Military Machine: 1. US Defense Spending

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The author’s hometown is Randolph, Vermont.  Randolph has never been attacked by a foreign power.

In fiscal year 2016, the total municipal expenditures of the Town of Randolph were $6,883,945.  With a population of 4,853, this represents a cost per head of $1,418.  For this, Randolph’s citizens get streets, sidewalks, snow plowing, fire and police protection, a library, cemeteries, water, sewage and much more.

According to The Financial Report of the United States, in fiscal year 2017, the US Department of Defense (“DOD”) had total expenditures of $718.7 billion and the Veterans Administration had expenditures of $254.8 billion. The total of the two combined is $975.3 billion, representing a cost of $3,009 per head (as you will see below, the actual cost is much higher).

So, if you live in Randolph, Vermont, your share of US defense spending is more than double your share of the cost to run the town for an entire year. Is this really how we should be spending our money?

To help readers answer that question for themselves, the next four articles in The Informed Vermonter will review the US military in some detail, including its cost, its scale and scope of activities, how it compares to other countries and the war in the Middle East.  Lets begin with costs.

DOD Budget

 Congressional appropriations for the DOD come from a variety of sources in the federal government.  In fiscal year 2017, total appropriations available to the DOD were $1,140.2 billion. The “Defense Budget”, which gets all the press attention, was $606 billion, or only about 53% of the total. 

 The Defense Budget is a key building block of total US defense spending and it will be reviewed first.  A reconciliation of the Defense Budget and actual total spending will then be provided.

 Fiscal Year 2017 US Defense Budget ($ billions)

Category

FY 2017 Appropriations

Military Personnel

139.5

Operations & Maintenance

259.7

Procurement

123.6

Research, Development, Testing & Evaluation

73.1

Revolving Funds

1.9

Family Housing

1.3

Military Construction

6.9

Total

606.0

Source: Department of Defense Agency Financial Report 2017

 In the land of federal budgets and financial reports, the war in the Middle East is referred to as “Overseas Contingency Operations”.  Another way to look at the same budget outlined above, including the prior four years, is as follows:

 US Defense Budget Including Overseas Contingency Operations Fiscal Years 2103-2017 ($ billions)

 

FY 2013

FY 2014

FY2015

FY 2016

FY 2017

Overseas Contingency Operations

87.3

85.4

64.3

50.9

82.8

All Other

527.5

496.0

496.3

529.6

523.2

Total

614.8

581.4

560.5

580.5

606.0

Source: Department of Defense Agency Financial Report 2017

 As illustrated above, the War on Terror/Middle East is costing a great deal of money. Since 2001, the total exceeds $1 trillion and counting.

The $606 billion Defense Budget is just the starting point for total military expenditures by the federal government.  Total expenditures for fiscal year 2017 are provided below.

Total Department of Defense Budget Appropriations Fiscal Year 2017 ($ billions)

Budget Source

Amount

Comment

Defense Budget

606.0

As per above

General Fund Contribution to Military Pension and Health Benefits

94.3

Paid via Treasury Department

Civil Works by Army Corp of Engineers

5.8

Separate Appropriation

Trust Fund Receipts

153.2

Military Pension and Health Trust Funds

Trust Fund Resources Temporarily Not Available

(83.2)

Appropriated, but only available in future years to fund unfunded pension/health liabilities

Unobligated Balances from Prior Year Budget Authority

181.0

Carry-Over from unused prior year appropriations

Spending Authority from Offsetting Collections

105.7

This is comprised of refunds and reimbursements from defense contractors and certain intergovernmental transfers

Contract Authority

76.5

Prior years contract obligations due in 2017

Total DOD Budget Resources

1,140.2

 

Source:  Department of Defense Agency Financial Report 2017

Of the total $1.14 trillion outlined above, $899.8 billion was dispersed in 2017, a further $87 billion was committed to be spent and the remaining $ 158.4 billion is basically a reserve for long term projects (or a less generous Congress in future years). Over the last four fiscal years, the Department of Defense has had the following budgetary profile:

DOD Total Annual Appropriations and Disbursements ($ billions)

Fiscal Year

Total DOD Appropriations

Total DOD Disbursements

“Defense Budget” Component

2014

1,084

891

581

2015

1,067

888

561

2016

1,102

896

580

2017

1,140

900

606

Source: Department of Defense Agency Financial Reports 2014-2017

With a “ defense budget” ranging from $580 billion to $606 billion, the Department of Defense actually spent between $888 billion to $900 billion each year since 2014. .  This is the third largest expenditure in the US government, behind Health & Human Services and Social Security. 

The next article will explore the scale of US military operations so readers can begin to understand how and why this much money is being spent.

 

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