US Military Strategies Vs Budget : Capability Or Capacity, Today Or Tomorrow?


The U.S. military budget is $824.6 billion. That’s the budget for Fiscal Year 2018 which covers the period October 1, 2017 through September 30, 2018.

Military spending is the second largest federal government expenditure after Social Security at $1 trillion.

U.S. military spending is larger than the next nine countries combined.

There are four components. First is the $574.5 billion base budget for the Department of Defense.

Third is the total of other agencies that protect our nation. These expenses are $173.5 billion. They include the Department of Veterans Affairs ($78.9 billion), the State Department ($27.1 billion), Homeland Security ($44.1 billion), FBI and Cybersecurity in the Department of Justice ($9.5 billion) and the National Nuclear Security Administration in the Department of Energy ($13.9 billion).

The last component is $12 billion in OCO funds for the State Department and Homeland Security to fight ISIS. (Source: “FY 2018 Budget,” OMB, May 23, 2017. “2018 Budget, Table 2,” OMB, March 16, 2017. “Mid-Session Review Fiscal Year 2017, Table S-10.” OMB, July 15, 2016.)

The Air Force requested $10.3 billion for 70 F-35 Joint Strike Fighter aircraft. Overall, the program will cost $400 billion for 2,457 planes. Most of the cost has been for development and testing.  (Source: “Watchdog: Delayed Testing Adds $1 Billion to F-35 Program,” The Hill, April 24, 2017.)

Lockheed Martin built 45 planes in 2015, costing $100 million each. That’s expected to rise to 160 annually by 2025. By then the jet should cost $85 million each, adjusted for inflation. The Air Force cut five F-35s in the FY 2017 budget. (Source: “FY 2018 Budget,” OMB, March 16, 2017. “FY 2017 Budget Fact Sheet,” U.S. Department of Defense.  “F-35 Plan Stays on Track,” The Wall Street Journal, February 11, 2016.)

The Defense Department will also purchase the following equipment:

  • KC-46 Tanker, 15 aircraft, $3.1 billion.
  • B-21 Bomber, $2.0 billion.
  • Virginia Class Submarine, 2 ships, $5.5 billion.
  • DDG-51 Destroyers, 2 ships, $4.0 billion.
  • CVN-78 Class Aircraft Carrier, 1 ship, $4.6 billion.
  • Joint Light Tactical Vehicle, 2,647 vehicles, $1.1 billion.
  • Science and Technology, $13.2 billion

Overseas Contingency Operations

Ironically, the DoD base budget does not include the cost of wars. That falls under Overseas Contingency Operations.

It’s budgeted at $64.6 billion for DoD and $12 billion for the State Department.  For OCO spending back to 2001, see War on Terror Facts.

(Source: “2018 Budget, Table 2,” OMB, March 16, 2017.)

Military Spending History

Here’s a summary of military spending in billions of dollars since 2003:

FY  DoD Base  Budget DoD OCO  Support Base Support OCO Total Spending  
2003  $364.9    $72.5   $437.4
2004  $376.5    $91.1   $467.6
2005  $400.1    $78.8   $478.9
2006   $410.6   $124.0   $109.7   $644.3
2007   $431.5   $169.4   $120.6   $721.5
2008   $479.0   $186.9   $127.0   $792.9
2009   $513.2   $153.1   $149.4   $815.7
2010   $527.2   $163.1   $160.3    $0.3   $851.6
2011   $528.2   $158.8   $167.4    $0.7   $855.1
2012   $530.4   $115.1   $159.3  $11.5   $816.3
2013    $495.5     $82.1   $157.8  $11.0   $746.4
2014   $496.3     $85.2   $165.4    $6.7   $753.6
2015   $496.1     $64.2   $165.6  $10.5   $736.4
2016 Actual   $521.7     $58.6   $171.9  $15.1   $767.3
2017Enacted   $516.1     $82.4   $175.8  $19.4   $793.7
2018 Budget   $574.5     $64.6   $173.5  $12.0   $824.6


Factors Influencing the Budget

  • 2003: Iraq War launched March 19.
  • 2004: U.S. torture at Abu Ghraib prison increased resistance to the war, but not enough to lower costs.
  • 2005: Afghanistan War costs rose to protect free elections.
  • 2006: Costs rose in Iraq.
  • 2007: Surge in Iraq to counter violence.
  • 2008: Violence rose in Middle East due to recession.
  • 2009: Surge in Afghanistan.
  • 2010: Obama funds Iraq drawdown.
  • 2011: Iraq War ended but costs reached all-time high.
  • 2012: Troop withdrawal in Afghanistan War. Costs began falling.
  • 2013: Sequestration cut spending.
  • 2014: Wind-down of Afghanistan War.
  • 2015: Sequestration cut spending. Still higher than in 2007.
  • 2016: Resurgence of ISIS.
  • 2017: Increase in VA and FBI funding. Trump asked Congress for $30 billion more in military spending.
  • 2018: Trump asked Congress to repeal sequestration for the defense budget. Requested a spending increase to fight ISIS.

As the Pentagon finishes its strategic review, the stage is set for another struggle over whether to ready for a high-end war with Russia or China or just manage the current, much lower intensity battles around the world.

In military terms it’s a choice between capability and capacity.

The outcome will shape the four services modernization portfolios, the size of America’s military, and how ready our forces are to fight.

Strategists focus on the high-end conflicts and Defense Secretary Jim Mattis seems so inclined once immediate readiness shortfalls are fixed. But he is likely to find what his predecessors did, that the press of today’s conflicts and crises pushes the department to expand forces and build readiness.

CSIS has analyzed the administration’s fiscal 2018 budget and we found that the services were leaning towards force structure and readiness — capacity — despite the pressing strategic imperative for modernization (capability).

The result of this tension is likely to be a high-low mix that tries to cover both.

High-End Conflict

It is a commonplace observation that great power competition has returned after a generation. China and Russia are challenging the global order and have the ability to set up very sophisticated anti-access/area denial environments.

Strategists naturally focus on this challenge because it is the most demanding and the basic military planning approach to is to assume the worst and plan for it.

Only Russia and China can compete with the United States in all five warfighting domains — ground, sea, air, space, cyber.

So-called peer conflicts put far different demands on the forces than the regional conflicts and stability operations that the United States has conducted for the last 25 years.

Competing requires developing and fielding the most advanced technologies and implementing new war fighting doctrines to go with these technologies, for example, distributed operations to avoid vulnerable concentrations, and long-range precision strike to stay outside of the adversary’s defensive bubble.

Mark Cancian

Mattis seems to be focused on this. After rebuilding readiness in the fiscal 2017 and 2018 budgets, he has signaled that the next one will focus on Russia and China, “We cannot focus solely on urgent threats when other countries with far greater potential to threaten our future security continue to expand their military capability.”

Gen. Joe Dunford, Chairman of the Joint Chiefs, noted the implications of that approach for force size: “I don’t see, in the near term, our ability to really grow the force.”

Day-to-day Superpower CommitmentsUnfortunately, the world has not been cooperating with this vision. The 2014 Quadrennial Defense Review anticipated that force demands would decline once the US withdrew from Iraq and Afghanistan.

That would allow forces and near-term readiness to be cut. However, this projection was immediately upset by Russian aggression in Crimea and the Ukraine, ISIS conquests in Syria and Iraq, and China’s increasing assertiveness in the South China Sea.

The United States responded by deploying more forces. For Europe, a long neglected theater, the U.S. created the European Reassurance Initiative (ERI), which stopped the withdrawal of U.S. troops from Europe, expanded engagement with allies in Eastern Europe and the Baltics and began the rebuilding of infrastructure to facilitate rapid reinforcement.

Originally conceived as a one year program, ERI is in its fourth year and projected to continue indefinitely. Funding has increased from the original $1 billion to a proposed $4.3 billion in fiscal 2018.

Troop commitments have increased commensurately, with an armored brigade now rotating continuously to Europe.

In the Middle East, the US began an air war against ISIS in both Iraq and Syria. Over time, it has also ramped up the ground component beginning with special forces teams and now including a wide variety of ground combat troops acting in support of local forces.

In Afghanistan, the US halted its withdrawal. In the Pacific, the US has tried to “rebalance” by moving 60 percent of its naval strength to meet the rising challenge from the Chinese Navy.

The Trump administration has continued these deployments, even expanding them with there recently announced “mini-surge” in Afghanistan.


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