Two Plans for Defense Spending

When it comes to defense spending, the two candidates are not that far off. The President’s budget proposal provides $525.4 billion to the Department of Defense (DOD) for FY 2013, while the Ryan House budget provides $554 billion. Overseas Contingency Operation (OCO) funding, which primarily is used for operations in Afghanistan and Iraq, is separate from DOD funding. The President allots $97.7 billion for FY 2013, and caps spending through 2021 at $450 billion. Over the next decade Ryan provides $6.2 trillion for general defense spending, averaging $620 billion per year, which would include both DOD and OCO funding.

Some main sources of saving would come from reducing the standing army as the U.S. withdraws from Afghanistan and Iraq. The DOD requested budget decreases active Army to 490,000 from a 570,000 peak in 2010. It removes at least 8 Brigade Combat Teams. It also decreases active Marine Corps to 182,000 from peak of 202,000. Military personnel costs have doubled since 2001. However, the number of full time military personnel, including activated reserves, increased by only 8% during that same time period.

The president’s budget would find some savings by changing benefits for military personnel, such as health insurance and retirements. Current and former military personnel would be grandfathered in to keep their current benefits. The budget introduces new TRICARE copays and fees, increases to TRICARE Prime enrollment fees, a new Standard/Extra annual enrollment fees, and adjusts deductibles and catastrophic caps. It would also introduce annual fees for TRICARE beneficiaries over age 65 when they transition to Medicare coverage.

Some major parts of the President’s DOD budget break down as follows:

  • $176.2 billion to support operations, training and maintenance
  • $280 billion for DOD contracts
  • $3.7 billion for unmanned air surveillance systems
  • $2 billion for upgrading tactical vehicles
  • $4.1 billion for the Virginia class submarine program
  • $9.7 billion for ballistic missile defense.
  • Provides 1.7% increase in basic pay for servicemen (full current law amount).
  • $48.7 billion for the DOD Unified Medical Budget to support the Military Health System
  • $69.4 for research, development, test and evaluation

Romney suggests that defense spending should be around 4% of GDP. The cold war high was 7.5% of GDP, but the 4% figure would be higher than under the Obama plan. Currently DOD funding amounts to about 3.6% of GDP, but this does not include OCO funding. This difference amounts to about $60.36 billion per year, in 2012 dollars. Romney is also proposing to reduce federal government spending to 20% of GDP, making defense spending about 20% of his proposed budget, which is what it is currently. However, when you take all spending related to defense, including OCO funding, total defense spending currently amounts to around 5% of GDP. Still, this is low by post WWII standards.

Additional Resources

The Wall Street Journal U.S. Plans New Asia Missile Defense: http://online.wsj.com/article/SB10000872396390444812704577605591629039400.html?mod=WSJ_hps_LEFTTopStories

Defense Budget 2012: http://www.defense.gov/news/Defense_Budget_Priorities.pdf

Naval technology Littoral Combat Ship: http://www.naval-technology.com/projects/littoral/

Naval Technology DDG 1000 Zumwalt Class – Multimission Destroyer: http://www.naval-technology.com/projects/dd21/

Wikipedia Defense Budget: http://en.wikipedia.org/wiki/Military_budget_of_the_United_States

U.S. DOD Panetta Announces FY 2013 Budget Priorities: http://www.defense.gov/news/newsarticle.aspx?id=66940

The Daily Caller Top Five Reasons the F-35 will Rule the Sky: http://dailycaller.com/2012/07/12/top-five-reasons-the-f-35-will-rule-the-sky/

The F-35 Lightning II: http://www.jsf.mil/index.htm

Richmond Times-Dispatch Forbes Says U.S. Defense Spending, Measured Against GDP, Is Near Historic Low: http://www.politifact.com/virginia/statements/2011/aug/05/randy-forbes/forbes-says-us-defense-spending-measured-against-g/

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