For other versions of this document, see http://wikileaks.org/wiki/CRS-RL31349 ------------------------------------------------------------------------------ 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 defense- related issues, congressional offices should go to: [http://www.crs.gov/products/browse/is-defense.shtml]. Selected defense-related products include: CRS-4 CRS Issue Brief IB10062, Defense Research: DOD's Research, Development, Test and Evaluation Program, by John Dimitri Moteff. CRS Issue Brief IB10089, Military Pay and Benefits: Key Questions and Answers, by 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) Actual Actual Actual Actual Actual Actual Actual Estimate Request Proj. Proj. Proj. Proj. Fiscal Year: 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 National Defense Budget Function Budget Authority Current year dollars 266.4 266.2 270.4 271.3 292.3 304.1 329.0 350.7 396.8 405.6 426.6 447.7 469.8 Constant FY2002 dollars 324.2 317.2 315.3 309.1 325.3 329.9 346.5 358.5 396.8 396.1 406.5 416.2 426.1 Real growth/decline -0.9% -2.2% -0.6% -2.0% +5.2% +1.4% +5.0% +3.5% +10.7% -0.2% +2.6% +2.4% +2.4% Outlays Current year dollars 271.0 265.2 270.4 268.4 274.9 294.5 308.5 348.0 379.0 393.8 413.5 428.5 442.5 Constant FY2003 dollars 329.1 315.5 313.8 304.8 306.3 319.5 324.9 355.2 379.0 384.5 394.2 398.4 401.1 Real growth/decline -4.5% -4.1% -0.5% -2.9% +0.5% +4.3% +1.7% +9.3% +6.7% +1.5% +2.5% +1.1% +0.7% Department of Defense Budget Authority Current year dollars 255.7 254.6 258.0 258.6 278.6 290.5 313.0 333.0 378.6 387.4 408.3 429.2 450.9 Constant FY2003 dollars 311.3 303.3 300.8 294.6 310.0 315.1 329.6 340.4 378.6 378.3 389.0 398.9 409.0 Real growth/decline -0.3% -2.5% -0.8% -2.1% +5.2% +1.7% +4.6% +3.3% +11.2% -0.1% +2.8% +2.5% +2.5% Outlays Current year dollars 258.4 252.7 258.2 256.1 261.4 281.2 294.0 330.6 361.0 375.6 395.2 410.2 423.9 Constant FY2003 dollars 313.7 300.5 299.6 290.8 291.2 305.1 309.6 337.4 361.0 366.7 376.7 381.3 384.2 Real growth/decline -4.4% -4.2% -0.3% -2.9% +0.2% +4.8% +1.5% +9.0% +7.0% +1.6% +2.7% +1.2% +0.8% Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003 , February 2002. Deflators and data on Desert Shield/Desert Storm budget authority and outlays from DOD Comptroller. Notes: Figures exclude Operation Desert Shield/Desert Storm costs and receipts, which affects outlay amounts from FY1995-1998. This and other tables in this report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees beginning in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above. CRS-7 Table 2. National Defense Budget Function by Appropriations Title, Budget Authority, FY1995-2007 (current year dollars in billions) Actual Actual Actual Actual Actual Actual Actual Estimate Request Proj. Proj. Proj. Proj. Fiscal Year: 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Department of Defense (military activities only) Military Personnel 71.6 69.8 70.3 69.8 70.6 73.8 76.9 82.0 94.3 104.0 108.1 113.7 117.4 Operation & Maintenance 93.8 93.7 92.4 97.2 105.0 108.8 117.7 129.8 150.4 140.9 147.0 152.3 155.2 Procurement 43.6 42.6 43.0 44.8 51.1 55.0 62.6 61.1 68.7 74.7 79.2 86.9 99.0 RDT&E 34.5 35.0 36.4 37.1 38.3 38.7 41.7 48.6 53.9 57.0 60.7 58.9 58.0 Military Construction 5.4 6.9 5.7 5.5 5.4 5.1 5.5 6.6 4.8 5.1 6.3 10.8 13.8 Family Housing 3.4 4.3 4.1 3.8 3.6 3.5 3.7 4.1 4.2 4.3 5.1 4.9 4.8 Other 3.4 2.4 6.1 0.3 4.6 5.6 4.9 0.9 2.3 1.4 1.9 1.5 2.7 Subtotal, Department of Defense 255.7 254.6 258.0 258.6 278.6 290.5 313.0 333.0 378.6 387.4 408.3 429.2 450.9 Department of Energy Atomic Energy Defense Activities 10.1 10.7 11.4 11.7 12.6 12.4 14.4 16.0 16.5 16.5 16.6 16.8 17.1 Other Agencies Defense-Related Activities 0.6 0.9 1.0 1.0 1.1 1.2 1.6 1.7 1.7 1.7 1.7 1.7 1.7 Total, National Defense 266.4 266.2 270.4 271.3 292.3 304.1 329.0 350.7 396.8 405.6 426.6 447.7 469.8 Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002; except Title level detail for FY2004-2007 from Office of Management and Budget, Analytical Perspectives: Budget of the United States Government, Fiscal Year 2003, February 2002. Notes: This and other tables in this report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees beginning in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above. CRS-8 Table 3. National Defense Budget Function by Appropriations Title, Outlays, FY1995-2007 (current year dollars in billions) Actual Actual Actual Actual Actual Actual Actual Estimate Request Proj. Proj. Proj. Proj. Fiscal Year: 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Department of Defense (military activities only) Military Personnel 70.8 66.7 69.7 69.0 69.5 76.0 74.0 81.2 92.8 102.1 107.1 112.8 116.6 Operation & Maintenance 90.9 88.7 92.4 93.5 96.4 105.9 114.0 133.6 143.5 146.2 147.0 146.8 147.9 Procurement 54.3 48.5 47.6 48.2 48.8 51.7 55.0 59.6 62.3 65.3 75.0 81.8 87.6 RDT&E 34.6 36.5 37.0 37.4 37.4 37.6 40.6 45.1 50.8 52.3 56.2 57.6 57.4 Military Construction 6.8 6.7 6.2 6.0 5.5 5.1 5.0 5.7 6.0 4.7 4.5 5.5 7.8 Family Housing 3.6 3.8 4.0 3.9 3.7 3.4 3.5 3.8 3.9 3.9 4.0 4.4 4.4 Other -2.6 1.8 1.2 -1.9 0.1 1.6 1.9 1.7 1.7 1.1 1.3 1.4 2.1 Subtotal, DOD 258.4 252.7 258.2 256.1 261.4 281.2 294.0 330.6 361.0 375.6 395.2 410.2 423.9 Department of Energy Atomic Energy Defense Activities 11.8 11.6 11.3 11.3 12.4 12.2 13.0 15.9 16.3 16.5 16.6 16.7 16.9 Other Agencies Defense-Related Activities 0.8 0.9 0.9 1.1 1.1 1.1 1.5 1.6 1.7 1.7 1.7 1.7 1.7 Total, National Defense 271.0 265.2 270.4 268.4 274.9 294.5 308.5 348.0 379.0 393.8 413.5 428.5 442.5 Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002; except Title level detail for FY2004-2007 from Office of Management and Budget, Analytical Perspectives: Budget of the United States Government, Fiscal Year 2003, February 2002. Deflators and data on Desert Shield/Desert Storm outlays from DOD Comptroller. Notes: Figures exclude Operation Desert Shield/Desert Storm costs and receipts, which affects data from FY1995-1998. This and other tables in this report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees beginning in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above. CRS-9 Table 4. Department of Defense Budget Authority by Service, FY1994-2003 (current year dollars in billions) Actual Actual Actual Actual Actual Actual Actual Est. Proj. Fiscal Year: 1995 1996 1997 1998 1999 2000 2001 2002 2003 Army 63.3 64.5 64.4 64.0 68.4 73.2 77.0 80.8 90.8 % of DOD Total 24.8% 25.4% 25.0% 24.8% 24.5% 25.2% 24.9% 24.5% 24.0% Navy/Marine Corps 76.9 80.0 79.5 80.7 84.0 88.8 95.5 98.6 108.2 % of DOD Total 30.1% 31.4% 30.8% 31.2% 30.2% 30.6% 30.8% 29.9% 28.6% Air Force 73.9 73.0 73.2 76.3 81.9 83.1 89.5 94.2 106.9 % of DOD Total 28.9% 28.7% 28.4% 29.5% 29.4% 28.6% 28.9% 28.6% 28.2% Defense Wide 41.6 37.0 40.8 37.6 44.3 45.5 47.9 56.2 72.7 % of DOD Total 16.3% 14.5% 15.8% 14.5% 15.9% 15.7% 15.4% 17.0% 19.2% DOD Total 255.7 254.4 258.0 258.6 278.6 290.5 309.9 329.9 378.6 Source: Department of Defense Comptroller, National Defense Budget Estimates for FY2003, March 2002. Notes: Totals may not add due to rounding. Total is discretionary DOD budget authority. FY2002 and FY2003 Defense-Wide amounts include Defense Emergency Response Fund. Figure 1: DOD Budget Authority by Service, FY2003 Request Navy/Marine Army 28.6% 24.0% Defense-Wide 19.2% Air Force 28.2% CRS-10 Table 5. Operation Desert Shield/Desert Storm Budget Authority and Outlays (current year dollars in millions) FY1990 FY1991 FY1992 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 Total Budget Authority Military Personnel 281 5,824 2,409 ­ ­ ­ ­ ­ ­ 8,514 Operations & Maintenance 1,328 24,366 8,132 ­ ­ ­ ­ ­ ­ 33,826 Procurement 10 5,278 1,950 ­ ­ ­ ­ ­ ­ 7,238 Research, Development, Test, & Evaluation 9 69 106 ­ ­ ­ ­ ­ ­ 184 Military Construction ­ 35 ­ ­ ­ ­ ­ ­ ­ 35 Family Housing ­ ­ ­ ­ ­ ­ ­ ­ ­ 0 Stock Funds 400 271 ­ ­ ­ ­ ­ ­ ­ 671 Allied Cash Contributions ­ -43,154 -5,240 ­ ­ ­ ­ ­ ­ -48,394 Total Budget Authority 2,028 -7,311 7,357 ­ ­ ­ ­ ­ ­ 2,074 Outlays Military Personnel 267 5,382 2,734 114 ­ ­ ­ ­ ­ 8,497 Operations & Maintenance 1,033 16,212 11,152 3,974 1,142 147 51 21 4 33,736 Procurement 1 -152 2,154 2,619 1,369 729 378 44 17 7,159 Research, Development, Test, & Evaluation 5 40 76 45 11 4 1 ­ ­ 182 Military Construction ­ 10 13 7 2 2 1 ­ ­ 35 Family Housing ­ ­ ­ ­ ­ ­ ­ ­ ­ 0 Stock Funds 156 -1,778 1,348 429 259 166 79 11 ­ 670 Allied Cash Contributions ­ -43,154 -5,240 ­ ­ ­ ­ ­ ­ -48,394 Total Outlays 1,462 -23,440 12,237 7,188 2,783 1,048 510 76 21 1,885 Source: Department of Defense Comptroller. Notes: Totals may not add due to rounding. Totals in this table represent only cash outlays and receipts. DOD estimates that the total cost of Operation Desert Shield/Desert Storm was $61.1 billion, including activities supported through allied in-kind assistance and material losses not replaced. CRS-11 Part II: Trends in Defense Spending Part II provides data on trends in the defense budget that may be of particular interest to Congress. In assessing trends, current levels of spending are often compared to the peak levels reached during the defense buildup of the 1980s. FY1985 was the peak year in budget authority for national defense, FY1987 was the peak in the number of military personnel, and FY1989 was the peak in outlays. Table 6 shows budget authority by appropriations title for selected years for the period FY1976 through FY2007 in inflation-adjusted dollars and calculates cumulative real growth or decline over the selected parts of that period. Figure 2 graphically shows trends in budget authority by title from FY1985 to FY2007. Table 7 shows the trend in personnel levels for active duty forces, reserve forces, and DOD civilians for FY1981 and selected years thereafter. Figure 3 illustrates the trend in active duty military personnel levels. Table 8 and Figure 4 show total active duty end-strength levels from FY1950-2003. Table 9 shows the trend in major elements of force structure (Army and Marine Corps divisions, Air Force tactical air wings, and Navy ships) for FY1980-2003. Table 10 shows the trend in total national defense budget authority and outlays in current and constant FY2003 dollars from FY1940 to FY2007. Table 11 tracks national defense outlays as a share of gross national product (GNP) and gross domestic product (GDP) from FY1910 to FY2007. Figure 5 illustrates the trend in national defense outlays in constant FY2003 dollars from FY1910 to FY2007. Figure 6 illustrates trends in national defense budget authority and outlays in constant FY2003 dollars from FY1947 to FY2007. Figures 7 and 8 illustrate trends in national defense outlays as a percentage of GNP/GDP from FY1910 to FY2007 and as a percentage of GDP from FY1947 to FY2007. Table 12 shows the allocation of outlays by budget enforcement act category in the federal budget in current year dollars, and Table 13 and Figure 9 show the same data as percentages of total federal outlays. Figure 10 shows the allocation of federal outlays in constant FY2003 dollars. Table 14 follows the trend in DOD five- and six-year defense plans since 1987. Finally, Table 15 shows defense spending of the top 25 foreign nations. CRS-12 Table 6. National Defense Budget Authority Trends by Appropriations Title, FY1976-2007 (constant FY2003 dollars in billions) Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Fiscal Year 1976 1980 1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Military Personnel 117.9 111.3 123.4 123.2 117.9 114.8 105.8 96.9 94.9 90.5 88.6 84.8 83.2 Operation and Maintenance 85.3 94.4 126.9 121.5 120.2 110.5 113.8 110.2 114.3 111.6 107.9 110.5 116.7 Procurement 61.0 69.7 144.0 101.8 81.4 72.5 61.4 50.4 49.0 47.1 47.0 48.5 54.5 RDT&E 26.7 26.7 47.8 46.7 45.0 44.0 44.7 40.1 39.3 39.0 40.0 40.3 41.1 Military Construction 6.2 4.3 8.4 6.5 6.4 6.3 5.4 6.9 6.2 7.7 6.3 6.0 5.8 Family Housing 3.6 3.0 4.3 4.0 4.1 4.5 4.6 4.0 3.8 4.7 4.5 4.1 3.8 Other -0.5 1.1 7.0 -1.0 1.5 4.6 3.5 3.6 3.8 2.7 6.6 0.4 4.8 Subtotal, Department of Defense 300.2 310.6 461.7 402.6 376.5 357.2 339.2 312.2 311.3 303.3 300.8 294.6 310.0 Dept. of Energy Defense-Related 5.3 6.6 11.8 13.4 15.4 15.6 15.3 13.5 12.3 12.7 13.2 13.3 14.0 Other Defense-Related 0.5 0.5 0.8 0.8 1.5 1.3 2.3 1.3 0.7 1.1 1.2 1.2 1.3 Total, National Defense 306.0 317.6 474.3 416.8 393.3 374.0 356.8 327.0 324.2 317.2 315.3 309.1 325.3 CRS-13 Table 6. ­ continued (constant FY2003 dollars in billions) Real Real Real Real Growth/ Growth/ Growth/ Growth/ Actual Actual Est. Proj. Proj. Proj. Proj. Proj. Decline Decline Decline Decline Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 FY76-85 FY85-90 FY90-98 FY98-03 Military Personnel 83.2 83.9 84.8 94.3 100.9 101.7 103.7 103.9 +5% 0% -31% +11% Operation and Maintenance 118.5 123.3 132.4 150.4 137.4 139.7 141.0 139.8 +49% -4% -9% +36% Procurement 57.7 64.7 62.1 68.7 73.4 76.4 82.2 91.9 +136% -29% -52% +42% RDT&E 40.8 43.2 49.3 53.9 56.0 58.5 55.6 53.7 +79% -2% -14% +34% Military Construction 5.4 5.7 6.7 4.8 5.0 6.1 10.2 12.7 +36% -23% -8% -20% Family Housing 3.7 3.8 4.1 4.2 4.2 4.9 4.6 4.5 +20% -7% +3% +2% Other 5.8 5.0 0.9 2.3 1.3 1.8 1.5 2.5 NA NA NA NA Subtotal, Department of Defense 315.1 329.6 340.4 378.6 378.3 389.0 398.9 409.0 +54% -13% -27% +29% Dept. of Energy Defense-Related 13.5 15.2 16.4 16.5 16.1 15.8 15.7 15.5 +123% +13% -0% +23% Other Defense-Related 1.3 1.7 1.8 1.7 1.7 1.6 1.6 1.6 +76% +4% +37% +49% Total, National Defense 329.9 346.5 358.5 396.8 396.1 406.5 416.2 426.1 +55% -12% -26% +28% Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002; except Title level figures for FY2004-2007 from Office of Management and Budget, Analytical Perspectives: Budget of the United States Government, Fiscal Year 2003, February 2002. Deflators and data on Desert Shield/Desert Storm costs and receipts from DOD Comptroller. Notes: Data for FY1990-92 exclude Desert Shield/Desert Storm costs and receipts (see Table 5, above). Totals may not add due to rounding. This and other tables in this report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees beginning in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above. CRS-14 Figure 2: DOD Budget Authority by Title, FY1985-2007 160 140 Operation & Maintenance 120 100 Military Personnel 80 Procurement 60 40 RDT&E 20 0 1985 1990 1995 2000 2005 Figure 3: Active Duty End-Strength by Service, Selected Years, FY1987-2003 2500 Air Force Marine Corps 2000 Navy Army 1500 1000 500 0 1987 1989 1991 1993 1995 1997 1999 2000 2001 2002 2003 CRS-15 Table 7. Department of Defense Personnel Levels, Selected Years (end strength/ full-time equivalents in thousands) Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Est. Proj. Fiscal Year: 1981 1985 1987 1989 1991 1993 1995 1997 1999 2000 2001 2002 2003 Army 781 781 781 770 725 572 509 492 479 482 481 480 480 Navy 540 571 587 593 571 510 435 396 373 373 378 376 376 Marine Corps 191 198 200 197 195 178 174 174 173 173 173 173 175 Air Force 570 602 607 571 511 444 400 378 361 356 354 359 359 Total Active 2,082 2,151 2,174 2,130 2,002 1,705 1,518 1,440 1,386 1,384 1,385 1,387 1,390 Selected Reserves 851 1,188 1,151 1,171 1,138 1,058 946 902 877 865 869 864 865 Total Civilians (FTEs) 947 1,029 1,032 1,023 969 932 822 746 681 660 650 635 627 Sources: Active and reserve force levels for FY2001-FY2003 from Office of Management and Budget, Budget of the United States Government for FY2003: Appendix, February 2002; active duty force levels for prior years from Department of Defense, Undersecretary of Defense Comptroller, National Defense Budget Estimate for FY2002, August 2001; reserve force levels for prior years from U.S. Department of Defense, Manpower Requirements Report, FY1998, July 1998 and prior years and from Office of Management and Budget, Budget of the United States Government for FY2002: Appendix, April 2001 and prior years; civilian FTE levels from Office of Management and Budget, Historical Tables: Budget of the United States Government for FY2003, February 2002. Notes: Figures reflect end-strength for active and reserve forces and full time equivalent (FTE) employment levels for civilians. End-strength represents force levels at the end of each fiscal year. Selected reserves do not include Standby Reserve, Individual Ready Reserve, and Inactive National Guard. Totals may not add due to rounding. Active duty totals do not include full time Guard and Reserve. CRS-16 Table 8. Department of Defense Active Duty Personnel Levels, FY1950-2003 (end-strength in thousands) 1950 1,459 1964 2,688 1978 2,061 1992 1,808 1951 3,249 1965 2,656 1979 2,024 1993 1,705 1952 3,636 1966 3,094 1980 2,050 1994 1,610 1953 3,555 1967 3,377 1981 2,082 1995 1,518 1954 3,302 1968 3,548 1982 2,108 1996 1,472 1955 2,935 1969 3,460 1983 2,123 1997 1,440 1956 2,806 1970 3,065 1984 2,138 1998 1,406 1957 2,795 1971 2,714 1985 2,151 1999 1,386 1958 2,600 1972 2,322 1986 2,169 2000 1,384 1959 2,504 1973 2,252 1987 2,174 2001 1,385 1960 2,475 1974 2,161 1988 2,138 2002 1,387 1961 2,483 1975 2,127 1989 2,130 2003 1,390 1962 2,808 1976 2,081 1990 2,069 1963 2,700 1977 2,073 1991 2,002 Sources: FY2001-FY2003 from Office of Management and Budget, Budget of the United States Government for FY2003: Appendix, February 2002; FY1950-2000 from Under Secretary of Defense Comptroller, National Defense Budget Estimates for FY2002, June 2001. Figure 4: Active Duty End-Strength, FY1950-2003 4,000 3,000 2,000 1,000 0 1950 1960 1970 1980 1990 2000 CRS-17 Table 9. U.S. Military Force Structure, FY1980-2003 Air Force Fiscal Army Divisions Marine Divisions Naval Forces Tactical Wingsa Year Active Reserve Active Reserve Carriersb Total Ships Active Reserve 1980 16 8 3 1 13 477 26 11 1981 16 8 3 1 13 491 26 11 1982 16 8 3 1 14 513 26 12 1983 16 8 3 1 14 514 25 12 1984 16 9 3 1 14 524 25 12 1985 17 10 3 1 14 542 25 12 1986 18 10 3 1 14 556 25 12 1987 18 10 3 1 15 569 25 12 1988 18 10 3 1 15 566 25 12 1989 18 10 3 1 15 567 25 12 1990 18 10 3 1 15 546 24 12 1991 16 10 3 1 15 526 22 13 1992 14 10 3 1 14 466 16 13 1993 14 10 3 1 13 434 16 11 1994 12 8 3 1 12 387 13 9 1995 12 8 3 1 11+1 373 13 8 1996 10 8 3 1 11+1 365 13 7 1997 10 8 3 1 11+1 357 13 7 1998 10 8 3 1 11+1 333 13 7 1999 10 8 3 1 11+1 317 13 7.2 2000 10 8 3 1 11+1 316 13 7.6 2001 10 8 3 1 11+1 316 12.6 7.6 2002 10 8 3 1 11+1 315 12+ 7+ 2003 10 8 3 1 11+1 308 12+ 7+ Sources: U.S. Navy, Highlights of the Department of the Navy FY2003 Budget, February 2002; U.S. Department of Defense, briefing materials accompanying the FY2002 budget request (mimeo), June 2001 and similar materials provided in prior years. U.S. Library of Congress, Congressional Research Service, U.S./Soviet Military Balance: Statistical Trends, 1980-1989, CRS Report 90-401 RCO, by John M. Collins and 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 Outlays Fiscal Year Constant Real Constant Real Current FY2003 Growth/ Current FY2003 Growth/ Dollars Dollars Decline Dollars Dollars Decline 1940 ­ ­ ­ 1.7 26.2 ­ 1941 ­ ­ ­ 6.4 97.0 +269.8% 1942 ­ ­ ­ 25.7 352.8 +263.6% 1943 ­ ­ ­ 66.7 844.3 +139.3% 1944 ­ ­ ­ 79.1 1,031.9 +22.2% 1945 39.2 612.9 ­ 83.0 1,118.3 +8.4% 1946 44.0 558.1 -8.9% 42.7 574.2 -48.7% 1947 9.0 115.5 -79.3% 12.8 157.3 -72.6% 1948 9.5 108.8 -5.8% 9.1 107.7 -31.5% 1949 10.9 127.8 +17.5% 13.2 149.1 +38.4% 1950 16.5 175.8 +37.5% 13.7 154.6 +3.7% 1951 57.8 470.5 +167.7% 23.6 237.6 +53.7% 1952 67.5 570.4 +21.2% 46.1 423.7 +78.3% 1953 56.9 497.0 -12.9% 52.8 469.9 +10.9% 1954 38.7 361.2 -27.3% 49.3 447.0 -4.9% 1955 32.9 306.8 -15.1% 42.7 385.3 -13.8% 1956 35.0 306.4 -0.1% 42.5 364.1 -5.5% 1957 39.4 329.4 +7.5% 45.4 368.9 +1.3% 1958 40.1 318.5 -3.3% 46.8 360.4 -2.3% 1959 45.1 335.7 +5.4% 49.0 360.2 0.0% 1960 44.3 324.8 -3.2% 48.1 353.1 -2.0% 1961 45.1 328.2 +1.0% 49.6 352.5 -0.2% 1962 50.2 359.1 +9.4% 52.3 372.8 +5.8% 1963 52.1 364.9 +1.6% 53.4 377.1 +1.2% 1964 51.6 348.4 -4.5% 54.8 373.3 -1.0% 1965 50.6 333.5 -4.3% 50.6 341.6 -8.5% 1966 64.4 387.7 +16.3% 58.1 365.2 +6.9% 1967 73.1 423.1 +9.1% 71.4 422.1 +15.6% 1968 77.2 430.5 +1.7% 81.9 460.0 +9.0% 1969 78.5 420.5 -2.3% 82.5 448.6 -2.5% 1970 75.3 380.9 -9.4% 81.7 416.2 -7.2% 1971 72.7 347.4 -8.8% 78.9 379.6 -8.8% 1972 76.4 333.8 -3.9% 79.2 351.9 -7.3% 1973 79.1 318.8 -4.5% 76.7 320.8 -8.8% 1974 81.5 302.4 -5.2% 79.3 307.2 -4.3% 1975 86.2 292.1 -3.4% 86.5 300.1 -2.3% 1976 97.3 306.1 +4.8% 89.6 290.6 -3.2% 1977 110.2 318.3 +4.0% 97.2 293.0 +0.8% 1978 117.2 313.9 -1.4% 104.5 293.3 +0.1% 1979 126.5 312.3 -0.5% 116.3 302.4 +3.1% 1980 143.9 317.8 +1.7% 134.0 310.2 +2.6% 1981 180.0 354.7 +11.6% 157.5 324.5 +4.6% 1982 216.5 393.3 +10.9% 185.3 347.0 +6.9% 1983 245.0 425.5 +8.2% 209.9 374.8 +8.0% 1984 265.2 445.0 +4.6% 227.4 390.0 +4.1% 1985 294.7 474.3 +6.6% 252.7 414.5 +6.3% 1986 289.1 455.6 -4.0% 273.4 436.0 +5.2% CRS-19 Budget Authority Outlays Fiscal Year Constant Real Constant Real Current FY2003 Growth/ Current FY2003 Growth/ Dollars Dollars Decline Dollars Dollars Decline 1987 287.4 440.9 -3.2% 282.0 437.4 +0.3% 1988 292.0 432.2 -2.0% 290.4 435.8 -0.4% 1989 299.6 426.7 -1.3% 303.6 437.1 +0.3% 1990 301.2 416.8 -2.3% 297.9 416.8 -4.6% 1991 296.2 393.3 -5.6% 296.7 397.9 -4.5% 1992 287.7 374.0 -4.9% 286.1 372.3 -6.5% 1993 281.1 356.8 -4.6% 283.9 359.0 -3.5% 1994 263.3 327.0 -8.3% 278.9 344.4 -4.1% 1995 266.4 324.2 -0.9% 271.0 329.1 -4.5% 1996 266.2 317.2 -2.2% 265.2 315.5 -4.1% 1997 270.4 315.3 -0.6% 270.4 313.8 -0.5% 1998 271.3 309.1 -2.0% 268.4 304.8 -2.9% 1999 292.3 325.3 +5.2% 274.9 306.3 +0.5% 2000 304.1 329.9 +1.4% 294.5 319.5 +4.3% 2001 329.0 346.5 +5.0% 308.5 324.9 +1.7% 2002 350.7 358.5 +3.5% 348.0 355.2 +9.3% 2003 396.8 396.8 +10.7% 379.0 379.0 +6.7% 2004 405.6 396.1 -0.2% 393.8 384.5 +1.5% 2005 426.6 406.5 +2.6% 413.5 394.2 +2.5% 2006 447.7 416.2 +2.4% 428.5 398.4 +1.1% 2007 469.8 427.5 +2.4% 442.5 401.1 +0.7% Sources: Current dollar FY1940-1975 budget authority figures from Department of Defense Comptroller, National Defense Budget Estimates for FY1982, March 1983; all other current dollar figures from U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002; constant dollar figures calculated by CRS using deflators from Department of Defense Comptroller; figures on Desert Shield/Desert Storm costs and receipts from Department of Defense Comptroller. Notes: This and other tables in this report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees beginning in FY2004; and (3) proposed accrual accounting for all civilian retirement benefits beginning in FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above. Figures for FY1990 and beyond exclude costs and receipts of Operation Desert Shield/Desert Storm. Figures prior to FY1976 are from DOD data that have not been revised to reflect accrual accounting for military retirement in years prior to its adoption in FY1985. Figures from FY1976 on have been revised by OMB to reflect accrual accounting. CRS-20 Table 11. National Defense Outlays as a Percentage of GNP/GDP, FY1910-2007 (current year dollars in billions) National Outlays National Outlays Fiscal Defense GNP/ as % of Fiscal Defense GNP/ as % of Year Outlays GDP GNP/GDP Year Outlays GDP GNP/GDP 1910 0.3 35.3 0.8% 1945 83.0 221.3 37.5% 1911 0.3 35.8 0.8% 1946 42.7 222.7 19.2% 1912 0.3 39.4 0.7% 1947 12.8 234.6 5.5% 1913 0.3 39.6 0.7% 1948 9.1 256.4 3.6% 1914 0.3 38.6 0.8% 1949 13.2 271.5 4.8% 1915 0.3 40.0 0.7% 1950 13.7 273.4 5.0% 1916 0.3 48.3 0.6% 1951 23.6 321.0 7.3% 1917 0.6 60.4 1.0% 1952 46.1 348.8 13.2% 1918 7.1 76.4 9.3% 1953 52.8 373.4 14.1% 1919 13.5 84.0 16.1% 1954 49.3 378.0 13.0% 1920 4.0 91.5 4.4% 1955 42.7 395.2 10.8% 1921 2.6 69.6 3.7% 1956 42.5 427.7 9.9% 1922 0.9 74.1 1.3% 1957 45.4 450.7 10.1% 1923 0.7 85.1 0.8% 1958 46.8 461.1 10.2% 1924 0.6 84.7 0.8% 1959 49.0 492.1 10.0% 1925 0.6 93.1 0.6% 1960 48.1 518.9 9.3% 1926 0.6 97.0 0.6% 1961 49.6 531.8 9.3% 1927 0.6 94.9 0.6% 1962 52.3 568.5 9.2% 1928 0.7 97.0 0.7% 1963 53.4 599.7 8.9% 1929 0.7 103.1 0.7% 1964 54.8 641.3 8.5% 1930 0.7 97.4 0.8% 1965 50.6 687.9 7.4% 1931 0.7 83.7 0.9% 1966 58.1 754.2 7.7% 1932 0.7 67.5 1.0% 1967 71.4 813.5 8.8% 1933 0.6 57.4 1.1% 1968 81.9 868.4 9.4% 1934 0.5 61.2 0.9% 1969 82.5 949.2 8.7% 1935 0.7 69.7 1.0% 1970 81.7 1,013.2 8.1% 1936 0.9 78.5 1.2% 1971 78.9 1,081.4 7.3% 1937 0.9 87.8 1.1% 1972 79.2 1,181.5 6.7% 1938 1.0 89.0 1.2% 1973 76.7 1,308.1 5.9% 1939 1.1 89.0 1.2% 1974 79.3 1,442.1 5.5% 1940 1.7 96.7 1.7% 1975 86.5 1,559.8 5.5% 1941 6.4 114.0 5.6% 1976 89.6 1,736.7 5.7% 1942 25.7 144.2 17.8% 1977 97.2 1,971.3 5.6% 1943 66.7 180.1 37.0% 1978 104.5 2,218.6 5.3% 1944 79.1 209.0 37.9% 1979 116.3 2,503.8 5.2% 1980 134.0 2,732.1 4.9% 1995 272.1 7,324.0 3.7% 1981 157.5 3,061.6 5.1% 1996 265.8 7,694.6 3.5% 1982 185.3 3,228.6 5.7% 1997 270.5 8,185.2 3.3% 1983 209.9 3,440.5 6.1% 1998 268.5 8,663.9 3.1% 1984 227.4 3,839.4 5.9% 1999 274.9 9,124.3 3.0% 1985 252.7 4,136.6 6.1% 2000 294.5 9,744.3 3.0% 1986 273.4 4,401.4 6.2% 2001 308.5 10,150.5 3.0% 1987 282.0 4,647.0 6.1% 2002 348.0 10,361.6 3.4% 1988 290.4 5,014.7 5.8% 2003 379.0 10,922.3 3.5% 1989 303.6 9,824.4 3.1% 2004 393.8 11,525.8 3.4% CRS-21 National Outlays National Outlays Fiscal Defense GNP/ as % of Fiscal Defense GNP/ as % of Year Outlays GDP GNP/GDP Year Outlays GDP GNP/GDP 1990 299.3 5,735.6 5.2% 2005 413.5 12,158.9 3.4% 1991 273.3 5,930.4 4.6% 2006 428.5 12,803.3 3.3% 1992 298.4 6,218.6 4.8% 2007 442.5 13,448.0 3.3% 1993 291.1 6,558.4 4.4% 1994 281.6 6,944.6 4.1% Sources: Outlays, FY1910-1939, and GNP, FY1910-1929, from U.S. Department of Commerce, Historical Statistics of the United States, Washington: GPO, 1975; outlays, FY1940-2007, and GDP, FY1930-2007, from U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002. Notes: This and other tables in this report use OMB data that reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees beginning in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above. For this and following tables, national defense outlay figures for FY1990 and beyond do not exclude Operation Desert Shield/Desert Storm costs and receipts, since the amounts involved cannot be separated from national economic activity or from total federal outlays. GNP before 1930, GDP thereafter. CRS-22 Figure 5: National Defense Outlays, FY1910-2007 1,200 1,000 800 600 400 200 0 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Figure 6: National Defense Budget Authority and Outlays, FY1947-2007 600 500 400 300 200 Budget Authority 100 Outlays 0 1947 1957 1967 1977 1987 1997 2007 CRS-23 Figure 7: National Defense Outlays, Percentage of GDP/GNP, FY1910-2007 40% 30% 20% 10% 0% 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Figure 8: National Defense Outlays, Percentage of GDP, FY1947-2007 16% 14% 12% 10% 8% 6% 4% 2% 0% 1950 1960 1970 1980 1990 2000 CRS-24 Table 12. Allocation of Federal Outlays by Budget Enforcement Act Category, FY1962-2007 (current year dollars in billions) Defense Non-Defense Fiscal Discretionary Discretionary Mandatory Net Total Federal Year Outlays Outlays Outlays Interest Outlays 1962 52.6 19.5 27.9 6.9 106.8 1963 53.7 21.6 28.3 7.7 111.3 1964 55.0 24.1 31.2 8.2 118.5 1965 51.0 26.8 31.8 8.6 118.2 1966 59.0 31.1 35.0 9.4 134.5 1967 72.0 34.5 40.7 10.3 157.5 1968 82.2 35.8 49.1 11.1 178.1 1969 82.7 34.6 53.6 12.7 183.6 1970 81.9 38.3 61.0 14.4 195.6 1971 79.0 43.5 72.8 14.8 210.2 1972 79.3 49.2 86.7 15.5 230.7 1973 77.1 53.3 98.0 17.3 245.7 1974 80.7 57.5 109.7 21.4 269.4 1975 87.6 70.3 151.1 23.2 332.3 1976 89.9 85.7 169.5 26.7 371.8 1977 97.5 99.6 182.2 29.9 409.2 1978 104.6 114.1 204.6 35.5 458.7 1979 116.8 123.2 221.4 42.6 504.0 1980 134.6 141.7 262.1 52.5 590.9 1981 158.0 149.9 301.6 68.8 678.2 1982 185.9 140.0 334.8 85.0 745.8 1983 209.9 143.4 365.2 89.8 808.4 1984 228.0 151.4 361.3 111.1 851.9 1985 253.1 162.7 401.1 129.5 946.4 1986 273.8 164.7 415.9 136.0 990.5 1987 282.5 161.7 421.3 138.7 1,004.1 1988 290.9 173.5 448.2 151.8 1,064.5 1989 304.0 184.8 485.8 169.0 1,143.7 1990 300.1 200.4 568.2 184.4 1,253.2 1991 319.7 213.6 596.6 194.5 1,324.4 1992 302.6 231.2 648.5 199.4 1,381.7 1993 292.4 247.0 671.4 198.7 1,409.5 1994 282.3 259.1 717.5 203.0 1,461.9 1995 273.6 271.3 738.8 232.2 1,515.8 1996 266.0 266.7 786.8 241.1 1,560.6 1997 271.7 275.6 810.0 244.0 1,601.3 1998 270.2 281.9 859.4 241.2 1,652.6 1999 275.5 296.5 900.2 229.8 1,701.9 2000 295.0 319.9 951.0 223.0 1,788.8 2001 309.1 348.3 1,000.3 206.2 1,863.9 2002 348.0 392.5 1,133.4 178.4 2,052.3 2003 379.0 410.0 1,158.6 180.7 2,128.2 2004 393.7 421.3 1,185.3 188.8 2,189.1 2005 413.4 424.9 1,248.3 190.2 2,276.9 2006 428.5 429.3 1,322.9 188.3 2,369.1 2007 442.5 437.5 1,402.4 185.3 2,467.7 Source: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002. Note: National defense outlay figures do not exclude Desert Shield/Desert Storm costs and receipts. This and other tables in this report use OMB data which reflect enacted and proposed changes in accrual accounting for retirement benefits after FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above. CRS-25 Table 13. Allocation of Federal Outlays by Budget Enforcement Act Category, FY1962-2007 (percentage of total outlays) Defense Non-Defense Defense Fiscal Discretionary Discretionary Mandatory Net Share Year Outlays Outlays Outlays Interest Discretionary 1962 49.3 18.3 26.1 6.5 73.0 1963 48.2 19.4 25.4 6.9 71.3 1964 46.4 20.3 26.3 6.9 69.5 1965 43.1 22.7 26.9 7.3 65.6 1966 43.9 23.1 26.0 7.0 65.5 1967 45.7 21.9 25.8 6.5 67.6 1968 46.2 20.1 27.6 6.2 69.7 1969 45.0 18.8 29.2 6.9 70.5 1970 41.9 19.6 31.2 7.4 68.1 1971 37.6 20.7 34.6 7.0 64.5 1972 34.4 21.3 37.6 6.7 61.7 1973 31.4 21.7 39.9 7.0 59.1 1974 30.0 21.3 40.7 7.9 58.4 1975 26.4 21.2 45.5 7.0 55.4 1976 24.2 23.1 45.6 7.2 51.2 1977 23.8 24.3 44.5 7.3 49.5 1978 22.8 24.9 44.6 7.7 47.8 1979 23.2 24.4 43.9 8.5 48.7 1980 22.8 24.0 44.4 8.9 48.7 1981 23.3 22.1 44.5 10.1 51.3 1982 24.9 18.8 44.9 11.4 57.0 1983 26.0 17.7 45.2 11.1 59.4 1984 26.8 17.8 42.4 13.0 60.1 1985 26.7 17.2 42.4 13.7 60.9 1986 27.6 16.6 42.0 13.7 62.4 1987 28.1 16.1 42.0 13.8 63.6 1988 27.3 16.3 42.1 14.3 62.6 1989 26.6 16.2 42.5 14.8 62.2 1990 23.9 16.0 45.3 14.7 59.9 1991 24.1 16.1 45.0 14.7 59.9 1992 21.9 16.7 46.9 14.4 56.7 1993 20.7 17.5 47.6 14.1 54.2 1994 19.3 17.7 49.1 13.9 52.1 1995 18.0 17.9 48.7 15.3 50.2 1996 17.0 17.1 50.4 15.4 49.9 1997 17.0 17.2 50.6 15.2 49.7 1998 16.3 17.1 52.0 14.6 48.9 1999 16.2 17.4 52.9 13.5 48.2 2000 16.5 17.9 53.2 12.5 48.0 2001 16.6 18.7 53.7 11.1 47.0 2002 17.0 19.1 55.2 8.7 47.0 2003 17.8 19.3 54.4 8.5 48.0 2004 18.0 19.2 54.1 8.6 48.3 2005 18.2 18.7 54.8 8.4 49.3 2006 18.1 18.1 55.8 7.9 50.0 2007 17.9 17.7 56.8 7.5 50.3 Source: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002. Note: National defense outlay figures do not exclude Desert Shield/Desert Storm costs and receipts. This and other tables in this report use OMB data which reflect enacted and proposed changes in accrual accounting for retirement benefits after FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above. CRS-26 Figure 9: National Defense Outlays, Percentage of Federal Outlays, FY1940-2007 100% 80% 60% 40% 20% 0% 1940 1950 1960 1970 1980 1990 2000 Figure 10: Federal Outlays by Budget Enforcement Act Category, FY1962-2007 2,500 Net Interest 2,000 Mandatory Non-Defense Discretionary Defense Discretionary 1,500 1,000 500 0 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 CRS-27 Table 14. Trends in Department of Defense Future-Years Defense Plans (budget authority, current year dollars in billions) Admin. Request 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 FY1987, 2/86 312 332 354 375 396 FY1988, 1/87 282 303 323 344 365 387 FY1989, 2/88 279 283 291 307 324 342 360 Reagan FY1990 279 284 290 306 321 336 351 366 Bush FY1990 279 284 290 296 311 322 336 350 FY1991, 1/90 279 284 290 289 295 300 304 308 312 FY1992, 2/91 279 284 291 291 280 278 278 278 281 283 287 FY1993, 1/92 279 284 291 291 298 269 268 268 270 270 275 FY1994, 3/93 279 284 291 291 284 275 259 251 248 240 233 241 FY1995, 2/94 279 284 291 291 284 275 267 249 252 243 240 247 253 FY1996, 2/95 279 284 291 291 284 275 267 251 253 246 243 248 256 266 277 FY1997, 3/96 279 284 291 291 284 275 267 251 256 252 243 248 254 262 270 277 FY1998, 2/97 279 284 291 291 284 275 267 251 256 252 250 251 256 263 270 277 FY1999, 2/98 279 284 291 293 276 282 267 251 256 254 258 255 257 263 271 274 284 FY2000, 2/99 279 284 291 293 276 282 267 251 256 254 258 259 263 267 286 288 299 308 319 FY2001, 2/00 279 284 291 293 276 282 267 251 256 254 258 259 278 280 291 295 301 308 316 FY2002, 6/01 279 284 291 293 276 282 267 251 256 254 258 259 278 280 301 328 337 346 356 366 FY2003, 2/02 279 284 291 293 276 282 267 251 256 255 258 259 279 290 313 333 379 387 408 429 451 Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, FY2003, February 2002 and prior years; for FY2002 request, U.S. Office of Management and Budget, "Policy Function and Category Summary," mimeo, August 2001; for FY1994 request, U.S. Office of Management and Budget, Budget Baselines, Historical Data, and Alternatives for the Future, January 1993. Notes: Boldface denotes the future-year defense plan projected at the time of the budget submission. Figures for the budget year and following years reflect the Administration's request and future budget projections. Figures for the year immediately preceding the year for which funding is requested (e.g., FY2002 in the FY2003 request) represent the Administration's estimate of the amount enacted by Congress and may include proposed supplemental appropriations and rescissions. Figures for earlier years reflect changes to the enacted level due to congressional action on supplemental appropriations and rescissions, transfers of budget authority from one year to another, and/or adjustments in contract authority for Working Capital Funds. The large discrepancies in year-to-year estimates for FY1991 are due to substantial changes in accounting for Operation Desert Shield/Desert Storm. Figures in this table have not been adjusted to exclude funding for Operation Desert Shield/Desert Storm. This and other tables in this report use OMB data which reflect enacted and proposed changes in accrual accounting for retirement benefits after FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above. CRS-28 Table 15. Defense Spending by Top 25 Foreign Nations (current year U.S. dollars in millions) IISS: US Dept. of State: Military Balance Country Rank WMEAT 1998 2001-2002 Defense Defense Expenditures % Expenditures % (1997 data) GDP (2000 data) GDP United States 1 276,300 3.3% 291,200 3.0% China -- Mainland 2 74,910 2.2% 42,000 5.4% Russia 3 41,730 5.8% 60,000 5.0% France 4 41,520 3.0% 35,000 2.6% Japan 5 40,840 1.0% 45,600 1.0% United Kingdom 6 35,290 2.8% 34,600 2.4% Germany 7 32,870 1.6% 28,800 1.6% Italy 8 22,720 2.0% 21,000 2.0% Saudi Arabia 9 21,150 14.4% 18,700 10.1% Korea, South 10 15,020 3.4% 12,800 2.8% Brazil 11 14,150 1.8% 17,900 2.8% China -- Taiwan 12 13,060 4.6% 17,600 5.6% India 13 10,850 2.8% 14,700 3.1% Israel 14 9,335 9.7% 9,500 8.9% Australia 15 8,463 2.2% 7,100 1.9% Canada 16 7,800 1.3% 8,100 1.2% Turkey 17 7,792 4.0% 10,800 5.2% Spain 18 7,670 1.5% 7,200 1.3% Netherlands 19 6,839 1.9% 6,500 1.9% Korea, North 20 6,000 27.5% 2,100 13.9% Singapore 21 5,664 5.7% 4,800 4.9% Poland 22 5,598 2.3% 3,300 2.0% Sweden 23 5,550 2.5% 5,300 2.2% Greece 24 5,533 4.6% 5,600 4.9% Indonesia 25 4,812 2.3% 1,500 1.0% Sources: U.S. Department of State: Bureau of Arms Control, World Military Expenditures and Arms Transfers: 1998, April 2000. International Institute for Strategic Studies, The Military Balance 2001-2002, October 2001. Notes: For information on a total of 167 countries and details on this data, see CRS Report RL30931, Military Spending by Foreign Nations: Data from Selected Public Sources. Military spending in this table is defined primarily by the NATO standard definition: cash outlays of central governments to meet costs of national armed forces. This definition includes military retired pay, which is excluded in the U.S. Office of Management and Budget's definition of DOD outlays. Therefore, the U.S. outlay numbers may be higher in this table than the reported DOD outlay numbers in the rest of the report. CRS-29 Part III: Definitions of Budget Terms2 The definitions that follow are taken from Office of Management and Budget and Department of Defense publications. Accrual Accounting ­ as applied to military retired pay, a method of recording costs designed to reflect the liability of the federal government for the future retirement costs of military personnel currently on active or reserve duty. First used in FY1985 in DOD, this method of accounting represents a change from the earlier practice in which the cost of military retirement was measured in terms of actual payments to current retirees. Appropriation ­ one form of budget authority provided by Congress for the funding of an agency, department, or program for a given amount of time. An appropriation provides funds for purposes specifically designated by Congress. Funds will not necessarily all be spent in the year in which they are initially provided. Authorization ­ establishes or maintains a government program or agency by defining its scope. Authorizing legislation is normally a prerequisite for appropriations and may set specific limits on the amount that may be appropriated for the specified program or agency. An authorization, however, does not make money available, and sometimes appropriations are made without having been authorized. Budget Authority ­ legal authority for an agency to enter into obligations for the provision of goods or services. It may be available for one or more years. An appropriation is one form of budget authority. Current/Constant Dollars ­ the cost of goods or services in current dollars is the value in terms of prices current at the time of purchase ­ current dollars are also referred to simply as "dollars" or as "then-year dollars." The cost of goods or services in constant dollars is the value adjusted to eliminate the effects of changes in prices (usually due to inflation). Constant dollars, expressed in terms of an arbitrary reference year (e.g., Fiscal Year 2003 dollars), are determined by dividing current dollars by a "deflator" based on the prices in the reference year. Constant dollars are used to assess growth rates of programs independently of the effects of inflation. Growth rates in constant, inflation- adjusted dollars are referred to as "real growth" rates. Deficit ­ in the federal budget, the amount by which total federal budget outlays for a given fiscal year exceed total federal revenues for that year. Fiscal Year ­ a fiscal year in the federal government begins on October 1 and ends on September 30 and is designated by the calendar year in which it ends. Thus, 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. ------------------------------------------------------------------------------ For other versions of this document, see http://wikileaks.org/wiki/CRS-RL31349