Managing DOD in a Time of Austerity

AABPA Fall Symposium20 November 2012Dr. Gordon Adams

American University/Stimson Center

2

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22$450

$470

$490

$510

$530

$550

$570

$590

National Defense Spendingin constant FY12 dollars

Budget Control Act levels

FY13 President's Request

FY13 House Budget Alternative

Sequester

$525

$550

$575

$600

$625

$650

$675

$700

$725

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

PB13 in Comparative ContextCurrent Dollars (B)

Source: CBO August 2011 Budget and Economic Outlook; OMB Table 32.1

Ten-Year Deltas (Fy12-21)$340B: PB13 against CBO '11$498: PB13 against PB12

CBO 2011Baseline

President's 2013 BudgetPresident's 2012 Budget

$597

$636

$686

$728$738

$755

$736

$682

$639

$593 $595 $594 $595

$502$494 $500

$529

$576$583

$571 $565$550 $550 $552 $552 $554

$400

$450

$500

$550

$600

$650

$700

$750

$800

2005 2006 2007 2008 2009 2010 2011 2012 estimate

2013 estimate

2014 estimate

2015 estimate

2016 estimate

2017 estimate

National Defense Discretionary Budget Authority at Peak

Source: OMB Historical Tables 5-6 and 10-1

Total budget (incl. war)

Base Budget (non-war)

Constant Dollars, 2013 (B)

Savings Y10 % less Y1

Korea $2.3T 31%

Vietnam $1.2T 28%

Cold War $1.0T 31%

Current $0.3T 8%

Year0 Year1 Year2 Year3 Year4 Year5 Year6 Year7 Year8 Year9 Year1040%

50%

60%

70%

80%

90%

100%

110%

U.S. Defense Builddowns from Height of Defense SpendingAs percent of highest budget year

Korea

Vietnam

Cold War

Current

Source: FY12 Greenbook, Table 6-8, DoD FY13 factsheet

FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$602,631$581,798

$568,184 $570,628 $567,193 $557,638

$503,869 $505,803

$476,415

$440,316 $438,866$424,410 $422,943 $417,484

$54,272$33,186 $35,967 $31,820 $30,775 $32,610 $37,749 $33,770

$49,914$26,851

$37,808$23,698 $20,632 $20,681

Post-Cold War U.S. Defense Build-Down (Budget Authority)Constant 2013 Dollars (Thousands)

National DefenseInternational Affairs

Source: OMB Historical Tables 5-1 (Deflated according to OMB Historical Table 10-1)Data for FY12-FY17 is esti-mated

FY85

FY86

FY87

FY88

FY89

FY90

FY91

FY92

FY93

FY94

FY95

FY96

FY97

FY98

0

20

40

60

80

100

120

Cold War Builddown by Budget Titleas a share of FY85 (inflation adjusted)

Ops & Maintenance

Military PersonnelProcurement

RDTE

Source: DOD Green Book Table 6-8

Army

Navy

Air Force

Defense-Wide

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY

72

FY

74

FY

76

FY

78

FY

80

FY

82

FY

84

FY

86

FY

88

FY

90

FY

92

FY

94

FY

96

FY

98

FY

00

FY

02

FY

04

FY

06

FY

08

FY

10

FY

12

One-Third Rule: Pentagon Base Budget by Military Service