The Department of Defense (DoD) receives just over 50 percent of all discretionary appropriations. It would be difficult, therefore, to achieve a significant reduction in discretionary spending if DoD appropriations were excluded from consideration. The breadth of DoD's portfolio provides many options for absorbing budget cuts of various magnitudes: It employs nearly 1.5 million military personnel and 785,000 civilians; operates nearly 500,000 buildings and facilities on approximately 5,000 installations; manages 87 major defense acquisition programs; and spends about $200 billion annually to develop and acquire weapons and equipment.
This option includes three alternative paths for reducing the growth in DoD's appropriations (excluding appropriations related to operations in Iraq and Afghanistan) relative to the amounts in the baseline budget projections of the Congressional Budget Office:
Funding for DoD's regular activities (excluding appropriations for overseas contingency operations) has increased by approximately 75 percent over the past 10 years, or by about 40 percent adjusted for inflation. Thus, DoD would have more buying power than it had a decade ago even if its regular budget was reduced substantially relative to the amounts in CBO's baseline. If regular defense appropriations had grown at the rate of inflation since 2001 and continued to do so through 2021, budget authority in 2021 would total $465 billion, $200 billion less than the amount in the baseline. Even if those appropriations were reduced by 1 percent per year from the current level (as described in the third alternative), funding would still be $10 billion more in 2021 than it would have been if appropriations had grown with inflation since 2001.
An argument for reducing defense spending is that doing so could reduce the deficit and promote economic growth by redirecting resources from soldiers and weapons to more-productive uses. Furthermore, U.S. defense expenditures are almost as large as the combined defense expenditures of all other nations. Proponents of this option might contend, therefore, that the United States could still field a relatively robust military force on a smaller budget. Moreover, many beneficiaries of U.S. defense spending, such as allied nations in Europe, have economies large enough to pay for more of their own defense.
An argument against cutting the growth in DoD's appropriations is that the nation needs to maintain or increase defense spending to counter the increasingly sophisticated threats posed by current and potential adversaries. Weapon systems and facilities are aging, and the costs of replacing them with more-capable systems have grown. Further, the armed forces require sufficient military personnel to defend the nation's interests abroad without overburdening service members with too-frequent deployments. In addition, the costs of military compensation, particularly health care costs, have been growing rapidly and will probably continue to do so. By CBO's estimates, the multiyear plans that DoD had in place in 2010 would involve costs that are almost $600 billion more than CBO's baseline projections over the 2012- 2021 period.