Center for Arms Control and Non-Proliferation

The FY 2008 Pentagon Spending Request

by Christopher Hellman [contact information]

February 5, 2007

"Top Line" Funding - The Bush Administration is requesting $481.4 billion for the Department of Defense in Fiscal Year 2008, which begins on October 1, 2007. This is $49 billion more than the current level of $432.4 billion, an increase of 11.3 percent, and inflation-adjust ("real") increase of 8.6 percent. This figure does not include funding for the nuclear weapons activities of the Department of Energy, which is considered part of total Defense Department spending. Nor does this figure include the costs of ongoing military operations in Iraq and Afghanistan.

The Office of Management and Budget estimates that total annual funding for the Defense Department alone will grow to $495 billion by Fiscal Year 2012, a figure which is undoubtedly low. Total Pentagon spending, not including funding for the Department of Energy or for actual combat operations for the period FY'08 through FY'12 will exceed $2.3 trillion.

Funding for Contingency Operations (Supplemental Appropriations) - In addition to its annual budget request, the Pentagon is also requesting $93.4 billion in supplemental funding for combat operations for Fiscal Year 2007, which is in addition to $70 billion in FY'07 supplemental funding approved by Congress as part of their regular 2007 budget work. In addition, the request includes $141.7 billion to cover Iraq and Afghanistan operations during FY'08. Congress has already approved over $500 billion in supplemental funding for operations in Iraq and Afghanistan.

Missile Defense - The Administration is requesting $8.9 billion for the Missile Defense Agency in FY'08, down roughly $0.5 billion from the current $9.4 billion. Missile defense continues to receive more funding than any other weapons program in the annual Pentagon budget. This total does not include $1.1 billion for the SBIRS-High satellite program.

Shipbuilding - The request includes funding for the continued development of the Aircraft Carrier Replacement Program and procurement of one vessel ($2.8 billion), the DDG-1000 [DD] Destroyer Program ($3.0 billion), and the Littoral Combat Ship ($0.9 billion for three vessels). It includes $2.6 billion for the purchase of one SSN-774 "Virginia" class nuclear attack submarine.

Aircraft - The request includes $2.6 billion for 24 of the Navy's F/A-18E/F "Super Hornet," $2.6 billion for procurement of 26 V-22 "Osprey" tilt-rotor aircraft, $6.1 billion for 12 F-35 Joint Strike Fighters and $4.6 billion for 20 F-22A "Raptor" fighters.

Military Personnel - The request includes an increase in base pay of 3 percent. According to the Pentagon, base pay has risen 32 percent since 2001.

Army and Marine Corps End Strengths - Starting in FY'08 the active Army will grow by 7,000 annually through 2012, for a total increase of 65,000 troops, for a total end strength of 547,000. The active Marine Corps will grow by 5,000 annually through 2011, for a total increase of 27,000 and an end strength of 202,000. Combined, the Army and Marine Corps will grow by 92,000 by FY'12.

Homeland Defense - The request contains $17.5 billion for Pentagon activities related to homeland security including detection of and protection against weapons of mass destruction, emergency preparedness and response, and protecting critical infrastructure. The increase in DoD's FY'08 contribution over last year is 5.6 percent. NOTE: A footnote on the 2008 budget's Table "Homeland Security Funding By Agency" (Table S-4) indicates that DoD's contribution to homeland security has been revised upward significantly due to a change in methodology. Thus the 2007 budget shows a $16.4 billion DoD contribution to homeland security in FY'06, rather than the $9.5 billion shown in the 2006 request.

Cooperative Threat Reduction (CTR) - The Administration is requesting $348.0 million for the CTR (also known as "Nunn-Lugar") program, 6.5 percent below the current level of $372.1 million and 15 percent below FY'06. Further, the request recommends a reduction (or rescission) of $1 million in current funding. The CTR program assists Russia and the former Soviet republics safeguard weapons of mass destruction and related technologies.

Federal Budget Deficit -In January the Congressional Budget Office estimated that the deficit for FY'07 will be $172 billion. And while this is lower than the FY'06 deficit of $248 billion, it assumes that only $70 billion will be appropriated for military operations in Iraq and Afghanistan, and does not include the $93 billion in additional supplemental fundings requested today. Including those funds, the projected FY'07 deficit jumps to $265 billion.

The FY'08 Pentagon "Top Line" Request

Annual Pentagon funding by fiscal year for FY'07 '12, as well as breakdowns of the FY'08 request by spending function and service. The Bush Administration has requested the following funding for the military.

TABLE 1. TOP LINE REQUEST (budget authority in $billions)

	FY’07	FY’08	FY’09	FY’10	FY’11	FY’12	TOTAL FY’08- FY’12
DOD Military(051)	432.4	481.4	455.2	468.5	481.9	495.4	2,382.4
DOE and Other	20.7	20.8	21.4	21.9	22.5	23.0	109.6
TOTAL (050)	453.1	502.2	476.6	490.4	504.4	518.4	2,492.0
TABLE NOTES All “Function 050” and “Out Year” figures are estimates. For the last several years, the Defense Department has released fewer and fewer figures to accompany their budgets. As recently as the FY’04 request, the Pentagon released DoD, DoE and total 050 funding projections for the entire Future Year’s Defense Plan. No longer. Now such projections are done only for those areas of defense spending the Pentagon wishes to highlight. The projected “Out Year” figures here are undoubtedly low. For example, the Pentagon says that defense funding (Function 051) for FY’08 will be $481.4 billion, yet OMB’s figure is a mere $442.1 billion. Figures do not include funding for operations in Iraq and Afghanistan. Totals may not add up due to rounding. SOURCES: Department of Defense, Office of Management and Budget‚Äôs ‚ÄúAnalytical Perspectives,‚Äù Current Services Budget Authority by Function, Category and Program [Table 25-13].)

TABLE 2. FY’08 BUDGET REQUEST BY FUNCTION INCREASE/DECREASE FROM FY’07 (budget authority in $billions)

	FY’07	FY’08 Requested	+/-	%
Military Personnel	111.1	116.3	+5.2	+4.7%
Operations & Maintenance	149.2	164.7	+15.5	+10.4%
Procurement	81.3	101.7	+20.4	+25.1%
RDT&E	75.1	75.1	0	0%
Military Construction*	9.3	18.2	+8.9	+95.7%
Family Housing*	4.0	2.9	+1.1	-27.5%
Working Capital Funds	2.4	2.5	+0.1	+4.2%
TOTAL (051)	432.4	481.4	+49.0	+11.3%
TABLE NOTES *Includes projected Military Construction/Quality of Life programs. **Totals may not add up due to rounding.

TABLE 3. PERCENTAGE OF TOTAL DEFENSE SPENDING: 051 Account (budget authority in billions)

	FY’08 Requested	Percentage of Total
Military Personnel	116.3	24.2%
Operations & Maintenance	164.7	34.2%
Procurement	101.7	21.1%
RDT&E	75.1	15.6%
Military Construction	18.2	3.8%
Family Housing	2.9	0.6%
Working Capital Funds	2.5	0.5%
TOTAL (051)	481.4
TABLE NOTES *Totals may not add up due to rounding.

TABLE 4. FY’08 BUDGET REQUEST BY SERVICE INCREASE/DECREASE FROM FY’07 (budget authority in billions)

	FY’07	FY’08 Requested	+/-	%
Army	109.7	130.1	+20.4	+18.6%
Navy	110.3	119.3	+9.0	+8.2%
Marine Corps	16.2	20.5	+4.3	+26.5%
Air Force	128.4	136.6	+8.2	+6.4%
Defense Wide	70.9	74.9	+4.0	+5.9%
BRAC	-3.1	N/A	+3.1	N/A
TOTAL (051)	432.4	481.4	+49.0	+11.3%
TABLE NOTES *Totals may not add up due to rounding.

The FY'08 Request for Selected Weapons Systems

The breakdown by selected weapon systems provides funding requests, per unit costs and total program costs for the Pentagon's major weapons programs.

TABLE 5. FY’08 REQUEST FOR SELECTED WEAPONS SYSTEMS (budget authority in millions)

	FY’08 Request	Quantity	Per Unit Cost	Total Program Cost
F/A-18E/F Fighter	2,609.1	24	95.3	44,030.5
F-22 Fighter	4,604.9	20	338.4	62,600.0
F-35 Fighter (JSF)	6,142.2	12	112.5	274,458.9
C-17 Transport Aircraft	653.5	——	330.8	59,552.7
C-130J Cargo Aircraft	1,589.2	13	96.4	7,612.3
B-2 Bomber	560.1	——	2,114	44,400
V-22 Osprey Aircraft	2,589.1	26	110.3	50,497.1
E/A-18G Jamming Aircraft	1,591.5	18	100.5	9,045.0
MH-60R “Seahawk” Helicopter	1,075.7	27	44.6	11,319.3
MH-60S “Knighthawk” Helicopter	547.5	18	28.5	7,725.6
Aircraft Carrier Replacement Program (CVN-21)	3,080.6	1	11,964.2	35,892.5
DDG-51 Destroyer	78.0	——	1,009.9	62,614.9
DDG-1000 (DDx) Surface Combatant	3,456.9	——	3,657.1	36,570.8
Littoral Combat Ship (LCS)	1,208.3	3	851.0	1,701.9*
SSN-774 “Virginia” Attack Submarine	2,722.9	1	3,194.1	95,821.7
LPD-17 “San Antonio” Landing Ship	1,403.2	1	1,387.4	12,486.6
LHA Replacement Vessel [LH/LHA®]	1,383.3	——	3,093.5	3,093.5
Trident II D-5 Missile	1,214.2	12	67.7	38,001.9
Tactical Tomahawk Cruise Missile	394.5	394	1.3	4,149.1
Joint Direct Attack Munition (JDAM)	146.4	4,962	0.03	5,137.0
Joint Stand-off Weapon (JSOW)	156.2	421	0.46	4,747.0
Joint Air to Surface Standoff Missile (JASSM)	213.3	210	0.98	4,914.0
Small Diameter Bomb	250.3	1,395	.07	1,580.1
Stryker Interim Armored Vehicle (IAV)	1,181.5	127	4.3	11,360.8
Future Combat System (FCS)	3,663.0	——	N/A	164,628.3
Family of Medium Tactical Vehicles (FMTV)	830.4	2,862	0.2	17,450.1
Expeditionary Fighting Vehicle (AAAV)	288.2	——	12.3	12,619.7
HMMWV “Humvee” Vehicles	607.2	3,367	N/A	N/A
TABLE NOTES *“Total Program Cost” for these systems reflects only the cost of Research, Development, Testing and Evaluation (RDT&E). ** “Per Unit Costs” and “Total Program Costs” are based on DoD’s Selected Acquistion Report, November 15, 2006, with the exception of the B-2 Bomber, which is no longer listed. ‚“Per Unit Costs‚” are derived by dividing total program costs by the number of systems purchased, and include both procurement and research & development funding. SOURCES: DOD, Program Acquisition Costs By Weapon System, Procurement Programs (P-1),and RDT&E Programs (R-1), February, 2007.

The FY'08 Request for Ballistic Missile Defense

The ballistic missile defense program receives more funding than any other weapons system in the annual Pentagon budget.

Background: As part of its Fiscal Year 2002 budget request, the Defense Department announced a major restructuring of the Ballistic Missile Defense Office (BMDO). Funding for a range of programs within BMDO were absorbed and redistributed in to five major areas of research. These are the Terminal, Midcourse and Boost Segments, the Ballistic Missile Defense Segment, and Ballistic Missile Defense Sensors.

As part of the FY'02 reorganization, some specific missile defense programs were absorbed in to the general research areas and have, from a funding prospective, effectively disappeared.

Meanwhile, as specific systems and technologies mature, they are shifted out of the MDA budget into one (or more) of the service budgets.

The Space Based Infra-Red System-High (SBIRS-High) continues to be funded outside the MDA budget.

TABLE 6. FY’08 REQUEST FOR BALLISTIC MISSILE DEFENSE (budget authority in millions)

	FY’07 Total	FY’08 Request
Terminal Defense (MDA)	1,092.1	962.6
Boost Defense (MDA)	629.0	548.7
Midcourse Defense (MDA)	3,043.1	2,520.1
AEGIS BMD (MDA)	1,122.7	1,059.1
BMD Sensors (MDA)	514.1	778.2
Space Tracking & Surveillance (MDA)	322.2	331.5
BMD Technologies (MDA)	193.3	118.6
Advanced Concepts (MDA)	353.0	323.3
BMD System Interceptors (MDA)	356.0	227.5
BMD Test & Targets (MDA)	594.2	586.2
Multiple Kill Vehicle	144.4	271.2
Other Programs (MDA)	1,017.2	1,069.0
Joint Theater Air Missile Defense Org. (Joint Staff)	52.3	53.7
Total Ballistic Missile Defense	9,433.6	8,849.7
MEADS/Patriot CAP (Army)	908.8	933.2
Space Based Infra-Red System-High (SBIRS-High) (Air Force)	669.10	1,070.00
GRAND TOTAL Ballistic Missile Defense	11,011.50	10,852.90
SOURCE: DoD’s Program Acquisition Costs by Weapons System, February 2007.

The FY'08 Request for Unmanned Aerial Vehicles (UAVs)

Unmanned Aerial Vehicles (UAVs) continue to prove their worth on the modern battlefield performing a wide range of surveillance missions and an increasing number of strike missions as more and different types of armed UAVs enter the aresenal.

TABLE 7. FY’08 Request for Unmanned Aerial Vehicles (UAVs) (in millions)

	FY’07 Total	Number	FY’08 Total	Number
Global Hawk (Air Force)	695.7	5	876.3	5
Predator MQ-1 (Air Force)	361.0	26	375.0	24
Reaper MQ-9 (Air Force)	——	——	140.1	4
Warrior (Army	130.3	——	163.7	12
Shadow (Army)	51.9	——	47.5	——
Raven (Army)	10.2	——	22.7	300
SOURCES: DoD’s Program Acquisiton Costs By Weapon System, February 2007.

FY'08 Discretionary Spending Request

The Fiscal Year 2008 budget request includes $930 billion for discretionary spending (the money the President and Congress must decide and act to spend each year), roughly $481 billion of which will go to the Pentagon. The "National Defense" category of the federal budget for FY'08 accounts for over half of all discretionary spending (52 percent). [NOTE: These totals do NOT include funding for military operations in Iraq and Afghanistan. If the $141.7 billion requested for the "Global War on Terror" were included in both the request for the Department of Defense and the total for discretionary spending, the percentage of Pentagon spending of total discretionary spending would jump to over 58 percent.]

The other category of federal spending is mandatory spending, money that is spent in compliance with existing laws that govern the particular program or function. Mandatory spending includes entitlements, money or benefits provided directly to individuals such as Social Security, Medicare, Medicaid, Food Stamps, and Federal Retirement. It also includes interest payments on the national debt.

GRAPH I. DISCRETIONARY BUDGET REQUEST FOR FY 2008 (in billions)

Spending Category	Billions of US dollars
Defense		481.4
Education		58.6
Health		52.3
Justice		43.6
Veternan Benefits		39.6
International Affairs		39.5
Housing Assitance		32.9
Natural Resources & Environment		28.7
Science & Space		27.3
Transportation		23.4
Training, Employment & Social Services		17.6
General Government		17.6
Other Income Security		16.4
Economic Development		10.7
Social Security & Medicare		10.1
Agriculture		5.8
Energy		4.2
Notes: The “Social Security & Medicare” funding in this graph refers to administrative costs associated with these programs, and does not reflect actual benefits paid out.