Long-Term Implications of the Fiscal Year 2010 Defense Budget

January 25, 2010

What amount of budgetary resources might be needed in the long term to carry out the Administration’s plans for defense that were proposed during 2009? CBO addresses that question in a study prepared at the request of the Chairman and the Ranking Member of the Senate Budget Committee. The study updates the resource projections contained in CBO’s January 2009 paper Long-Term Implications of the 2009 Future Years Defense Program, reflecting changes that the new Administration made to defense plans in preparing the President’s budget request for fiscal year 2010.

In CBO’s estimation, carrying out the Department of Defense's (DoD’s) 2009 plans for 2010 and beyond—excluding overseas contingency operations (the wars in Iraq and Afghanistan and some much smaller military actions elsewhere)—would require defense resources averaging at least $573 billion annually (in 2010 dollars) from 2011 to 2028. That amount, CBO’s base projection, is about 7 percent more than the $534 billion in total obligational authority the Administration requested in its regular 2010 budget, again excluding overseas contingency operations.  The projection also exceeds the peak of about $500 billion (in 2010 dollars) during the height of the Reagan Administration’s military buildup in the mid-1980s. During that period, for example, DoD was pursuing a Navy fleet of 600 battle force ships, more than twice the size of the current fleet of 287.

The department’s resource requirements to execute the same plans could be even greater. CBO has also estimated some “unbudgeted” costs that reflect the likelihood that weapon systems would cost more than initially estimated; that medical costs and fuel prices would grow at rates faster than DoD has anticipated; and that pay raises the Congress enacts for military personnel and DoD’s civilian employees might exceed the percentages in the department’s plans. Furthermore, additional appropriations may be necessary to fund overseas contingency operations.

Including the unbudgeted costs increases the projection to an annual average of $632 billion through 2028, or 18 percent more than the regular funding requested for 2010. Some 35 percent of the total unbudgeted costs between 2013 and 2028 are associated with overseas contingency operations; in particular, the analysis includes the potential costs—about $20 billion per year—of deploying 30,000 troops to contingency operations from 2013 through 2028. The total costs of $670 billion at the endpoint in 2028 would approach the peak of the past three years (measured in 2010 dollars), which includes the height of operations in Iraq.

Not included in the unbudgeted cost projections, however, is the funding needed to increase U.S. presence in Afghanistan as the President announced on December 1, 2009.  Although the Administration’s 2010 budget planned for an increase in U.S. service members in Afghanistan from 59,000 to 68,000, neither that budget nor CBO’s projection anticipated the further increase of 30,000 troops in Afghanistan. (See CBO’s recent analysis of the funding needed to support an additional 30,000 troops in Afghanistan.)

This study was prepared by a team led by Matthew Goldberg; the primary authors were Adam Talaber and Daniel Frisk of CBO’s National Security Division.