Implications of defense plans over the long term

December 13, 2007

CBO released today an updated analysis of the implications of the nation's long-term defense plans. National defense decisions made todayincluding those regarding weapon systems, military compensation, and numbers of personnelcan have long-lasting effects on the composition of U.S. armed forces and the budgetary resources needed to support them. What we're trying to do in this report is evaluate the costs involved.

  • In particular, CBO's analysis evaluates the costs of carrying out the plans in the Administrations Future Years Defense Program (FYDP), which is prepared by the Department of Defense (DoD) and submitted to the Congress each fiscal year.

    • The 2008 FYDP -- and therefore also CBOs projections of its long-term implications -- excludes potential future supplemental or emergency appropriations. The President, however, has indicated that at least $189 billion in such appropriations will be needed to pay for military operations in Iraq, Afghanistan, and other locations in the war on terrorism in fiscal year 2008.
  • CBOs projections find that under DoDs current plans, defense resources will average about $521 billion annually (in 2008 dollars) from 2014 to 2025 -- or about 8 percent more than the total obligational authority for defense requested by the Administration for 2008.
  • Considering potential unbudgeted costs increases the projected long-term demand for defense funding to an annual average of about $621 billion through 2025, or 29 percent more than the Administrations 2008 request of about $482 billion (excluding funding for war-related activities).

    • CBOs analysis of unbudgeted costs included several possibilities: that the costs of weapon systems now under development would exceed early estimates, as they have in the past; that medical costs might rise more rapidly than DoD has assumed; and that DoD would continue to conduct contingency military operations overseas as part of the war on terrorism, albeit at reduced levels relative to current operations in Iraq and Afghanistan.

CBO's analysis was led by Adam Talaber in our National Security Division. Adam has played a key role in many of our most noteworthy defense analyses. (One example is our analysis early in the year about the implications of the so-called surge in troop levels in Iraq. For a discussion of CBO's analysis during a recent Congressional hearing, click here and see the exchange starting at roughly 2 minutes 45 seconds into the clip.)