Costs of Supporting and Modernizing Current U.S. Military Forces

At the request of Senator Domenici, the Congressional Budget Office CBO recently estimated future defense costs. The results of this analysis were presented to Senator Domenici in a briefing. This paper summarizes the results of the analysis and the assumptions underlying it. It also incorporates minor revisions of the figures used in the briefing. According to CBOs analysis, supporting and modernizing current numbers of U.S. military forces over the next five years could require average real growth in the defense budget of between 1 percent and 4 percent a year. This estimate assumes that the current number of forces are maintained and that they are modernized with weapons currently in development or production--that is, no weapons programs are canceled nor are any new programs proposed beyond those now in development. This range of average annual real growth would also provide sufficient money to sustain the current tempo of day-to-day military training and operations, which should avoid declines in the readiness of military forces. The higher 4 percent level of annual budget growth would be needed to support increases in day-to-day operating costs consistent with the projected 1989 relationship between the value of major weapons and operating expenditures. The higher level of growth would also allow new weapons to be bought at the relatively fast pace envisioned in the currently available plans of the Reagan Administration. Some of these plans were proposed in January 1987.