Budget Book

The Congressional Budget Office just released a report titled the "Long-Term Implications of the 2011 Future Years Defense Program." In it, CBO projects the "costs of DOD's plans for its base budget (reflected in the [future years defense program], along with other long-term plans released by the department) by using factors that are consistent with the department's recent experience."

The report presents the following conclusions:

* To execute its base-budget plans for the period covered by the FYDP, DoD would need about $187 billion (or 7 percent) more over those five years than if funding was held at the 2010 level of $537 billion. Over the 10 years from 2012 to 2021, DoD would need a total of $680 billion (or 13 percent) more than if funding was held at the 2010 level.

* From 2011 to 2015, DoD's base budget would grow at an average annual rate of 2.3 percent, after an adjustment for inflation. Beyond the FYDP period, from 2016 to 2028, average annual growth in the costs of DoD's base-budget plans would be 0.8 percent after an adjustment for inflation. At those rates, DoD's base budget would rise from $548 billion in 2011 to $601 billion in 2015 and to $665 billion in 2028.

* The primary cause of long-term growth in DoD's budget from 2011 through 2028 would be increasing costs for operation and support, which would account for nearly all of the increase. In particular, CBO projects that there would be significant increases in the costs for military and civilian compensation, military medical care, and various operation and maintenance activities.

* That large contribution of operation and support costs to budget growth is a change from earlier projections, in which sharp growth in anticipated requirements to replace and modernize weapon systems (the so-called bow wave) was the primary factor underlying budget growth beyond the years covered by the FYDP. In the current projections, acquisition costs would steadily grow from $189 billion in 2011 to a peak of $218 billion in 2017 (an increase of about 15 percent) before decreasing and leveling off—albeit with year-to-year variations—at an average of about $200 billion per year thereafter.

Stay tuned to InsideDefense.com's Defense Budget Alert on Monday, Feb. 14, for in-depth coverage of the Pentagon's rollout of the fiscal year 2012 budget request.