Defense spending is expected to continue to rise for years

Thursday, January 9, 2003

WASHINGTON -- Rising costs of paying soldiers, along with pricey new weapons systems, will probably lead to increases in defense spending over the next two decades, the Congressional Budget Office said Wednesday.

But the increases will probably be less than in recent years and defense will make up a smaller part of the overall federal budget than it does now.

The budget office stressed that it was not making specific predictions about future defense budgets -- something that will be determined by changing national security needs and decisions by policy makers. The costs of a war with Iraq, for example, were not included in the estimates.

Rather, the office used Pentagon budget projections to examine long-term expenses that can be anticipated today. That would include replacing aging equipment, providing housing and benefits to personnel and paying for new weapons systems that the Pentagon has already committed to buy. One example is the Joint Strike Fighter, which won't begin to be delivered until the end of the decade.

"In defense, the decisions you make today are decisions that are going to affect what's going on in 20 years," said J. Michael Gilmore, assistant director for national security.

Defense spending rose from $274 billion in 1997 to $345 billion last year. Congress has budgeted $359 billion for defense for this year and the Pentagon projects it will need $408 billion by 2007.

Under CBO projections, spending would average $430 billion to $480 billion a year from 2015 to 2020, the budget office said. Those figures are in 2002 dollars; inflation would make them higher.

Defense spending, which accounted for 18 percent of last year's federal budget, would fall to about 13 percent in 2020. That is the result of rising costs expected elsewhere in the budget, such as Social Security, Medicare and Medicaid.

It would also account for a smaller part of the overall U.S. economy. Defense spending made up 4 percent of gross domestic product in the 1990s. It is expected to fall to 3 percent by 2007 and 2 percent by 2020, the budget office said.

A large part of increased military spending will be for wage increases and rising medical costs. Such day-to-day costs, which also include housing expense and fuel supplies, make up the biggest part of the defense budget.

Investments in new weapons systems could rise from $128 billion this year to as much as $190 billion in 2012, then gradually falling to $165 billion as purchases are completed.

The Pentagon had no immediate comment about the projections.

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