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CBO
STUDY

The Long-Term Implications
of Current Defense Plans
January 2003


Notes

In the print version of this report, Summary Figure 5, Figure 3-27, and several passages in the text were incorrect in regard to the average age and inventory of Air Force tankers. They have been corected in this version.

Please note that because of their complexity, some of the figures in Chapter 3 of this report are best viewed in color. If you print a copy of Chapter 3, you may wish to use a color printer.

Unless otherwise indicated, all years referred to in this study are fiscal years, and all dollar amounts are expressed in 2002 dollars of total obligational authority.

Numbers in the text and tables may not add up to totals because of rounding.





                
Preface

What are the long-term implications of the Bush Administration's plans for defense? What level of resources might be needed to execute those plans? If they were carried out, what would the Administration's plans imply about the size, composition, and age of future U.S. military forces?

This Congressional Budget Office (CBO) study--prepared at the request of the Chairman and Ranking Minority Member of the Subcommittee on Defense of the Senate Appropriations Committee--addresses those questions. It projects the long-term implications of today's defense plans for both resources and forces. In keeping with CBO's mandate to provide objective, impartial analysis, the study makes no recommendations.

Lane Pierrot and Gregory T. Kiley of CBO's National Security Division wrote the study under the supervision of J. Michael Gilmore. Ian MacLeod and Eric J. Labs, along with Allison Percy, Paul Rehmus, Sally Sagraves, Russ Beland, Adebayo Adedeji, and David Arthur, all of the National Security Division, contributed to the analysis. Debbie Clay-Mendez supervised the analysis of operation and support costs, and R. William Thomas supervised portions of the investment analysis. Kent R. Christensen, Raymond J. Hall, Sarah T. Jennings, David B. Newman, Sam Papenfuss, Michelle Patterson, and Matthew Schmit of CBO's Defense, International Affairs, and Veterans' Affairs Cost Estimates Unit also contributed to the analysis, under the supervision of Jo Ann W. Vines. Barry Anderson and Arlene Holen of CBO provided thoughtful review comments. In addition, the authors are grateful to Robert R. Soule for his suggestions on how to improve the analysis. (The presence of external participants implies no responsibility for the final product, which rests solely with CBO.)

Christian Spoor edited the study, and Leah Mazade proofread it. Cindy Cleveland produced drafts of the manuscript, Karina Braszo and Kathryn Winstead prepared the study for publication, and Annette Kalicki prepared the electronic versions for CBO's Web site.

Barry B. Anderson
Acting Director
January 2003




CONTENTS


  Summary
   
1  Introduction
      The Current Defense Budget
      The Administration's Plans for Defense
      Methods of CBO's Analysis
      Possible Effects of Transforming the Military
      Projected Long-Term Costs Versus Actual Funding
   
2  Long-Term Implications for Operation and Support
      Overview of Operation and Support
      Forces and Logistics
      Medical Costs
      Training
      Installations Support
      Headquarters, C3, and Administration
      Personnel Support
      Recruiting
      Other Costs: Military Construction and Family Housing
   
3  Long-Term Implications for Investment
      Overview of Investment
      The Army
      The Navy and Marine Corps
      The Air Force
      Defense Agencies and Missile Defenses
      Transformation


Tables  
   
S-1. Steady-State Procurement Costs Under a Variety of Assumptions
1-1. Actual, Requested, and Projected Funding for the Department of Defense, 2003-2020
2-1. Requested and Projected Funding for Department of Defense Operation and Support
3-1. Requested and Projected Funding for Department of Defense Investment
3-2. Steady-State Procurement Costs Under a Variety of Assumptions
3-3. Current and Transformed Forces for the Army
3-4. Current and Transformed Forces for the Navy and Marine Corps
3-5. Current and Transformed Forces for the Air Force
3-6. Steady-State Procurement Costs for Current and Transformed Forces
   
Figures  
   
S-1. Past and Projected Resources for Defense
S-2. Defense Spending as a Share of the Federal Budget and GDP
S-3. Past and Projected Resources for Operation and Support
S-4. Past and Projected Resources for Investment
S-5. Average Age of Selected Army and Air Force Weapon Systems
S-6. Average Age of Selected Navy and Marine Corps Weapon Systems
1-1. Past and Projected Resources for Defense
1-2. Defense Spending as a Share of the Federal Budget and GDP
2-1. Spending for Operation and Support
2-2. Three Measures of Defense Spending
2-3. Spending for Forces and Logistics
2-4. Medical Spending
2-5. Spending for Training
2-6. Spending for Installations Support
2-7. Spending for Installations Support by Subcategory
2-8. Spending for Headquarters, C3, and Administration
2-9. Spending for Personnel Support
2-10. Spending for Recruiting
2-11. Spending for Military Construction and Family Housing
3-1. Spending for Investment by Budget Account
3-2. Projected Department of Defense Spending for Investment
3-3. Projected Army Spending for Investment
3-4. Procurement of Army Ground Combat Vehicles
3-5. Age and Inventory of Army Ground Combat Vehicles
3-6. Procurement of Army Helicopters
3-7. Age and Inventory of Army Helicopters
3-8. Projected Army Procurement Funding Versus Steady-State Costs
3-9. Projected Navy and Marine Corps Spending for Investment
3-10. Procurement of Battle Force Ships
3-11. Age and Inventory of Battle Force Ships
3-12. Procurement of Navy Fighter and Attack Aircraft
3-13. Age and Inventory of Navy Fighter and Attack Aircraft
3-14. Procurement of Marine Corps Helicopters
3-15. Age and Inventory of Marine Corps Helicopters
3-16. Procurement of Marine Corps Ground Combat Vehicles
3-17. Age and Inventory of Marine Corps Ground Combat Vehicles
3-18. Projected Navy and Marine Corps Procurement Funding Versus Steady-State Costs
3-19. Projected Air Force Spending for Investment
3-20. Procurement of Air Force Fighter and Attack Aircraft
3-21. Age and Inventory of Air Force Fighter and Attack Aircraft
3-22. Procurement of Air Force Bombers
3-23. Age and Inventory of Air Force Bombers
3-24. Procurement of Air Force Airlifters
3-25. Age and Inventory of Air Force Airlifters
3-26. Procurement of Air Force Tankers
3-27. Age and Inventory of Air Force Tankers
3-28. Projected Air Force Procurement Funding Versus Steady-State Costs
3-29. Projected Investment Spending for Defense Agencies
3-30. Projected Investment Spending for Missile Defenses
   
Boxes  
   
1-1. The Future Years Defense Program
1-2. Base Realignment and Closure
1-3. Calculating Steady-State Procurement Costs
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