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Growth in DoD's Budget From 2000 to 2014 1 (November 2014)

handle is hein.congrec/cbo1988 and id is 1 raw text is: _NOVEMBER 2014 Growth in DoD's Budget From 2000 to 2014 The Department of Defense's (DoD's) base budget grew from $384 billion to $502 billion between fiscal years 2000 and 2014 in inflation-adjusted (real) terms-an increase of 31 percent and an annual average growth rate of 1.9 percent.' Several factors contributed to that growth. The largest rate of growth was in the costs for military personnel, which increased by 46 percent over the period. The costs for operation and maintenance (O&M) increased by 34 percent, and the costs for acqui- sition increased by 25 percent. About two-thirds of the $117 billion real increase in the budget went for the following activities: procurement; O&M costs for the Defense Health Program; research, development, test, and evaluation; the basic allowance for housing; fuel; and basic pay for active-duty military personnel. For this analysis, the Congressional Budget Office (CBO) examined DoD's base budget, which excludes supple- mental and emergency funding for overseas contingency operations (those conducted in Afghanistan and Iraq and other countries). DoD's base budget includes both 1. This report examines budget subfunction 051, which encom- passes funding for the military activities of the Department of Defense. See Office of the Undersecretary of Defense (Comptrol- ler), National Defense Budget Estimatesfor FY2015 (Green Book) (April 2014), http://go.usa.gov/7HFx. That subfunction does not include activities of the Army Corps of Engineers and several other civilian programs of DoD that appear in other parts of the budget. CBO selected 2000 and 2014 for comparison because 2000 was the last full year before funding for defense was increased in response to the attacks on September 11, 2001, and 2014 was the most recent year for which appropriations were fully enacted. A comparison of DoD's budget request for 2015 with its budget in 2000 would yield similar findings. discretionary funding (controlled by annual appropria- tion acts) and mandatory funding (generally determined by eligibility rules, benefit formulas, and other parame- ters that are set in current law). All costs are expressed in 2014 dollars of budget authority, adjusted for the effects of inflation over the 15-year period using the gross domestic product price index; unless otherwise noted, all growth rates are measured in those real terms. CBO's analysis is based on data from DoD. In addition, CBO relied on analyses described in several of its publications. Major Components of DoD's Budget This report examines four broad categories of DoD's budget: military personnel, operation and maintenance, acquisition, and a collection of smaller budget accounts (see Figure 1). * Military personnel appropriations fund compensation for uniformed service members, including pay, housing and subsistence allowances, and related items, such as the cost of moving service members and their families to new duty stations. Funding in the military personnel category accounted for 28 percent of DoD's base budget in 2014. 2 Budget authority is the authority provided by law to incur finan- cial obligations that will result in immediate or future outlays of federal government funds. 3 Congressional Budget Office, Long- Term Implications ofthe 2015 Future Years Defense Program (November 2014), www.cbo.gov/ publication/49483; Approaches to Reducing Federal Spending on Military Health Care (January 2014), www.cbo.gov/publication/ 44993; and Costs of Military Pay and Benefits in the Defense Budget (November 2012), www.cbo.gov/publication/43574. Note: Numbers in the text and table may not add up to totals because of rounding.

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