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The military budget is that portion of the United States discretionary federal budget that is allocated to the Department of Defense, or more broadly, the portion of the budget that goes to any defense-related expenditures. This military budget pays the salaries, training, and health care of uniformed and civilian personnel, maintains arms, equipment and facilities, funds operations, and develops and buys new equipment. The budget funds all branches of the U.S. military: Army, Navy, Air Force, Marine Corps, and Coast Guard.
When the budget was signed into law on October 28, 2009 the final size of the Department of Defense's budget was $680 billion, $16 billion more than Obama had requested.  Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff expected an additional supplemental spending bill, possibly in the range of $40–50 billion, by the Spring of 2010 in order to support the wars in Iraq and Afghanistan. Defense-related expenditures outside of the Department of Defense constitute between $216 billion and $361 billion in additional spending, bringing the total for defense spending to between $880 billion and $1.03 trillion in fiscal year 2010.
The recent invasions of Iraq and Afghanistan were largely funded through supplementary spending bills outside the Federal Budget, so they are not included in the military budget figures listed below. In addition, the Pentagon has access to black budget military spending for special programs which is not listed as Federal spending and is not included in published military spending figures. Starting in the fiscal year 2010 budget however, the wars in Iraq and Afghanistan are categorized as "Overseas Contingency Operations" and included in the budget.
By the end of 2008, the U.S. had spent approximately $900 billion in direct costs on the Iraq and Afghanistan Wars. Indirect costs such as interest on the additional debt and incremental costs of caring for the more than 33,000 wounded borne by the Veterans Administration are additional. Some experts estimate these indirect costs will eventually exceed the direct costs.
|Components||Funding||Change, 2009 to 2010|
|Operations and maintenance||$283.3 billion||+4.2%|
|Military Personnel||$154.2 billion||+5.0%|
|Research, Development, Testing & Evaluation||$79.1 billion||+1.3%|
|Military Construction||$23.9 billion||+19.0%|
|Family Housing||$3.1 billion||−20.2%|
|Total Spending||$685.1 billion||+3.0%|
|Service||2010 Budget request||Percentage of Total|
|Navy/Marine Corps||$171.7 billion||25.9%|
|Air Force||$160.5 billion||24.2%|
|Defense Wide||$106.4 billion||16.0%|
The FY 2009 $104.2 billion procurement and $79.6 billion RDT&E budgets appropriated several programs with more than $1 billion.
|Program||2009 Budget request||Change, 2008 to 2009|
|Missile Defense||$9.4 billion||+8.0%|
|F-35 Joint Strike Fighter||$6.9 billion||+6.2%|
|Carrier Replacement Program||$4.2 billion||+23.5%|
|F-22 Raptor||$4.1 billion||−6.8%|
|Virginia class submarine||$3.9 billion||+14.7%|
|Future Combat System||$3.3 billion||−2.9%|
|DDG 1000 Destroyer||$3.2 billion||−8.6%|
|V-22 Osprey||$2.7 billion||+3.8%|
|Space-Based Infrared System||$2.3 billion||+130.0%|
|F/A-18E/F Hornet||$2.0 billion||−4.8%|
|EA-18G Growler||$1.8 billion||+12.5%|
|Chemical Demilitarization||$1.6 billion||+0.0%|
|Littoral combat ship||$1.3 billion||+116.7%|
|CH-47 Chinook||$1.2 billion||+9.1%|
|P-8A Poseidon||$1.2 billion||+33.3%|
|Evolved Expendable Launch Vehicle||$1.2 billion||+9.1%|
|UH-60 Black Hawk||$1.1 billion||−26.7%|
|E-2C/D Hawkeye||$1.1 billion||+22.2%|
|Trident II Ballistic Missile||$1.1 billion||+0.0%|
|Mobile User Objective System||$1.0 billion||+25.0%|
This does not include many military-related items that are outside of the Defense Department budget, such as nuclear weapons research, maintenance, cleanup, and production, which is in the Department of Energy budget, Veterans Affairs, the Treasury Department's payments in pensions to military retirees and widows and their families, interest on debt incurred in past wars, or State Department financing of foreign arms sales and militarily-related development assistance. Neither does it include defense spending that is not military in nature, such as the Department of Homeland Security, counter-terrorism spending by the FBI, and intelligence-gathering spending by NASA.
|Defense-related expenditure||2011 Budget request & Mandatory spending||Calculation|
|DOD spending||$721.3 billion||Base budget + "Overseas Contingency Operations"|
|FBI counter-terrorism||$2.7 billion||At least one-third FBI budget.|
|International Affairs||$10.1–$54.2 billion||At minimum, foreign arms sales. At most, entire State budget|
|Energy Department, defense-related||$20.9 billion|
|Veterans Affairs||$66.2 billion|
|Homeland Security||$54.7 billion|
|NASA, satellites||$3.4–$8.5 billion||Between 20% and 50% of NASA's total budget|
|Veterans pensions||$58.4 billion|
|Other defense-related mandatory spending||$7.5 billion|
|Interest on debt incurred in past wars||$57.7–$228.1 billion||Between 23% and 91% of total interest|
|Total Spending||$1.003–$1.223 trillion|
The role of support service contractors has increased since 2001 and in 2007 payments for contractor services exceeded investments in equipment for the armed forces for the first time. In the 2010 budget the support service contractors will be reduced from the current 39 percent of the workforce down to the pre-2001 level of 26 percent.
The U.S. Department of Defense budget accounted in fiscal year 2010 for about 19% of the United States federal budgeted expenditures and 28% of estimated tax revenues. Including non-DOD expenditures, defense spending was approximately 25–29% of budgeted expenditures and 38–44% of estimated tax revenues. According to the Congressional Budget Office, defense spending grew 9% annually on average from fiscal year 2000–2009.
Because of constitutional limitations, military funding is appropriated in a discretionary spending account. (Such accounts permit government planners to have more flexibility to change spending each year, as opposed to mandatory spending accounts that mandate spending on programs in accordance with the law, outside of the budgetary process.) In recent years, discretionary spending as a whole has amounted to about one-third of total federal outlays. Military funding's share of discretionary funding was 50.5% in 2003, and has risen steadily ever since.
For FY 2010, Department of Defense spending amounts to 4.7% of GDP. Because the U.S. GDP has risen over time, the military budget can rise in absolute terms while shrinking as a percentage of the GDP. For example, the Department of Defense budget is slated to be $664 billion in 2010 (including the cost of operations in Iraq and Afghanistan previously funded through supplementary budget legislation), higher than at any other point in American history, but still 1.1–1.4% lower as a percentage of GDP than the amount spent on defense during the peak of Cold-War military spending in the late 1980s. Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, has called four percent an "absolute floor". This calculation does not take into account some other defense-related non-DOD spending, such as Veterans Affairs, Homeland Security, and interest paid on debt incurred in past wars, which has increased even as a percentage of the national GDP.
The 2009 U.S. military budget is almost as much as the rest of the world's defense spending combined and is over nine times larger than the military budget of China (compared at the nominal US dollar / Renminbi rate, not the PPP rate). The United States and its close allies are responsible for two-thirds to three-quarters of the world's military spending (of which, in turn, the U.S. is responsible for the majority). China's reported defense spending is, however, a matter of debate as the PRC official numbers are often underreported. Additionally, the Chinese defense establishment owns and operates companies within China and uses profits as well as the companies themselves to invest in defense research and production.
In 2005, the United States spent 4.06% of its GDP on its military (considering only basic Department of Defense budget spending), more than France's 2.6% and less than Saudi Arabia's 10%. This is historically low for the United States since it peaked in 1944 at 37.8% of GDP (it reached the lowest point of 3.0% in 1999–2001). Even during the peak of the Vietnam War the percentage reached a high of 9.4% in 1968.
In February 2009, Congressman Barney Frank, D-Mass., called for a reduction in the defense budget: "The math is compelling: if we do not make reductions approximating 25 percent of the military budget starting fairly soon, it will be impossible to continue to fund an adequate level of domestic activity even with a repeal of Bush's tax cuts for the very wealthy. I am working with a variety of thoughtful analysts to show how we can make very substantial cuts in the military budget without in any way diminishing the security we need...[American] well-being is far more endangered by a proposal for substantial reductions in Medicare, Social Security or other important domestic areas than it would be by canceling weapons systems that have no justification from any threat we are likely to face."
Republican historian Robert Kagan has argued that 2009 is not the time to cut defense spending, relating such spending to jobs and support for allies: "A reduction in defense spending this year would unnerve American allies and undercut efforts to gain greater cooperation. There is already a sense around the world...that the United States is in terminal decline. Many fear that the economic crisis will cause the United States to pull back from overseas commitments. The announcement of a defense cutback would be taken by the world as evidence that the American retreat has begun."
U.S. Secretary of Defense Robert Gates wrote in January 2009 that the U.S. should adjust its priorities and spending to address the changing nature of threats in the world: "What all these potential adversaries—from terrorist cells to rogue nations to rising powers—have in common is that they have learned that it is unwise to confront the United States directly on conventional military terms. The United States cannot take its current dominance for granted and needs to invest in the programs, platforms, and personnel that will ensure that dominance's persistence. But it is also important to keep some perspective. As much as the U.S. Navy has shrunk since the end of the Cold War, for example, in terms of tonnage, its battle fleet is still larger than the next 13 navies combined—and 11 of those 13 navies are U.S. allies or partners." Secretary Gates announced some of his budget recommendations in April 2009.
The Congressional Research Service has noted a discrepancy between a budget that is declining as a percentage of GDP while the responsibilities of the DoD have not decreased and additional pressures on the defense budget have arisen due to broader missions in the post-9/11 world, dramatic increases in personnel and operating costs, and new requirements resulting from wartime lessons in the Iraq War and Operation Enduring Freedom.