Fiscal Year 2002 Budget Request
by Christopher Hellman, Senior Analyst
The Defense Monitor, Center for Defense Information,
As THE WORLD'S LONE SUPERPOWER, it is not surprising that
the United States spends more on its military than any other nation.
What is surprising is just how large the U.S. share of world military
spending actually is, and the fact that while defense budgets
of most countries are shrinking, U.S. military spending continues
Consider the following:
* Russia, which has the second largest military budget in
the world, will spend less than one-sixth what the United States
will, assuming its economy can afford it. China, which has the
third largest military budget, recently announced that it would
increase its military spending by almost 18 percent. (The largest
part of the increase reportedly is for personnel costs.) Yet the
United States still spends more than eight times what China spends.
* The U.S. military budget is 23 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-which together spend just over $14
* The United States and its close allies-the NATO nations,
South Korea, and Japan-spend more than the rest of the world combined,
accounting for roughly two-thirds of all military spending. Together
they spend more than 38 times that of the seven rogue states.
* The seven rogue nations, along with Russia and China, together
spend $116 billion, roughly one-third the U.S. military budget.
* The United States alone spends more than the combined spending
of the next 15 nations.
THE BUSH ADMINISTRATION is requesting $343.2 billion for the
Pentagon in Fiscal Year 2002. This is $32.6 billion above current
levels, and includes the $14.2 billion increase requested for
the military in the March budget release (see below). This total
also includes $14.3 billion for the defense functions of the Department
On February 28, the Bush administration released the first
official information on its proposed Fiscal Year 2002 budget request.
The document, "A Blueprint for New Beginnings: A
Responsible Budget for America's Priorities," was a preliminary
document outlining broad spending priorities for the federal government.
As part of its initial request, the Bush administration sought
$310.5 billion for the Defense Department in FY'02, plus an additional
$14.3 billion for the defense functions of the Department of Energy.
In all, the Pentagon's initial request was $324.8 billion. This
was the FY'02 spending level projected last year by the Clinton
administration. It was $14.2 billion more than FY'01, a 4.6 percent
increase above current levels. At the time, White House and Pentagon
officials made clear that this was a "placeholder budget,"
and that further significant increases would be requested.
Highlights of the Full Request The military budget includes
$82.3 billion for personnel ($6.9 billion above current levels)
to fund a 4.6 percent pay raise, increased health benefits and
higher housing allowances. The Operations and Maintenance budget
(which is most closely associated with force readiness) grows
by $17.8 billion to $125.7 billion, while the research and development
budget, at $47.4 billion, represents a $6.4 billion funding boost.
Only the procurement budget, which goes mainly towards the
purchase of weapons, did not increase, dropping from $62.1 billion
to $61.6 billion. While this represents a reduction of only $500
million (0.8 percent), it seems improbable that Congress will
accept such levels, and will likely increase the procurement accounts
by substantial amounts.
The Bush administration has stated repeatedly its intention
to fund weapons modernization and develop "leap ahead"
technologies in part through the termination of some current programs.
But as many analysts expected, most major weapons systems received
funding at or above current levels. [For specific programs, see
the box "Funding for Selected Weapons Systems" on page
1.] Defense Secretary Donald Rumsfeld said that the tough decisions
on specific weapons will not occur until the FY'03 budget cycle,
after a number of reviews currently under way at the Pentagon
have been completed.
One area which received significant additional funding was
missile defense. In all, the Pentagon plans to spend $8.3 billion
on missile defense, an increase of $3 billion (57 percent) over
current levels. [See Box "Fiscal Year 2002 Ballistic Missile
Funding Request"] In addition, the Ballistic Missile Defense
Office (BMDO) has been restructured. Funds are now allocated in
general categories, rather than to specific programs. The three
major categories will focus on developing technologies related
to Boost Phase, Midcourse and Terminal segments of an incoming
missile's flight. Effectively, budgetary line items within BMDO
have been eliminated. Without such details it will be extremely
difficult, if not entirely impossible, for independent assessments
of how much money is being spent on programs.
In all, the federal government will spend approximately $1.9
trillion in Fiscal Year 2002. Of this, discretionary spending-those
funds that the administration must request and Congress must act
on each year-accounts for roughly one-third. The other category
of federal spending is mandatory spending, which the federal government
spends automatically unless the President and Congress change
the laws that govern it. Mandatory spending includes entitlements,
those benefits like Social Security, Medicare, food stamps and
federal pensions. It also includes interest payments on the national
debt. With the new funds, Pentagon spending now accounts for over
half (50.5 percent) of all discretionary spending. [See chart]
Congress is just now beginning its work on the annual Pentagon
spending bills. The debate in Washington this year is over whether
to increase military spending a lot, or increase it a whole lot.
Ultimately, whether Congress can fully fund the Pentagon's request-or
even add more money to the defense budget, as has been the case
in recent years-will be decided by economic factors, rather than
ideology. The Congressional Budget Office's (CBO) revised budget
projections, which will update figures for the federal budget
surplus, are due out in late August. The new figures will likely
have a significant impact on how large the Pentagon spending increase