# Defense Budget for FY2003: Data Summary

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URL: https://www.frixlaw.com/law-library/documents/crs%3ARL31349

## Record

- **Collection:** Congressional research report
- **Document type:** CRS Report
- **Published:** March 29, 2002
- **Citation:** RL31349

## Text

Order Code RL31349

CRS Report for Congress
Received through the CRS Web

Defense Budget for FY2003:
Data Summary

March 29, 2002

/name redacted/
Specialist in National Defense
and
/name redacted/
Consultant
Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

Defense Budget for FY2003:
Data Summary
Summary
This report is designed to be a readily accessible source of facts and figures on
the FY2003 defense budget. Part I presents basic data on the national defense budget
request, including figures on budget authority and outlays for the Department of
Defense and for the national defense budget function. Part II shows trends in overall
defense spending, including figures on the growth and decline of defense spending,
on defense outlays as a share of federal expenditures, on defense outlays as a share
of gross domestic product, and on foreign military spending. Part III defines key
defense budget terms.
To illustrate trends in the regular defense program, most of the data included in
this report exclude costs of Operation Desert Shield/Desert Storm, which was largely
financed by allied contributions.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Part I: The FY2003 Defense Budget Request . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Part II: Trends in Defense Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Part III: Definitions of Budget Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

List of Figures
Figure 1: DOD Budget Authority by Service, FY2003 Request . . . . . . . . . . . . . 9
Figure 2: DOD Budget Authority by Title, FY1985-2007 . . . . . . . . . . . . . . . . 14
Figure 3: Active Duty End-Strength by Service, Selected Years, FY1987-2003 14
Figure 4: Active Duty End-Strength, FY1950-2003 . . . . . . . . . . . . . . . . . . . . . 16
Figure 5: National Defense Outlays, FY1910-2007 . . . . . . . . . . . . . . . . . . . . . 22
Figure 6: National Defense Budget Authority and Outlays, FY1947-2007 . . . . 22
Figure 7: National Defense Outlays, Percentage of GDP/GNP, FY1910-2007 . 23
Figure 8: National Defense Outlays, Percentage of GDP, FY1947-2007 . . . . . 23
Figure 9: National Defense Outlays, Percentage of Federal Outlays,
FY1940-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Figure 10: Federal Outlays by Budget Enforcement Act Category,
FY1962-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

List of Tables
Table 1. National Defense Budget Function and Department of Defense
Budget, FY1995-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 2. National Defense Budget Function by Appropriations Title,
Budget Authority, FY1995-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 3. National Defense Budget Function by Appropriations Title,
Outlays, FY1995-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 4. Department of Defense Budget Authority by Service, FY1994-2003 . . 9
Table 5. Operation Desert Shield/Desert Storm Budget Authority and
Outlays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 6. National Defense Budget Authority Trends by Appropriations
Title, FY1976-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 7. Department of Defense Personnel Levels, Selected Years . . . . . . . . . 15
Table 8. Department of Defense Active Duty Personnel Levels,
FY1950-2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 9. U.S. Military Force Structure, FY1980-2003 . . . . . . . . . . . . . . . . . . 17
Table 10. Real Growth/Decline in National Defense Funding, FY1940-2007 . . 18
Table 11. National Defense Outlays as a Percentage of GNP/GDP,
FY1910-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table 12. Allocation of Federal Outlays by Budget Enforcement Act
Category, FY1962-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Table 13. Allocation of Federal Outlays by Budget Enforcement Act
Category, FY1962-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table 14. Trends in Department of Defense Future-Years Defense Plans . . . . . 27
Table 15. Defense Spending by Top 25 Foreign Nations . . . . . . . . . . . . . . . . . 28

Defense Budget for FY2003:
Data Summary
Introduction
This report is designed to be a readily accessible source of facts and figures on
the FY2003 defense budget. Part I provides basic data on the Administration’s
FY2003 national defense budget request, submitted on February 4, 2002. It includes
data on budget authority and outlays for the Department of Defense (DOD) and for
the national defense budget function (Function 050). Part II shows trends in overall
defense spending, in personnel levels, and in military force structure. It includes data
showing the growth and decline of defense spending over time, defense outlays as a
share of total federal expenditures, and defense outlays as a share of gross domestic
product. It also includes a table showing military spending by foreign nations. Part
III defines key defense budget terms.
Data showing long term spending trends can be interpreted in different ways.
For example, while defense outlays are at historically low levels as a percentage of
total federal outlays, this trend is more a reflection of increases in federal entitlement
programs – notably the escalating costs of Medicare and Social Security – than
decreases in defense spending. Also, while defense outlays as a percentage of GDP
are at their lowest levels since World War II, in constant dollar terms they remain
comparable to average peacetime defense outlays during the Cold War.
Most of the data used in this report are taken from annual budget documents
prepared by the Office of Management and Budget (OMB). These data have several
features that users of this report should be aware of.
! First, figures represent the Administration’s request to Congress, including
requested changes in standing legislation, such as this year’s request for
changes in accounting for retirement benefits;
! Second, OMB sometimes adjusts figures for prior year budgets for purposes
of comparison with proposed budgets; and
! Third, the data show estimates of funding in years prior to the budget year
(FY2003) according to OMB conventions for “scoring” of funding, which may
differ from those used by the Congressional Budget Office or the Department
of Defense.

CRS-2
This year, all of these features of the OMB data have some quite significant
effects on estimated and projected funding for defense and other parts of the budget.
Major adjustments include:
(1) Financing of benefits for military and civilian personnel on an accrual
basis: Most federal retirement benefits, including benefits for uniformed military
personnel and DOD civilian personnel, have long been funded on the basis of “accrual
accounting,” in which the cost of future benefits for current employees is charged to
the employing agency as the benefits are accrued. Under accrual accounting
procedures, federal agencies pay the actuarily determined cost of future benefits into
a trust fund. Payments to retirees are then charged to the fund, not to the agency.
In the FY2003 and FY2004 defense budgets, three substantial adjustments involving
accrual accounting have a large effect on reported budget totals. These are:
! Accrual accounting for over-65 health care benefits for uniformed
personnel: The FY2001 Defense Authorization Act included a provision,
known as “Tricare-for-Life,” that guarantees DOD-provided health care to
over-65 military retirees and their dependents. Beginning in FY2003, these
benefits are being funded on an accrual basis. This results in (1) an increase of
$8.1 billion in FY2003 in the military personnel accounts to reflect the accrual
cost of future benefits for current uniformed personnel and (2) a reduction of
$5.6 billion in operation and maintenance accounts to reflect a payment from
the health care trust fund to DOD for providing care to over-65 retirees.
! Accrual accounting for all civilian personnel retirement pension and
health benefits: While most federal civilian retirement benefits are funded on
an accrual basis, a small part is not. Now the Administration is proposing to
fund all retirement benefits on an accrual basis. In FY2003, the proposed
change results in an increase of $3.3 billion (both in budget authority and in
outlays) in the Department of Defense budget.
! Accrual accounting for under-65 health care benefits for uniformed
personnel: Beginning in FY2004, the Administration is also proposing to
finance health care benefits for under-65 military retirees on an accrual basis,
in which, again, DOD would pay into a trust fund the cost of future benefits
for current employees and would receive reimbursement from the fund for
costs of under-65 retiree health care that it provides. Both the contributions
to the fund and reimbursements from the fund are reflected in budget
projections from FY2004 on.

(2) Adjustment of prior year budget figures for accrual accounting: OMB
has adjusted FY2001 and FY2002 figures – though not figures for earlier years – to
be comparable to the new, proposed treatment of civilian retirement and health
benefits. Thus, OMB figures include $3.0 billion in FY2001 and $3.2 billion in
FY2002 Department of Defense budget totals (both in budget authority and in
outlays) for increased civilian retirement accrual even though this accounting
procedure was not in place in those years.
(3) Fiscal year scoring of funding provided by the Emergency Terrorism
Response supplemental appropriations act: Congress and the executive branch

CRS-3
sometimes count or “score” appropriations differently. This year, there are major
differences in how OMB and the Congressional Budget Office (CBO) show the
allocation of funds provided in the Emergency Terrorism Response supplemental
appropriations measure that Congress approved on September 14, 2001. In all,
Congress appropriated $40 billion for responding to the September 11 terrorist
attacks, including $20 billion that was made available to agencies after the President
notified Congress how the funds would be distributed and a second $20 billion that
was made available only after Congress allocated the funds in a subsequent
appropriations act. Of the $40 billion total, $17.5 billion was allocated to the Defense
Department, of which $14.0 billion was from the first $20 billion and $3.5 billion from
the second $20 billion. An additional $374 million was allocated to the Department
of Energy for defense-related activities, of which $5 million came from the initial $20
billion and $369 million from the second. These amounts are part of the national
defense budget function. CBO and OMB differ in allocating these funds –
! CBO scoring conventions: CBO scores funds by fiscal year according to the
date when Congress makes funds available to the executive branch. Thus,
CBO allocates all of the initial $20 billion in supplemental funding to FY2001,
when the original appropriation was enacted, while it allocates all of the second
$20 billion to FY2002, which is when Congress approved a subsequent
appropriations measure distributing the funds among federal agencies. Under
this convention, CBO shows $14.0 billion of supplemental funds in the
Department of Defense budget for FY2001 and $3.5 billion in the budget for
FY2002 (all in budget authority).
! OMB scoring conventions: OMB, however, normally allocates funds by
fiscal year based on when the executive branch actually releases money to the
agencies. Following that rule, OMB allocates $4.3 billion to DOD in FY2001
because the President had sent two notifications to Congress distributing that
amount to DOD before the end of the fiscal year on September 30, 2001.
OMB allocates the $3.5 billion that Congress provided for DOD in the second
$20 billion to FY2002. OMB did not, however, include in either year’s DOD
budget the remaining $9.8 billion that was allocated to DOD out of the initial
$20 billion in supplemental funding. Instead, OMB shows those funds in the
Emergency Response Fund, a government-wide account into which the funds
were initially appropriated. Although OMB released all but a small amount of
the initial $20 billion before the budget was released on February 4, it does not
show funds released after September 30, 2001, in agency totals.

This report relies primarily on OMB data, so the figures shown here follow
OMB’s scoring conventions.
CRS annually prepares a number of issue briefs and reports on specific weapon
programs and other defense issues. For up-to-date lists of CRS products on defenserelated issues, congressional offices should go to:
[http://www.crs.gov/products/browse/is-defense.shtml].
Selected defense-related products include:

CRS-4
CRS Issue Brief IB10062, Defense Research: DOD’s Research, Development, Test
and Evaluation Program, by John Dimitri Moteff.
CRS Issue Brief IB10089, Military Pay and Benefits: Key Questions and Answers,
by (name redacted).
CRS Issue Brief IB93103, Military Medical Care Services: Questions and Answers,
by Richard A. Best, Jr.
CRS Issue Brief IB85159, Military Retirement: Major Legislative Issues, by (name
redacted).
CRS Report RL31111, Missile Defense: the Current Debate, coordinated by (name
redacted) and (name redacted).
CRS Report RS20535, Navy Ship Procurement Rate and the Planned Size of the
Navy: Background and Issues for Congress, by (name redacted).
CRS Report RS20643, Navy CVNX Aircraft Carrier Program: Background and
Issues for Congress, by (name redacted).
CRS Report RS21059, Navy DD(X) Future Surface Combatant Program:
Background and Issues for Congress, by (name redacted).
CRS Issue Brief IB94040, Peacekeeping: Issues of U.S. Military Involvement, by
Nina Maria Serafino.
CRS Report RL31297, Recruiting and Retention in the Active Component Military,
by (name redacted).
CRS Issue Brief IB92115, Tactical Aircraft Modernization: Issues for Congress, by
(name redacted).
CRS Report RL31187, Terrorism Funding: Congressional Debate on Emergency
Supplemental Allocations, by (name redacted) and Larry Q. Nowels.
CRS Report RS21133, The Nuclear Posture Review: Overview and Emerging Issues,
by (name redacted).
CRS Issue Brief IB86103, V-22 Osprey Tilt-Rotor Aircraft, by (name redacted).
For an extensive discussion of the defense budget process, see CRS Report
RL30002, A Defense Budget Primer, by (namer edacted)
and (name r edacted).

CRS-5

Part I: The FY2003 Defense Budget Request
The following section provides basic data on the FY2003 defense budget
request. Table 1 provides data on the national defense budget function and the
Department of Defense budget, including figures for budget authority and outlays in
current and constant dollars and percentages of real growth. For a definition of terms,
see the glossary at the end of this report.
Tables 2 and 3 show, respectively, budget authority and outlay figures for the
national defense budget function broken down by appropriations title.
Table 4 shows DOD budget authority broken down by military component —
i.e., the military services. Figure 1 graphically displays shares of DOD budget
authority by service for the FY2003 budget request.
Table 5 shows budget authority and outlays associated with Operation Desert
Shield/Desert Storm. In order to reflect accurately trends in defense funding, most
of the data in this report have been adjusted to exclude costs associated with the
Persian Gulf War, since that conflict was largely financed by U.S. allies. Table 5
allows the reader to compare the adjusted data published in this report with
unadjusted data published elsewhere.

CRS-6

Table 1. National Defense Budget Function and Department of Defense Budget, FY1995-2007
(current and constant FY2003 dollars in billions)
Fiscal Year:
National Defense Budget Function
Budget Authority
Current year dollars
Constant FY2002 dollars
Real growth/decline
Outlays
Current year dollars
Constant FY2003 dollars
Real growth/decline
Department of Defense
Budget Authority
Current year dollars
Constant FY2003 dollars
Real growth/decline
Outlays
Current year dollars
Constant FY2003 dollars
Real growth/decline

Actual
1995

Actual
1996

Actual
1997

Actual
1998

Actual
1999

Actual
2000

Actual Estimate Request
2001
2002
2003

Proj.
2004

Proj.
2005

Proj.
2006

Proj.
2007

266.4
324.2
-0.9%

266.2
317.2
-2.2%

270.4
315.3
-0.6%

271.3
309.1
-2.0%

292.3
325.3
+5.2%

304.1
329.9
+1.4%

329.0
346.5
+5.0%

350.7
396.8
358.5
396.8
+3.5% +10.7%

405.6
396.1
-0.2%

426.6
406.5
+2.6%

447.7
416.2
+2.4%

469.8
426.1
+2.4%

271.0
329.1
-4.5%

265.2
315.5
-4.1%

270.4
313.8
-0.5%

268.4
304.8
-2.9%

274.9
306.3
+0.5%

294.5
319.5
+4.3%

308.5
324.9
+1.7%

348.0
355.2
+9.3%

379.0
379.0
+6.7%

393.8
384.5
+1.5%

413.5
394.2
+2.5%

428.5
398.4
+1.1%

442.5
401.1
+0.7%

255.7
311.3
-0.3%

254.6
303.3
-2.5%

258.0
300.8
-0.8%

258.6
294.6
-2.1%

278.6
310.0
+5.2%

290.5
315.1
+1.7%

313.0
329.6
+4.6%

333.0
378.6
340.4
378.6
+3.3% +11.2%

387.4
378.3
-0.1%

408.3
389.0
+2.8%

429.2
398.9
+2.5%

450.9
409.0
+2.5%

258.4
313.7
-4.4%

252.7
300.5
-4.2%

258.2
299.6
-0.3%

256.1
290.8
-2.9%

261.4
291.2
+0.2%

281.2
305.1
+4.8%

294.0
309.6
+1.5%

330.6
337.4
+9.0%

375.6
366.7
+1.6%

395.2
376.7
+2.7%

410.2
381.3
+1.2%

423.9
384.2
+0.8%

361.0
361.0
+7.0%

Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003 , February 2002. Deflators and
data on Desert Shield/Desert Storm budget authority and outlays from DOD Comptroller.
Notes: Figures exclude Operation Desert Shield/Desert Storm costs and receipts, which affects outlay amounts from FY1995-1998. This and other tables in this
report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health
care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees beginning
in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also reflect OMB
scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact
of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-7

Table 2. National Defense Budget Function by Appropriations Title, Budget Authority, FY1995-2007
(current year dollars in billions)
Fiscal Year:

Actual
1995

Actual
1996

Department of Defense (military activities only)
Military Personnel
71.6
69.8
Operation & Maintenance
93.8
93.7
Procurement
43.6
42.6
RDT&E
34.5
35.0
Military Construction
5.4
6.9
Family Housing
3.4
4.3
Other
3.4
2.4
Subtotal, Department of Defense
255.7
254.6
Department of Energy
Atomic Energy Defense Activities
10.1
10.7
Other Agencies
Defense-Related Activities
0.6
0.9
Total, National Defense

266.4

266.2

Proj.

Actual
1997

Actual
1998

Actual
1999

Actual
2000

Actual Estimate Request
2001
2002
2003

Proj.
2004

Proj.
2005

Proj.
2006

2007

70.3
92.4
43.0
36.4
5.7
4.1
6.1
258.0

69.8
97.2
44.8
37.1
5.5
3.8
0.3
258.6

70.6
105.0
51.1
38.3
5.4
3.6
4.6
278.6

73.8
108.8
55.0
38.7
5.1
3.5
5.6
290.5

76.9
117.7
62.6
41.7
5.5
3.7
4.9
313.0

82.0
129.8
61.1
48.6
6.6
4.1
0.9
333.0

94.3
150.4
68.7
53.9
4.8
4.2
2.3
378.6

104.0
140.9
74.7
57.0
5.1
4.3
1.4
387.4

108.1
147.0
79.2
60.7
6.3
5.1
1.9
408.3

113.7
152.3
86.9
58.9
10.8
4.9
1.5
429.2

117.4
155.2
99.0
58.0
13.8
4.8
2.7
450.9

11.4

11.7

12.6

12.4

14.4

16.0

16.5

16.5

16.6

16.8

17.1

1.0

1.0

1.1

1.2

1.6

1.7

1.7

1.7

1.7

1.7

1.7

270.4

271.3

292.3

304.1

329.0

350.7

396.8

405.6

426.6

447.7

469.8

Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002; except Title level
detail for FY2004-2007 from Office of Management and Budget, Analytical Perspectives: Budget of the United States Government, Fiscal Year 2003, February
2002.
Notes: This and other tables in this report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1)
enacted accrual accounting for health care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for
under-65 military retirees beginning in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003.
Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001.
For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-8

Table 3. National Defense Budget Function by Appropriations Title, Outlays, FY1995-2007
(current year dollars in billions)
Fiscal Year:

Actual
1995

Actual
1996

Department of Defense (military activities only)
Military Personnel
70.8
66.7
Operation & Maintenance
90.9
88.7
Procurement
54.3
48.5
RDT&E
34.6
36.5
Military Construction
6.8
6.7
Family Housing
3.6
3.8
Other
-2.6
1.8
Subtotal, DOD
258.4 252.7
Department of Energy
Atomic Energy Defense Activities
11.8
11.6
Other Agencies
Defense-Related Activities
0.8
0.9
Total, National Defense

271.0

265.2

Actual
1997

Actual
1998

Actual
1999

Actual
2000

Actual Estimate Request
2001
2002
2003

Proj.
2004

Proj.
2005

Proj.
2006

Proj.
2007

69.7
92.4
47.6
37.0
6.2
4.0
1.2
258.2

69.0
93.5
48.2
37.4
6.0
3.9
-1.9
256.1

69.5
96.4
48.8
37.4
5.5
3.7
0.1
261.4

76.0
105.9
51.7
37.6
5.1
3.4
1.6
281.2

74.0
114.0
55.0
40.6
5.0
3.5
1.9
294.0

81.2
133.6
59.6
45.1
5.7
3.8
1.7
330.6

92.8
143.5
62.3
50.8
6.0
3.9
1.7
361.0

102.1
146.2
65.3
52.3
4.7
3.9
1.1
375.6

107.1
147.0
75.0
56.2
4.5
4.0
1.3
395.2

112.8
146.8
81.8
57.6
5.5
4.4
1.4
410.2

116.6
147.9
87.6
57.4
7.8
4.4
2.1
423.9

11.3

11.3

12.4

12.2

13.0

15.9

16.3

16.5

16.6

16.7

16.9

0.9

1.1

1.1

1.1

1.5

1.6

1.7

1.7

1.7

1.7

1.7

270.4

268.4

274.9

294.5

308.5

348.0

379.0

393.8

413.5

428.5

442.5

Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002; except Title level
detail for FY2004-2007 from Office of Management and Budget, Analytical Perspectives: Budget of the United States Government, Fiscal Year 2003, February
2002. Deflators and data on Desert Shield/Desert Storm outlays from DOD Comptroller.
Notes: Figures exclude Operation Desert Shield/Desert Storm costs and receipts, which affects data from FY1995-1998. This and other tables in this report use
OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care benefits
for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees beginning in FY2004;
and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also reflect OMB scoring
of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation of the impact of accrual
accounting and of budget scoring conventions, see the Introduction, above.

CRS-9

Table 4. Department of Defense Budget Authority by Service,
FY1994-2003
(current year dollars in billions)
Actual Actual Actual Actual Actual Actual Actual
1995 1996 1997 1998 1999 2000 2001
Army
63.3
64.5
64.4
64.0
68.4
73.2
77.0
% of DOD Total
24.8% 25.4% 25.0% 24.8% 24.5% 25.2% 24.9%
Navy/Marine Corps
76.9
80.0
79.5
80.7
84.0
88.8
95.5
% of DOD Total
30.1% 31.4% 30.8% 31.2% 30.2% 30.6% 30.8%
Air Force
73.9
73.0
73.2
76.3
81.9
83.1
89.5
% of DOD Total
28.9% 28.7% 28.4% 29.5% 29.4% 28.6% 28.9%
Defense Wide
41.6
37.0
40.8
37.6
44.3
45.5
47.9
% of DOD Total
16.3% 14.5% 15.8% 14.5% 15.9% 15.7% 15.4%
DOD Total
255.7 254.4 258.0 258.6 278.6 290.5 309.9

Fiscal Year:

Est.
2002
80.8
24.5%
98.6
29.9%
94.2
28.6%
56.2
17.0%
329.9

Proj.
2003
90.8
24.0%
108.2
28.6%
106.9
28.2%
72.7
19.2%
378.6

Source: Department of Defense Comptroller, National Defense Budget Estimates for FY2003, March
2002.
Notes: Totals may not add due to rounding. Total is discretionary DOD budget authority. FY2002
and FY2003 Defense-Wide amounts include Defense Emergency Response Fund.

Figure 1: DOD Budget Authority by Service, FY2003 Request

Navy/Marine
28.6%

Army
24.0%

Defense-Wide
19.2%
Air Force
28.2%

CRS-10

Table 5. Operation Desert Shield/Desert Storm Budget Authority and Outlays
(current year dollars in millions)
Budget Authority
Military Personnel
Operations & Maintenance
Procurement
Research, Development,
Test, & Evaluation
Military Construction
Family Housing
Stock Funds
Allied Cash Contributions
Total Budget Authority
Outlays
Military Personnel
Operations & Maintenance
Procurement
Research, Development,
Test, & Evaluation
Military Construction
Family Housing
Stock Funds
Allied Cash Contributions
Total Outlays

FY1990

FY1991

FY1992

FY1993

FY1994

FY1995

FY1996

FY1997

FY1998

Total

281
1,328
10

5,824
24,366
5,278

2,409
8,132
1,950

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

8,514
33,826
7,238

9
–
–
400
–
2,028

69
35
–
271
-43,154
-7,311

106
–
–
–
-5,240
7,357

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

184
35
0
671
-48,394
2,074

267
1,033
1

5,382
16,212
-152

2,734
11,152
2,154

114
3,974
2,619

–
1,142
1,369

–
147
729

–
51
378

–
21
44

–
4
17

8,497
33,736
7,159

5
–
–
156
–
1,462

40
10
–
-1,778
-43,154
-23,440

76
13
–
1,348
-5,240
12,237

45
7
–
429
–
7,188

11
2
–
259
–
2,783

4
2
–
166
–
1,048

1
1
–
79
–
510

–
–
–
11
–
76

–
–
–
–
–
21

182
35
0
670
-48,394
1,885

Source: Department of Defense Comptroller.
Notes: Totals may not add due to rounding. Totals in this table represent only cash outlays and receipts. DOD estimates that the total cost of Operation
Desert Shield/Desert Storm was $61.1 billion, including activities supported through allied in-kind assistance and material losses not replaced.

CRS-11

Part II: Trends in Defense Spending
Part II provides data on trends in the defense budget that may be of particular
interest to Congress. In assessing trends, current levels of spending are often
compared to the peak levels reached during the defense buildup of the 1980s.
FY1985 was the peak year in budget authority for national defense, FY1987 was the
peak in the number of military personnel, and FY1989 was the peak in outlays.
Table 6 shows budget authority by appropriations title for selected years for the
period FY1976 through FY2007 in inflation-adjusted dollars and calculates
cumulative real growth or decline over the selected parts of that period. Figure 2
graphically shows trends in budget authority by title from FY1985 to FY2007.
Table 7 shows the trend in personnel levels for active duty forces, reserve
forces, and DOD civilians for FY1981 and selected years thereafter. Figure 3
illustrates the trend in active duty military personnel levels. Table 8 and Figure 4
show total active duty end-strength levels from FY1950-2003.
Table 9 shows the trend in major elements of force structure (Army and Marine
Corps divisions, Air Force tactical air wings, and Navy ships) for FY1980-2003.
Table 10 shows the trend in total national defense budget authority and outlays
in current and constant FY2003 dollars from FY1940 to FY2007.
Table 11 tracks national defense outlays as a share of gross national product
(GNP) and gross domestic product (GDP) from FY1910 to FY2007.
Figure 5 illustrates the trend in national defense outlays in constant FY2003
dollars from FY1910 to FY2007.
Figure 6 illustrates trends in national defense budget authority and outlays in
constant FY2003 dollars from FY1947 to FY2007.
Figures 7 and 8 illustrate trends in national defense outlays as a percentage of
GNP/GDP from FY1910 to FY2007 and as a percentage of GDP from FY1947 to
FY2007.
Table 12 shows the allocation of outlays by budget enforcement act category in
the federal budget in current year dollars, and Table 13 and Figure 9 show the same
data as percentages of total federal outlays. Figure 10 shows the allocation of federal
outlays in constant FY2003 dollars.
Table 14 follows the trend in DOD five- and six-year defense plans since 1987.
Finally, Table 15 shows defense spending of the top 25 foreign nations.

CRS-12

Table 6. National Defense Budget Authority Trends by Appropriations Title, FY1976-2007
(constant FY2003 dollars in billions)
Fiscal Year
Military Personnel
Operation and Maintenance
Procurement
RDT&E
Military Construction
Family Housing
Other
Subtotal, Department of Defense
Dept. of Energy Defense-Related
Other Defense-Related
Total, National Defense

Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual
1976
1980
1985
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
117.9
111.3
123.4
123.2
117.9
114.8
105.8
96.9
94.9
90.5
88.6
84.8
83.2
85.3
94.4
126.9
121.5
120.2
110.5
113.8
110.2
114.3
111.6
107.9
110.5
116.7
61.0
69.7
144.0
101.8
81.4
72.5
61.4
50.4
49.0
47.1
47.0
48.5
54.5
26.7
26.7
47.8
46.7
45.0
44.0
44.7
40.1
39.3
39.0
40.0
40.3
41.1
6.2
4.3
8.4
6.5
6.4
6.3
5.4
6.9
6.2
7.7
6.3
6.0
5.8
3.6
3.0
4.3
4.0
4.1
4.5
4.6
4.0
3.8
4.7
4.5
4.1
3.8
-0.5
1.1
7.0
-1.0
1.5
4.6
3.5
3.6
3.8
2.7
6.6
0.4
4.8
300.2
310.6
461.7
402.6
376.5
357.2
339.2
312.2
311.3
303.3
300.8
294.6
310.0
5.3
6.6
11.8
13.4
15.4
15.6
15.3
13.5
12.3
12.7
13.2
13.3
14.0
0.5
0.5
0.8
0.8
1.5
1.3
2.3
1.3
0.7
1.1
1.2
1.2
1.3
306.0
317.6
474.3
416.8
393.3
374.0
356.8
327.0
324.2
317.2
315.3
309.1
325.3

CRS-13

Table 6. – continued
(constant FY2003 dollars in billions)

Fiscal Year
Military Personnel
Operation and Maintenance
Procurement
RDT&E
Military Construction
Family Housing
Other
Subtotal, Department of Defense
Dept. of Energy Defense-Related
Other Defense-Related
Total, National Defense

Actual
2000
83.2
118.5
57.7
40.8
5.4
3.7
5.8
315.1
13.5
1.3
329.9

Actual
2001
83.9
123.3
64.7
43.2
5.7
3.8
5.0
329.6
15.2
1.7
346.5

Est.
2002
84.8
132.4
62.1
49.3
6.7
4.1
0.9
340.4
16.4
1.8
358.5

Proj.
2003
94.3
150.4
68.7
53.9
4.8
4.2
2.3
378.6
16.5
1.7
396.8

Proj.
2004
100.9
137.4
73.4
56.0
5.0
4.2
1.3
378.3
16.1
1.7
396.1

Proj.
2005
101.7
139.7
76.4
58.5
6.1
4.9
1.8
389.0
15.8
1.6
406.5

Proj.
2006
103.7
141.0
82.2
55.6
10.2
4.6
1.5
398.9
15.7
1.6
416.2

Real
Real
Real
Real
Growth/ Growth/ Growth/ Growth/
Proj. Decline Decline Decline Decline
2007 FY76-85 FY85-90 FY90-98 FY98-03
103.9
+5%
0%
-31%
+11%
139.8
+49%
-4%
-9%
+36%
91.9 +136%
-29%
-52%
+42%
53.7
+79%
-2%
-14%
+34%
12.7
+36%
-23%
-8%
-20%
4.5
+20%
-7%
+3%
+2%
2.5
NA
NA
NA
NA
409.0
+54%
-13%
-27%
+29%
15.5 +123%
+13%
-0%
+23%
1.6
+76%
+4%
+37%
+49%
426.1
+55%
-12%
-26%
+28%

Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, Fiscal Year 2003, February 2002; except Title level
figures for FY2004-2007 from Office of Management and Budget, Analytical Perspectives: Budget of the United States Government, Fiscal Year 2003, February
2002. Deflators and data on Desert Shield/Desert Storm costs and receipts from DOD Comptroller.
Notes: Data for FY1990-92 exclude Desert Shield/Desert Storm costs and receipts (see Table 5, above). Totals may not add due to rounding. This and other tables
in this report use OMB data which reflect enacted and proposed changes in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for
health care benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health care benefits for under-65 military retirees
beginning in FY2004; and (3) proposed accrual accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in these tables also
reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an explanation
of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-14
Figure 2: DOD Budget Authority by Title, FY1985-2007
160
140

Operation & Maintenance

120
100

Military Personnel

80
Procurement

60
40

RDT&E
20
0
1985

1990

1995

2000

2005

Figure 3: Active Duty End-Strength by Service,
Selected Years, FY1987-2003
2500

2000

Air Force
Marine Corps
Navy
Army

1500

1000

500

0
1987 1989 1991 1993 1995 1997 1999 2000 2001 2002 2003

CRS-15

Table 7. Department of Defense Personnel Levels, Selected Years
(end strength/ full-time equivalents in thousands)
Fiscal Year:
Army
Navy
Marine Corps
Air Force
Total Active
Selected Reserves
Total Civilians (FTEs)

Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual
1981
1985
1987
1989
1991
1993
1995
1997
1999
2000
2001
781
781
781
770
725
572
509
492
479
482
481
540
571
587
593
571
510
435
396
373
373
378
191
198
200
197
195
178
174
174
173
173
173
570
602
607
571
511
444
400
378
361
356
354
2,082 2,151 2,174 2,130 2,002 1,705 1,518 1,440 1,386 1,384 1,385
851 1,188 1,151 1,171 1,138 1,058
946
902
877
865
869
947 1,029 1,032 1,023
969
932
822
746
681
660
650

Est.
2002
480
376
173
359
1,387
864
635

Proj.
2003
480
376
175
359
1,390
865
627

Sources: Active and reserve force levels for FY2001-FY2003 from Office of Management and Budget, Budget of the United States Government for
FY2003: Appendix, February 2002; active duty force levels for prior years from Department of Defense, Undersecretary of Defense Comptroller,
National Defense Budget Estimate for FY2002, August 2001; reserve force levels for prior years from U.S. Department of Defense, Manpower
Requirements Report, FY1998, July 1998 and prior years and from Office of Management and Budget, Budget of the United States Government for
FY2002: Appendix, April 2001 and prior years; civilian FTE levels from Office of Management and Budget, Historical Tables: Budget of the United
States Government for FY2003, February 2002.
Notes: Figures reflect end-strength for active and reserve forces and full time equivalent (FTE) employment levels for civilians. End-strength represents
force levels at the end of each fiscal year. Selected reserves do not include Standby Reserve, Individual Ready Reserve, and Inactive National Guard.
Totals may not add due to rounding. Active duty totals do not include full time Guard and Reserve.

CRS-16

Table 8. Department of Defense Active Duty Personnel
Levels, FY1950-2003
(end-strength in thousands)
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963

1,459
3,249
3,636
3,555
3,302
2,935
2,806
2,795
2,600
2,504
2,475
2,483
2,808
2,700

1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977

2,688
2,656
3,094
3,377
3,548
3,460
3,065
2,714
2,322
2,252
2,161
2,127
2,081
2,073

1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991

2,061
2,024
2,050
2,082
2,108
2,123
2,138
2,151
2,169
2,174
2,138
2,130
2,069
2,002

1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003

1,808
1,705
1,610
1,518
1,472
1,440
1,406
1,386
1,384
1,385
1,387
1,390

Sources: FY2001-FY2003 from Office of Management and Budget, Budget of the
United States Government for FY2003: Appendix, February 2002; FY1950-2000
from Under Secretary of Defense Comptroller, National Defense Budget Estimates
for FY2002, June 2001.

Figure 4: Active Duty End-Strength, FY1950-2003
4,000

3,000

2,000

1,000

0
1950

1960

1970

1980

1990

2000

CRS-17

Table 9. U.S. Military Force Structure, FY1980-2003
Fiscal
Year
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003

Army Divisions
Active
Reserve
16
8
16
8
16
8
16
8
16
9
17
10
18
10
18
10
18
10
18
10
18
10
16
10
14
10
14
10
12
8
12
8
10
8
10
8
10
8
10
8
10
8
10
8
10
8
10
8

Marine Divisions
Active
Reserve
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1

Naval Forces
Carriersb Total Ships
13
477
13
491
14
513
14
514
14
524
14
542
14
556
15
569
15
566
15
567
15
546
15
526
14
466
13
434
12
387
11+1
373
11+1
365
11+1
357
11+1
333
11+1
317
11+1
316
11+1
316
11+1
315
11+1
308

Air Force
Tactical Wingsa
Active
Reserve
26
11
26
11
26
12
25
12
25
12
25
12
25
12
25
12
25
12
25
12
24
12
22
13
16
13
16
11
13
9
13
8
13
7
13
7
13
7
13
7.2
13
7.6
12.6
7.6
12+
7+
12+
7+

Sources: U.S. Navy, Highlights of the Department of the Navy FY2003 Budget, February 2002; U.S. Department of
Defense, briefing materials accompanying the FY2002 budget request (mimeo), June 2001 and similar materials
provided in prior years. U.S. Library of Congress, Congressional Research Service, U.S./Soviet Military Balance:
Statistical Trends, 1980-1989, CRS Report 90-401 RCO, by John M. Collins and (name redacted),
Aug. 6, 1990.
U.S. Library of Congress, Congressional Research Service, U.S. Armed Forces: Statistical Trends, 1985-1990, CRS
Report 91-672 RCO, by John M. Collins and (name redacted),
Sep. 6. 1991. U.S. Department of the Navy (Program
Information Center), Listing of U.S. Naval Ship Battle Forces as of 30 September 1993, Washington 1993 and
previous editions.
Notes: Figures for FY2002 and FY2003 are Administration projections.
a. Air Force figures do not include a wing of F-117 aircraft prior to FY1990.
b. Carrier figures exclude one auxiliary training carrier for FY1980-92 but include one operational reserve training
carrier (shown as “+1") since FY1995.

CRS-18

Table 10. Real Growth/Decline in National Defense
Funding, FY1940-2007
(current and constant FY2003 dollars in billions)
Budget Authority
Fiscal
Year

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986

Outlays

Current
Dollars

Constant
FY2003
Dollars

Real
Growth/
Decline

Current
Dollars

Constant
FY2003
Dollars

Real
Growth/
Decline

–
–
–
–
–
39.2
44.0
9.0
9.5
10.9
16.5
57.8
67.5
56.9
38.7
32.9
35.0
39.4
40.1
45.1
44.3
45.1
50.2
52.1
51.6
50.6
64.4
73.1
77.2
78.5
75.3
72.7
76.4
79.1
81.5
86.2
97.3
110.2
117.2
126.5
143.9
180.0
216.5
245.0
265.2
294.7
289.1

–
–
–
–
–
612.9
558.1
115.5
108.8
127.8
175.8
470.5
570.4
497.0
361.2
306.8
306.4
329.4
318.5
335.7
324.8
328.2
359.1
364.9
348.4
333.5
387.7
423.1
430.5
420.5
380.9
347.4
333.8
318.8
302.4
292.1
306.1
318.3
313.9
312.3
317.8
354.7
393.3
425.5
445.0
474.3
455.6

–
–
–
–
–
–
-8.9%
-79.3%
-5.8%
+17.5%
+37.5%
+167.7%
+21.2%
-12.9%
-27.3%
-15.1%
-0.1%
+7.5%
-3.3%
+5.4%
-3.2%
+1.0%
+9.4%
+1.6%
-4.5%
-4.3%
+16.3%
+9.1%
+1.7%
-2.3%
-9.4%
-8.8%
-3.9%
-4.5%
-5.2%
-3.4%
+4.8%
+4.0%
-1.4%
-0.5%
+1.7%
+11.6%
+10.9%
+8.2%
+4.6%
+6.6%
-4.0%

1.7
6.4
25.7
66.7
79.1
83.0
42.7
12.8
9.1
13.2
13.7
23.6
46.1
52.8
49.3
42.7
42.5
45.4
46.8
49.0
48.1
49.6
52.3
53.4
54.8
50.6
58.1
71.4
81.9
82.5
81.7
78.9
79.2
76.7
79.3
86.5
89.6
97.2
104.5
116.3
134.0
157.5
185.3
209.9
227.4
252.7
273.4

26.2
97.0
352.8
844.3
1,031.9
1,118.3
574.2
157.3
107.7
149.1
154.6
237.6
423.7
469.9
447.0
385.3
364.1
368.9
360.4
360.2
353.1
352.5
372.8
377.1
373.3
341.6
365.2
422.1
460.0
448.6
416.2
379.6
351.9
320.8
307.2
300.1
290.6
293.0
293.3
302.4
310.2
324.5
347.0
374.8
390.0
414.5
436.0

–
+269.8%
+263.6%
+139.3%
+22.2%
+8.4%
-48.7%
-72.6%
-31.5%
+38.4%
+3.7%
+53.7%
+78.3%
+10.9%
-4.9%
-13.8%
-5.5%
+1.3%
-2.3%
0.0%
-2.0%
-0.2%
+5.8%
+1.2%
-1.0%
-8.5%
+6.9%
+15.6%
+9.0%
-2.5%
-7.2%
-8.8%
-7.3%
-8.8%
-4.3%
-2.3%
-3.2%
+0.8%
+0.1%
+3.1%
+2.6%
+4.6%
+6.9%
+8.0%
+4.1%
+6.3%
+5.2%

CRS-19
Budget Authority
Fiscal
Year
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007

Current
Dollars
287.4
292.0
299.6
301.2
296.2
287.7
281.1
263.3
266.4
266.2
270.4
271.3
292.3
304.1
329.0
350.7
396.8
405.6
426.6
447.7
469.8

Constant
FY2003
Dollars
440.9
432.2
426.7
416.8
393.3
374.0
356.8
327.0
324.2
317.2
315.3
309.1
325.3
329.9
346.5
358.5
396.8
396.1
406.5
416.2
427.5

Real
Growth/
Decline
-3.2%
-2.0%
-1.3%
-2.3%
-5.6%
-4.9%
-4.6%
-8.3%
-0.9%
-2.2%
-0.6%
-2.0%
+5.2%
+1.4%
+5.0%
+3.5%
+10.7%
-0.2%
+2.6%
+2.4%
+2.4%

Outlays
Current
Dollars
282.0
290.4
303.6
297.9
296.7
286.1
283.9
278.9
271.0
265.2
270.4
268.4
274.9
294.5
308.5
348.0
379.0
393.8
413.5
428.5
442.5

Constant
FY2003
Dollars
437.4
435.8
437.1
416.8
397.9
372.3
359.0
344.4
329.1
315.5
313.8
304.8
306.3
319.5
324.9
355.2
379.0
384.5
394.2
398.4
401.1

Real
Growth/
Decline
+0.3%
-0.4%
+0.3%
-4.6%
-4.5%
-6.5%
-3.5%
-4.1%
-4.5%
-4.1%
-0.5%
-2.9%
+0.5%
+4.3%
+1.7%
+9.3%
+6.7%
+1.5%
+2.5%
+1.1%
+0.7%

Sources: Current dollar FY1940-1975 budget authority figures from Department of Defense
Comptroller, National Defense Budget Estimates for FY1982, March 1983; all other current dollar
figures from U.S. Office of Management and Budget, Historical Tables: Budget of the United States
Government, Fiscal Year 2003, February 2002; constant dollar figures calculated by CRS using
deflators from Department of Defense Comptroller; figures on Desert Shield/Desert Storm costs and
receipts from Department of Defense Comptroller.
Notes: This and other tables in this report use OMB data which reflect enacted and proposed changes
in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care
benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for health
care benefits for under-65 military retirees beginning in FY2004; and (3) proposed accrual accounting
for all civilian retirement benefits beginning in FY2003. Data in these tables also reflect OMB scoring
of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in
September 2001. For an explanation of the impact of accrual accounting and of budget scoring
conventions, see the Introduction, above. Figures for FY1990 and beyond exclude costs and receipts
of Operation Desert Shield/Desert Storm. Figures prior to FY1976 are from DOD data that have not
been revised to reflect accrual accounting for military retirement in years prior to its adoption in
FY1985. Figures from FY1976 on have been revised by OMB to reflect accrual accounting.

CRS-20

Table 11. National Defense Outlays as a Percentage of
GNP/GDP, FY1910-2007
(current year dollars in billions)
Fiscal
Year
1910
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

National
Defense
Outlays
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.6
7.1
13.5
4.0
2.6
0.9
0.7
0.6
0.6
0.6
0.6
0.7
0.7
0.7
0.7
0.7
0.6
0.5
0.7
0.9
0.9
1.0
1.1
1.7
6.4
25.7
66.7
79.1
134.0
157.5
185.3
209.9
227.4
252.7
273.4
282.0
290.4
303.6

Outlays
GNP/
as % of Fiscal
GDP GNP/GDP Year
35.3
0.8% 1945
35.8
0.8% 1946
39.4
0.7% 1947
39.6
0.7% 1948
38.6
0.8% 1949
40.0
0.7% 1950
48.3
0.6% 1951
60.4
1.0% 1952
76.4
9.3% 1953
84.0
16.1% 1954
91.5
4.4% 1955
69.6
3.7% 1956
74.1
1.3% 1957
85.1
0.8% 1958
84.7
0.8% 1959
93.1
0.6% 1960
97.0
0.6% 1961
94.9
0.6% 1962
97.0
0.7% 1963
103.1
0.7% 1964
97.4
0.8% 1965
83.7
0.9% 1966
67.5
1.0% 1967
57.4
1.1% 1968
61.2
0.9% 1969
69.7
1.0% 1970
78.5
1.2% 1971
87.8
1.1% 1972
89.0
1.2% 1973
89.0
1.2% 1974
96.7
1.7% 1975
114.0
5.6% 1976
144.2
17.8% 1977
180.1
37.0% 1978
209.0
37.9% 1979
2,732.1
4.9% 1995
3,061.6
5.1% 1996
3,228.6
5.7% 1997
3,440.5
6.1% 1998
3,839.4
5.9% 1999
4,136.6
6.1% 2000
4,401.4
6.2% 2001
4,647.0
6.1% 2002
5,014.7
5.8% 2003
9,824.4
3.1% 2004

National
Defense
Outlays
83.0
42.7
12.8
9.1
13.2
13.7
23.6
46.1
52.8
49.3
42.7
42.5
45.4
46.8
49.0
48.1
49.6
52.3
53.4
54.8
50.6
58.1
71.4
81.9
82.5
81.7
78.9
79.2
76.7
79.3
86.5
89.6
97.2
104.5
116.3
272.1
265.8
270.5
268.5
274.9
294.5
308.5
348.0
379.0
393.8

Outlays
GNP/
as % of
GDP GNP/GDP
221.3
37.5%
222.7
19.2%
234.6
5.5%
256.4
3.6%
271.5
4.8%
273.4
5.0%
321.0
7.3%
348.8
13.2%
373.4
14.1%
378.0
13.0%
395.2
10.8%
427.7
9.9%
450.7
10.1%
461.1
10.2%
492.1
10.0%
518.9
9.3%
531.8
9.3%
568.5
9.2%
599.7
8.9%
641.3
8.5%
687.9
7.4%
754.2
7.7%
813.5
8.8%
868.4
9.4%
949.2
8.7%
1,013.2
8.1%
1,081.4
7.3%
1,181.5
6.7%
1,308.1
5.9%
1,442.1
5.5%
1,559.8
5.5%
1,736.7
5.7%
1,971.3
5.6%
2,218.6
5.3%
2,503.8
5.2%
7,324.0
3.7%
7,694.6
3.5%
8,185.2
3.3%
8,663.9
3.1%
9,124.3
3.0%
9,744.3
3.0%
10,150.5
3.0%
10,361.6
3.4%
10,922.3
3.5%
11,525.8
3.4%

CRS-21

Fiscal
Year
1990
1991
1992
1993
1994

National
Defense
Outlays
299.3
273.3
298.4
291.1
281.6

Outlays
GNP/
as % of
GDP GNP/GDP
5,735.6
5.2%
5,930.4
4.6%
6,218.6
4.8%
6,558.4
4.4%
6,944.6
4.1%

Fiscal
Year
2005
2006
2007

National
Outlays
Defense GNP/
as % of
Outlays GDP GNP/GDP
413.5 12,158.9
3.4%
428.5 12,803.3
3.3%
442.5 13,448.0
3.3%

Sources: Outlays, FY1910-1939, and GNP, FY1910-1929, from U.S. Department of Commerce,
Historical Statistics of the United States, Washington: GPO, 1975; outlays, FY1940-2007, and GDP,
FY1930-2007, from U.S. Office of Management and Budget, Historical Tables: Budget of the United
States Government, Fiscal Year 2003, February 2002.
Notes: This and other tables in this report use OMB data that reflect enacted and proposed changes
in accounting for retirement benefits. Figures reflect (1) enacted accrual accounting for health care
benefits for over-65 military retirees beginning in FY2003; (2) proposed accrual accounting for
health care benefits for under-65 military retirees beginning in FY2004; and (3) proposed accrual
accounting for all civilian retirement pension and health benefits beginning in FY2003. Data in
these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response
supplemental appropriations act approved in September 2001. For an explanation of the impact of
accrual accounting and of budget scoring conventions, see the Introduction, above. For this and
following tables, national defense outlay figures for FY1990 and beyond do not exclude Operation
Desert Shield/Desert Storm costs and receipts, since the amounts involved cannot be separated from
national economic activity or from total federal outlays. GNP before 1930, GDP thereafter.

CRS-22
Figure 5: National Defense Outlays, FY1910-2007
1,200

1,000

800

600

400

200

0
1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Figure 6: National Defense Budget Authority and
Outlays, FY1947-2007
600

500

400

300

200
Budget Authority
Outlays

100

0
1947

1957

1967

1977

1987

1997

2007

CRS-23
Figure 7: National Defense Outlays,
Percentage of GDP/GNP, FY1910-2007
40%

30%

20%

10%

0%
1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Figure 8: National Defense Outlays,
Percentage of GDP, FY1947-2007
16%
14%
12%
10%
8%
6%
4%
2%
0%
1950

1960

1970

1980

1990

2000

CRS-24

Table 12. Allocation of Federal Outlays by Budget Enforcement
Act Category, FY1962-2007
(current year dollars in billions)
Fiscal
Year
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007

Defense
Discretionary
Outlays
52.6
53.7
55.0
51.0
59.0
72.0
82.2
82.7
81.9
79.0
79.3
77.1
80.7
87.6
89.9
97.5
104.6
116.8
134.6
158.0
185.9
209.9
228.0
253.1
273.8
282.5
290.9
304.0
300.1
319.7
302.6
292.4
282.3
273.6
266.0
271.7
270.2
275.5
295.0
309.1
348.0
379.0
393.7
413.4
428.5
442.5

Non-Defense
Discretionary
Outlays
19.5
21.6
24.1
26.8
31.1
34.5
35.8
34.6
38.3
43.5
49.2
53.3
57.5
70.3
85.7
99.6
114.1
123.2
141.7
149.9
140.0
143.4
151.4
162.7
164.7
161.7
173.5
184.8
200.4
213.6
231.2
247.0
259.1
271.3
266.7
275.6
281.9
296.5
319.9
348.3
392.5
410.0
421.3
424.9
429.3
437.5

Mandatory
Outlays
27.9
28.3
31.2
31.8
35.0
40.7
49.1
53.6
61.0
72.8
86.7
98.0
109.7
151.1
169.5
182.2
204.6
221.4
262.1
301.6
334.8
365.2
361.3
401.1
415.9
421.3
448.2
485.8
568.2
596.6
648.5
671.4
717.5
738.8
786.8
810.0
859.4
900.2
951.0
1,000.3
1,133.4
1,158.6
1,185.3
1,248.3
1,322.9
1,402.4

Net
Interest
6.9
7.7
8.2
8.6
9.4
10.3
11.1
12.7
14.4
14.8
15.5
17.3
21.4
23.2
26.7
29.9
35.5
42.6
52.5
68.8
85.0
89.8
111.1
129.5
136.0
138.7
151.8
169.0
184.4
194.5
199.4
198.7
203.0
232.2
241.1
244.0
241.2
229.8
223.0
206.2
178.4
180.7
188.8
190.2
188.3
185.3

Total Federal
Outlays
106.8
111.3
118.5
118.2
134.5
157.5
178.1
183.6
195.6
210.2
230.7
245.7
269.4
332.3
371.8
409.2
458.7
504.0
590.9
678.2
745.8
808.4
851.9
946.4
990.5
1,004.1
1,064.5
1,143.7
1,253.2
1,324.4
1,381.7
1,409.5
1,461.9
1,515.8
1,560.6
1,601.3
1,652.6
1,701.9
1,788.8
1,863.9
2,052.3
2,128.2
2,189.1
2,276.9
2,369.1
2,467.7

Source: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government,
Fiscal Year 2003, February 2002.
Note: National defense outlay figures do not exclude Desert Shield/Desert Storm costs and receipts. This and
other tables in this report use OMB data which reflect enacted and proposed changes in accrual accounting for
retirement benefits after FY2003. Data in these tables also reflect OMB scoring of funds provided in the
Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an
explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-25

Table 13. Allocation of Federal Outlays by
Budget Enforcement Act Category, FY1962-2007
(percentage of total outlays)
Fiscal
Year
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007

Defense
Non-Defense
Discretionary Discretionary
Outlays
Outlays
49.3
48.2
46.4
43.1
43.9
45.7
46.2
45.0
41.9
37.6
34.4
31.4
30.0
26.4
24.2
23.8
22.8
23.2
22.8
23.3
24.9
26.0
26.8
26.7
27.6
28.1
27.3
26.6
23.9
24.1
21.9
20.7
19.3
18.0
17.0
17.0
16.3
16.2
16.5
16.6
17.0
17.8
18.0
18.2
18.1
17.9

18.3
19.4
20.3
22.7
23.1
21.9
20.1
18.8
19.6
20.7
21.3
21.7
21.3
21.2
23.1
24.3
24.9
24.4
24.0
22.1
18.8
17.7
17.8
17.2
16.6
16.1
16.3
16.2
16.0
16.1
16.7
17.5
17.7
17.9
17.1
17.2
17.1
17.4
17.9
18.7
19.1
19.3
19.2
18.7
18.1
17.7

Mandatory
Outlays

Net
Interest

26.1
25.4
26.3
26.9
26.0
25.8
27.6
29.2
31.2
34.6
37.6
39.9
40.7
45.5
45.6
44.5
44.6
43.9
44.4
44.5
44.9
45.2
42.4
42.4
42.0
42.0
42.1
42.5
45.3
45.0
46.9
47.6
49.1
48.7
50.4
50.6
52.0
52.9
53.2
53.7
55.2
54.4
54.1
54.8
55.8
56.8

6.5
6.9
6.9
7.3
7.0
6.5
6.2
6.9
7.4
7.0
6.7
7.0
7.9
7.0
7.2
7.3
7.7
8.5
8.9
10.1
11.4
11.1
13.0
13.7
13.7
13.8
14.3
14.8
14.7
14.7
14.4
14.1
13.9
15.3
15.4
15.2
14.6
13.5
12.5
11.1
8.7
8.5
8.6
8.4
7.9
7.5

Defense
Share
Discretionary
73.0
71.3
69.5
65.6
65.5
67.6
69.7
70.5
68.1
64.5
61.7
59.1
58.4
55.4
51.2
49.5
47.8
48.7
48.7
51.3
57.0
59.4
60.1
60.9
62.4
63.6
62.6
62.2
59.9
59.9
56.7
54.2
52.1
50.2
49.9
49.7
48.9
48.2
48.0
47.0
47.0
48.0
48.3
49.3
50.0
50.3

Source: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government,
Fiscal Year 2003, February 2002.
Note: National defense outlay figures do not exclude Desert Shield/Desert Storm costs and receipts. This and
other tables in this report use OMB data which reflect enacted and proposed changes in accrual accounting for
retirement benefits after FY2003. Data in these tables also reflect OMB scoring of funds provided in the
Emergency Terrorism Response supplemental appropriations act approved in September 2001. For an
explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-26
Figure 9: National Defense Outlays,
Percentage of Federal Outlays, FY1940-2007
100%

80%

60%

40%

20%

0%
1940

1950

1960

1970

1980

1990

2000

Figure 10: Federal Outlays by Budget Enforcement Act Category,
FY1962-2007
2,500
Net Interest
Mandatory
Non-Defense Discretionary
Defense Discretionary

2,000

1,500

1,000

500

0
1962

1967

1972

1977

1982

1987

1992

1997

2002

2007

CRS-27

Table 14. Trends in Department of Defense Future-Years Defense Plans
(budget authority, current year dollars in billions)
Admin. Request

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

FY1987, 2/86
FY1988, 1/87
FY1989, 2/88
Reagan FY1990
Bush FY1990
FY1991, 1/90
FY1992, 2/91
FY1993, 1/92
FY1994, 3/93
FY1995, 2/94
FY1996, 2/95
FY1997, 3/96
FY1998, 2/97
FY1999, 2/98
FY2000, 2/99
FY2001, 2/00
FY2002, 6/01
FY2003, 2/02

312
282
279
279
279
279
279
279
279
279
279
279
279
279
279
279
279
279

332
303
283
284
284
284
284
284
284
284
284
284
284
284
284
284
284
284

354
323
291
290
290
290
291
291
291
291
291
291
291
291
291
291
291
291

375
344
307
306
296
289
291
291
291
291
291
291
291
293
293
293
293
293

396
365
324
321
311
295
280
298
284
284
284
284
284
276
276
276
276
276

387
342
336
322
300
278
269
275
275
275
275
275
282
282
282
282
282

360
351
336
304
278
268
259
267
267
267
267
267
267
267
267
267

366
350
308
278
268
251
249
251
251
251
251
251
251
251
251

312
281
270
248
252
253
256
256
256
256
256
256
256

283
270
240
243
246
252
252
254
254
254
254
255

287
275
233
240
243
243
250
258
258
258
258
258

241
247
248
248
251
255
259
259
259
259

253
256
254
256
257
263
278
278
279

266
262
263
263
267
280
280
290

277
270
270
271
286
291
301
313

277
277
274
288
295
328
333

284
299
301
337
379

308
308
346
387

319
316
356
408

366
429

451

Sources: U.S. Office of Management and Budget, Historical Tables: Budget of the United States Government, FY2003, February 2002 and prior years; for FY2002 request, U.S. Office of
Management and Budget, “Policy Function and Category Summary,” mimeo, August 2001; for FY1994 request, U.S. Office of Management and Budget, Budget Baselines, Historical Data,
and Alternatives for the Future, January 1993.
Notes: Boldface denotes the future-year defense plan projected at the time of the budget submission. Figures for the budget year and following years reflect the Administration’s request and
future budget projections. Figures for the year immediately preceding the year for which funding is requested (e.g., FY2002 in the FY2003 request) represent the Administration’s estimate
of the amount enacted by Congress and may include proposed supplemental appropriations and rescissions. Figures for earlier years reflect changes to the enacted level due to congressional
action on supplemental appropriations and rescissions, transfers of budget authority from one year to another, and/or adjustments in contract authority for Working Capital Funds. The large
discrepancies in year-to-year estimates for FY1991 are due to substantial changes in accounting for Operation Desert Shield/Desert Storm. Figures in this table have not been adjusted to
exclude funding for Operation Desert Shield/Desert Storm. This and other tables in this report use OMB data which reflect enacted and proposed changes in accrual accounting for retirement
benefits after FY2003. Data in these tables also reflect OMB scoring of funds provided in the Emergency Terrorism Response supplemental appropriations act approved in September 2001.
For an explanation of the impact of accrual accounting and of budget scoring conventions, see the Introduction, above.

CRS-28

Table 15. Defense Spending by Top 25 Foreign Nations
(current year U.S. dollars in millions)
IISS:

Country

United States
China — Mainland
Russia
France
Japan
United Kingdom
Germany
Italy
Saudi Arabia
Korea, South
Brazil
China — Taiwan
India
Israel
Australia
Canada
Turkey
Spain
Netherlands
Korea, North
Singapore
Poland
Sweden
Greece
Indonesia

Rank

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

US Dept. of State:
WMEAT 1998
Defense
Expenditures
%
(1997 data)
GDP
276,300
3.3%
74,910
2.2%
41,730
5.8%
41,520
3.0%
40,840
1.0%
35,290
2.8%
32,870
1.6%
22,720
2.0%
21,150 14.4%
15,020
3.4%
14,150
1.8%
13,060
4.6%
10,850
2.8%
9,335
9.7%
8,463
2.2%
7,800
1.3%
7,792
4.0%
7,670
1.5%
6,839
1.9%
6,000 27.5%
5,664
5.7%
5,598
2.3%
5,550
2.5%
5,533
4.6%
4,812
2.3%

Military Balance
2001-2002
Defense
Expenditures
(2000 data)
291,200
42,000
60,000
35,000
45,600
34,600
28,800
21,000
18,700
12,800
17,900
17,600
14,700
9,500
7,100
8,100
10,800
7,200
6,500
2,100
4,800
3,300
5,300
5,600
1,500

%
GDP
3.0%
5.4%
5.0%
2.6%
1.0%
2.4%
1.6%
2.0%
10.1%
2.8%
2.8%
5.6%
3.1%
8.9%
1.9%
1.2%
5.2%
1.3%
1.9%
13.9%
4.9%
2.0%
2.2%
4.9%
1.0%

Sources: U.S. Department of State: Bureau of Arms Control, World Military Expenditures and
Arms Transfers: 1998, April 2000. International Institute for Strategic Studies, The Military
Balance 2001-2002, October 2001.
Notes: For information on a total of 167 countries and details on this data, see CRS Report RL30931,
Military Spending by Foreign Nations: Data from Selected Public Sources.
Military spending in this table is defined primarily by the NATO standard definition: cash outlays
of central governments to meet costs of national armed forces. This definition includes military
retired pay, which is excluded in the U.S. Office of Management and Budget’s definition of DOD
outlays. Therefore, the U.S. outlay numbers may be higher in this table than the reported DOD
outlay numbers in the rest of the report.

CRS-29

Part III: Definitions of Budget Terms2
The definitions that follow are taken from Office of Management and Budget and
Department of Defense publications.
Accrual Accounting – as applied to military retired pay, a method of recording costs
designed to reflect the liability of the federal government for the future
retirement costs of military personnel currently on active or reserve duty. First
used in FY1985 in DOD, this method of accounting represents a change from
the earlier practice in which the cost of military retirement was measured in
terms of actual payments to current retirees.
Appropriation – one form of budget authority provided by Congress for the funding
of an agency, department, or program for a given amount of time. An
appropriation provides funds for purposes specifically designated by Congress.
Funds will not necessarily all be spent in the year in which they are initially
provided.
Authorization – establishes or maintains a government program or agency by
defining its scope. Authorizing legislation is normally a prerequisite for
appropriations and may set specific limits on the amount that may be
appropriated for the specified program or agency. An authorization, however,
does not make money available, and sometimes appropriations are made without
having been authorized.
Budget Authority – legal authority for an agency to enter into obligations for the
provision of goods or services. It may be available for one or more years. An
appropriation is one form of budget authority.
Current/Constant Dollars – the cost of goods or services in current dollars is the
value in terms of prices current at the time of purchase – current dollars are also
referred to simply as “dollars” or as “then-year dollars.” The cost of goods or
services in constant dollars is the value adjusted to eliminate the effects of
changes in prices (usually due to inflation). Constant dollars, expressed in terms
of an arbitrary reference year (e.g., Fiscal Year 2003 dollars), are determined
by dividing current dollars by a “deflator” based on the prices in the reference
year. Constant dollars are used to assess growth rates of programs
independently of the effects of inflation. Growth rates in constant, inflationadjusted dollars are referred to as “real growth” rates.
Deficit – in the federal budget, the amount by which total federal budget outlays for
a given fiscal year exceed total federal revenues for that year.
Fiscal Year – a fiscal year in the federal government begins on October 1 and ends
on September 30 and is designated by the calendar year in which it ends. Thus,

2

For a complete glossary of defense budget terms, see CRS Report RL30002, A Defense
Budget Primer by (name redacted) and (name redacted).

CRS-30
FY2003 begins on October 1, 2002 and will end on September 30, 2003. (Note
that the federal fiscal year ran from July 1 to June 30 until FY1977.)
National Defense Budget Function – one of the categories of the federal budget.
It consists of the Department of Defense (DOD) budget, which funds all direct
DOD military programs, and of a number of defense-related activities
administered by other agencies. These activities include atomic energy defense
activities funded through the Department of Energy, civil defense programs
administered by the Federal Emergency Management Agency, and the Selective
Service System. The DOD budget constitutes more than 95% of the National
Defense Budget Function.
Obligation – an order placed, contract awarded, service agreement undertaken, or
other commitments made by federal agencies during a given period which will
require outlays during the same or some future period.
Outlays – money spent by a federal agency from funds provided by Congress.
Outlays in a given fiscal year are a result of obligations that in turn follow the
provision of budget authority.
Unexpended Funds – budget authority that has been appropriated by Congress, but
remains unspent, representing future outlays. Unexpended funds, whether
obligated or as yet unobligated, are formally appropriated by Congress for
specific programs.
Unobligated Funds – budget authority that has been appropriated by Congress for
specific programs but that has not yet been pledged or obligated by contract.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3ARL31349. Public record. Not legal advice.