Revenue & Spending
U.S. Defense Spending in Eight Charts
by Scott Klinger, 5/20/2014
This week, the House is expected to debate and vote on the 2015 Defense Appropriations Act. On May 7, the House Armed Services Committee unanimously approved $496 billion in discretionary spending and $79.4 billion in war operations spending for the budget that starts Oct. 1. We explore how this stacks up against the rest of the world, who benefits most from defense spending, and what these funding levels mean for other national priorities.
The House committee rejected several of the Pentagon's plans for reducing costs and making military operations more efficient:
- It blocked the Pentagon's plans for retiring 238 A-10 Warthog aircraft, which the Department of Defense projected would save $4.2 billion over five years.
- It also rejected the Navy's plans to remove 11 Ticonderoga-class cruisers, foregoing an additional $4 billion in cost savings over five years.
- It also set aside Pentagon plans for mothballing the U-2 high-altitude spy planes and reassigning Apache helicopters from state National Guard units to the regular Army, following protests from all 50 governors.
- It prohibited the Department of Defense (DOD) from moving ahead on additional plans for base closings and consolidations.
As a backdrop for the full House debate and the expected Senate Armed Services Committee hearings on the 2015 budget, also slated to begin this week, we offer the following charts on various aspects of Pentagon spending that should be part of the deliberations.
The United States Accounts for 36.6 Percent of All Military Spending in the World
Inflation-Adjusted Defense Spending Is Higher Today than During the Vietnam and Korean Wars
The U.S. Spends Twice as Much as Other Industrialized Countries on Defense
The DOD Fared Better than Other Government Agencies Under the Sequester
The Budget Control Act of 2011 set in place mandatory automatic budget cuts that would be implemented if Congress failed to successfully negotiate to reach targeted budget savings. When Congress failed to reach that negotiated solution, these cuts, known as "the sequester," kicked in, starting in fiscal year 2013. The sequester was intended to divide cuts equally between defense and non-defense spending. However, a subsequent deal allowed some share of military cuts to be shifted from FY 13 to FY 14. In addition, the Defense Department has successfully shifted some of its programs to the Overseas Contingency Fund, a pool of money established to support the war effort, which is not subject to sequester cuts. As a result, Pentagon cuts are far less dramatic than those experienced by some other federal agencies.
Defense Funding Increasingly Flows into the Hands of the Largest Contractors
…And Fewer Contracts Are Bid Competitively
Private Contractor CEOs Make 40 to 200 Times More than Army Generals
When they retire, Pentagon contractor CEOs have a lot more than retired generals. Five leading CEOs had $160 million in their company-sponsored retirement accounts, an average of $32 million per executive. Boeing CEO James McNerney, Jr. leads a firm which derives about a third of its sales from government contracts. McNerney led the way with a company retirement account worth $45.5 million, enough to generate a monthly retirement check of $260,494. A retired general with 30 years of service to our country receives an average monthly retirement payment of $10,964.
An Ever Smaller Share of Pentagon Spending Supports Military Families
As the House and Senate deliberate on how much our nation spends on national defense, they should also take a look at how that money is spent, particularly the amount spent on outsourced contracts to the for-profit sector. And as they continue to balance tight budgets, they should consider how much more our nation spends on national security than other nations in the world before so quickly dismissing the Pentagon’s own ideas for belt-tightening.