U.S. DoD Defense Spending

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Welcome to the DoD Defense Spending Section on AeroWeb. This section covers defense spending both by spending type (procure-ment, RDT&E, O&M, MILPERS and MILCON), military service, and defense program.



Sequestration Information


In early January 2013, Congress reached an agreement that averted the fiscal cliff. The agreement, however, did not resolve the issue of spending cuts. In 2011, Congress passed the Budget Control Act of 2011, which required lawmakers to reduce the budget deficit by at least $1.5 trillion over the 10-year period from FY2012-FY2021. The act stated that if lawmakers should fail to agree on a plan to reduce the deficit by the required amount, about $1 trillion in automatic, arbitrary and across the board budget cuts would start to take effect in 2013. As Congress failed to reach an agreement to reduce the budget deficit, automatic spending cuts known as sequester went into effect on March 1, 2013. The sequester entailed FY 2013 federal spending cuts in the amount of $85 billion of which $31 billion ($37 billion including previous years' cuts) was in defense. The U.S. is the largest defense market in the world (35% share in 2014 according to SIPRI) and the aerospace & defense industry depends on U.S. government contracts. Major cuts in defense spending therefore have a significant impact on the revenues and profits of most major aerospace & defense OEMs and their suppliers. On Tuesday March 26, 2013, President Obama signed into law a government funding bill that ended the 2013 budget fight and locked in $85 billion in sequestration cuts.

FY 2012


In FY 2012 (fiscal year started October 1, 2011), by Budget Authority, the DoD budget was $655.4 billion dollars - $533.1 billion Base + $122.3 billion for Overseas Contingency Operations (OCO).



FY 2013


In FY 2013 (fiscal year started October 1, 2012), by Budget Authority, the DoD budget was $585.4 billion dollars. Of this amount, $501.2 billion is Base funding + $84.2 billion for OCO. A closer look reveals a large decrease in the DoD budget of $70.0 billion or -10.8% from FY 2012 to FY 2013.



FY 2014


In FY 2014 (fiscal year started October 1, 2013), by Budget Authority, the DoD budget was $595.7 billion dollars. Of this amount, $501.7 billion was Base funding + $94.0 billion for OCO. A closer look reveals budget increase of $10.4 billion or +1.8% from FY 2013 to FY 2014.

FY 2015


In FY 2015 (fiscal year started October 1, 2014), by Budget Authority, the DoD budget is $569.3 billion dollars. Of this amount, $501.7 billion is Base funding + $64.3 billion for OCO. A closer look reveals a decrease in the DoD budget of $26.5 billion or -4.4% from FY 2014 to FY 2015.



FY 2016


Turning to the President's Budget for FY 2015 (fiscal year beginning October 1, 2015), the DoD is expected to receive a total of $592.3 billion (by Budget Authority). Of this amount $541.3 billion is Base funding (discretionary + mandatory) while the remaining $51.0 billion are for OCO. A closer look reveals a DoD budget increase of $23.0 billion or +4.0% from FY 2015 to FY 2016.

DoD Spending FY2015-FY2016: Total DoD OCO O&M Procurement RDT&E MILPERS MILCON
+4.0% -20.8% +1.3% +11.7% +7.4% -0.6% +24.3%
DoD Spending FY2014-FY2015: Total DoD OCO O&M Procurement RDT&E MILPERS MILCON
-4.4% -31.6% -5.7% +2.2% +2.7% -3.8% -32.7%

Total DoD Defense Spending and Procurement | FY 2008 - FY 2016    (updated June 5, 2015)

DoD Defense Spending from FY 2008 to FY 2014, FY 2015, FY 2016 and FY 2020 - Base, OCO, Procurement and Total

Looking at the chart above, you can see that total DoD defense spending (Base + OCO) grew from $673 billion in FY 2008 to $696 billion in FY 2010. From FY 2010-13, defense spending decreased every year. In FY 2014, in total, the DoD Budget ($595.7 billion) increased for the first time in four years, however, in FY 2015, defense spending is expected to fall to $569.3 billion and then shoot back up to $592.3 billion in FY 2016. Out to FY 2020, the DoD Budget is expected to grow at a very slow pace.

In FY 2015, the total OCO request is $64.3 billion compared to $94.0 billion and $84.2 billion in FY 2014 and FY 2013, respectively.

DoD spending on procurement (Base + OCO) fell from $165.0 billion in FY 2008 to $97.8 billion in FY 2013. In FY 2014, DoD Procurement increased slightly to $100.4 billion or +2.7% and is expected to continue to grow in FY 2015 and 16.

All figures are by Budget Authority unless otherwise specified. Source is the official FY 2016 Budget Request from the U.S. Department of Defense.

DoD Spending | Military Personnel, O&M, Procurement, RDT&E, and Military Construction (MILCON)

As a result of large defense budget cuts coupled with sequestration, all types of spending decreased from FY 2012 to FY 2013. Procurement and Military Construction (MILCON) were hit particularly hard and fell 17.4% and 29.0%, respectively.

As illustrated by the chart, by far the largest part of the DoD budget is Operations & Maintenance (O&M). In FY 2015, $247.5 billion O&M spending is projected, down $14.9 billion (-5.7%) from FY 2014.

In FY 2015, $148.3 billion in funding for Military Personnel (MILPERS) is projected, down $5.9 billion (-3.8%) from FY 2014. In FY 2015, procurement amounts to $102.7 billion, up $2.2 billion (+2.2%) from FY 2014.

Another significant DoD expense is RDT&E (Research Development Test & Evaluation). In FY 2015, projected spending on RDT&E amounts to $65.2 billion, up $1.7 billion (+2.7%) from FY 2014.

Another significant DoD expense is MILCON. In FY 2015, projected DoD MILCON spending is $5.6 billion, down as much as $2.7 billion (-32.7%) from FY 2014. In FY 2009, spending on MILCON was as high as $26.8 billion.


All defense spending figures are by Budget Authority and include Overseas Contingency Operations (OCO).

DoD Defense Spending by Cost Type FY 2008 to FY 2016 - O&M, MILPERS, Procurement, RDT&E, MILCON

U.S. Defense Spending by Top DoD Defense Programs | 5-Year Spending FY2012 - FY2016

In Fiscal Year (FY) 2016 (October 1, 2015 - September 30, 2016), the largest DoD program is the F-35 Lightning II (Joint Strike Fighter). In total, the FY 2016 Budget Request provides $11.01 billion for the F-35 ($9.16 billion procurement + $1.85 billion in RDT&E). In FY 2016, the DoD plans to purchase 57 F-35s (up from 38 in FY 2015, 29 in FY 2014, 29 in FY 2013, and 31 in FY 2012).

The second largest program is the SSN 774 Virginia Class attack submarine with total FY 2016 requested funding in the amount of $5.78 billion ($5.49 billion procurement + $0.29 billion in RDT&E).

The third largest program in FY 2016 is the DDG 51 Arleigh Burke Class Aegis Destroyer with $3.58 billion in requested funding ($3.58 billion procurement + $4.22 million RDT&E) followed by the P-8A Poseidon (a maritime patrol aircraft based on Boeing's 737-700 narrow-body commercial jet) with $3.56 billion ($3.31 billion procurement + $0.25 billion RDT&E).

Other top FY 2016 defense programs are the KC-46A Pegasus Tanker, C-130 Super Hercules, CVN 78 Ford Class Aircraft Carrier, the Littoral Combat Ship, AEGIS BMD incl. SM-3, and the V-22 Osprey.

FY2012 FY2013 FY2014 FY2015(p) FY2016(e)

# Program Name Type User $ Million $ Million $ Million $ Million $ Million

Top-10 DoD Programs and Costs

F-35 Lightning II (JSF)
SSN 774 Virginia Class Submarine
DDG 51 AEGIS Destroyer
P-8A Poseidon
KC-46A New Tanker
C-130 Hercules (all variants)
CVN 78 Ford Class Aircraft Carrier
Littoral Combat Ship
AEGIS BMD & SM-3
V-22 Osprey

Fighter
Submarine
Destroyer
ISR/Patrol
Tanker
Airlift
Carrier
Frigate
Missile
Rotorcraft

JOINT
NAVY
NAVY
NAVY
USAF
JOINT
NAVY
NAVY
MDA
JOINT

9,162.3
4,953.8
2,256.9
2,911.5
818.9
2,506.5
699.1
2,144.1
2,274.0
2,984.9

7,629.8
4,852.0
4,912.0
3,132.6
1,550.3
1,835.9
718.2
2,259.9
2,141.4
2,165.9

7,538.9
6,737.3
2,372.4
3,478.5
1,505.5
2,365.9
1,740.1
2,360.7
2,019.7
2,011.6

8,572.3
6,234.1
3,263.8
2,507.2
2,359.6
2,045.6
1,867.8
2,046.4
2,110.6
1,825.9

11,012.4
5,782.7
3,580.2
3,556.5
3,008.0
2,975.3
2,693.0
2,074.2
1,843.4
1,727.2

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DoD Defense Spending in Detail by Military Service | FY2000 - FY2016

In the following, we focus on DoD defense spending by service and cost/expense categories. There are major differences in the way the military services spend their funds. For example, the Army is relatively "low-tech" compared to the Navy and the Air Force, due to the fact that the Army spends a higher proportion of funds on Military Personnel and O&M while spending less on Procurement and RDT&E.

The Navy and Air Force spend more money on Procurement and RDT&E than the Army, even though the latter has received more funding in total in recent years. This is explained by the Navy's and Air Force's greater demand for high technology systems (aircraft, missiles, ships etc.). At the same time, the Army relies heavily on manpower to operate. In the following, the differences in spending are highlighted and discussed.

Total DoD Spending by Service | FY2000-FY2016

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DoD Total Budget by Military Service FY 2000 to FY 2014, FY2015 and FY 2016

From FY 2004 to FY 2014, the Army received the most DoD funding followed by the Navy and the Air Force. However, in FY15 and FY16, the Navy and Air Force are expected to surpass the Army. In FY 2015, $158.8 billion in total funding is provided for the Navy, down from $164.0 billion or -3.1% from FY 2014.

In FY 2015, the Air Force will receive $152.4 billion, up from $151.1 billion or +0.9% from FY 2014.

In FY 2015, the Army will receive $147.6 billion, down from $166.0 billion or -11.1% from FY 2014.

Clearly, while the Army has experienced major budget cuts over the last four fiscal years (FY11-14), the Navy, USAF and Defense-Wide agencies (e.g. MDA, DARPA, SOCOM, DISA) have been much less impacted.

Figures include Overseas Contingency Operations (OCO).

Procurement Spending by Service | FY2000-FY2016

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DoD Procurement FY 2000 to FY 2014, FY2015 and FY 2016

As shown, the Navy is expected to receive the most DoD procurement funds in FY 2015 followed by the Air Force and the Army. In FY 2015, $41.6 billion is provided for Navy procurement, up from $42.2 billion or -1.5% from FY 2014.

In FY 2015, the Air Force will receive $38.3 billion, up from $34.4 billion or +11.3% from FY 2014.

In FY 2015, the Army will receive $15.5 billion, down from $18.2 billion or -14.8% from FY 2014.

Clearly, the Army is procuring much fewer vehicles, aircraft, and other products and services compared to the peak in FY 2008 (FY08-FY15: -77.0%).

Figures include Overseas Contingency Operations (OCO).

RDT&E Spending by Service | FY2000-FY2016

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DoD RDT&E FY 2000 to FY 2014, FY2015 and FY 2016

The Air Force is projected to receive the most RDT&E (Research Development Test & Evaluation) funds in FY 2015 followed by Defense-Wide activities (mainly MDA Ballistic Missile Defense programs), the Navy and the Army. In FY 2015, $23.6 billion is provided for Air Force RDT&E, down from $23.8 billion or -0.9% from FY 2014.

In FY 2014, the Navy will receive $15.8 billion, up from $15.0 billion or +5.5% from FY 2014.

In FY 2014, the Army will receive $6.7 billion, down from $7.1 billion or -5.8% from FY 2014.

Clearly, the Air Force is the most "high-tech" branch of the military.

Figures include Overseas Contingency Operations (OCO).

O&M, Operations & Maintenance | FY2000-FY2016

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DoD O&M FY 2000 to FY 2014, FY2015 and FY 2016

As illustrated, the Defense-Wide agencies are projected to receive the most O&M (Operations & Maintenance) funds in FY 2015 followed by the Army, the Air Force, and the Navy.

In FY 2015, $64.1 billion in O&M funds are provided for the Army, down from $76.9 billion or -16.7% from FY 2014.

In FY 2015, the Air Force will receive $54.5 billion, down from $56.0 billion or -2.7% from FY 2014.

In FY 2015, the Navy will receive $53.4 billion, down from $55.9 billion or -4.4% from FY 2014.

Figures include Overseas Contingency Operations (OCO).

Military Personnel Expenses | FY2000-FY2016

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DoD MILPERS FY 2000 to FY 2014, FY2015 and FY 2016

As illustrated, the Army is expected to receive the most Military Personnel (MILPERS) funds in FY 2015 followed by the Navy, the Air Force, and Defense-Wide agencies.

In FY 2015, the Army will receive $59.7 billion, down from $62.0 billion or -3.7% from FY 2014.

In FY 2015, the Navy will receive $45.8 billion, down from $46.0 billion or -0.4% from FY 2014.

In FY 2015, the Air Force will receive $34.5 billion, down from $35.9 billion or -3.8% from FY 2014.


Clearly, the Army relies heavily on manpower.

Figures include Overseas Contingency Operations (OCO).

MILCON, Military Construction Costs | FY2000-FY2016

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DoD MILCON FY 2000 to FY 2014, FY2015 and FY 2016

As illustrated, Defense-Wide construction is expected to receive the most DoD funds for MILCON (Military Construction) in FY 2015 followed by the Navy, the Air Force, and the Army.

In FY 2015, the Navy will receive $1.3 billion, down from $1.8 billion or -30.2% from FY 2014.

In FY 2015, the Air Force will receive $1.2 billion, down from $1.3 billion or -8.9% from FY 2014.

In FY 2015, the Army will receive $1.0 billion, down from $1.7 billion or -40.0% from FY 2014.

Army MILCON has been hit hard and is down a massive 91.5% from the peak in FY 2009.


Figures include Overseas Contingency Operations (OCO).


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