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Numbers in the text and tables may not add to totals because of rounding. All dollar amounts are expressed in 1996 dollars unless otherwise noted. All years are fiscal years unless otherwise indicated. |
Pressures to find money for new weapon systems are pushing the Department of Defense (DoD) to take a fresh look at its infrastructure. Spending on operation and maintenance (O&M) is one of the chief sources of funding for infrastructure. In order to realize its plans and meet the level of defense spending included in the 1998 Congressional budget resolution, DoD may have to cut $11 billion from its current level of annual spending on O&M by 2002. In light of past trends, that could be difficult and would require either major changes in the amount or method of providing O&M support or reductions in the number of forces.
This analysis, prepared by the Congressional Budget Office (CBO) for the Defense Subcommittee of the Senate Committee on Appropriations, examines how O&M spending grew in the 1980s and fell in the 1990s. The study highlights changes that could be made to achieve lower levels of spending by 2002. In keeping with CBO's mandate to provide objective analysis, the study makes no recommendations.
Amy Belasco of CBO's National Security Division prepared the study under the general supervision of Cindy Williams and Neil Singer. Ellen Breslin Davidson wrote the section on DoD's health care spending, and Wayne Glass contributed the section on DoD's environmental security program in Chapter 2. The author would like to thank Nathan Stacy, Shaun Black, Doug Taylor, Jofi Joseph, and Evan Christman for their help in organizing and verifying large amounts of data. She is also grateful to the many people in the Department of Defense and the military services for providing data and answering numerous queries. Michael Miller of CBO and Stanley Horowitz of the Institute for Defense Analyses provided helpful comments on an earlier draft of the study, and Amy Plapp, Kent Christensen, and Lisa Siegel of CBO helped with cost estimates.
Sherwood Kohn edited the manuscript. Cindy Cleveland and Judith Cromwell
produced drafts of the study. Kathryn Quattrone and Jill Sands prepared
the report for publication.
June E. O'Neill
Director
September 1997
ONE - THE NEED TO REDUCE OPERATION AND MAINTENANCE SPENDING LEVELS IN THE FUTURE
TWO - WHY DEFENSEWIDE SPENDING ON OPERATION AND MAINTENANCE HAS GROWN
THREE - READINESS AND O&M SPENDING BY THE SERVICES
FOUR - STRATEGIES FOR REDUCING O&M SPENDING
APPENDIXES
A - Adjusting
Operation and Maintenance Spending Between 1981 and 1996
B - Classifying Operation
and Maintenance Activities According to the New Operation and Maintenance
(O-1) Structure Adopted by DoD
C - Spending
in the Services by New Operation and Maintenance (O-1) Budget Categories
D - Estimating Future Cuts
in Force Structure
| TABLES | |
| S-1. | Spending for Operation and Maintenance and Indicators of Workload in the 1980s and 1990s |
| S-2. | Changes in Spending for Operation and Maintenance and Indicators of Workload in the 1980s and 1990s |
| S-3. | Mission- and Infrastructure-Related Spending as a Share of Total Spending for Operation and Maintenance |
| 1. | Spending for Operation and Maintenance and Indicators of Workload in the 1980s and 1990s |
| 2. | Changes in Spending for Operation and Maintenance and Indicators of Workload in the 1980s and 1990s |
| 3. | Mission- and Infrastructure-Related Spending as a Share of Total Spending for Operation and Maintenance |
| 4. | Changes in Spending for Operation and Maintenance by O-1 Budget Category |
| 5. | Spending for Operation and Maintenance by Component |
| 6. | Defensewide Spending for Operation and Maintenance by O-1 Budget Category |
| 7. | Sources of Growth in Defensewide Spending for Operation and Maintenance |
| 8. | Changes in Spending on Operating Forces and in Training Levels |
| 9. | Changes in O-1 Budget Categories for Operation and Maintenance Spending by the Services |
| 10. | Statutory Restrictions on Privatization: Key Provisions |
| A-1. | Standardizing Operation and Maintenance Spending Between 1981 and 1996 |
| C-1. | Mission- and Infrastructure-Related Spending as a Share of the Services' Total Spending for Operation and Maintenance |
| C-2. | Spending for Operation and Maintenance in the Services by O-1 Budget Category |
| C-3. | Changes in Spending for Operation and Maintenance in the Services by O-1 Budget Category |
| C-4. | Distribution of Spending for Operation and Maintenance in the Services by O-1 Budget Category |
| FIGURES | |
| S-1. | Past and Alternate Future Levels of Spending for Operation and Maintenance, 1979-2003 |
| S-2. | Changes in Indicators of Training Readiness and Spending in the 1980s and 1990s |
| S-3. | Changes in Average Operating Spending in the Army, Navy, and Air Force |
| 1. | Changes in Shares of Department of Defense Spending by Type in 1981, 1989, and 1996 |
| 2. | Past and Alternate Future Levels of Spending for Operation and Maintenance, 1979-2003 |
| 3. | Operation and Maintenance Spending per Person, 1971-2003 |
| 4. | Total Defense Spending on Environmental Security Programs, 1984-1997 |
| 5. | Spending for Operation and Maintenance per Capita by Service, 1981-1997 |
| 6. | Changes in Indicators of Equipment Readiness and Spending in the 1980s and 1990s |
| 7. | Changes in Indicators of Training Readiness and Spending in the 1980s and 1990s |
| 8. | Changes in Average Operating Spending in the Army, Navy, and Air Force |
| 9. | Changes in Spending for Schoolhouse Training by Service |
| 10. | Changes in per Capita Spending for Administrative and Servicewide Support by Service |
| 11. | Changes in per Capita Spending for Administration by Service |
| 12. | Per Capita Spending for Base Support by Service, 1981-1997 |
| 13. | Changes in Total Building Space Within the United States and Overseas, 1981-2001 |
| 14. | Floor Space of Buildings per Capita, 1981-2003 |
| BOXES | |
| 1. | Projections of Inflation by the Congressional Budget Office and the Administration |
| 2. | Comparing Operation and Maintenance Over Time |
| B-1. | Department of Defense O-1 Budget Categories, as Standardized by the Congressional Budget Office |
