Discretionary Spending

Function 050 - National Defense

Reduce DoD’s Operation and Maintenance Appropriation (Excluding Funding for the Defense Health Program) 

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of Dollars 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2021–
  Freeze O&M Budget for Five Years and Then Limit Its Growth to the Rate of Inflation
Change in Planned Defense Spending  
  Budget authority 0 -6 -8 -13 -18 -21 -25 -28 -32 -36 -45 -187
  Outlays 0 -4 -7 -11 -15 -19 -23 -26 -30 -33 -37 -168
  Limit the Growth of O&M Budget to the Rate of Inflation
Change in Planned Defense Spending  
  Budget authority 0 -2 -2 -3 -3 -5 -8 -12 -15 -19 -10 -69
  Outlays 0 -1 -2 -3 -3 -4 -7 -10 -13 -17 -9 -60

This option would take effect in October 2021.
Estimates of savings displayed in the table are based on the Department of Defense’s 2021 Future Years Defense Program and the Congressional Budget Office’s extension of that plan.
DoD = Department of Defense; O&M = operation and maintenance.

The Department of Defense (DoD) uses funds from its operation and maintenance (O&M) accounts to pay the salaries and benefits of most of its civilian employees, to train its military personnel, and to purchase goods (such as paper clips and jet fuel) and services (including equipment maintenance and repair and information technology support). O&M accounts are also used to fund health care for military personnel, mainly through the Defense Health Program (DHP). Based on DoD’s 2021 Future Years Defense Program, the Congressional Budget Office projects that O&M spending will grow faster than inflation through 2030.

This option has two alternatives. Both would reduce growth in DoD’s O&M appropriations (both base funding and overseas contingency operations funding) without affecting O&M funding for the DHP. CBO excluded funding for the DHP from this option because the causes of growth in that program are well known and distinct from the factors that underlie growth in other O&M accounts.

Under the first alternative, DoD’s O&M appropriations for 2022 through 2025 would equal the amount that the department requested in its budget for 2021. That portion of the budget would grow by no more than inflation from 2026 through 2030. Under the second alternative, DoD’s O&M appropriations would grow by no more than inflation from the 2021 amount throughout the entire 10-year period.