Analysis of the Long-Term Costs of the Administration’s Goals for the Military

This report describes CBO’s analysis of the costs and budgetary consequences through 2027 of the current Administration’s goals for increasing the readiness, size, and capabilities of the military. The report draws from the fiscal year 2018 budget request submitted by the Department of Defense (DoD) and from other official documents, including Congressional testimony presented by DoD officials.

The 2018 budget request calls for $640 billion in funding for the department. Of that total, $575 billion would fund base-budget activities (such as day-to-day military and civilian operations and developing and procuring weapon systems) and $65 billion would fund overseas contingency operations (OCO, mostly for the conflicts in Afghanistan and in Iraq and Syria). The base-budget funding request is 3 percent more than the amount that would have been requested for 2018 under the Obama Administration’s final Future Years Defense Program, the 2017 FYDP, after adjusting for inflation.

For the years after 2018, CBO estimates, the Administration’s goals for the military would result in steady increases in costs so that by 2027, the base budget (in 2018 dollars) would reach $688 billion, more than 20 percent larger than peak spending during the 1980s (see figure below). Several factors would contribute to the rising costs after 2018, including the following:

• The number of people serving in the armed forces would increase by more than 237,000 (or about 10 percent), CBO estimates;
• The Navy would increase its fleet to 355 battle force ships (nearly 30 percent more than are currently in the fleet); and
• Purchases of new weapons would increase, as would spending for research on future weapons.

Costs also would rise because growth in expenses for military personnel and for operation and maintenance (O&M) would continue to outpace inflation, CBO anticipates.

If the new Administration’s goals for increasing the readiness, size, and capabilities of the military were pursued, cumulative costs would be $683 billion (or 12 percent) higher from 2018 through 2027 than costs of the Obama Administration’s final budget plan for those same years, according to CBO’s projections. About half of that difference ($342 billion) would result from implementing the Trump Administration’s goals for expanding the size of the military after 2018. The other half of that difference would accrue primarily because more spending is planned for readiness and for research and development than was included in the Obama Administration’s final budget plan and because the current plan starts at a higher end strength than would have been the case under the 2017 FYDP. Specifically, the new Administration’s request calls for 2.130 million military personnel in 2018, whereas the Obama Administration’s final plan called for 2.074 million military personnel in that year.

National defense funding for the 2018–2021 period is subject to caps set by the Budget Control Act of 2011 (BCA). If DoD’s costs grow in accordance with CBO’s projection and the costs of agencies other than DoD that are funded in the national defense budget grow at the rate of inflation, total national defense costs for 2018 through 2021 would exceed the BCA caps by $295 billion, CBO estimates.

OCO costs are not constrained by the BCA. CBO did not attempt to project OCO costs because of uncertainty concerning current conflicts and the possibility of new ones.