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How much does the US Government spend on Defense?

The official defense budget is 503.8 billion, but that is not the total the US Government spends on defense. Hidden thought out the federal budget are other items that should be classified as defense spending.

So how much does the US spend when all defense spending is added up? Well, according to the Mercatus Center's Veronique de Rugy, the total amount of defense spending is 860.9 billion.

The other areas of defense spending that Veronique added to the official defense budget are the Department of Energy's 17 billion dollar nuclear weapons programs, the 136.6 billion spent on Veteran's health care, the 27.4 billion spent on military retirement costs, the 41 billion allocated in the International Affairs budget for war-funding and response to terrorism, and the 46.2 billion giving to Homeland Security for "war and terrorism."

Veronique's figure also includes the 82 billion Overseas Contingency Operation (OCO) funding. As the name suggest, OCO is used to fund our continuing military operations in Iraqi and Afghanistan. OCO funds are classified as "emergency" spending so it does not count in the official budget, thus allowing Congress to increase war spending while claiming to stay within the official budget caps.

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Veronique's full annayalis is available here, with her conclusion below:

While the majority of defense spending takes place in either the Pentagon budget or National Defense budget function, there is other funding related to national security and defense:

  • • $137 billion to Department of Veterans Affairs to care for wounded or retired military veterans.
  • • $46 billion to Department of Homeland Security for responding to terrorism and natural disasters.
  • • $41 billion to International Affairs for additional war funding, weapons training to foreign militaries, and foreign aid. There are nondefense-related items in this amount, such as operating US embassies and consulates and normal diplomatic operations. However, these are all key components of the US government’s national security apparatus.
  • • $27 billion for retirement costs for military pension benefits not included in the Pentagon’s budget.

When all these categories of funding are included, the more comprehensive defense funding figure comes out to $861 billion. It’s important to note that this amount does not include the associated interest costs on the debt, which would add to the total amount.

When Republicans take control of both houses of Congress in the new year, defense funding is likely to come to come to the forefront of policy discussions. Many in the party have been arguing that budget caps implemented by the 2011 Budget Control Act have been too restrictive on defense spending, pointing to the Pentagon’s base budget, which has receded from its peak in fiscal year 2010. What often goes unacknowledged is the fact that war funding is not subject to the caps. Moreover, the associated cost categories discussed above are routinely ignored. If the nation is to have an honest discussion and debate on the appropriate amount of funding for national defense, policymakers should acknowledge that the Pentagon’s allocation is just the tip of the iceberg.

 


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