Figure 2-3.
Spending for Operation and Support, by Account |
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| (Billions of 2005 Dollars of Total Obligational Authority) |
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- CBO projects that military personnel spending will increase from $114 billion in 2010 to $141 billion in 2022, an average annual growth rate of 1.7 percent. That growth is attributable to two factors:
- CBO's assumption, consistent with DoD planning documents, that military pay raises must keep pace with the ECI, a measure of the average pay level in the U.S. civilian economy.
- CBO's assumption, consistent with DoD's actuaries, that medical accrual costs will steadily increase. These costs are intended to fund the future medical spending for military retirees and dependents when they reach age 65.
- Operation and maintenance (O&M) spending will increase from $156 billion in 2010 to $181 billion in 2022, an average annual growth rate of 1.3 percent. Most of that growth comes from:
- The assumption that DoD must also provide civilian employees with pay raises equivalent to the ECI.
- Increasing medical costs associated with the Defense Health Program.
- Most supplemental funding for operations in Iraq, Afghanistan, and elsewhere is allocated to O&M.
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