U.S. Military Budget

Updated: March 1, 2021

Table of Contents

    Of the two biggest expenses incurred each year by the federal government, Social Security and defense spending are the largest. The U.S. military budget is set annually, and stretches across a wide range of fiscal responsibilities including funding for daily military operations, investing in infrastructure, research and development, establishing strategic partnerships, and much more.

    Military Budget Establishing and passing the U.S. military budget has a specific set of procedures. How does it work? Let’s look at a real-world example; in February 2020, the President sent Congress a military budget proposal that included $740 billion for national security, most of which is set aside for the Department of Defense.

    According to government sources, the proposed budget “resources four focus areas to build a more lethal, agile, and innovative joint force”. Those focus areas?

    • Improve military readiness and invest in the modernization of a more lethal force
    • Strengthen alliances
    • Reforming the DoD “for greater performance and accountability”
    • Supporting service members and their families

    The 2021 budget also included “priorities of nuclear deterrence recapitalization and homeland missile defense, while refining our focus on the cyber and space warfighting domains and joint enablers for all operations in all domains.”

    The Problem With Military Budgets

    The military budget is passed each year via the annual National Defense Authorization Act (NDAA) and covers funding across the whole of DoD operations.

    But the elephant in the room is sustainability. Multiple sources point out that DoD spending each year on maintenance and people runs toward roughly one third of the entire defense budget. At least one source reports that could rise to fully 100% by 2024.

    The culprits? Military benefits including medical care and military retirement pay. How does the DoD pay for the rest of its expenses in this scenario?

    Some have proposed lowering pay and benefits for troops, but the DoD is actually increasing them instead. The military needs to find ways to save money, but the most direct ways to do that are complicated.

    For example, closing under-utilized military bases could save DoD funds, but there hasn’t been a Base Realignment and Closure Commission (BRAC) authorized in many years. This in spite of elected officials discussing the need to examine closing some facilities to save money. The spending and budget problems faced by DoD officials isn’t going away anytime soon and it won’t surprise anyone to find a new round of BRAC closures in the years to come.

    What The Military Budget Includes

    Before we further explore the timeline of the proposal and approval of a military budget, let’s examine some of the areas it specifically covers. The numbers provided here aren’t necessarily an indication that the same levels of funding will occur next year, they are provided here to provide a sense of scale for this incredibly large amount of money.

    Agencies Included in the Defense Budget:

    • Department of Defense
    • Department of Veteran Affairs
    • Homeland Security
    • National Nuclear Security Administration in the Department of Energy
    • State Department
    • FBI
    • Cybersecurity in the Department of Justice

    The proposed 2021 military budget included a large amount of funding for specific defense systems including nuclear and missile defense:

    • Nuclear Command, Control and Communications – $7 billion
    • B-21 Long Range Strike Bomber – $2.8 billion
    • COLUMBIA Class Ballistic Missile Submarine – $4.4 billion
    • Long-Range Stand-off (LRSO) Missile – $474 million
    • Ground Based Strategic Deterrent (GBSD) – $1.5 billion
    • Sea-Based Interceptors (SM-3 IIA and IB) – $619 million
    • AEGIS Ballistic Missile Defense System – $1.1 billion
    • Homeland Defense and Next Generation Interceptors – $664 million
    • Terminal High Altitude Area Defense (THAAD) Ballistic Missile Defense – $916 million
    • Patriot Advanced Capability Missile Segment Enhancement – $780 million

    The U.S. Space Force and DoD space operations also gets a dedicated section of the budget–more than $15 billion including:

    • 3 National Security Space Launch (aka EELV) – $1.6 billion
    • 2 Global Positioning System III and Projects – $1.8 billion
    • Space Based Overhead Persistent Infrared Systems – $2.5 billion
    • U.S. Space Command – $249 million
    • Space Development Agency – $337 million

    Cybersecurity gets over $5 billion, and there are also federal funds set aside for:

    • Cyberspace – Operations – $3.8 billion
    • Cyberspace Science and Technology – $556 million
    • Artificial Intelligence – $841 million
    • Cloud – $789 million

    There are many other systems funded, but not all the money goes towards “domains” in the air, space, at sea, etc. There is also a significant amount of funding for readiness and troop support:

    • Army readiness -$30.9 billion
    • Navy and Marine Corps readiness -$47.5 billion
    • Air Force readiness -$37.1 billion
    • Special Operations Command readiness -$9.5 billion

    Readiness isn’t the only part of the equation. The 2021 budget included a three percent military pay raise plus:

    • Funding for increases in military Basic Allowance for Housing and Basic Allowance for Subsistence
    • $8 billion for military professional development and educational opportunities for military members and spouses
    • Affordable child care funding
    • DoD Dependent Schools funding

    What Happens After A Defense Budget Is Proposed

    All of the numbers you see above were proposed to Congress in 2020. The House and Senate vote or make a counterproposal. In this particular case, the House and Senate sent a version of the defense budget to the President’s desk, and it was vetoed. That is not unusual, but what was more out of the ordinary?

    The House and Senate in this particular case voted to override the presidential veto and pass the National Defense Authorization Act with a veto-proof majority. That is definitely an option, but one that is rarely used by comparison to the way things normally work.

    What The Future Holds For Military Budgets

    What lies ahead for U.S. military budgets? The report to Congress, the FY 2021 Defense-Wide review includes a warning that in an era of “flattening budgets”, the government must find “creative ways” to fund the military. The Fiscal Year 2021-2025 Defense-Wide Review, cited in the 2021 review, states, “…this is possible by cancelling or reducing programs that were a lower priority, not delivering a high return on investment, and/or were inconsistent,” adding, “…our reform work is far from finished”.

    The same document says of that reform work that “tough decisions” were needed. Some programs targeted for change or elimination may not be necessarily wasteful or managed badly but simply not falling in line with modern military priorities. Reform work continues, but painful cuts may be needed as costs continue to rise.

    The FY 2021 Defense-Wide Review says of this situation, “Every dollar spent on overhead, redundant efforts, and lower priority programs is a dollar not spent on lethality and readiness.”


    About The AuthorJoe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News


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