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Last year President Reagan called for the exploration of defensive technologies that would render nuclear weapons "impotent and obsolete." The resulting Administration plan--called the Strategic Defense Initiative (SDI)--has sparked intense debate on the technological and arms control implications of creating a novel strategic defensive system based largely in space.

Many in the Congress are also interested in the costs of the SDI. This paper, prepared at the request of the Arms Control, Oceans, International Operations and Environment Subcommittee of the Senate Foreign Relations Committee, examines near-term cost trends. It also discusses whether current SDI plans include all the efforts needed to support a strategic defense.

In summary, the paper finds that:

• The Administration plans substantial growth in SDI spending over the next two years; from $991 million in 1984 to $3,790 million in 1986. Press reports suggest continued though slower growth through 1989. While such Vapid growth is not atypical of newly started research and development (R&D) programs, the SDI will consume an increasing share of DoD R&D resources, growing from about 4 percent in 1984 to about 16 percent by 1989.
  
  
• Everything else being equal, growth in SDI funds between 1984 and 1985 would have been larger had the Administration funded the Army's Ballistic Missile Defense (BMD) program at levels planned in its February 1983 budget. Changes in BMD funding plans were probably tied to the shift in basing plans for the MX missile. BMD changes not only offset growth in SDI but may also portend a more fundamental shift in the Army's BMD effort, emphasizing development of a capability to defend entire areas of the United States sometime in the future rather than emphasizing the defense of specific military installations in the nearer term. This could be of concern to those who feel the United States may need to deploy a near-term ballistic missile defense in response to a potential Soviet deployment.
  
  
• There are questions about the inclusiveness of the Administration's current definition of SDI. The broad definition of strategic defense implied by the President and stated explicitly by others in the Administration embraces defense against all forms of nuclear attack. But the SDI currently contains funds for research on defense against ballistic missiles. Important components of a more comprehensive defense--most notably air defense--are missing. In addition, there appear to be a number of relevant programs that are not currently included in SDI even by the narrower definition of defense against ballistic missiles.

In accordance with the mandate of the Congressional Budget Office (CBO) to provide objective and impartial analysis, the paper makes no recommendations.

Lawrence J. Cavaiola and Bonita J. Dombey of CBO's National Security Division prepared this paper under the general supervision of Robert F. Hale. Francis Pierce edited the manuscript.

This document is available in its entirety in PDF.