The military services—the Army, Navy, Air Force, and Marine Corps—use modeling techniques to inform parts of their annual budget requests. As directed by the Congress in the 2011 National Defense Authorization Act, today’s CBO study provides information on the models used to develop budgets for activities associated with operational readiness.
The Department of Defense’s (DoD’s) total budget request for fiscal year 2012 was $671 billion, of which $554 billion was for the base budget (which funds the department’s normal activities) and $118 billion was for funding overseas contingency operations in Afghanistan, Iraq, and elsewhere.
CBO focused its analysis on the portion of the base budget devoted to operating forces—which totaled $79 billion for active duty forces in the FY 2012 request—because that portion is most closely linked to operational readiness. Funding for operating forces falls under the operation and maintenance budget, which covers most of the day-to-day expenses of the running the military; such funding pays for the training of combat and support units, as well as the operation of most service installations.
As shown in the report below, CBO found that:
CBO also found that the results of models are just one of many inputs to the budgeting process. DoD’s program and budget review process attempts to allocate the fixed overall funding amount that the President and the Office of Management and Budget set for the Department. Models inform decisions regarding resource allocation between competing areas of the budget, but they generally do not produce the final budget requests. Rather, the services often adjust the budget amounts generated by models in order to address programmatic trade-offs, budget constraints, and other factors not included in the models.
Scope of Analysis
For the purposes of this study, CBO defined a model as a set of mathematical relationships or similar logical expressions that link a military service’s activities, such as training and maintenance, to the cost of those activities. CBO focused only on models that inform budget requests for operating forces and included only those models that are used at the headquarters level of each service.
The report was prepared by Adebayo Adedeji, Daniel Frisk, and Derek Trunkey of CBO’s National Security Division.