Long-Term Costs of the Administration’s 2022 Defense Budget

This report describes the Congressional Budget Office’s analysis of the costs and budgetary consequences through 2031 of current plans for the Department of Defense (DoD). Ordinarily, CBO would have based its projections of long-term costs on DoD’s 2022 Future Years Defense Program (FYDP), which would have covered fiscal years 2022 to 2026. However, as is common when a new Administration submits its first budget request, DoD did not release a 2022 FYDP. Therefore, the report draws from the fiscal year 2022 budget request submitted by the Biden Administration, other documents and statements published by the Administration, and the 2021 FYDP (the most recent five-year plan released by DoD).

The Administration’s 2022 budget request calls for $715 billion in funding for DoD. In real terms—that is, with adjustments to remove the effects of inflation—the funding request is 1.5 percent less than the total amount provided for 2021 and 1.0 percent less than the amount that would have been requested for 2022 under the Trump Administration’s final (2021) FYDP.

Almost two-thirds of the request is for operation and support ($292 billion for operation and maintenance and $167 billion for military personnel), and about one-third is for acquisition ($134 billion for procurement and $112 billion for research, development, test, and evaluation). The remaining $9.8 billion is for infrastructure ($8.4 billion for military construction and $1.4 billion for family housing).

For the years after 2022, CBO projects that DoD’s costs would steadily increase so that, in 2031, the department’s budget (in 2022 dollars) would reach $787 billion, about 10 percent more than the amount proposed in the 2022 budget. Several factors would contribute to those rising costs, including the following:

• Continued growth in the costs of compensation for service members and DoD’s civilian employees, which would account for 24 percent of the increase;
• Continued growth in other costs to operate and maintain the force, which would account for 35 percent; and
• Increased spending on new, advanced military equipment and weapons (largely as a result of DoD’s shift in focus from counterinsurgency operations to potential conflicts with technologically advanced militaries), which would account for 39 percent.

Although the Administration’s request for 2022 is about $7 billion less than the amount that was planned for 2022 in the 2021 FYDP, the cumulative costs through 2031 under the projections presented here would be about the same as the costs CBO had projected for the 2022–2031 period in its analysis of that earlier FYDP.

In a departure from its practice for more than a decade, DoD did not split its 2022 request into two components: a base budget and funding for overseas contingency operations (OCO). The base budget was intended to fund normal, peacetime operations and other activities anticipated during the regular budgeting process, and OCO funding was intended for major overseas operations (primarily the wars in Afghanistan and Iraq). However, appropriations for OCO were also used to fund base-budget activities because the base budget was capped under the Budget Control Act of 2011 (BCA). (Funding provided for OCO and for emergencies such as natural disasters was not subject to those caps.) There was no need to separate base-budget costs from anticipated OCO costs in the 2022 request because fiscal year 2021 was the final year in which the base budget was subject to caps under the BCA. Of the amount requested for 2022, DoD identified $42 billion in funding for OCO, including both direct costs for current conflicts and enduring costs for other activities previously included in OCO.