Defense budget portends difficult trade-offs

The Obama administration's request for $538 billion for the Defense Department in fiscal 2010 and its stated intention to maintain a high level of funding in the coming years put the president on track to spend more on defense, in real dollars, than any other president has in one term of office since World War II. And that's not counting the additional $130 billion the administration is requesting to fund the wars in Iraq and Afghanistan next year, with even more war spending slated for future years.

Nonetheless, the department faces enormous fiscal challenges that likely will force a significant shift in spending priorities as it conducts its latest Quadrennial Defense Review, which will be released early next year.

"When you look at the pressure on the top line [of the Defense budget] and growing entitlements, we are going to have to look at some very hard choices," said Jim Thomas, vice president for studies at the nonpartisan Center for Strategic and Budgetary Assessments.

On Wednesday, CSBA released three reports that examine the Obama administration's fiscal 2010 Defense budget request, the impact of the wars in Iraq and Afghanistan on military plans, and classified funding in the 2010 budget.

Collectively, the reports show the toll the wars and economic trends are having on the military services and their long-term modernization plans. Of particular note are growing personnel costs. In 2007, to fill a shortage of ground troops needed for combat in Iraq and Afghanistan, the Army and Marine Corps began adding 65,000 and 27,000 troops, respectively.

"Whenever you add troops to the force there are long-term budget implications," said Todd Harrison, a CSBA budget analyst and author of the three reports. He estimated the additional 92,000 troops will cost about $14 billion annually when items such as pay, health care, housing, equipment, retirement benefits, training and education are factored in.

The Defense Department is predicting military health care costs will double during the next 10 years due to higher-than-inflation cost growth and Congress' steady expansion of benefits, including those for reservists and their families.

"Once these conflicts do subside, can we afford to maintain the [troop increases]? If so, where does the money come from?" Harrison wondered. What's more, the Army announced in July that it would need a temporary increase of 22,000 soldiers in addition to the earlier increase of 65,000.

The cost of fielding new weapons is another concern. The high cost of developing weapons is undercutting the department's ability to buy them once they're available, Harrison said.

In the 1970s and 1980s, the ratio of procurement to RTD&E (research, development, testing and engineering) funding was 3-to-1. Today, it is between 1.2-to-1 and 1.5-to-1, Harrison said.

"Acquisition programs are procuring next-generation systems in much smaller quantities than the legacy systems they are replacing," he said. Even with the increased capability provided by most next-generation weapons programs, numbers do matter. An aircraft or ship only can be in one place at a time -- something that matters greatly to military planners.

Harrison's analysis also shows that predicted savings from program changes don't always materialize. He noted that the 2005 Base Realignment and Closure process, which resulted in the decision to shut down 22 major bases -- about 7 percent of the military's network of installations -- was supposed to yield $40.1 billion in savings between 2005 and 2025. The Defense Department now estimates the savings will be $15.3 billion, but in the near term the department is spending more to close the bases than it is saving.

"The days of nipping and tucking are coming to an end," said Thomas, referring to the long-standing practice of cutting small amounts of money from many programs to make up for budget shortfalls. Instead, the nation faces strategic decisions about its willingness to accept risk.

In the broader context of the overall federal budget and the nation's mounting debt, the pressure to curtail spending on Defense is inevitable, Thomas and Harrison said. CSBA estimates that in 10 years, the interest payment on the national debt will exceed the Defense budget for the first time in history.

"We may not be able to afford to field a force that can respond to two major wars at a time," he said, referring to the strategic objective of the previous QDR.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.