The Pentagon's Fiscal Year 2003 BudgetRequest:
More of Everything
The Center for Defense Information, February
Christopher Hellman, Senior Analyst
On February 4, the administration of President George W. Bush
released its proposed federal budget for fiscal year 2003 (FY'03).
It includes a $396.1 billion request for national security: a
whopping $379.3 billion for the Defense Department and $16.8 billion
for the nuclear weapons functions of the Department of Energy.
This is $48 billion above current annual spending levels, an increase
of 13 percent. It is also 15 percent above the Cold War average,
to fund a military force structure that is one-third smaller than
it was a decade ago.
In all, the administration plans to spend $2.1 TRILLION on
the military over the next five years. The huge increase in the
defense budget also is the key reason that the Bush FY'03 proposal,
if approved by Congress, would lead the nation back into deficit
spending - for the first time in four years.
In presenting its request, the Bush administration justified
the proposed Pentagon spending increases as necessary for supporting
the "war" against terrorism, and providing funds to
transform the current military in to a force better suited to
meet emerging threats to U.S. national security. And while the
budget does include funds for costs related to military operations
in Afghanistan and transformation initiatives, the bulk of the
funding continues to support the current force structure, and
to purchase big-ticket Cold War-era weapons systems.
With the president's approval rating steady at above 75 percent
and broad support among the American people for the administration's
"war on terrorism," Congress has been generally receptive
to the idea of a significant boost in Pentagon spending. This
is true despite the potential impact of such a large increase
on funding for other domestic federal programs, and the likelihood
that it marks the return to deficit spending - a concept that
was a virtual political "non-starter" as recently as
Bush's rhetoric carries an eerie sense of deja vu: major tax
cuts, huge military spending increases, with a rapid return to
balanced budgets. President Ronald Reagan made similar promises.
While Pentagon spending during the Reagan administration reached
record highs for peacetime (about $425 billion annually in today's
dollars), the deficit spending that supported it and the many
tax cuts instituted during his administration drove the national
debt from $900 billion in 1980 to more than $2.6 trillion in 1988
- a 290 percent increase. The dream of a balanced budget thus
was sacrificed on the altar of increased defense spending.
Concerns in Congress about the Bush's proposed Pentagon funding
boost have focused on the economic impact of the plan, although
other issues have been raised. At the extremes are fiscally conservative
Republicans who support more drastic controls on non-defense spending,
and liberal Democrats who favor delaying or repealing tax cuts.
Other members, both Democrats and Republicans, support scaling
back a portion of the Pentagon increase to ease pressure on other
domestic programs. Yet generally speaking, the increase remains
popular on Capitol Hill, with some members- who see major opportunities
for home district pork-urging that even more be spent on the Pentagon.
The Bush budget request projects deficits of $106 billion
for the current fiscal year, and $80 billion for FY'03. It also
projects a return to surplus spending by 2005. But while Bush
administration officials continue to assert that the country's
return to deficit spending is temporary, some members of Congress
have raised concerns about the specter of long-term deficits.
Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee,
made the point forcefully in hearings on the administration's
budget proposal. "We don't see deficits as the president
asserted being short-term and small. What we see is an ocean of
red ink. What we see is deficits right through the decade. What
we see is the use of Social Security and Medicare trust fund money
by over $2 trillion to fund tax cuts and other spending."
The administration has made it clear that it will resist efforts
to tap military spending to fund other priorities. Mitchell Daniels,
Jr., the director of the Office of Management and Budget (OMB),
told the Senate Budget Committee that, "if there are attempts
to raid defense for lesser priorities or to raid homeland security
for lesser priorities, then we'll resist that, and I think pretty
According to Rep. John Spratt, D-SC, top Democrat on the House
Budget Committee, the administration's proposed budget falls $15.8
billion below the amount needed to maintain current government
services other than defense and homeland security. And despite
the administration's willingness to borrow extensively to fund
its proposed budget, a number of important programs would be cut
dramatically under the new plan. [See Box on page 2]
Yet no one seems to have a budgetary plan that will fund both
military and non-military domestic programs, increase funding
for homeland defense, and revive the economy while restoring budgetary
surpluses that is likely to work, let alone be politically palatable.
In the end - given the broad public support for higher military
spending, and the political cover that the current "state
of war" provides for those members of Congress reluctant
to return to deficit spending - legislators will likely support
the administration's request for the Pentagon, while borrowing
additional funds to meet shortfalls in other federal programs.
Spending vs. The World
According to CDI's latest analysis, the proposed $396 billion
Pentagon spending package exceeds that of the next 25 nations
combined. It is not surprising that as the world's lone super
power the United States spends more on its military than any other
nation. What is surprising, however, is just how much larger the
U.S. defense budget is compared to any other nation, or even groups
Consider the following:
* At $396 billion, the U.S. military budget request for FY'03
is more than six times larger than that of Russia, the second
* It is more than 26 times as large as the combined spending
of the seven countries traditionally identified by the Pentagon
as our most likely adversaries (Cuba, Iran, Iraq, Libya, North
Korea, Sudan and Syria).
* The United States and its close allies spend more than the
rest of the world combined, accounting for more than two-thirds
of all military spending. Together they spend over 39 times more
than the seven rogue states. ("Allies" includes NATO,
Australia, Japan and South Korea.)
The seven potential "enemies," Russia and China
together spend $117 billion, less than one-third (30 percent)
of the U.S. military budget.
The FY'03 budget request includes $767 billion for discretionary
spending (the money the president and Congress must decide and
act to spend each year), $396 billion of which will go to the
The other category of federal spending is mandatory spending,
money that is spent in compliance with existing laws that govern
the particular program or function. Mandatory spending includes
entitlements, money or benefits provided directly to individuals
such as Social Security, Medicare, Medicaid, Food Stamps, and
Federal Retirement. It also includes interest payments on the