b Most Persian Gulf War costs were offset by allied contributions or were absorbed by DOD. Net
costs to U.S. taxpayers totaled $4.7 billion in current year dollars, or 7.7% of the total cost. Source:
Department of Defense Annual Report to Congress, January 1993.

CRS-21
Part IV: Trends in Force Structure
The following section (questions 10, 11, and 12) provides figures and analysis
on U.S. military personnel levels, force structure, and budget authority by service.
Question 10: What Have Been the Recent Trends in U.S.
Military Personnel Levels?
Figure 9. Active Duty and Selected Reserve
End-Strength, Selected Years,
FY1989-FY2005
Sources: See Table 8 sources on following page.
As shown in Figure 9 and in Tables 8 and 9, the United States military
experienced a sharp drawdown in military personnel and forces that began in the late
1980s and ended, for the most part, by FY1999. The decision to decrease both
active duty and selected reserve forces reflected the disappearance of the Soviet
threat and congressional efforts to reduce budget deficits in the 1990s.
Although Congress has enacted significant increases in funding for national
defense, and military forces have been deployed in large numbers abroad since March
2003, the force structure has remained stable. In response to the demands of military
operations in Iraq and Afghanistan, the Secretary of Defense has temporarily
increased active-duty end strength temporarily by 30,000 troops, exercising authority
that allows the President to waive authorized end strength ceilings in national
emergencies.

CRS-22
Table 8. Department of Defense Personnel Levels, Selected Years
(end strength /civilian employees in thousands)a
ActualActualActualActualActualActualActual ActualActual ActualActual
Est.
Proj.
Fiscal Year:
1981 1985 1989 1991 1993 1995 1997
1999 2001
2002 2003 2004
2005
Army
781
781
770
725
572
509
492
479
481
487
499
482
482
Navy
540
571
593
571
510
435
396
373
378
383
382
374
366
Marine Corps
191
198
197
195
178
174
174
173
173
174
178
175
175
Air Force
570
602
571
511
444
400
378
361
354
368
375
359
360
Total Active
2,082 2,151 2,130 2,002 1,705 1,518 1,440 1,386 1,385 1,412 1,434 1,391
1,383
Selected Reserves
851 1,188 1,171 1,138 1,058
946
902
877
869
874
875
863
861
Total Civilians
984 1,107 1,075 1,013
891
802
723
666
647
645
636
648
651
Sources: Active duty force levels and selected reserve levels for FY2003-FY2005 from Department of Defense,
Undersecretary of Defense Comptroller, National Defense Budget Estimate for FY2005, March 2004, pp. 33, 212-213,
[http://www.defenselink.mil/comptroller/defbudget/fy2005/fy2005_greenbook.pdf]. Selected reserve levels for prior
years from U.S. Department of Defense, Manpower Requirements Report, FY1998, July 1998 and prior years; and from
Office of Management and Budget, Budget of the United States Government for FY2002: Appendix, April 2001 and prior
years. Civilian levels from Office of Management and Budget, Historical Tables: Budget of the United States
Government for FY2005, February 2004, pp. 295-296, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/hist.pdf].
aEnd strength refers to the number of military personnel on board on the last day of a fiscal year. Selected reserves do
not include Standby Reserve, Individual Ready Reserve, and Inactive National Guard. Totals may not add due to
rounding.

CRS-23
Question 11: What Are the Recent Trends in U.S. Military
Force Structure?
Table 9 lists the force structure for each service from FY1980 though FY2005.
Table 9. U.S. Military Force Structure, FY1980-2005

Fiscal
Army
Marine
Air Force
Year
Divisions
Divisions
Naval Forces
Tactical Wings
Active
Reserve
Active
Reserve
Carriers
Total
Active
Reserve
1980
16
8 3
1
13
477
26
11
1981
16
8 3
1
13
491
26
11
1982
16
8 3
1
14
513
26
12
1983
16
8 3
1
14
514
25
12
1984
16
9 3
1
14
524
25
12
1985
17
10 3
1
14
542
25
12
1986
18
10 3
1
14
556
25
12
1987
18
10 3
1
15
569
25
12
1988
18
10 3
1
15
566
25
12
1989
18
10 3
1
15
567
25
12
1990
18
10 3
1
15
546
24
12
1991
16
10 3
1
15
526
22
13
1992
14
10 3
1
14
466
16
13
1993
14
10 3
1
13
434
16
11
1994
12
8 3
1
12
387
13
9
1995
12
8 3
1
11+1
373
13
8
1996
10
8 3
1
11+1
365
13
7
1997
10
8 3
1
11+1
357
13
7
1998
10
8
3
1
11+1
333
13
7
1999
10
8
3
1
11+1
317
13
7.2
2000
10
8
3
1
11+1
316
13
7.6
2001
10
8
3
1
11+1
316
12.6
7.6
2002
10
8
3
1
11+1
315
12+
7+
2003
10
8
3
1
11+1
296
12+
7+
2004
10
8
3
1
11+1
292
12+
7+
2005
10
8
3
1
11+1
290
12+
7+
Sources: [http://www.defenselink.mil/pubs/almanac/]; U.S. Navy, Highlights of the Department of the Navy
FY2005 Budget, [http://navweb.secnav.navy.mil]; briefing materials accompanying the FY2005 budget request
and similar materials provided in prior years; CRS Report 90-401, U.S./Soviet Military Balance: Statistical
Trends, 1980-1989, RCO, by John M. Collins and (name redacted); CRS Report 91-672,
U.S. Armed Forces:
Statistical Trends, 1985-1990, by John M. Collins and (name redacted); U.S. Department of the Navy
(Program Information Center), Listing of U.S. Naval Ship Battle Forces as of 30 September 1993, Washington
1993 and previous editions.
Notes: Figures for FY2004 and FY2005 are Administration projections.
a Air Force figures do not include a wing of F-117 aircraft prior to FY1990.
b Carrier figures exclude one auxiliary training carrier for FY1980-92 but include one operational reserve training
carrier (shown as “+1”) since FY1995.

CRS-24
Question 12: How Much Budget Authority Has Been Provided
to Each Service in Recent Years?
Table 10 shows Department of Defense budget authority by service from
FY1995-FY2005, and Figure 10 shows the Administration’s FY2005 request by
service as a percent of total Department of Defense budget authority.
Table 10. Department of Defense Budget Authority by Service, FY1995-
FY2005
(current year dollars in billions/percent of total)
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Est.
Proj.
Fiscal Year:
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Army
63.3
64.5
64.4
64.0
68.4
73.2
77.0
85.9
121.1
132.9
97.0
% of DOD Total
24.8%
25.4%
25.0%
24.8%
24.5%
25.2%
24.9%
24.9%
27.7%
30.1%
24.1%
Navy/Marines
76.9
80.0
79.5
80.7
84.0
88.8
95.5
102.4
124.0
120.3
119.2
% of DOD Total
30.1%
31.4%
30.8%
31.2%
30.2%
30.6%
30.8%
29.6%
28.3%
27.2%
29.6%
Air Force
73.9
73.0
73.2
76.3
81.9
83.1
89.5
100.2
125.2
124.0
120.4
% of DOD Total
28.9%
28.7%
28.4%
29.5%
29.4%
28.6%
28.9%
29.0%
28.6%
28.1%
29.9%
Defense Wide
41.6
37.0
40.8
37.6
44.3
45.5
47.9
57.1
67.4
64.5
66.0
% of DOD Total
16.3%
14.5%
15.8%
14.5%
15.9%
15.7%
15.4%
16.5%
15.4%
14.6%
16.4%
DOD Total
255.7
254.4
258.0
258.6
278.6
290.5
309.9
345.6
437.7
441.7
402.6
Figure 10. Department of Defense Budget
Authority by Service, FY2005 Request
Source: Department of Defense Comptroller, National Defense Budget Estimates for FY2005, April
2004, [http://www.defenselink.mil/comptroller/defbudget/fy2005/fy2005_greenbook.pdf].

CRS-25
Part V: Appendix and Glossary
Part V provides additional data tables and a glossary of frequently used defense
budget terms.
Table 11 provides the real growth/decline in national defense budget authority
and outlays from FY1940 to FY2009, in both current and constant FY2005 dollars.
Table 12 lists national defense outlays as a percentage of GDP from FY1910 to
FY2009. The amounts of defense discretionary spending, non-defense discretionary
spending, mandatory spending, and net interest that make up total federal outlays
from FY1962 to FY2009 are shown in Table 13, while Table 14 shows each of these
four categories as a percentage of total federal outlays from FY1962 to FY2009.

CRS-26
Table 11. Real Growth/Decline in National Defense Budget
Authority and Outlays, FY1940-FY2009
(current and constant FY2005 dollars in billions)
BUDGET AUTHORITY
OUTLAYS
FISCAL
YEAR
Current
Constant
Real
Current
Constant
Real
Dollars
FY2005
Growth/
Dollars
FY2005
Growth/
Dollars
Decline
Dollars
Decline
1940
1.7
30.0
1941
6.4
97.9
226.8%
1942
25.7
329.7
236.7%
1943
66.7
806.5
144.6%
1944
79.1
1,055.0
30.8%
1945
39.2
740.8
83.0
1,202.4
14.0%
1946
44.0
637.7
-13.9%
42.7
647.7
-46.1%
1947
9.0
138.4
-78.3%
12.8
182.7
-71.8%
1948
9.5
122.5
-11.5%
9.1
125.2
-31.5%
1949
10.9
149.0
21.60%
13.2
173.5
38.5%
1950
16.5
187.2
25.6%
13.7
170.3
-1.9%
1951
57.8
488.8
161.1%
23.6
261.0
53.3%
1952
67.5
594.3
21.6%
46.1
451.0
72.8%
1953
56.9
522.8
-12.0%
52.8
497.7
10.4%
1954
38.7
383.5
-26.7%
49.3
473.3
-4.9%
1955
32.9
326.7
-14.8%
42.7
408.1
-13.8%
1956
35.0
325.1
-0.5%
42.5
385.5
-5.5%
1957
39.4
348.8
7.3%
45.4
390.6
1.3%
1958
40.1
335.8
-3.7%
46.8
380.9
-2.5%
1959
45.1
352.8
5.1%
49.0
380.0
-0.3%
1960
44.3
340.8
-3.4%
48.1
370.8
-2.4%
1961
45.1
344.5
1.1%
49.6
369.9
-0.2%
1962
50.2
376.6
9.3%
52.3
390.9
5.7%
1963
52.1
382.6
1.6%
53.4
395.3
1.1%
1964
51.6
365.7
-4.4%
54.8
391.1
-1.0%
1965
50.6
350.6
-4.1%
50.6
359.0
-8.2%
1966
64.4
405.6
15.7%
58.1
383.1
6.7%
1967
73.1
442.8
9.2%
71.4
441.9
15.4%
1968
77.2
450.8
1.8%
81.9
480.8
8.8%
1969
78.5
440.8
-2.2%
82.5
469.5
-2.3%
1970
75.3
401.0
-9.0%
81.7
436.2
-7.1%
1971
72.7
365.7
-8.8%
78.9
398.1
-8.7%
1972
76.4
351.6
-3.9%
79.2
369.3
-7.2%
1973
79.1
335.6
-4.6%
76.7
336.9
-8.8%
1974
81.5
318.2
-5.2%
79.3
322.4
-4.3%
1975
86.2
307.6
-3.3%
86.5
315.0
-2.3%
1976
97.3
321.6
4.6%
89.6
305.1
-3.1%
1977
110.2
334.5
4.0%
97.2
307.4
0.8%
1978
117.2
329.8
-1.4%
104.5
307.5
0.0%
1979
126.5
328.1
-0.5%
116.3
316.9
3.1%
1980
143.9
333.6
1.7%
134.0
324.9
2.5%
1981
180.0
370.8
11.1%
157.5
339.5
4.5%
1982
216.5
410.0
10.6%
185.3
362.6
6.8%
1983
245.0
442.7
8.0%
209.9
391.0
7.8%
1984
265.2
462.5
4.5%
227.4
406.7
4.0%
1985
294.7
493.9
6.8%
252.7
433.2
6.5%
1986
289.1
474.9
-3.8%
273.4
455.1
5.0%
1987
287.4
460.2
-3.1%
282.0
456.5
0.3%

CRS-27
BUDGET AUTHORITY
OUTLAYS
FISCAL
YEAR
Current
Constant
Real
Current
Constant
Real
Dollars
FY2005
Growth/
Dollars
FY2005
Growth/
Dollars
Decline
Dollars
Decline
1988
292.0
451.3
-1.9%
290.4
454.9
-0.4%
1989
299.6
445.5
-1.3%
303.6
456.0
0.3%
1990
301.2
435.2
-2.3%
297.9
435.3
-4.5%
1991
296.2
411.5
-5.4%
296.7
417.1
-4.2%
1992
287.7
390.8
-5.0%
286.1
389.0
-6.7%
1993
281.1
374.2
-4.2%
283.9
376.1
-3.3%
1994
263.3
343.2
-8.3%
278.9
360.8
-4.1%
1995
266.4
340.0
-0.9%
271.0
345.0
-4.4%
1996
266.2
332.5
-2.2%
265.2
331.0
-4.1%
1997
270.4
330.3
-0.7%
270.5
328.9
-0.6%
1998
271.3
323.1
-2.2%
268.5
318.9
-3.0%
1999
292.3
339.5
5.1%
274.9
320.3
0.4%
2000
304.1
344.2
1.4%
294.5
333.5
4.1%
2001
335.5
368.9
7.2%
305.5
335.6
0.6%
2002
362.1
387.6
5.1%
348.6
372.3
10.9%
2003
456.2
476.0
22.8%
404.9
422.5
13.5%
2004
460.5
469.7
-1.3%
453.7
462.1
9.4%
2005
448.1
448.1
-4.6%
469.4
469.4
1.6%
2006
444.0
433.7
-3.2%
441.0
431.3
-8.1%
2007
464.8
443.0
2.1%
447.9
427.9
-0.8%
2008
485.8
451.5
1.9%
467.4
435.7
1.8%
2009
508.2
460.5
2.0%
487.4
443.2
1.7%
Sources: Current dollar budget authority figures for FY1940-FY1975 from Department of Defense
Comptroller, National Defense Budget Estimates for FY1982, March 1983; all other current dollar
figures from U.S. Office of Management and Budget, Historical Tables: Budget of the United States
Government, Fiscal Year 2005, February 2004, [http://www.whitehouse.gov/omb/budget/fy2005/
pdf/hist.pdf]; constant dollar figures calculated by CRS using FY2005 deflators from Department of
Defense Comptroller.
Note: CBO outlay estimates for $25 billion budget amendment for Iraq and Afghanistan included in
FY2005 outlay figures. FY2006-FY2009 outlay estimates for the amendment were not available at
the printing of this report.

CRS-28
Table 12. National Defense Outlays as a Percentage of GDP,
FY1910-FY2009
(current year dollars in billions)
National
Outlays
National
Outlays
Fiscal
GNP/
Fiscal
GNP/
Defense
as % of
Defense
as % of
Year
GDPa
Year
GDP
Outlays
GNP/GDP
Outlays
GNP/GDP
1910
0.3
35.3
0.8%
1960
48.1
518.9
9.3%
1911
0.3
35.8
0.8%
1961
49.6
529.9
9.4%
1912
0.3
39.4
0.7%
1962
52.3
567.8
9.2%
1913
0.3
39.6
0.7%
1963
53.4
599.2
8.9%
1914
0.3
38.6
0.8%
1964
54.8
641.4
8.5%
1915
0.3
40.0
0.7%
1965
50.6
687.5
7.4%
1916
0.3
48.3
0.6%
1966
58.1
755.8
7.7%
1917
0.6
60.4
1.0%
1967
71.4
810.2
8.8%
1918
7.1
76.4
9.3%
1968
81.9
868.5
9.4%
1919
13.5
84.0
16.1%
1969
82.5
948.3
8.7%
1920
4.0
91.5
4.4%
1970
81.7
1,012.9
8.1%
1921
2.6
69.6
3.7%
1971
78.9
1,080.3
7.3%
1922
0.9
74.1
1.3%
1972
79.2
1,176.9
6.7%
1923
0.7
85.1
0.8%
1973
76.7
1,311.0
5.9%
1924
0.6
84.7
0.8%
1974
79.3
1,438.9
5.5%
1925
0.6
93.1
0.6%
1975
86.5
1,560.8
5.5%
1926
0.6
97.0
0.6%
1976
89.6
1,738.8
5.7%
1927
0.6
94.9
0.6%
1977
97.2
1,974.4
5.6%
1928
0.7
97.0
0.7%
1978
104.5
2,218.3
5.3%
1929
0.7
103.1
0.7%
1979
116.3
2,502.4
5.2%
1930
0.7
97.4
0.8%
1980
134.0
2,725.4
4.9%
1931
0.7
83.8
0.9%
1981
157.5
3,058.6
5.1%
1932
0.7
67.6
1.0%
1982
185.3
3,225.5
5.7%
1933
0.6
57.6
1.1%
1983
209.9
3,442.7
6.1%
1934
0.5
61.2
0.9%
1984
227.4
3,846.7
5.9%
1935
0.7
69.6
1.0%
1985
252.7
4,148.9
6.1%
1936
0.9
78.5
1.2%
1986
273.4
4,406.7
6.2%
1937
0.9
87.8
1.1%
1987
282.0
4,654.4
6.1%
1938
1.0
89.0
1.2%
1988
290.4
5,011.9
5.8%
1939
1.1
89.1
1.2%
1989
303.6
5,401.7
3.1%
1940
1.7
96.8
1.7%
1990
299.3
5,737.0
5.2%
1941
6.4
114.1
5.6%
1991
273.3
5,934.2
4.6%
1942
25.7
144.3
17.8%
1992
298.4
6,240.6
4.8%
1943
66.7
180.3
37.0%
1993
291.1
6,578.4
4.4%
1944
79.1
209.2
37.9%
1994
281.6
6,964.2
4.1%
1945
83.0
221.3
37.5%
1995
272.1
7,325.1
3.7%
1946
42.7
222.7
19.2%
1996
265.8
7,697.4
3.5%
1947
12.8
233.2
5.5%
1997
270.5
8,186.6
3.3%
1948
9.1
256.7
3.6%
1998
268.5
8,626.3
3.1%
1949
13.2
271.3
4.8%
1999
274.9
9,127.0
3.0%
1950
13.7
273.2
5.0%
2000
294.5
9,708.4
3.0%
1951
23.6
320.3
7.3%
2001
305.5
10,040.7
3.0%
1952
46.1
348.7
13.2%
2002
348.6
10,373.4
3.4%
1953
52.8
372.6
14.1%
2003
404.9
10,828.3
3.7%
1954
49.3
377.1
13.1%
2004
453.7
11,466.0
3.9%
1955
42.7
395.9
10.8%
2005
469.4
12,042.4
3.9%
1956
42.5
427.0
9.9%
2006
441.0
12,641.1
3.5%
1957
45.4
450.9
10.1%
2007
447.9
13,279.1
3.4%
1958
46.8
460.0
10.2%
2008
467.4
13,972.6
3.3%
1959
49.0
490.2
10.0%
2009
487.4
14,701.6
3.3%
Sources: Outlays, FY1910-FY1939, and GNP/GDP, FY1910-FY1939, from U.S. Department of
Commerce, Historical Statistics of the United States (Washington: GPO, 1975); outlays, FY1940-
FY2009, and GDP, FY1940-FY2009, from U.S. Office of Management and Budget, Historical
Tables: Budget of the United States Government, Fiscal Year 2005, February 2004, pp. 110, 184-185.
a Figures for FY1910-FY1929 were calculated in gross national product (GNP) rather than GDP.

CRS-29
Table 13. Allocation of Federal Outlays by Budget Enforcement
Act Category, FY1962-FY2009
(current year dollars in billions)
Defense
Non-Defense
Fiscal
Mandatory
Total Federal
Discretionary
Discretionary
Net Interest
Year
Outlays
Outlays
Outlays
Outlays
1962
52.6
19.5
27.9
6.9
106.8
1963
53.7
21.6
28.3
7.7
111.3
1964
55.0
24.1
31.2
8.2
118.5
1965
51.0
26.8
31.8
8.6
118.2
1966
59.0
31.1
35.0
9.4
134.5
1967
72.0
34.5
40.7
10.3
157.5
1968
82.2
35.8
49.1
11.1
178.1
1969
82.7
34.6
53.6
12.7
183.6
1970
81.9
38.3
61.0
14.4
195.6
1971
79.0
43.5
72.8
14.8
210.2
1972
79.3
49.2
86.7
15.5
230.7
1973
77.1
53.3
98.0
17.3
245.7
1974
80.7
57.5
109.7
21.4
269.4
1975
87.6
70.3
151.1
23.2
332.3
1976
89.9
85.7
169.5
26.7
371.8
1977
97.5
99.6
182.2
29.9
409.2
1978
104.6
114.1
204.6
35.5
458.7
1979
116.8
123.2
221.4
42.6
504.0
1980
134.6
141.7
262.1
52.5
590.9
1981
158.0
149.9
301.6
68.8
678.2
1982
185.9
140.0
334.8
85.0
745.7
1983
209.9
143.4
365.2
89.8
808.4
1984
228.0
151.4
361.3
111.1
851.9
1985
253.1
162.7
401.1
129.5
946.4
1986
273.8
164.7
415.9
136.0
990.4
1987
282.5
161.7
421.3
138.6
1,004.1
1988
290.9
173.5
448.2
151.8
1,064.5
1989
304.0
184.8
485.8
169.0
1,143.6
1990
300.1
200.4
568.2
184.3
1,253.2
1991
319.7
213.6
596.6
194.4
1,324.4
1992
302.6
231.2
648.5
199.3
1,381.7
1993
292.4
247.0
671.4
198.7
1,409.5
1994
282.3
259.1
717.5
202.9
1,461.9
1995
273.6
271.3
738.8
232.1
1,515.8
1996
266.0
266.7
786.8
241.1
1,560.5
1997
271.7
275.6
810.0
244.0
1,601.2
1998
270.2
281.9
859.4
241.1
1,652.6
1999
275.5
296.5
900.1
229.8
1,701.9
2000
295.0
319.9
951.0
223.0
1,788.8
2001
306.1
343.3
1,008.3
206.2
1,863.8
2002
348.9
385.4
1,105.7
171.0
2,011.0
2003
404.9
420.8
1,178.9
153.1
2,157.6
2004
451.6
456.6
1,254.4
156.3
2,318.8
2005
467.0
465.8
1,307.9
177.9
2,399.8
2006
434.6
457.7
1,367.6
213.4
2,473.3
2007
445.6
458.8
1,441.5
246.2
2,592.1
2008
465.5
457.4
1,526.7
274.6
2,724.3
2009
485.6
456.7
1,612.0
299.1
2,853.5
Source: Office of Management and Budget: Budget of the United States Government, Fiscal Year
2005: Historical Tables, February 2004, p. 125, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/
hist.pdf].

CRS-30
Table 14. Percentage Allocation of Federal Outlays by
Budget Enforcement Act Category, FY1962-FY2009
(percentage of total outlays)
Defense
Non-Defense
Defense
Fiscal
Mandatory
Net
Discretionary
Discretionary
Share
Year
Outlays
Interest
Outlays
Outlays
Discretionary
1962
49.2
18.3
26.1
6.4
73.0
1963
48.3
19.4
25.4
7.0
71.3
1964
46.4
20.3
26.3
6.9
69.5
1965
43.1
22.6
26.9
7.3
65.6
1966
43.9
23.2
26.0
7.0
65.5
1967
45.7
21.9
25.9
6.5
67.6
1968
46.1
20.1
27.5
6.2
69.7
1969
45.0
18.8
29.2
6.9
70.5
1970
41.9
19.6
31.2
7.4
68.1
1971
37.6
20.7
34.6
7.1
64.5
1972
34.4
21.3
37.6
6.7
61.7
1973
31.4
21.7
39.9
7.1
59.1
1974
30.0
21.3
40.7
8.0
58.4
1975
26.4
21.2
45.5
7.0
55.4
1976
24.2
23.1
45.6
7.2
51.2
1977
23.8
24.3
44.5
7.3
49.5
1978
22.8
24.9
44.6
7.7
47.8
1979
23.2
24.4
43.9
8.5
48.7
1980
22.8
24.0
44.4
8.9
48.7
1981
23.3
22.1
44.5
10.1
51.3
1982
24.9
18.8
44.9
11.4
57.0
1983
26.0
17.7
45.2
11.1
59.4
1984
26.8
17.8
42.4
13.0
60.1
1985
26.7
17.2
42.4
13.7
60.9
1986
27.6
16.6
42.0
13.7
62.4
1987
28.1
16.1
42.0
13.8
63.6
1988
27.3
16.3
42.1
14.3
62.6
1989
26.6
16.2
42.5
14.8
62.2
1990
24.0
16.0
45.3
14.7
59.9
1991
24.1
16.1
45.0
14.7
59.9
1992
21.9
16.7
46.9
14.4
56.7
1993
20.7
17.5
47.6
14.1
54.2
1994
19.3
17.7
49.1
13.9
52.1
1995
18.0
17.9
48.7
15.3
50.2
1996
17.0
17.1
50.4
15.4
49.9
1997
17.0
17.2
50.6
15.2
49.7
1998
16.4
17.1
52.0
14.6
48.9
1999
16.2
17.4
52.9
13.5
48.2
2000
16.5
17.9
53.2
12.5
48.0
2001
16.4
18.4
54.1
11.1
47.1
2002
17.4
19.2
55.0
8.5
47.5
2003
18.8
19.5
54.6
7.1
49.0
2004
19.5
19.7
54.1
6.7
49.7
2005
18.7
19.4
54.5
7.4
49.1
2006
17.6
18.5
55.3
8.6
48.7
2007
17.2
17.7
55.6
9.5
49.3
2008
17.1
16.8
56.0
10.1
50.4
2009
17.0
16.0
56.5
10.5
51.5
Source: Office of Management and Budget: Budget of the United States Government, Fiscal Year
2005: Historical Tables, February 2004, p. 127, [http://www.whitehouse.gov/omb/budget/fy2005/pdf/
hist.pdf].

CRS-31
Glossary
The definitions that follow are taken from Office of Management and Budget
and Department of Defense publications.
Accrual Accounting — as applied to military retired pay, a method of recording
costs designed to reflect the liability of the federal government for the future
retirement costs of military personnel currently on active or reserve duty. First
used in FY1985 in DOD, this method of accounting represents a change from
the earlier practice in which the cost of military retirement was measured in
terms of actual payments to current retirees.
Appropriation — one form of budget authority provided by Congress for the
funding of an agency, department, or program for a given amount of time. An
appropriation provides funds for purposes specifically designated by Congress.
Funds will not necessarily all be spent in the year in which they are initially
provided.
Authorization — establishes or maintains a government program or agency by
defining its scope. Authorizing legislation is normally a prerequisite for
appropriations and may set specific limits on the amount that may be
appropriated for the specified program or agency. An authorization, however,
does not make money available, and sometimes appropriations are made
without having been authorized.
Budget Authority — legal authority for an agency to enter into obligations for the
provision of goods or services. It may be available for one or more years. An
appropriation is one form of budget authority.
Current/Constant Dollars — the cost of goods or services in current dollars is the
value in terms of prices current at the time of purchase — current dollars are
also referred to simply as “dollars” or as “then-year dollars.” The cost of goods
or services in constant dollars is the value adjusted to eliminate the effects of
changes in prices (usually due to inflation). Constant dollars, expressed in
terms of a selected reference year (generally the most recent fiscal year), are
determined by dividing current dollars by a “deflator” based on the prices in the
reference year. Constant dollars are used to assess changes in funding of
programs independently of the effects of inflation. Growth rates in constant,
inflation-adjusted dollars are referred to as “real growth” rates.
Deficit — in the federal budget, the amount by which total federal budget outlays for
a given fiscal year exceed total federal revenues for that year.
Fiscal Year — a fiscal year in the federal government begins on October 1 and ends
on September 30 and is designated by the calendar year in which it ends. Thus,
FY2005 begins on October 1, 2004 and will end on September 30, 2005. (Note
that the federal fiscal year ran from July 1 to June 30 until FY1977.)

CRS-32
National Defense Budget Function — one of the categories of the federal budget.
It consists of the Department of Defense (DOD) budget, which funds all direct
DOD military programs, and a number of defense-related activities administered
by other agencies. These activities include atomic energy defense activities
funded through the Department of Energy, civil defense programs administered
by the Federal Emergency Management Agency, and the Selective Service
System. The DOD budget constitutes more than 95% of the National Defense
Budget Function.
Obligation — an order placed, contract awarded, service agreement undertaken, or
other commitments made by federal agencies during a given period which will
require outlays during the same or some future period.
Outlays — money spent by a federal agency from funds provided by Congress.
Outlays in a given fiscal year are a result of obligations that in turn follow the
provision of budget authority.
Unexpended Funds — budget authority that has been appropriated by Congress, but
remains unspent, representing future outlays. Unexpended funds, whether
obligated or as yet unobligated, are formally appropriated by Congress for
specific programs.
Unobligated Funds — budget authority that has been appropriated by Congress for
specific programs but that has not yet been pledged or obligated by contract.

CRS-33
CRS Defense Reports
CRS annually prepares a number of issue briefs and reports on specific weapons
systems and other defense issues that impact the defense budget. For updated lists
of CRS products on defense-related issues, congressional offices should go to
[http://www.crs.gov/products/browse/is-defense.shtml].
Selected defense-related products include:
CRS Report RL32305, Authorization and Appropriations for FY2005: Defense, by
(name redacted) a nd (name redacted).
CRS Issue Brief IB85159, Military Retirement: Major Legislative Issues, by (name
redacted).
CRS Issue Brief IB93103, Military Medical Care Services: Questions and Answers,
by Richard A. Best, Jr.
CRS Issue Brief IB10089, Military Pay and Benefits: Key Questions and Answers,
by (name redacted).
CRS Report RS20851, Naval Transformation: Background and Issues for Congress,
by Ronald O’Rourke.
CRS Report RS21059, Navy DD(X) Destroyer Program: Background and Issues for
Congress, by Ronald O’Rourke.
CRS Report RS21195, Evolutionary Acquisition and Spiral Development in DoD
Programs: Policy Issues for Congress, by (name redacted) and Ronald
O’Rourke.
CRS Issue Brief IB92115, Tactical Aircraft Modernization: Issues for Congress, by
(name redacted).
CRS Report RL31872, Unmanned Aerial Vehicles: Background and Issues for
Congress, by (name redacted).
CRS Report RS20859, Air Force Transformation, by (name redacted).
CRS Report RL30802, Reserve Component Personnel Issues: Questions and
Answers, by (name redacted).
CRS Report RL32141, Funding for Military and Peacekeeping Operations: Recent
History and Precedents, by (name redacted).
CRS Report RL32321, Policing in Peacekeeping and Related Stability Operations:
Problems and Proposed Solutions, by (name redacted).
CRS Report RS21822, Military Base Closures: DoD’s 2005 Internal Selection
Process, by Daniel Else

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