FYDP Figures

By John Liang / June 30, 2011 at 7:37 PM

The Congressional Budget Office today released an assessment of the Pentagon's five-year future years defense program. Among its conclusions:

-- To execute its base-budget plans for the period covered by the 2012 FYDP, DoD would need appropriations totaling about $206 billion (or 8 percent) more over those five years than if funding was held at the 2011 level of $536 billion. Over the 10 years from 2012 to 2021, DoD would need a total of $597 billion (or 11 percent) more than if funding was held at the 2011 level.

-- DoD's base budget would grow at a real (inflation-adjusted) average annual rate of 1.8 percent from 2012 to 2016 and by 0.5 percent from 2016 to 2030. At those rates, DoD's base budget would rise from $554 billion in 2012 to $594 billion in 2016 and to $642 billion in 2030.

-- The primary cause of long-term growth in DoD's budget from 2012 to 2030 would be rising costs for operation and support (O&S), which would account for nearly all of the increase. In particular, CBO projects significant increases in the costs for military and civilian compensation, military health care, and various operation and maintenance activities. O&S costs would grow steadily throughout the projection period, from $350 billion in 2012 to $459 billion in 2030, a growth rate of 1.5 percent per year.

-- That large contribution of operation and support costs to long-term budget growth is a change from the years before the wars in Afghanistan and Iraq, when sharp growth in anticipated requirements to replace and modernize weapon systems (the so-called bow wave) was the primary factor underlying projected budget growth beyond the years covered by the FYDP. In CBO's current projections, acquisition costs (the costs of developing and procuring weapon systems) would grow steadily from $189 billion in 2012 to a peak of $217 billion in 2019 (an increase of about 14 percent) before decreasing and leveling off -- albeit with year-to-year variations -- at an average of about $197 billion per year through 2030.

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