The Army Budget fiscal year 2010 an analysis Author Frank A. DiStasio, Jr.

Principal Researcher Lucinda M. Custer

Editors Danielle Giovannelli Sandra J. Daugherty

Cover Photograph U.S. Army Sergeant Robert Newman, Bravo Company, 1st Battalion, 4th Infantry Regiment, U.S. Army Europe, watches the sunrise after a dismounted patrol mission near Forward Operating Base Baylough, Zabul, Afghanistan, 19 March 2009. (U.S. Army photograph by Staff Sergeant Adam Mancini/Released)

Graphics and design Kevin Irwin

Technical support Master Print, Inc.

© 2009 by The Association of the United States Army All rights reserved.

Reproduction of this report, in whole or in part, is authorized with appropriate acknowledgment of the source.

Institute of Land Warfare Association of the United States Army 2425 Wilson Boulevard, Arlington, Virginia 22201-3385 703-841-4300 www.ausa.org

ii Contents

Foreword ...... vii The Budget Message of the President of the United States ...... ix The Federal Budget ...... 1 The President's Perspective ...... 1 Budget Top Line ...... 1 Budget Overview ...... 2 Background on the Federal Budget ...... 3 Budget Terms ...... 3 Funding Authority ...... 3 Appropriations and Authorization ...... 3 Discretionary and Mandatory ...... 3 Budget Data ...... 4 National Defense Classification ...... 4 National Defense Outlays and Gross Domestic Product ...... 5 Discretionary and Mandatory Funds ...... 5 Discretionary for Defense ...... 7 Discretionary for Non-Defense ...... 8 Mandatory Funds ...... 8 Homeland Security ...... 8 Economic Considerations ...... 12 Gross Domestic Product ...... 12 Gross Federal Debt ...... 12 Balancing the Budget ...... 13 Receipts ...... 13 Spending ...... 15 Borrowing and Interest ...... 16 Congressional Budget Office Estimates ...... 17 Observations ...... 18 Endnotes ...... 19 The Department of Defense Budget ...... 21 Introduction ...... 21 The DoD Budget and the Federal Conundrum ...... 21 Budget Priorities and Resources ...... 22 Strategic Goals ...... 22 Budget Analysis – Top Line ...... 25 Support for Troops in the Field ...... 25 Budget Titles and Service Analyses ...... 26 DoD Budget by Title – In Current Dollars ...... 28 DoD Budget by Title – In Constant Dollars ...... 28 DoD Budget by Title – Percentage Distribution ...... 28 DoD Budget by Service and Defensewide – Current Dollars ...... 29 DoD Budget by Service and Defensewide – Constant Dollars ...... 30 DoD Budget by Service and Defensewide – Percentage Distribution ...... 31 Military Forces ...... 31 Combatant Commands ...... 31 Military Services ...... 32 Endstrength ...... 33 Military Endstrength ...... 33 Civilian Endstrength ...... 33 Military Personnel ...... 34 Military Accrual Payments ...... 34 Military Medical Accrual ...... 35 Military Retirement Accrual ...... 35 Civilian Personnel ...... 35 Operation and Maintenance ...... 36 Defense Health Program ...... 36 Research, Development and Acquisition ...... 37 RDA Trends in Current Dollars ...... 37

iii RDA Trends in Constant Dollars ...... 38 RDA by Military Services ...... 38 Select Major Weapon Systems ...... 38 Special Operations RDA ...... 38 Missile Defense Agency ...... 43 Facilities and Infrastructure Investment ...... 44 Military Construction ...... 45 Family Housing ...... 45 Reserve Component ...... 46 Defensewide Programs ...... 46 Environmental Restoration Program ...... 46 Chemical Destruction Program ...... 47 Counternarcotics Program ...... 48 Base Realignment and Closure ...... 48 Working Capital and Revolving Funds ...... 49 Keep America Strong and Secure ...... 50 Endnotes ...... 51 The Army Budget ...... 53 Introduction ...... 53 Top Line Analysis ...... 53 Army Land Forces ...... 54 Global Commitments ...... 54 Grow the Army ...... 54 Army Force Generation ...... 56 Budget Basics ...... 56 Army Appropriations ...... 57 Budget Formulation Process ...... 57 Budget Documents ...... 58 Budget Summary ...... 58 Budget by Appropriation ...... 58 Overseas Contingency Operations ...... 60 Personnel ...... 60 Endstrength ...... 60 Military Personnel ...... 62 Military Accrual Accounts ...... 62 Civilian Personnel ...... 63 Pay Raise Rates ...... 63 Operation and Maintenance ...... 63 Operation and Maintenance, Army Overview ...... 64 Operation and Maintenance, Army National Guard Overview ...... 65 Operation and Maintenance, Army Reserve Overview ...... 65 Research, Development and Acquisition ...... 66 Top Ten Weapon Systems ...... 67 Research, Development, Test and Evaluation ...... 67 Procurement ...... 68 Aircraft Procurement, Army ...... 72 Missile Procurement, Army ...... 72 Weapons and Tracked Combat Vehicles Procurement, Army ...... 72 Ammunition Procurement, Army ...... 72 Other Procurement, Army ...... 74 Installations and Facilities ...... 76 Military Construction ...... 78 Military Construction, Army ...... 78 Military Construction, Army National Guard ...... 79 Military Construction, Army Reserve ...... 79 Family Housing ...... 79 Base Realignment and Closure ...... 80 Environmental Restoration, Army ...... 81 Chemical Demilitarization Program ...... 81 Army Working Capital Fund ...... 81 Revenues and Expenses ...... 82 iv Customer Rates ...... 82 Direct Appropriated Funds ...... 82 Capital Investment ...... 82 Army Reserve Component ...... 83 Army National Guard ...... 83 Army Reserve ...... 84 Summary ...... 86 Endnotes ...... 87 Appendix I – Glossary of Terms ...... 89 Appendix II – The Budget Process ...... 91 Appendix III – Glossary of Acronyms ...... 95 Appendix IV – References ...... 97 Tables – Federal 1. Budget of the U.S. Government, Fiscal Year 2010 ...... 2 2. Budget Authority by Function and Subfunction – 050 National Defense ...... 4 3. Outlays by Function and Subfunction – 050 National Defense ...... 5 4. Discretionary and Mandatory Outlays ...... 7 5. Supplemental Funds for Overseas Contingency Operations ...... 8 6. Discretionary Budgetary Authority by Agency ...... 9 7. Mandatory Outlays by Category ...... 10 8. Homeland Security by Agency ...... 11 9. Homeland Security by Mission ...... 12 10. Gross Domestic Product and Annual Deficit ...... 13 11. Gross Domestic Product and Receipts ...... 15 12. Federal Receipts and Estimates ...... 15 13. Gross Federal Debt by Source ...... 17 14. Interest as a Percentage of Outlays ...... 18 15. Comparisons of Deficit Estimates ...... 18 Tables – Department of Defense 16. Overseas Contingency Operations by Appropriation ...... 27 17. Department of Defense Budget Authority by Title – Current Dollars ...... 28 18. Department of Defense Budget Authority by Title – Constant Dollars ...... 29 19. Department of Defense Budget Authority by Title as Percentage of Annual Total ...... 29 20. Department of Defense Budget Authority by Component – Current Dollars ...... 30 21. Department of Defense Budget Authority by Component – Constant Dollars ...... 31 22. Department of Defense Budget Authority by Component as Percentage of Annual Total ...... 32 23. Conventional Forces Summary ...... 33 24. Department of Defense Personnel Endstrength ...... 34 25. Military Personnel Budget ...... 34 26. Medical Accrual in Military Personnel Budgets ...... 35 27. Retirement Accrual in Military Personnel Budgets ...... 35 28. Civilian Pay ...... 36 29. Operation and Maintenance ...... 37 30. Defense Health Care Program Funding ...... 37 31. Research, Development and Acquisition by Military Service ...... 38 32. Research, Development and Acquisition – Selected Major Weapon Systems – Aircraft ...... 40 33. Research, Development and Acquisition – Selected Major Weapon Systems – Missiles and Munitions ...... 41 34. Research, Development and Acquisition – Selected Major Weapon Systems – Missile Defense ...... 41 35. Research, Development and Acquisition – Selected Major Weapon Systems – Shipbuilding and Maritime Systems ...... 42 36. Research, Development and Acquisition – Selected Major Weapon Systems – Space and Command, Control, Communications, Computers and Intelligence ...... 42 37. Research, Development and Acquisition – Special Operations Command ...... 43 38. Missile Defense Program Funding by Title ...... 43 39. Missile Defense Program Funding by Major Systems ...... 44 40. Military Construction and Family Housing ...... 45 41. Military Construction by Service ...... 45 42. Family Housing by Service ...... 46 43. Reserve Component Funding by Service ...... 46 44. Environmental Restoration Program ...... 47 45. Chemical Agents and Munitions Destruction Program ...... 48 46. Counternarcotics Program Budget Authority ...... 48

v 47. Base Realignment and Closure Account 2005 – Costs and Savings by Fiscal Year ...... 49 48. Defense Management and Revolving Budget Authority ...... 49 Tables – Army 49. Army Budget Summary – Total Obligational Authority ...... 54 50. Army Budget Summary – Total Obligational Authority by Component and Appropriation Group ...... 59 51. Overseas Contingency Operations ...... 60 52. Military Personnel Appropriations ...... 62 53. Military Retired Pay Accruals ...... 62 54. Civilian Endstrength ...... 63 55. Army Operation and Maintenance ...... 64 56. Army Research, Development and Acquisition ...... 66 57. Research, Development and Acquisition Programs – Top Ten Systems ...... 67 58. Research, Development, Test and Evaluation ...... 68 59. Research, Development, Test and Evaluation – Science and Technology ...... 69 60. Research, Development, Test and Evaluation – BA4: Advanced Component Development and Prototypes ...... 70 61. Research, Development, Test and Evaluation – BA5: System Development and Demonstration ...... 70 62. Research, Development, Test and Evaluation – BA6: Management Support ...... 71 63. Research, Development, Test and Evaluation – BA7: Operational Systems Development ...... 71 64. Procurement Summary by Appropriation ...... 72 65. Aircraft Procurement, Army ...... 73 66. Missile Procurement, Army ...... 74 67. Weapons and Tracked Combat Vehicles ...... 75 68. Ammunition Procurement ...... 76 69. Other Procurement, Army ...... 76 70. Other Procurement, Army – OPA1: Tactical, Non-Tactical and Support Vehicles ...... 77 71. Other Procurement, Army – OPA2: Communications and Electronic Equipment ...... 77 72. Other Procurement, Army – OPA3: Other Support Equipment ...... 78 73. Military Construction ...... 79 74. Military Construction, Army ...... 79 75. Military Construction, Army National Guard ...... 79 76. Military Construction, Army Reserve ...... 79 77. Army Family Housing ...... 80 78. Army Family Housing – New Construction and Privatization ...... 80 79. Base Realignment and Closure ...... 81 80. Environmental Restoration, Army ...... 81 81. Chemical Agents and Munitions Destruction, Army ...... 81 82. Army Working Capital Fund – Revenues and Expenses ...... 82 83. Army Working Capital Fund – Customer Rate Changes ...... 82 84. Army Working Capital Fund – Direct Appropriation ...... 83 85. Army Working Capital Fund – Capital Budget ...... 83 86. Army National Guard Personnel Summary – Military Endstrength ...... 84 87. Army National Guard Key Contributions ...... 84 88. Army National Guard Budget Summary ...... 84 89. Army Reserve Personnel Highlights – Military Endstrength ...... 85 90. Army Reserve Key Contributions ...... 86 91. Army Reserve Key Units ...... 86 92. Army Reserve Budget Summary ...... 86 Figures – Federal 1. National Defense Outlays and Gross Domestic Product (GDP) ...... 6 2. Federal Surplus/Debt and Deficit ...... 14 3. The Federal Government Dollars for FY 2010 ...... 16 Figures – Department of Defense 4. National Defense Budget Authority ...... 22 5. Department of Defense Top Line FY 2001–FY 2010 ...... 25 6. FY 2010 Overseas Contingency Operations ...... 27 7. Research, Development and Acquisition Budget Authority – Current Dollars ...... 39 8. Research, Development and Acquisition Budget Authority – Constant Dollars ...... 39 Figures – Army 9. Army Global Commitments ...... 55 10. Personnel Endstrength ...... 61 vi Foreword

The U.S. Army is engaged in a multifaceted battle; Soldiers are in combat with enemies in Iraq, Afghanistan and elsewhere around the world, while at home Army leaders are fighting to get Soldiers the funding they need to continue the warfight and strengthen national security. To maintain its status as the best fighting force in the world, the U.S. Army must have the best equipment, technology and, most important, personnel—all of which requires full funding from the federal government. The new year brought a new administration with its own strategy for pursuing the war on terrorism (now known as overseas contingency operations, or OCOs), but the Army cannot afford to assume that funding will automatically be kept at current levels. The current warfight and those of the future are unpredictable; defense funding must provide a hedge against risks and contingencies. To execute current operations, reset our forces while maintaining a high operational tempo, and develop future capabilities to sustain the highest-quality force, timely, predictable and comprehensive funding is crucial. The size of the Army, and indeed the defense force as a whole, must be sufficient to accomplish our national security goals; the active Army must be at least 700,000 Soldiers strong, and defense spending must be at least 5 percent of the U.S. Gross Domestic Product. In addition, the radically changed role of the reserve component must result in redesigned structures, pay and benefits (including retirement) that reflect the way that component of the U.S. armed forces is now used. Fiscal Year 2010 Army Budget—An Analysis details the resources required for the Army to accomplish its missions today and tomorrow. It examines the Army’s proposed budget in the context of the federal and Department of Defense budgets and breaks down requests—from Soldiers’ pay to research and development—according to funding authority and programs. The analysis explains budget terminology and procedures, including the OCO funding process that is necessary for the Army to sustain the current level of operations and provide for Soldiers and their families. The Association of the United States Army fully supports the Army—active Army, Army National Guard, Army Reserve, Army civilians and the families and communities who stand behind them all—as it faces its many challenges. Fiscal Year 2010 Army Budget—An Analysis is just one of many ways we speak out on issues important to the American Soldier, American landpower and the security of the nation and the world.

GORDON R. SULLIVAN General, United States Army Retired President, AUSA

September 2009

vii viii The Budget Message of the President of the United States

To the Congress of the United States: I have the honor to transmit to you the Budget of the United States Government for Fiscal Year 2010. In my February 26th budget overview, A New Era of Responsibility: Renewing America’s Promise, I provided a broad outline of how our Nation came to this moment of economic, financial, and fiscal crisis; and how my Administration plans to move this economy from recession to recovery and lay a new foundation for long-term economic growth and prosperity. This Budget fills out this picture by providing full programmatic details and proposing appropriations language and other required information for the Congress to put these plans fully into effect. Specifically, this Budget details the pillars of the stable and broad economic growth we seek: making long overdue investments and reforms in education so that every child can compete in the global economy, undertaking health care reform so that we can control costs while boosting coverage and quality, and investing in renewable sources of energy so that we can reduce our dependence on foreign oil and become the world leader in the new clean energy economy. Fiscal discipline is another critical pillar in this economic foundation. My Administration came into office facing a budget deficit of $1.3 trillion for this year alone, and the cost of confronting the recession and financial crisis has been high. While these are extraordinary times that have demanded extraordinary responses, it is impossible to put our Nation on a course for long-term growth without beginning to rein in unsustainable deficits and debt. We no longer can afford to tolerate investments in programs that are outdated, duplicative, ineffective, or wasteful. That is why the Budget I am sending to you includes a separate volume of terminations, reductions, and savings that my Administration has identified since we sent the budget overview to you 10 weeks ago. In it, we identify programs that do not accomplish the goals set for them, do not do so efficiently, or do a job already done by another initiative. Overall, we have targeted more than 100 programs that should be ended or substantially changed, moves that will save nearly $17 billion next year alone. These efforts are just the next phase of a larger and longer effort needed to change how Washington does business and put our fiscal house in order. To that end, the Budget includes billions of dollars in savings from steps ranging from ending subsidies for big oil and gas companies, to eliminating entitlements to banks and lenders making student loans. It provides an historic down payment on health care reform, the key to our long-term fiscal future, and was constructed without commonly used budget gimmicks that, for instance, hide the true costs of war and natural disasters. Even with these costs on the books, the Budget will cut the deficit in half by the end of my first term, and we will bring non-defense discretionary spending to its lowest level as a share of GDP since 1962. Finally, in order to keep America strong and secure, the Budget includes critical investments in rebuilding our military, securing our homeland, and expanding our diplomatic efforts because we need to use all elements of our power to provide for our national security. We are not only proposing significant funding for our national security, but we are also being careful with those investments by, for instance, reforming defense contracting so that we are using our defense dollars to their maximum effect. I have little doubt that there will be various interests—vocal and powerful—who will oppose different aspects of this Budget. Change is never easy. However, I believe that after an era of profound irresponsibility, Americans

ix are ready to embrace the shared responsibilities we have to each other and to generations to come. They want to put old arguments and the divisions of the past behind us, put problem-solving ahead of point-scoring, and reconstruct an economy that is built on a solid new foundation. If we do that, America once again will teem with new industry and commerce, hum with the energy of new discoveries and inventions, and be a place where anyone with a good idea and the will to work can live their dreams. I am gratified and encouraged by the support I have received from the Congress thus far, and I look forward to working with you in the weeks ahead as we put these plans into practice and make this vision of America a reality.

Ba r a c k Ob a m a The White House

7 May 2009

x The Federal Budget

The President’s Perspective plans. The Analytical Perspectives document includes President Barack Obama sent a budget overview doc- analyses of federal spending and other non-spending ument, A New Era of Responsibility: Renewing America’s information, e.g., economic and accounting analyses; Promise, to Congress on 26 February 2009. In his opening information on federal receipts and collections; informa- message the President notes, tion on federal borrowing and debt; the baseline or current services estimates; and other technical presentations. Government has failed to fully confront the deep, systemic problems that year after year have only In his transmittal letter, President Obama observes become a larger and larger drag on our economy. that the Budget seeks stable and broad economic growth From the rising costs of health care to the state including “long overdue investments and reforms in edu- of our schools, from the need to revolutionize cation,” health care reform and investing in renewable how we power our economy to our crumbling sources of energy; fiscal discipline to begin reining in infrastructure, policymakers in Washington have unsustainable deficits and debt; and a separate volume of chosen temporary fixes over lasting solutions. terminations, reductions and savings. He says, Regaining our economic strength also is critical . . . the Budget will cut the deficit in half by the end to our national security. It is a major source of our of my first term, and we will bring non-defense global leadership, and we must not let it waver. discretionary spending to its lowest level as a That’s why this Budget makes critical investments share of [Gross Domestic Product] since 1962. in rebuilding our military, securing our homeland, Finally, in order to keep America strong and and expanding our diplomatic efforts because to secure, the Budget includes critical investments provide for the security of the United States we in rebuilding our military, securing our homeland, need to use all elements of our power. Moreover, and expanding our diplomatic efforts because we to honor the service of those who have worn our need to use all elements of our power to provide military’s uniform, we will make the investments for our national security. We are not only propos- necessary to take care of our veterans.1 ing significant funding for our national security, The President concludes his message with the state- but we are also being careful with those invest- ments by, for instance, reforming defense con- ment, “This Budget is a first step in that journey.”2 tracting so that we are using our defense dollars Three months later, on 7 May 2009, the new adminis- to their maximum effect.4 tration transmitted the Budget of the United States Govern- The rest of this section of the Budget analysis pro- ment for Fiscal Year 2010 to Congress. In his transmittal vides a national perspective on the Budget of the United letter to Congress, President Obama states, “This Budget States Government and the fundamental context for fills out this picture [fromA New Era of Responsibility] by understanding the Department of Defense (DoD) and the providing full programmatic details and proposing appro- Army budgets. priations language and other required information for the Congress to put these plans fully into effect.”3 Budget Top Line The Budget includes the President’s plans for specific In the Budget of the United States Government for programs and projects of the departments and agencies Fiscal Year 2010, President Obama estimates Budget and estimates of the funds necessary to implement those Authority of $2.873 trillion and Outlays of $3.042 trillion5

The Federal Budget 1 to support the operations of the departments and agencies. and 2009, then a decrease of 21.2 percent between FYs The data behind these totals are aggregated and subdi- 2009 and 2010. A comparison of the FY 2008 actual expe- vided in many different ways; many of those are intro- rience to the FY 2010 proposal reveals only a 3 percent duced in this analysis. increase, which is effectively no increase after two years of inflation, cost increases and pay raises. This suggests The Budget for FY 2010 estimates Budget Author- the need for improved productivity, reduction or elimina- ity of $3.82 trillion for FY 2009; the FY 2010 Budget Authority is $947 billion, or 24.8 percent, less than the FY tion of programs, supplemental funds or some combina- 2009 estimate.6 However, the FY 2009 estimate includes tion of these alternatives. supplemental funds. The Outlays increase by 34 percent between FYs A more equitable comparison for the FY 2010 esti- 2008 and 2009 and, despite a decrease from FY 2009, mate is with President Bush’s base budget estimate for FY Outlays also increase by 20.4 percent between FYs 2008 2009. President Bush’s Budget Authority estimate for FY and 2010. The FY 2010 Outlays exceed Budget Author- 2009 was $2.528 trillion, while President Obama’s esti- ity, which occurs because Outlays are the sum of expen- mate for FY 2010 is $2.873 trillion, an increase of $345 ditures of Budget Authority from earlier years as well as billion or 13.6 percent.7 FY 2010. In summary, President Obama’s Budget Authority The top-line Outlays are essential for analyzing estimate for FY 2010 is lower than the FY 2009 estimate, whether the Budget is balanced, i.e., whether revenues which includes the supplemental, but greater than Presi- and expenditures are equal. If expenditures exceed reve- dent Bush’s base estimate for FY 2009. As this compari- nues, then the federal government will operate at a deficit son suggests, it is difficult to draw definitive conclusions and have to borrow to meet Outlays. from just the top line. Budget Overview President Obama estimates Outlays of $3.48 trillion Each administration prepares plans and requests for FY 2009 and requests $3.042 trillion for FY 2010. The resources in the Budget to accomplish those plans. As FY 2010 Outlays are a decrease of $438 billion or 12.6 8 the following comments highlight, the Budget is greatly percent from the FY 2009 estimate. However, President influenced by the current recession. Obama’s Outlays estimate for FY 2010 is $427 billion, or 16.3 percent, greater than President Bush’s base estimate On 17 February 2009, less than a month after his inau- for FY 2009 of $2.615 trillion, which did not have supple- guration, President Obama signed into law the American mental funds.9 Recovery and Reinvestment Act of 2009 to expend funds on projects to modernize infrastructure, create jobs and The top-line tables in the Budget include the amount stimulate and transform the economy. Nine days later, on expended during the last completed fiscal year, the amount 26 February 2009, the President issued the Budget over- appropriated for the current year (or an estimate if the view, A New Era of Responsibility: Renewing America’s appropriations have not been enacted) and the President’s Promise. In the section “Jumpstarting the Economy and proposal for the next budget year. The top-line totals from Investing for the Future,” the President identified certain the FY 2010 Budget are in table 1. pillars upon which to build a new foundation for the Table 1 economy. These include: Budget of the U.S. Government, Fiscal Year 2010 • reforming the education system to prepare children ($ billions) to compete in the 21st century; 1 2 3 FY08 FY09 FY10 • lowering health care costs and ensuring broader Budget Authority 2,842 3,820 2,873 health care coverage; Outlays 2,508 3,480 3,042 • beginning a comprehensive approach to transform 1 Actual amounts. 2 Appropriated and estimates. energy supply and slow global warming; and 3 Budget proposals. Source: Budget of the United States Government, Fiscal Year 2010, • restoring America’s place in the world and keeping Analytical Perspectives, Table 25–1 America safe by: ◦ investing in the armed forces; A comparison of the data in table 1 reveals an increase in Budget Authority of 30.6 percent between FYs 2008 ◦ providing for wounded warriors; and

2 ◦ increasing “investments in other elements of officials, which is somewhat analogous to the monies our national power—like diplomacy, economic available in a personal line of credit. Outlays refer to the development, and education—so that we end the actual amount of cash on hand to make payments during reliance on our military alone to defeat emerging the fiscal year, i.e., to liquidate the checks. threats.”10 In this section, tables and figures display Budget On 7 May 2009, President Obama transmitted to Con- Authority and Outlays. Outlays are important at the gress the Budget of the United States Government for national level because the relationship between Outlays Fiscal Year 2010, which is consistent with these “pillars.” and revenues drives the federal debt or surplus, which is an overall federal issue and not an individual depart- Background on the Federal Budget ment issue. The DoD and Army sections display dollars in This section introduces key budget terms, data and term of Budget Authority or Total Obligational Authority processes that are useful for understanding the Budget because the agencies focus on the availability of funds to and this analysis. initiate actions and support programs and projects. Budget Terms Appropriations and Authorizations. An appropriation The federal government uses very specific terms to provides legal authority for federal agencies to incur obli- define the various funding authorities and to account for gations and to make payments out of the U.S. Treasury budget execution. for specified purposes. Appropriations bills, such as the Department of Defense bill and the Department of Home- Funding Authority. Funding authority refers to the land Security bill, contain funds for specific purposes and various types of funding power granted by Congress to restrict the movement of funds among the appropriations. allow agencies to obligate the government to make pay- Appropriations bills require Congress to stipulate the ments or to make payments on behalf of the government. amount of funds every year and may include supplemen- Three types of funding authority are important in this tal bills. analysis: Budget Authority, Total Obligational Authority and Outlay Authority. Each type has a unique definition An authorization is an act of Congress that establishes and, therefore, each will be a different dollar amount for or continues a federal program or agency and sets forth the same fiscal year. the guidelines to which it must adhere. Authorization acts may also require federal action, such as the Social Secu- • Budget Authority (BA) is the authority provided rity authorization that requires federal payments to all by law to incur financial obligations that will result qualified persons. in Outlays. Discretionary and Mandatory. These terms refer to • Total Obligational Authority (TOA) is the sum of: whether or not the funds are controllable through the ◦ Budget Authority for a given fiscal year; annual congressional appropriation process. BA and ◦ balances of Budget Authority brought forward Outlays may be discretionary or mandatory. from prior years that remain available for obliga- • Discretionary funds—such as funds for defense, tion in the fiscal year; and homeland security, space exploration, foreign aid, ◦ amounts authorized to be credited to a specific agriculture, commerce, highway construction, justice fund or account during that year, including trans- and law enforcement, education and housing—are fers between funds or accounts. annually appropriated by Congress and enacted into law. • Outlay Authority is the authority to make actual payments for liquidating obligations, including inter- • Mandatory funds flow from enacted authorization est payments, during a fiscal year. Outlays occur laws—i.e., laws that may have been enacted years when funds are transferred, checks are issued or cash before that set criteria for an entitlement—and not is distributed to liquidate obligations. Outlays may from the annual appropriations process. Examples be for payment of obligations incurred in the current include Social Security, Medicare and Medicaid. or prior years. The Glossary of Budget Terms in the final section of In summary, Budget Authority and Total Obligational this document provides an explanation of frequently used Authority refer to funds available for use by government federal budget terms.

The Federal Budget 3 Budget Data The congressional appropriation process ideally All of the budgetary tables and figures in this analy- takes about seven or eight months from budget submis- sis display Budget Authority, Total Obligational Author- sion to enactment by the beginning of the fiscal year on 1 ity or Outlays, or some combination of the three. The October. With the submission in May this year, Congress content of each type varies across time—the President’s has about four and a half months to review the submis- plan for the budget year is an estimate, the current-year sion and appropriate funds prior to the beginning of the amount reflects congressional appropriations and the new fiscal year. Actual execution begins on 1 October, prior-year amount reflects actual outlays for the complete about a year and a half after the initial estimates were fiscal year. made. • The prior-year and earlier BA dollars are actual National Defense Classification appropriated amounts including supplemental and Congress uses a functional classification system to rescission actions. The prior-year and earlier Outlay allocate budgetary resources that is not synonymous dollars are the sum of actual obligations, expen- with the agencies of government. Budgets are generally ditures and disbursements during the fiscal year assigned to the single budget function that best reflects regardless of the fiscal year of the BA and include the agency’s major purpose; for example, DoD is placed supplemental dollars. in National Defense. A budget function may include a • The current-year BA and Outlay dollars—in this few subfunctions, and a portion of an agency’s budget case FY 2009—summarizes the entire BA and may be assigned to a subfunction that is not in its primary Outlay authority enacted at the time the Budget was function; for example, part of the Department of Energy’s prepared. It includes supplemental dollars appropri- budget for nuclear energy is in a subfunction of National ated, but it does not include supplemental requests Defense. not yet enacted. The National Defense function includes three • The budget-year and any future-year BA and Outlay subfunctions: dollars are estimates and do not include supplemen- • 051 Department of Defense–Military; tal requests. • 053 Atomic Energy Defense Activities; and The budget formulation process involves “bottom up” input from perhaps thousands of organizations. • 054 Defense-related Activities. With so many participants and so many organizational The President’s Budget proposes $692.8 billion in BA layers, the process requires fairly substantial lead time. for National Defense in FY 2010. The BA for National For example, the FY 2010 Budget incorporates propos- Defense and the individual subfunctions are in table 2. als that were prepared, reviewed, integrated, analyzed, modified and consolidated across the government during The Department of Defense–Military subfunction calendar year 2008. Normally, this formulation process includes the budget for the military services and defense culminates with the President’s Budget submission to agencies. The DoD–Military subfunction BA proposal is Congress in February 2009; however, with the change of $667.7 billion in FY 2010—virtually the same as in FY administration, the FY 2010 Budget was not submitted 2009 and only slightly less than in FY 2008. In FY 2000, until 7 May 2009. prior to the war on terrorism, the DoD–Military BA was

Table 2 Budget Authority by Function and Subfunction – 050 National Defense ($ billions*)

FY08 FY09 FY10 FY11 FY12 FY13 FY14 051 Department of Defense–Military 674.7 663.7 667.7 596.0 605.1 615.7 629.3 053 Atomic Energy Defense Activities 16.6 22.9 17.7 17.5 17.3 17.3 17.2 054 Defense-related Activities 4.9 7.0 7.4 7.1 7.0 7.0 7.1 Total 696.2 693.6 692.8 620.6 629.4 640.0 653.6 * Numbers may not add due to rounding. Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 5.1

4 $290.3 billion; for FY 2010 it increased by $377.4 billion, the Budget to accomplish the national security mission, or 130 percent. objectives and plans; at best they provide relational points of reference for comparisons at different points in time. The estimate for DoD–Military in FY 2011 is $71.7 The comparison is sensitive to both the change in GDP billion less than that of FY 2010—a reduction of 10.7 and defense spending. The percentages for FYs 2009 and percent in one year that would require a substantial reduc- 2010 are higher, in part, because the GDP is flat or esti- tion in forces, operations or acquisitions, or some combi- mated to grow only slightly. nation of the three. The historical trends for the past 25 years illustrate the The Outlays for DoD–Military in FY 2010 are $685.1 fact that defense spending peaked during the Reagan-era billion. See table 3. buildup and reached a low point at the end of the 1990s The DoD–Military Outlays for FY 2010 are $20 drawdown. For example, the National Defense Outlays as billion more than for FY 2009—an increase of 3 percent. percentages of the GDP were: The FY 2010 DoD–Military Outlays are an increase of • 5.2 percent in FY 1990 at the end of the Cold War; 143.7 percent from the $281.1 billion experience in FY 2000—prior to the war on terrorism. • 3 percent in FY 2000 at the end of the “peace divi- dend” decade; and The estimate for FY 2011 DoD–Military Outlays is 7.8 percent lower than for FY 2010; achieving this size • 4.8 percent in FY 2010 with operations in Afghani- reduction in one year would require a reduction in forces, stan, Iraq and elsewhere. operations or acquisitions. This completes the introduction to the National The FY 2001 to FY 2009 BA and Outlays include Defense functional category. See figure 1 for the National supplemental funding for the war on terrorism. The FY Defense Outlays as a percentage of GDP. 2010 BA and Outlays include appropriated supplemen- Discretionary and Mandatory Funds tal funds but not other supplemental funds that were requested but not appropriated at the time of the Budget The federal budget consists of discretionary funds— submission. The scope and duration of operations in Iraq funds appropriated explicitly by Congress in the annual or Afghanistan will affect the final Outlays for FY 2010 appropriations process—and mandatory funds that require payment based on a condition such as age of and beyond. the population for Social Security. The DoD budget is National Defense Outlays and Gross discretionary. Domestic Product The Summary Tables submitted with the President’s The press, politicians and even members of the Depart- Budget include data on discretionary and mandatory ment of Defense sometimes compare National Defense Outlays. For FY 2010, the Budget proposes $1.368 tril- Outlays to the Gross Domestic Product (GDP). Such lion in discretionary Outlays, $2.009 trillion in mandatory comparisons do not provide insights into the adequacy of Outlays, $136 billion in net interest and $11 billion for

Table 3 Outlays by Function and Subfunction – 050 National Defense ($ billions*)

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 051 Department of Defense–Military 528.6 594.7 665.0 685.1 631.8 608.2 611.4 620.5 053 Atomic Energy Defense Activities 17.1 17.1 18.5 20.6 19.9 18.8 17.3 17.2 054 Defense-related Activities 5.7 4.3 6.8 7.2 7.0 7.1 7.1 7.1 Total 551.4 616.1 690.3 712.9 658.7 634.1 635.8 644.8 050 National Defense as percentage of all Outlays 20.2% 20.7% 17.3% 19.9% 18.2% 17.5% 16.7% 16.7% 050 National Defense as percentage of Gross 4.0% 4.3% 4.8% 4.8% 4.2% 3.9% 3.6% 3.5% Domestic Product * Numbers may not add due to rounding. Source: Budget of the United States Government, FY 2010, Historical Tables 3.1, 3.2 and 10.1

The Federal Budget 5 Figure 1 National Defense Outlays and Gross Domestic Product (GDP) ($ billions)

20,000 $18,386 $17,498 17,500 $16,470 $15,500

15,000 $14,729 $14,222 $14,240 $13,642 $13,010

12,500 $12,235

10,000 $9,708

7,500 $7,325 $5,735

5,000 $4,142

2,500

4.0 4.0 4.0 4.3 4.8 4.8 4.2 3.9 3.6 3.5 0 6.1 5.2 3.7 3.0 FY85* FY90* FY95* FY00* FY05* FY06* FY07* FY08* FY09 FY10 FY11 FY12 FY13 FY14

National Defense Outlays as percentage of Gross Domestic Product

* FY85–FY08 are actual data. Remaining years are estimates. Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 3.1

6 Disaster Costs. The distribution is 38.5 percent discretion- support ongoing overseas contingency operations11, ary, 56.6 percent mandatory and 4.6 percent net interest. while increasing efforts in Afghanistan and drawing down troops from Iraq responsibly; The discretionary amount includes $673 billion, or 49 percent, for defense and $695 billion, or 51 percent, for all • supports a transparent budget process, which simul- other departments and agencies, such as agriculture, com- taneously and separately requests estimated base merce, education, housing, highway construction, justice, budget and overseas contingency operations costs; law enforcement, space exploration, foreign aid, etc. See • expands concurrent receipt of military retired pay table 4. and Veterans Disability Compensation for those dis-

Table 4 abled upon retirement from active duty; and Discretionary and Mandatory Outlays • improves efforts to care for wounded servicemem- 12 ($ billions1) bers and to treat mental health needs. FY08 FY09 FY10 The Funding Highlights specifically note that: Discretionary 1,120 1,279 1,368 • the base Budget is $533.7 billion, which excludes Defense (051) 593 666 673 funding from the American Recovery and Reinvest- Non-Defense 528 613 695 ment Act of 2009 and $130 billion for overseas con- tingency operations. Note that the total of the base Mandatory 1,610 2,516 2,009 and OCO is $663.7 billion, or $4 billion less than the Social Security 612 662 696 DoD–Military subfunction amount of $667.7 billion Medicare 386 425 453 in table 2; Medicaid 201 259 290 • the base Budget incorporates funds for items pre- TARP2 247 viously in emergency supplementals for ongoing Placeholder 250 activities, including certain medical services, family Other entitlements 411 673 571 support initiatives, security assistance to foreign governments, and enhancements to intelligence, sur- Net Interest 253 143 136 veillance and reconnaissance; Disaster Costs3 4 11 The Funding Highlights also note that the Budget: Total 2,983 3,942 3,524 1 Numbers may not add due to rounding. • supports additional permanent forces in the Army 2 Troubled Asset Relief Program. 3 An estimate based on the statistical probability of a major disaster and Marine Corps (547,400 and 202,000, respec- requiring federal assistance for relief and reconstruction. tively, by the end of FY 2009, two to three years Source: Budget of the United States, Fiscal Year 2010, Summary Table S-4 ahead of schedule), to reduce stress on servicemem- bers and their families and ensure heightened readi- Discretionary for Defense ness for a full spectrum of military operations; In absolute terms, the discretionary defense funds • includes funding for a 2.9 percent pay raise; increase each year in FYs 2008, 2009 and 2010: $593 • continues to sustain and modernize barracks and billion, $668 billion and $673 billion, respectively. dormitories and works to end all inadequate housing However, as a percentage of all discretionary funds, the for military families; defense funds decrease each year: 53 percent in FY 2008, • builds or renovates base facilities at a level sufficient 52 percent in FY 2009 and 49 percent in FY 2010. for safe operation of all structures; In the Office of Management and Budget’s (OMB’s) • requests sufficient funding to enable DoD to con- Funding Highlights, Department of Defense, it is noted tinue its efforts to meet the requirements of the that the DoD budget: 2005 Base Realignment and Closure (BRAC) • provides $533.7 billion for the Department of Commission; Defense base budget in FY 2010, a 4 percent • includes funding to complete additional Army increase over 2009; wounded warrior complexes at posts throughout • includes $75.5 billion in supplemental appropria- the continental United States, as well as at sites in tions for FY 2009 and $130 billion for FY 2010 to Alaska, Hawaii and Germany;

The Federal Budget 7 Table 5 Supplemental Funds for Overseas Contingency Operations ($ billions) Enacted Requested FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY09 FY10 13 17 72 91 76 118 166 187 66 76 130 Source: “DoD Releases Fiscal 2010 Budget Proposal,” News Release No. 304-09, 7 May 2009, Summary Charts, “Department of Defense Topline” • expands pilot programs, along with Department of Back in FY 2000, discretionary Budget Authority Veterans Affairs, to expedite processing of injured was split 53 percent for non-defense and 47 percent for troops through the Disability Evaluation System; and defense. In FY 2010, the proposal is 46 percent for non- • expands the number of mental health professionals defense and 54 percent for defense. Since 2002, the dis- integrated with their deployed units. tribution has consistently favored defense. See table 4 for Outlays and table 6 for Budget Authority by agency. Support for Overseas Contingency Operations. In addi- tion to the FY 2010 baseline Budget, the President pro- In his Budget message, the President proposes funds poses $130 billion in supplemental funds for overseas con- to tackle significant structural impediments to long-term tingency operations and $76 billion in additional supple- economic growth, including investments in education, mental funds for FY 2009. The total enacted from FY 2001 clean energy, health care and infrastructure. However, to FY 2009 is $806 billion, and another $206 billion was with the economy currently in a recession, finding addi- proposed by the President in the current Budget. See table tional funds for the non-defense departments will be 5 for funding by fiscal year. difficult.

Supplemental funding peaked in FY 2008, and the FY Mandatory Funds 2009 total of appropriated and requested funds is $142 billion, or 24 percent less than for FY 2008. The FY 2010 The FY 2010 Budget estimates mandatory Outlays at request is $130 billion, $36 billion less than for FY 2008 $2.033 trillion or 56 percent of total Outlays. Mandatory and $12 billion less than for FY 2009. The President and programs involve statutory entitlements that obligate the the Secretary of Defense have stated that the continuing federal government to make payments subject to some costs of the war have been moved into the base Budget, criteria until the law is amended or repealed, such as but table 5 still displays the incremental costs of ongoing making Social Security payments to everyone who meets military operations in Iraq and Afghanistan. the qualification requirements. Discretionary for Non-Defense The estimate for Health plus Medicare consumes 38 percent of mandatory Outlays in FY 2010. To the extent The President’s Budget proposes a total of $695 billion that the federal government provides additional health in discretionary Outlays for all of the non-defense depart- ments and agencies of government, an increase of 13 care, mandatory Outlays will increase. See table 7 for percent over FY 2009. However, the Budget Authority for mandatory Outlays by entitlement program. non-defense departments is down 28 percent, from $793 Homeland Security billion to $569 billion. In the case of many federal pro- grams, the term “discretionary” is somewhat misleading The Department of Homeland Security (DHS) oper- since a large portion of the funds for most agencies is for ates with discretionary non-defense funds. The Home- payroll and essential services. land Security Act of 2002 established the Department of Homeland Security with the primary mission to: The Budget Authority proposal for the five largest non- defense departments—Health and Human Services, Trans- • prevent terrorist attacks within the United States; portation, Veterans Affairs, Education and Housing and • reduce the vulnerability of the United States to ter- Urban Development—in terms of funding is $281 billion, rorism; and or nearly 51 percent of all non-defense discretionary funds. Of those five, only the budget proposal for Veterans Affairs • minimize the damage, and assist in the recov- is increasing from FY 2009; Health and Human Services ery, from terrorist attacks that do occur within the and Education are both down significantly from FY 2009. United States.

8 Table 6 Discretionary Budgetary Authority by Agency ($ billions*)

FY08 FY09 FY10 Agency Actual Estimate Proposal Legislative Branch 4.0 4.6 5.0 The Judiciary 5.8 6.1 6.6 Agriculture 26.1 31.9 25.7 Commerce 7.9 17.3 13.8 Defense–Military 666.0 662.3 663.6 Education 57.2 147.9 46.7 Energy 24.1 72.6 26.4 Health and Human Services 72.2 102.8 80.5 Homeland Security 50.0 44.9 41.4 Housing and Urban Development 47.2 54.3 43.7 Interior 11.7 14.3 12.0 Justice 23.6 29.7 24.0 Labor 11.8 17.7 13.2 State 22.1 25.7 27.5 Transportation 16.6 64.9 57.5 Treasury 12.2 12.9 13.4 Veterans Affairs 43.6 49.2 53.0 Corps of Engineers 9.0 15.8 5.1 Other Defense–Civil­ Programs .2 .2 .3 Environmental Protection Agency 7.5 14.9 10.5 Executive Office of the President .3 .4 .6 General Services Administration .3 6.7 .7 International Assistance Programs 18.4 21.3 23.7 National Aeronautics and Space Administration 17.2 18.8 18.7 National Science Foundation 6.1 9.5 7.0 Office of Personnel Management .3 .2 .2 Small Business Administration 1.6 1.3 .8 Social Security Administration (On-budget) 3.0 4.4 3.5 Social Security Administration (Off-budget) 5.0 5.3 5.8 Other Independent Agencies (On-budget) 8.4 8.6 13.7 Other Independent Agencies (Off-budget) .2 .3 .3 Total Discretionary Budget Authority 1,179.7 1,466.6 1,245.0 Total Discretionary less Judiciary and Legislative Branches 1,169.9 1,456.0 1,233.3 Total Discretionary less Judiciary and Legislative Branches and Defense 503.9 793.6 569.7 * Numbers may not add due to rounding. Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 5.4—Discretionary Budget Authority by Agency: 1976–2010

The Federal Budget 9 Table 7 Mandatory Outlays by Category ($ billions)

Enacted Estimate Category and Program Change from FY00 FY08 FY09 FY10 FY00–10 Health 129 227 293 322 150% Medicare 194 386 425 452 133% Income security 212 373 454 478 125% Social Security 406 612 675 696 71% Veterans Benefits and Services 26 43 50 57 119% Other mandatory programs -17 -55 678 25 247% Total 951 1,595 2,558 2,033 114% Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 8.5, Outlays For Mandatory and Related Programs: 1962–2014 The Homeland Security Act charges DHS with the Defense, the protection of the United States and its ter- responsibility for information analysis and infrastructure ritories from attack. protection; chemical, biological, radiological, nuclear and The Homeland Security Act of 2002, Section 889, related countermeasures; border and transportation secu- requires a homeland security funding analysis in the Pres- rity; emergency preparedness and response; and coor- ident’s Budget. The analysis includes homeland security dination (including the provision of training and equip- funding for activities in all federal agencies, including ment) with other executive agencies, with state and local DHS, DoD and other federal departments, plus state and government personnel, agencies and authorities, with the local governments and private-sector expenditures. private sector and with other entities. The President’s Budget for FY 2010 includes $69.8 DHS consolidated a large number of organizations billion in Budget Authority for homeland security across and functions to accomplish this mission. In addition, a all departments. The FY 2009 Budget was $68.8 billion in vast national network of organizations and institutions the base Budget and $3.4 billion in supplemental funds, involved in efforts to secure the nation were not consoli- dated in DHS, but DHS has the responsibility to unify a sum of $72.2 billion, or $3.4 billion greater than the FY and lead the national efforts. 2010 proposal. The largest amount is for DHS at $34.7 billion. The DHS budget proposal is for the entire depart- The DHS and DoD missions are complementary— ment, but not all DHS funds are for homeland security. both focusing on deterrence and prevention or, failing For example, funding for the Coast Guard search-and- that, on protection and response. DoD is responsible for rescue mission is in the DHS budget, but this is not part of homeland defense—to protect U.S. sovereignty, territory, the homeland security function. See table 8 for funding domestic population and critical defense infrastructure by department. against external threats and aggression, or other threats as directed by the President. DoD provides this protec- DHS and five other departments account for 95 tion by generating ready and capable military forces to percent of all homeland security funds: deter conflict or, if deterrence fails, to fight and win the • $19.3 billion for DoD (discretionary defense funds); nation’s wars; to contribute to an international environ- ment of peace; and to support civil authorities at home • $4.8 billion for the Department of Health and and abroad in times of crisis. Human Services; DoD contributes to homeland security through • $4 billion for the Department of Justice; its military missions overseas, homeland defense and • $2 billion for the Department of Energy; and support to civil authorities. Homeland defense includes • $1.8 billion for the Department of State. domestic air defense, maritime intercept operations, land-based defense of critical infrastructure and assets, The FY 2010 Budget summarizes the Homeland Secu- and, when directed by the President or the Secretary of rity funds into three critical mission areas (see table 9). The

10 Table 8 Homeland Security by Agency (Budget Authority, $ millions*)

FY 2008 FY 2009 FY 2010 Agency Actual Supplement Enacted Supplement Request Department of Agriculture 574.6 507.1 574.7 Department of Commerce 206.9 258.1 12.9 267.5 Department of Defense 17,374.4 657.7 19,413.5 365.0 19,303.3 Department of Education 27.1 31.8 30.6 Department of Energy 1,827.3 1,938.8 2,007.5 Department of Health and Human Services 4,300.6 4,626.8 50.0 4,839.8 Department of Homeland Security 29,755.8 2,730.0 34,350.9 2,509.1 34,731.5 Department of Housing & Urban Development 1.9 4.8 4.9 Department of the Interior 50.2 52.7 54.2 Department of Justice 3,277.5 250.0 3,641.3 46.7 3,973.9 Department of Labor 47.8 48.5 52.7 Department of State 1,719.1 1,809.2 1,767.8 Department of Transportation 205.3 220.9 247.9 Department of the Treasury 120.0 133.7 129.8 Department of Veterans Affairs 308.9 304.6 369.1 Corps of Engineers 42.0 42.0 43 Environmental Protection Agency 138.1 157.0 160.1 Executive Office of the President 21.0 19.1 17.0 General Services Administration 143.0 233.0 159.4 369.0 192.0 National Aeronautics and Space Administration 205.2 221.8 220.4 National Science Foundation 365.1 1.0 377.2 29.4 385.5 Office of Personnel Management 2.3 1.9 2.2 Social Security Administration 184.2 214.6 228.8 Smithsonian Institution 91.0 92.3 98.1 Other Agencies 238.5 190.5 142.7 Total, Homeland Security BA less Public Safety 61,227.8 3,871.6 68,818.5 3,382.1 69,845.0 Interoperable Communications (PSIC) and BioShield Less Department of Defense 17,374.4 657.7 19,413.5 365.0 19,303.3 Non-Defense Homeland Security BA 43,853.4 3,213.9 49,405.0 3,017.1 50,541.6 excluding BioShield* Less Fee-Funded Homeland Security Programs -4,743.8 -5,478.6 -5,414.5 Less Mandatory Homeland Security Programs -2,887.0 -2,604.3 -7.9 -2,622.7 Net Non-Defense Discretionary BA, excluding 36,222.6 3,213.9 41,322.0 3,009.2 42,504.4 BioShield Plus BioShield 1,264.0 Net Non-Defense Discretionary BA 36,222.6 3,213.9 41,322.0 3,009.2 43,768.4 * Numbers may not add due to rounding. Source: Budget of the United States Government, Fiscal Year 2010, Analytical Perspectives, Table 3-1

The Federal Budget 11 Table 9 Homeland Security by Mission (Budget Authority, $ millions*)

FY 2008 FY 2009 FY 2010 Actual Supplement Enacted Supplement Request Prevent and Disrupt Terrorist Attacks 27,288.5 3,126.7 30,739.8 2,142.9 33,048.4 Protecting Crucial Infrastructure and Key Assets 28,172.6 685.0 31,359.8 1,027.3 31,380.3 Response and Recovery Funding 5,580.8 60.0 6,507.6 210.0 6,378.9 Total 61,041.9 3,871.7 68,607.2 3,380.2 70,807.6 * Numbers may not add due to rounding. Source: Budget of the United States Government, Fiscal Year 2010, Analytical Perspectives, Tables 3-2, 3-3 and 3-4 only significant increase in the FY 2010 Budget proposal or generate a surplus. The history of the late 1990s illus- is in the area of Prevent and Disrupt Terrorist Attacks. trates this point—a strong economy generated budget surpluses. Clearly, the fiscal outlook is important to the Economic Considerations federal budget. The current economy and predictions for the future Since FY 2002, the federal budgets have generated a strongly influence the budget top line because the economy string of deficits that peaked in FY 2004 at $413 billion, significantly influences the estimates of federal receipts decreased annually between FYs 2005 and 2007, grew by and collections. The President, members of Congress and nearly 300 percent in FY 2008, and grew by an additional most Americans want a balanced budget—wherein Outlays 400 percent in FY 2009. The FY 2010 Budget estimates a equal receipts. very large deficit of $1.258 trillion. Seetable 10. The material already presented in this section focuses on the Budget and generally the Outlays, which is the Gross Domestic Product spending part of the equation. The forecast for the economy The Gross Domestic Product is the measure of the is a key consideration in estimating the receipts part of health of the U.S. economy. The GDP is the total market the equation. value, or output, of the goods and services produced by labor and capital located within the United States (regard- Receipts, or revenue, are primarily a function of two less of nationality of the corporate entity) during a year. variables: the size of the economy and tax policy that draws The GDP became the unit of measure in 1991, replac- revenue from the economy. When the economy is strong ing the Gross National Product. The Bureau of Economic and growing, and tax policy remains constant, then revenue Analysis (BEA) produces the GDP figures. or federal receipts increase. When the economy is weak and tax policy remains constant, receipts go down. Tax policy The FY 2010 Budget forecasts a 3 percent increase in can be modified to generate revenue, but the President, Con- GDP over FY 2009. This follows an estimate of only 0.1 gress, economists and academics, the business community percent growth in FY 2009. The Budget forecasts con- and American citizens have differing opinions about the tinuing growth in GDP through FY 2014; however, the results of tax policy modification. One theory is that if the rate of growth is smaller than the increases in government economy remains constant and the tax policy is modified Outlays. Therefore, the Budget displays annual increases to increase either the tax rates or the scope of applicability, in the Gross Federal Debt, i.e., the sum of all annual defi- cits offset by surpluses. See table 10. receipts will increase. An alternative theory is that if the economy remains constant and the tax policy is modified to Gross Federal Debt decrease either the tax rate or the scope of applicability, the The Gross Federal Debt (GFD) is the sum of all annual additional money in the nongovernment sector will be spent deficits and surpluses across the fiscal years. A large GFD by people and businesses. Over time, this will stimulate the impacts the national economy by causing the federal economy and ultimately increase receipts. government to borrow to meet Outlay requirements, Regardless of the economic theory, with no changes and later to service this debt. The annual surpluses and in tax policy and a growing economy, receipts increase. deficits since FY 1985 and the cumulative GFD trends are With greater receipts, it is easier to balance the budget displayed in figure 2.

12 Table 10 Gross Domestic Product and Annual Deficit ($ billions1)

Gross Federal Debt Annual Deficit/Surplus Gross Domestic Fiscal Year Product Amount As % GDP Amount As % GDP

FY852 4,142 1,817 43.9% -212 -5.1% FY902 5,735 3,206 55.9% -221 -3.9% FY952 7,325 4,920 67.2% -164 -2.2% FY002 9,708 5,629 58.0% 236 2.4% FY012 10,060 5,770 57.4% 128 1.3% FY022 10,378 6,198 59.7% -158 -1.5% FY032 10,804 6,760 62.6% -377 -3.5% FY042 11,504 7,355 63.9% -413 -3.6% FY052 12,235 7,905 64.6% -318 -2.6% FY062 13,010 8,451 65.0% -248 -1.9% FY072 13,642 8,951 65.6% -161 -1.2% FY082 14,222 9,986 70.2% -459 -3.2% FY09 14,240 12,867 90.4% -1,841 -12.9% FY10 14,729 14,456 98.1% -1,258 -8.5% FY11 15,500 15,674 101.1% -929 -6.0% FY12 16,470 16,566 100.6% -557 -3.4% FY13 17,498 17,440 99.7% -512 -2.9% FY14 18,368 18,350 99.9% -536 -2.9% 1 Numbers may not add due to rounding. 2 FY08 and earlier years are actual amounts. Remaining years are estimates. Source: Budget of the United States Government, Fiscal Year 2010, Historical Tables 1.1, 7.1, and 10.1 The GFD for the last completed fiscal year (FY 2008) Balancing the Budget was $9.986 trillion—an increase of more than $1 trillion Formulating a balanced budget is certainly the goal from FY 2007. The FY 2009 estimate is an increase of of the government. However, there is no constitutional or another $3 trillion and the FY 2010 estimate is an increase statutory mandate to balance the federal budget. Achiev- of $2.6 trillion. ing a balanced budget requires controlling spending within forecasts of receipts. Estimating comparable spending The annual deficits and the resulting GFD are con- and receipts is difficult—but getting it close from year to cerns for several reasons. First, the federal government year is good. borrows money to cover the deficit, then pays interest on the amount it borrows. If revenues are not adequate to pay Receipts. Federal receipts are analogous to revenue in the the interest, then additional borrowing pays the interest corporate world or personal income. See table 11 for data and adds to the annual deficit. The annual deficit increases on receipts and GDP. the GFD in a continuing spiral if unchecked by surpluses. Between FYs 1985 and 2000, federal receipts Second, the borrowing and interest payments divert capital increased at rates greater than GDP growth. By FY from productive uses in the economy. Thus, when the 2000, receipts were nearly 21 percent of GDP. However, government borrows, it takes money out of the economy; between FYs 2000 and 2005, GDP grew by 26 percent but arguably, this is not good for economic growth. receipts increased by only 6 percent; between FYs 2005

The Federal Budget 13 Figure 2 Federal Surplus/Debt and Deficit ($ billions1)

20,000 Gross Federal Debt 17,500

15,000

12,500

10,000

7,500

5,000

2,500

0 Annual Federal Surplus/De cit

-2,500

2 2 2 2 2 2 2 2 2 2 2 2

FY85 FY90 FY95 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

1 Numbers may not add due to rounding. 2 Actual expenditures; remaining years are estimates. Source: Budget of the United States Government, Fiscal Year 2010, Historical Tables 1.1 and 7.1 and 2010, the estimate for GDP growth is 20 percent and The mix of revenue has changed somewhat since FY for receipts growth is 8 percent. The reductions in receipts 2000, as shown in the FY 2000 distribution below: are due, in large part, to a weaker economy, a collapse in • 50 percent from individual income taxes; capital gains because of the stock market downturn and tax cuts. • 32 percent from Social Security receipts;

The Budget identifies four specific sources of receipts • 10 percent from corporate income taxes; plus “other.” The FY 2010 distribution is: • 3 percent from excise taxes; and • 45 percent from individual income taxes; • 5 percent from other sources. • 40 percent from Social Security receipts; Social Security receipts show an increase of 8 percent, individual income taxes decrease by 5 percent and cor- • 8 percent from corporate income taxes; porate income taxes decrease by 2 percent. The current • 3 percent from excise taxes; and receipts for Social Security exceed entitlement payments; therefore, the federal government borrows from the • 4 percent from other sources. entitlement funds to meet current Outlay requirements.

14 Table 11 Gross Domestic Product and Receipts ($ billions)

Gross Domestic Percentage Percentage Receipts as % of Fiscal Year Receipts Product (GDP) of increase2 of increase2 GDP FY851 4,142 734 17.7% FY901 5,735 38.5% 1,032 40.6% 18.0% FY951 7,325 27.7% 1,352 31.0% 18.5% FY001 9,708 32.5% 2,025 49.8% 20.9% FY051 12,235 26.0% 2,154 6.4% 17.6% FY061 13,010 2,407 18.5% FY071 13,642 2,568 18.8% FY081 14,222 2,524 17.7% FY09 14,240 2,157 15.1% FY10 14,729 20.4% 2,333 8.3% 15.8% FY11 15,500 2,685 17.3% FY12 16,470 3,075 18.7% FY13 17,498 3,305 18.9% FY14 18,368 3,480 18.9% 1 FY85–08 are actual amounts and include Title IX Supplementals. Remaining years are estimates. 2 Percentages for FY90, FY95, FY05, and FY10 are for the previous five years. Source: Budget of the United States Government, Fiscal Year 2010, Historical Tables 1.1 and 10.1

Table 12 Federal Receipts and Estimates ($ billions1)

FY082 FY09 FY10 FY11 FY12 FY13 FY14 Individual Income Taxes 1,146 953 1,051 1,211 1,381 1,501 1,613 Social Security Receipts 900 899 940 995 1,052 1,115 1,167 Corporate Income Taxes 304 147 179 306 378 417 420 Excise Taxes 67 66 75 73 77 78 79 All Other 107 91 87 100 188 195 202 Total 2,524 2,156 2,332 2,685 3,076 3,306 3,481 1 Numbers may not add due to rounding. 2 FY08 are actual data. Remaining years are estimates. Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 2.1

As more people become eligible for entitlements in the • Discretionary Outlays are for what the President future, the government will no longer be able to borrow proposes in the Budget and Congress provides from Social Security receipts and, eventually, the other through the annual appropriations bills. Examples general revenues will need to pay back all that has been include appropriations for defense, homeland secu- borrowed to keep Social Security solvent for as long as rity, agriculture, commerce, foreign aid, justice and possible. See table 12. law enforcement, education, housing, highway con- struction, space exploration and more. Spending. Spending is the focus of most budget analy- ses and the focus of the DoD and Army chapters of this • Mandatory Outlays are controlled by permanent book. Federal spending may be discretionary, mandatory law and are not provided annual appropriations, e.g., or interest payments. Social Security, Medicare and Medicaid. In addition,

The Federal Budget 15 Figure 3 The Federal Government Dollars for FY 2010 ($ billions*)

Where it Comes From: Where it Goes:

$ 1,051 45% Individual Income Taxes $ 1,394 39% Discretionary $ 940 40% Social Insurance Receipts $ 707 20% National Defense $ 179 8% Corporate Income Taxes $ 687 19% Non-Defense $ 75 3% Excise Taxes $ 87 4% Other $ 2,197 61% Mandatory $ 696 19% Social Security Total $ 2,332 $ 452 13% Medicare $ 290 8% Medicaid $ 623 17% Other Entitlements $ 136 4% Net Interest

$ 3,591 Total

* Numbers may not add due to rounding. Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 2.1 and Summary Table S-4 some Budget Authority in annual appropriations is Borrowing and Interest treated as mandatory when the authorization legisla- When spending exceeds receipts, the federal govern- tion either entitles beneficiaries who meet the legal ment needs to borrow money to cover Outlays. The federal criteria for eligibility to receive payments or obli- government borrows money from other federal accounts, gates the federal government to make payments until such as Social Security, and from private sources through the law is amended or repealed. the sale of debt instruments. • Interest Outlays are to meet obligations to those Prior to FY 2000, the largest percentage of the GFD was held by the private sector. However, since 2000, the holding federal debt instruments. The federal gov- government has been borrowing substantially from other ernment pays interest when due. federal programs. The size and distribution of the GFD The FY 2010 receipts and Outlay estimates are leads to a number of concerns, among them that: expressed as percentages in figure 3 under “Where It • other federal programs, which provide funds to Comes From” and “Where It Goes,” respectively. cover the GFD, will be unfunded in the future;

16 Table 13 Gross Federal Debt by Source ($ billions1)

Amount in Federal Percentage Fiscal Gross Amount Held Percentage Held Government Held By Federal Year Federal Debt by Public by Public Accounts Government FY852 1,817 310 17% 1,507 83% FY902 3,206 795 25% 2,411 75% FY952 4,921 1,316 27% 3,604 73% FY002 5,629 2,219 39% 3,410 61% FY012 5,770 2,450 42% 3,319 58% FY022 6,198 2,658 43% 3,540 57% FY032 6,760 2,847 42% 3,913 58% FY042 7,355 3,059 42% 4,296 58% FY052 7,905 3,313 42% 4,592 58% FY062 8,451 3,622 43% 4,829 57% FY072 8,951 3,916 44% 5,305 59% FY082 9,986 4,183 42% 5,803 58% FY09 12,867 4,336 34% 8,531 66% FY10 14,456 4,574 32% 9,882 68% FY11 15,674 4,801 31% 10,873 69% FY12 16,566 5,097 31% 11,468 69% FY13 17,440 5,413 31% 12,027 69% FY14 18,350 5,755 31% 12,595 69% 1 Numbers may not add due to rounding. 2 FY85–FY08 are actual amounts. Remaining years are estimates. Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 7.1 • foreign governments, who hold a great deal of the to decline for another two years. This is an indication of public debt instruments, may have increasing influ- the impact of low interest rates. See table 14 for interest ence on the United States; and payments. • servicing the debt, i.e., making interest payments, Interest payments, i.e., net interest as shown in table will consume tax receipts, either increase annual 14, decreased from year to year in FYs 2000 through 2004. deficit or reduce annual surplus, and deprive the However, starting in FY 2005, interest payments increased economy of more productive uses of that money. for three years. The FY 2008 experience was virtually the same as that of FY 2007. The Budget estimates reductions A summary of the Gross Federal Debt and the funding in interest payments for FYs 2009 and 2010. In part, this is sources is in table 13. a function of exceptionally low interest rates. The interest payments to service the GFD are a function The point of this analysis is that interest payments of both the amount of the GFD and interest rates. The GFD take money away from homeland security, defense and increases with each deficit or decreases with each surplus, civilian programs to satisfy earlier debt. Clearly, this is but interest rates are independent of government action to not a good situation. the extent that the Federal Reserve, an independent agency, sets the prime rate that influences all other rates. Congressional Budget Office Estimates Even though the federal government began operat- Article 1, Section 8 of the Constitution gives Con- ing at a deficit in FY 2002, Outlays for interest continued gress the sole authority for laying and collecting taxes and

The Federal Budget 17 Table 14 the deficits are much smaller than those of the President’s Budget. A comparison of the President’s Budget and the Interest as a Percentage of Outlays ($ billions) CBO estimates of the deficits is intable 15. The differences between the President’s Budget and the CBO estimates are Fiscal Interest as % Net interest Outlays a result of different spending and revenue assumptions. Year of Outlays FY001 222.9 1,789.2 12.5% Observations FY011 206.2 1,863.2 11.1% In his Budget transmittal letter, President Obama FY021 170.9 2,011.2 8.5% states that he seeks stable and broad economic growth, FY031 153.1 2,160.1 7.1% investments in education and renewable sources of energy, health care reform and critical investments in rebuilding FY041 160.2 2,293.0 7.0% our military, securing our homeland and expanding our FY051 184.0 2,472.2 7.4% diplomatic efforts. FY061 226.6 2,655.4 8.5% To remedy the recession, the President has proposed 1 FY07 237.1 2,728.9 8.7% and Congress has provided various supplemental funds FY081 252.8 2,982.9 8.5% to spur economic recovery. The federal government FY092 142.7 3,997.8 3.6% will operate at a deficit at least until FY 2014; therefore, FY10 135.9 3,591.1 3.8% the annual deficits will result in increases to the Gross Federal Debt. FY11 254.5 3,617.8 7.0% FY12 348.8 3,632.7 9.6% The Budget estimates the following financial data for FY13 411.6 3,817.5 10.8% FY 2010: FY14 460.1 4,016.0 11.5% • $14.73 trillion for Gross Domestic Product; 1 FY00–08 are actual amounts and include Title IX Supplementals. 2 FY09 are appropriated amounts. Remaining years are estimates. • $2.33 trillion in receipts to federal government; Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 6.1 • $1.37 trillion in discretionary Outlays:

for paying the debts. As part of the Congressional Budget ◦ $673 billion in defense discretionary Outlays; and Impoundment Control Act of 1974, Congress created ◦ $695 billion in non-defense discretionary Outlays; the Congressional Budget Office (CBO) as an agency within the legislative branch to provide a neutral bench- • $2 trillion in mandatory Outlays; mark for measuring the effects of taxes and spending pro- • $164 billion in interest payments on the Gross Federal posals. The CBO produces an independent estimate of Debt; receipts and outlays for the same years addressed in the President’s Budget. • a $1.26 trillion annual deficit; and • $14.46 trillion for Gross Federal Debt. The differences are significant between the President’s Budget and the CBO estimates of the deficits from FYs As this data indicates, the GFD will nearly equal the 2009 to 2014. In each of those years, the CBO estimates of GDP. Low interest rates are holding interest payments

Table 15 Comparisons of Deficit Estimates ($ billions)

FY081 FY09 FY10 FY11 FY12 FY13 FY14 President’s Budget2 -459 -1,841 -1,258 -929 -557 -512 -536 Congressional Budget Office estimate of -455 -1,186 -703 -498 -264 -257 -250 President’s Budget3 Difference between President’s Budget and -0.8% -35.6% -44.1% -46.4% -52.6% -49.8% -53.3% Congressional Budget Office estimates 1 FY08 are actual amounts. Remaining years are estimates. Sources: 2 Budget of the United States Government, Fiscal Year 2010, Historical Table 1.1, 3 Congressional Budget Office Budget & Economic Outlook: Fiscal Years 2009–2019, Table 4

18 down in absolute terms. In short, Americans should be taxing policy. The Budget estimates 3 percent growth concerned about national prosperity. in GDP in FY 2010 and an 8 percent increase in federal receipts. The federal government will take in receipts at a Arguably, the United States needs to move from rate greater than the growth of the economy. A couple of annual deficits to surpluses; to do so, the government questions come to mind: How much can the federal gov- needs to stimulate the economy. However, economics is ernment take in before it becomes a drain on the economy? not a “hard” science—there are no absolute rules for stim- And what is the fairest way of raising revenue, i.e., who ulating the economy. is to be taxed and at what rate? These are questions that The President’s Budget focuses on controlling dis- deserve serious discussion, bipartisan solutions and the cretionary Outlays and modifying mandatory programs. leadership to make it happen. However, controlling discretionary Outlays is very dif- ficult because approximately 49 percent are for defense, * * * * * * and this does not include supplemental funds to support The subsequent chapters of this analysis focus on the DoD overseas contingency operations. and Army budget proposals and what the funds will buy The other half of the deficit equation is receipts; and provide to the nation. receipts are a function of the health of the economy and

Endnotes 1 A New Era of Responsibility, Renewing America’s Promise, President’s Message, Office of Management and Budget, 26 February 2009, http://www.whitehouse.gov/omb/assets/fy2010_new_era/a_new_era_of_responsibility2.pdf. 2 Ibid. 3 Office of Management and Budget (OMB), Budget of the U.S. Government, Fiscal Year 2010, Presidential Transmittal Letter, President Barack Obama, 7 May 2009, http://www.whitehouse.gov/omb/budget/Message. 4 OMB, Budget of the U.S. Government, Fiscal Year 2010. 5 Budget of the U.S. Government, Fiscal Year 2010, Analytical Perspectives, The Budget System and Concepts, Table 25–1, “Totals for the Budget and the Federal Government,” http://www.gpoaccess.gov/usbudget/fy10/pdf/ spec.pdf. These numbers are the on-budget amounts, i.e., the total budget minus the off-budget amount (the budget for entitlements such as Social Security and the U.S. Postal Service). The off-budget numbers are irrelevant to this analysis. 6 President’s Budget for Fiscal Year 2010, Analytical Perspectives, Table 25–1. 7 Budget of the U.S. Government, Fiscal Year 2009, Analytical Perspectives, The Budget System and Concepts, Table 26–1, “Totals for the Budget and the Federal Government,” http://www.gpoaccess.gov/usbudget/fy09/pdf/spec.pdf. 8 President’s Budget for Fiscal Year 2010, Analytical Perspectives, Table 25–1. 9 Budget of the U.S. Government, Fiscal Year 2009, Analytical Perspectives. 10 A New Era of Responsibility: Renewing America’s Promise, “Jumpstarting the Economy and Investing for the Future,” p. 30, http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf. 11 “Overseas contingency operations (OCO)” replaces the Bush administration’s term “Global War on Terror (GWOT).” 12 A New Era of Responsibility, p. 53.

The Federal Budget 19 20 The Department of Defense Budget

Introduction My decisions have been almost exclusively influ- Robert M. Gates has been the Secretary of Defense for enced by factors other than simply finding a way more than two years,1 but his recommendation for the FY to balance the books or fit under the “top line”— 2010 budget for the Department of Defense (DoD) was as is normally the case with most budget exer- a substantial departure from his prior recommendations. cises. Instead, these recommendations are the In addition to the substantial changes, the budget submis- product of a holistic assessment of capabilities, sion was about three months later than normal because of requirements, risks and needs for the purpose of the change of presidential administration. The day before shifting this department in a different strategic releasing the budget, Secretary Gates took the unusual direction. Let me be clear: I would have made step of describing his recommendations to the President: virtually all of the decisions and recommenda- tions announced today regardless of the depart- The President agreed to this unorthodox ment’s top-line budget number.2 approach—announcing the department’s request before the White House submits a budget to the Similarly, any increase in the defense budget without Congress—because of the scope and significance an increase in revenue is a dollar not available to take care of the changes. In addition, the President and I of domestic requirements. Without an increase in revenue, believe that the American people deserve to learn both the federal and the DoD budgets are essentially zero of these recommendations fully and in context, sum games. as the proposed changes are interconnected and The DoD Budget and the Federal Conundrum cannot be properly communicated or understood in isolation from one another. Collectively, they The demands for federal funds—particularly discre- represent a budget crafted to reshape the priorities tionary funds—are great, but funds are not unlimited. DoD of America’s defense establishment. If approved, consumes approximately half of the discretionary budget, these recommendations will profoundly reform as it supports both the troops fighting overseas and actions how this department does business. to restore military capabilities after eight years of conflict. The non-defense discretionary funds support all of the In many ways, my recommendations represent domestic program requirements, excluding entitlements. the cumulative outcome of a lifetime spent in the national security arena and, above all, questions If resources are inadequate—whether for defense or asked, experience gained, and lessons learned non-defense—the options are: from over two years of leading this department— • reduce the scope of what is to be accomplished; and, in particular, from our experience in Iraq and Afghanistan. I reached the final decisions after • identify alternative, less resource-intense means; many hours of consultations with the military • add more resources; or and civilian leadership of the department. I have • some combination of these options. also consulted closely with the President. But, I received no direction or guidance from outside None of these options are attractive to those charged this department on individual program decisions. with the responsibility for accomplishing the missions or The chairman and vice chairman of the Joint implementing the programs, nor to some elected officials, Chiefs of Staff are in complete accord with these nor to advocate groups who support or oppose the mission recommendations. . . . or programs.

The Department of Defense Budget 21 This chapter of the budget analysis examines the DoD Figure 4 budget in terms of what the funding is for and funding National Defense Budget Authority trends. Given the size, scope and diversity of the DoD ($ billions) budget, the analysis does not examine the tens of thou- sands of details that are aggregated into the funding pro- 696.2 693.6 692.7 posals, as the various DoD budget submissions contain 700 30.3 more than 38,000 pages of material.3 Rather, this analysis 107.0 sheds some light at the macro level on whether the budget 600 158.9 is sufficient considering both the scope of what is to be accomplished and the resource trends. 500 Budget Priorities and Resources The budget was made public on 7 May 2009; the 400 accompanying DoD news release notes that the budget 665.9 proposes $663.8 billion for FY 2010. The total includes 300 586.6 $533.8 billion in discretionary budget authority to fund 533.8 base defense programs and $130 billion to support over- seas contingency operations (OCOs), primarily in Iraq 200 and Afghanistan. DoD also notes that the base budget represents an increase of $20.5 billion over the $513.3 100 billion enacted for FY 2009, an increase of 4 percent, or 4 2.1 percent real growth after adjusting for inflation. 0 The news release observes that the base budget ends FY08 FY09 FY10 the planned use of supplemental requests to fund over- Department of Defense Discretionary seas operations; rather, funds for overseas operations are Budget Authority in “a separate category in the annual budget request to Mandatory, Emergency and National ensure greater transparency and accountability to Con- Defense Budget Authority gress and the American people.” The base budget also requests funds for other programs that were previously Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense in supplemental requests, e.g., for support of military (Comptroller), June 2009 families and providing long-term medical care to injured years ahead, while at the same time providing a servicemembers. hedge against other risks and contingencies. The news release includes figure 4, which shows Third, in order to do this, we must reform how $158.9 billion for mandatory, emergency and additional and what we buy, meaning a fundamental over- national defense dollars. However, the news release and haul of our approach to procurement, acquisition, other budget documents state that $130 billion is for support and contracting.5 for OCO, leaving $28.9 billion for mandatory, other emer- gency and additional national defense funding needs. Consistent with these objectives, the DoD budget includes the following: Strategic Goals Commitment to troops and their families. The budget In determining the content of the budget, Secretary includes an increase in base budget funding of $13 Gates states that he focused on three principal objectives: billion, including: First, to reaffirm our commitment to take care of • an $11 billion increase to fund the growth in military the all-volunteer force, which, in my view repre- endstrength in the Army and Marine Corps, and to sents America’s greatest strategic asset. halt reductions in the Air Force and Navy; Second, we must rebalance this department’s • a $400 million increase to continue the steady programs in order to institutionalize and enhance growth in medical research and development; our capabilities to fight the wars we are in today • a $300 million increase in funding for wounded, ill and the scenarios we are most likely to face in the and injured, traumatic brain injury and psychological

22 health programs; the department will spend over $47 better-manned units are ready to deploy and to help billion on health care in FY 2010; and put an end to the routine use of stop-loss. • a $200 million increase for improvements in child Rebalancing to deter aggression. To project power when care, spousal support, lodging and education. necessary and to protect American interests and allies, the budget: Rebalancing for contemporary wartime needs. The budget includes: • increases the number of F-35 Joint Strike Fighters from the 14 aircraft bought in FY 2009 to 30 in FY • a $2 billion increase in intelligence, surveillance 2010, from $6.8 billion to $11.2 billion; the plan is and reconnaissance (ISR) support for the to buy 513 F-35s over the five-year defense plan warfighter, including: and, ultimately, to buy 2,443 aircraft. The budget ◦ fielding and sustaining 50 Predator-class also includes the purchase of 31 FA-18s in FY 2010 unmanned aerial vehicle orbits by FY 2011 for naval aviation; and maximizing their production, a 62 percent • retires 250 of the oldest Air Force tactical fighter air- increase in capability over the current level and craft in FY 2010; 127 percent more than a year ago; • ends production of the F-22 fighter at 187 (183 ◦ increasing manned ISR capabilities such as the planes plus four recommended for inclusion in the turbo-prop aircraft deployed so successfully as FY 2009 supplemental); part of Task Force Odin in Iraq; and • adds $700 million to field more of the United States’ ◦ initiating research and development on a number most capable theater missile defense systems, spe- of ISR enhancements and experimental plat- cifically the Terminal High Altitude Area Defense forms optimized for today’s battlefield. (THAAD) System and Standard Missile 3 (SM-3) programs; • $500 million more to increase the capacity to field and sustain more helicopters; today, the primary • adds $200 million to fund the conversion of six addi- limitation on helicopter capacity is not airframes tional Aegis ships to provide ballistic missile defense but shortages of maintenance crews and pilots, thus capabilities; these funds focus on recruiting and training more • increases the number of cyber experts the depart- helicopter crews; ment can train from 80 students per year to 250 per • a $500 million increase to boost global partnership year by FY 2011; capacity, including training and equipping foreign • maintains the KC-X aerial refueling tanker schedule militaries to undertake counterterrorism and stability and funding; and operations; • modifies nuclear and strategic forces by: • an increase of 2,800 personnel, or 5 percent growth, in special operations capabilities and funding to buy ◦ beginning the replacement program for the more special forces-optimized lift, mobility and refu- Ohio-class ballistic missile submarine program; eling aircraft, including increasing the purchasing of ◦ halting the pursuit of a development program Littoral Combat Ships (LCSs)—a key capability for for a follow-on Air Force bomber until we presence, stability and counterinsurgency operations have a better understanding of the need and the in coastal regions—from two to three ships in FY technology; 2010. The goal is to eventually acquire 55 LCSs; ◦ examining all strategic requirements during • an increase in the charter of Joint High Speed Vessel the Quadrennial Defense Review, the Nuclear (JHSV) ships—to improve inter-theater lift capac- Posture Review and in light of post-START arms ity—from two to four until the production program control negotiations; begins deliveries in 2011; and ◦ slowing production of several major surface • stopping the growth of Army brigade combat teams combatants and other maritime programs (BCTs) at 45 versus 48 while maintaining the because of the healthy margin of dominance of planned increase in endstrength of 547,000 to ensure the existing battle fleet at sea;

The Department of Defense Budget 23 ◦ shifting the Navy Aircraft Carrier program to a challenges and the need to take a fresh look at five-year build cycle, placing it on a more fis- the requirement; and cally sustainable path and resulting in 10 carriers ◦ reducing the Missile Defense Agency program after 2040; by $1.4 billion. ◦ delaying the Navy CG-X next-generation cruiser program to revisit both the requirements and the • completes the purchase of two navy destroyers in FY acquisition strategy; 2010, on the condition that contract arrangements can be worked out; and ◦ delaying amphibious ship and sea-basing pro- grams such as the 11th Landing Platform Dock • cancels the vehicle component of the Army’s Future (LPD) ship and the Mobile Landing Platform Combat Systems (FCS) program, reevaluates (MLP) ship to FY 2011 to assess costs and the requirements, technology and approach, then analyze the amount of these capabilities the relaunches the Army’s vehicle modernization pro- nation needs; and gram—including a competitive bidding process—to meet the needs of the full spectrum of conflict. ◦ completing production of the C-17 airlifter program this fiscal year with the 205 already in The budget supports the acquisition goal, in part, by the force and those currently in production. increasing the size of the defense acquisition workforce, converting 11,000 contractors and hiring an additional Acquisitions and acquisition processes. Secretary Gates 9,000 government acquisition professionals by 2015, recommends reforming the acquisition process to elimi- beginning with 4,100 in FY 2010. nate the contracting cycle of adding layer upon layer of cost and complexity onto fewer platforms that take longer Beyond the acquisition workforce, the budget also to build. Regarding certain acquisitions, the budget: reduces the number of support service contractors from • terminates the VH-71 presidential helicopter—the 39 percent of the workforce to the pre-2001 level of 26 program was to cost $6.5 billion and is now esti- percent and replaces them with full-time government mated to cost more than $13 billion, and it has fallen employees. The goal is to hire as many as 13,000 new six years behind schedule; civil servants in FY 2010 to replace contractors and up to 30,000 new civil servants in place of contractors over the • terminates the Air Force Combat Search and Rescue next five years. X (CSAR-X) helicopter program; Chairman of the Joint Chiefs of Staff Admiral Mike • terminates the $26 billion Transformational Satel- Mullen summarized his observations on the budget: lite (TSAT) program, and instead will purchase two more Advanced Extremely High Frequency (AEHF) Some will argue this budget devotes too much satellites as alternatives; money to these sorts of low-intensity needs, that • modifies missile defense by: it tilts dangerously away from conventional capa- bilities. It does not. A full 35 percent of the sub- ◦ restructuring the program to focus on the rogue mission is set aside for modernization, and much state and theater missile threat; of that will go to what we typically consider ◦ halting the increase of the number of current conventional requirements. It fully funds the ground-based interceptors in Alaska as had Joint Strike Fighter and F-18E/F Super Hornet been planned, but continuing to robustly fund programs, buys another Arleigh Burke-class research and development to improve the capa- destroyer, a nuclear submarine, and a third DDG- bility we already have to defend against long- 1000 [destroyer]. It invests $11 billion in space- range rogue missile threats; based programs, including funding for the next- ◦ canceling the second airborne laser (ABL) pro- generation early-warning satellite, and it devotes totype aircraft, keeping the existing aircraft and $9 billion towards missile defense. shifting the program to a research and develop- Ground capabilities are likewise supported, with ment effort; $3 billion going towards a restructured FCS ◦ terminating the Multiple Kill Vehicle (MKV) program and upgrades to the Abrams and Stryker program because of its significant technical weapons systems.6

24 Budget Analysis – Top Line The figure also presents the difference between nominal The top-line budget analysis focuses on the budget growth (current year dollars) and real growth (constant dollars). See figure 5. totals. The budget process almost always begins with receiving or setting an upper funding target, then priori- Secretary Gates has previously described the budget tizing the requirements to fit within the target. As noted as “staggering” and causing “sticker shock.”8 The cumu- earlier, Secretary Gates did not follow the normal approach lative expenditure of $800 billion for the war and the pro- with this budget, saying he “would have made virtually all posal for $684 billion in FY 2010 is certainly staggering— of the decisions and recommendations announced today perhaps even more so with the current economic crisis. regardless of the department’s top-line budget number.”7 Support for Troops in the Field This budget was built from the objectives and pri- Since 11 September 2001, Congress has appropriated orities introduced above; the result is a top line. The FY more than $800 billion for overseas contingency opera- 2010 news release includes a top-line figure that displays tions. For FY 2009, President Bush requested $141.7 the base and supplement budgets from FYs 2001 to 2010. billion but Congress appropriated $65.9 billion; with the

Figure 5 Department of Defense Top Line FY 2001–FY 2010 ($ billions)

700 667 662 664

601 76 600 130 187 535 66

479 166 7 500 468 116 38% 437 Real Growth 3 80% 76 Growth 91 8 400 72 3 345 316 17 13 300 6 513 534 480 432 200 400 411 365 377 328 297

100

0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

Base Budget Non-War Supplementals War Funding Request

War Funding Base Budget Request Base top line in FY09 Constant Dollars

Source: “DoD Releases Fiscal 2010 Budget Proposal,“ U.S. Department of Defense News Release No. 304-09, 7 May 2009

The Department of Defense Budget 25 current budget, President Obama requested the remaining other Defense activities are aggregated into eight budget $75.8 billion to support U.S. forces in combat. In addition, titles—groupings of like appropriations from among the the Defense budget requests $130 billion for FY 2010. approximately 75 DoD appropriations. Each budget title reflects the specific purpose for the funds and is subject Secretary Gates observed, “Our contemporary to different legal and regulatory constraints, including wartime needs must receive steady long-term funding various time periods for obligating the funds. The annual and a bureaucratic constituency similar to conventional appropriations acts use the following budget titles: modernization programs. I intend to use the FY10 budget to begin this process.”9 • Military Personnel (MILPERS); Approximately 83 percent of the supplemen- • Operation and Maintenance (O&M); tal—$108.5 billion—is for continuing the fight; this • Procurement; includes $74.1 billion for operations and $34.4 billion for • Research, Development, Test and Evaluation force protection, defeating improvised explosive devices, (RDT&E); etc. Another $17.6 billion is for reconstitution of the force as a result of the nearly eight years of continuous combat. • Military Construction (MILCON); See figure 6. A display of OCO funds by appropriation • Family Housing; title is in table 16. • Revolving and Management Funds; and The continuous war has put a strain on servicemem- 11 bers and equipment. Accordingly, Secretary Gates is • Other Related Agencies. clearly focusing on the needs of the fighting forces and This section of the analysis examines the budget in reshaping the budget accordingly. In his own words, terms of budget titles and military services, current and “. . . this budget presents an opportunity—one of those constant dollars and percentage of distribution. The sub- rare chances to match virtue to necessity.”10 headings for the top-line analysis are: Budget Titles and Service Analyses • title in current dollars; DoD involves thousands of organizations, functions • title in constant dollars; and programs. Most of the organizations prepare budget • title by percentage of distribution; requests that are aggregated through their vertical chains- of-command. The Department of Defense: • service and Defensewide—current dollars; • service and Defensewide—constant dollars; and • trains and maintains a fighting force of 2.2 million Soldiers, Sailors, Airmen and Marines; • service and Defensewide—percentage of distribution. • employs a highly dedicated workforce of 700,000 Current dollars are a measure of spending or revenues civilian personnel with a wide range of professions in a given year that has not been adjusted for differences and technical skills; in prices (such as inflation) between that year and a base year. Constant dollars are a measure of spending (or rev- • provides world-class health care for 9.2 million eli- enues) in a given year that has been adjusted for differ- gible servicemembers, families and retirees; ences in prices (such as inflation) between that year and • procures and maintains an arsenal of the world’s a base year. most advanced weapon systems; The analyses begin with data from FY 1985 and • maintains 545,000 facilities at 5,300 sites in the continue to FY 2000 at five-year intervals, and annually United States and around the globe; and thereafter. The purpose of this data is to reflect: • maintains vital intelligence capabilities. • the Reagan buildup (FY 1985); The budget details for military and civilian pay, ben- • the final year of the Cold War (FY 1990); efits, equipment acquisition and maintenance, training, • the drawdown for the peace dividend (FY 1995); maintenance of facilities and real property, etc., across the organizations are aggregated into appropriations, which are • the new post-Cold War baseline (FY 2000); and the typical focus of budgeting within the military depart- • four years into contingency operations against terror- ments. The appropriations from across the services and ists (FY 2005).

26 Figure 6 FY 2010 Overseas Contingency Operations ($ billions)

Commander’s Emergency Response Program Non-DoD Classi ed $1.5 billion $3.9 billion Pakistan Counterinsurgency Capability $0.7 billion Military Intelligence $4.7 billion Operations Force Protection $74.1 billion $15.2 billion

Continuing the Fight $108.5 billion Improvised Explosive Device Defeat $1.5 billion Afghan National Security Forces $7.5 billion Coalition Support $1.9 billion Military Construction Reconstruction Total: $130.0 billion $1.4 billion $17.6 billion

Source: “DoD Releases Fiscal 2010 Budget Proposal,“ U.S. Department of Defense News Release No. 304-09, 7 May 2009

Table 16 Overseas Contingency Operations by Appropriation ($ billions)

FY09 FY10 $ change % change Enacted Request1 Total Request from FY09 from FY09 Military Personnel 1.2 16.7 17.9 13.6 -4.3 -23.9% Operation & Maintenance (O&M) 55.2 34.2 89.4 89.1 -0.3 -0.4% Procurement 6.6 21.8 28.4 21.4 -7.0 -24.6% Research, Development, Test and Evaluation 0.0 0.4 0.4 0.2 -0.2 -46.5% Military Construction (MILCON) 0.0 2.1 2.1 1.4 -0.7 -33.8% Revolving and Management Funds 0.0 0.8 0.8 0.4 -0.4 -53.1% Subtotal 63.0 76.0 139.0 126.1 -12.9 -9.3% Additional Request and Non-DoD Classified2,3 2.9 3.1 6.1 3.9 -2.2 -36.1% Subtotal 65.9 79.2 145.1 130.0 -15.1 -10.4% Cancellation of Base Funding (Fuel Savings)1 0.0 -2.9 -2.9 0.0 2.9 -100.0% Cancellation of Base Funding (Procurement)1 0.0 -0.5 -0.5 0.0 0.5 -100.0% Total 65.9 75.8 141.7 130.0 -11.7 -8.3% 1 Additional request includes $3.4 billion cancelled from the base budget. 2 FY09 includes requested reappropriation of $181.5 million from O&M, Defensewide, to MILCON, Defensewide, to fund National Security Agency (NSA) project. 3 FY10 includes $6.6 million for a classified NSA MILCON project. Source: DoD FY 2010 Budget Request Summary Justification, Overview, pp. 5–18

The Department of Defense Budget 27 The constant-dollar tables provide insights into $667 billion; this is very close to the $673 billion experi- changes in buying power at various points in time; ence in FY 2008. the percentage tables provide insights into priorities at various points in time. DoD Budget by Title – In Constant Dollars The use of constant dollars for comparisons of data DoD Budget by Title – In Current Dollars over long periods of time allows for comparisons of con- The military services and the various Defensewide sistent buying power. For example, the change in the activities prepare budgets using the appropriation struc- total BA between FYs 1985 and 2010 is an 87.6 percent ture; DoD summarizes the appropriations from across the increase in current dollars but a 3.9 percent decrease in services and Defensewide agencies into the budget titles, constant dollars. which are functional groupings. For example, the Military Neither the FY 1985 nor the FY 2010 dollars include Personnel (MILPERS) title includes the military pay and funding for war operations; therefore, the compari- benefits appropriations for all active and reserve military son is “apples to apples.” However, the FY 1985 data servicemembers from all military services. Current and include funds for post-Vietnam restoration and a military selected historical data, in current or “then year” dollars, endstrength that was 50 percent larger than today. See are in table 17. table 18. In the 15 years between FYs 1985 and 2000, the total The reduction in constant dollars and, therefore, Budget Authority increased by only 1 percent; in the 11 buying power of nearly 4 percent between FYs 1985 and years between FYs 2000 and 2010, the total increases by 2010 does not apply uniformly across all budget titles. 85 percent. However, the FY 2010 total BA is for the The change in buying power for the four largest budget base budget only and does not include emergency sup- titles is a decrease of 9 percent for Military Personnel; plemental funds. The budget data from FY 2001 to FY an increase of 16 percent for Operation and Maintenance 2008 includes supplemental funds; the FY 2009 amount (O&M); a decrease of 35 percent for Procurement and an includes enacted supplemental funds but not other increase of 42 percent for RDT&E. requested supplemental funds. Therefore, comparisons of FY 2010 and even FY 2009 funds with earlier experi- DoD Budget by Title – Percentage Distribution ences need to be qualified. Converting the dollar amounts for each title to a per- With the $130 billion supplemental request and the centage of the distribution by fiscal year provides insights $537 billion baseline for FY 2010 (table 16), the total is into shifting priorities across time. Table 19 presents the

Table 17 Department of Defense Budget Authority by Title – Current Dollars ($ billions1)

FY852 FY902 FY952 FY002 FY052 FY062 FY072 FY082 FY093 FY104 Military Personnel 67.8 78.9 71.6 73.8 121.3 128.5 131.8 139.0 129.8 141.1 Operation and Maintenance 77.8 88.4 93.7 108.7 179.2 213.5 240.3 256.2 240.1 186.3 Procurement 96.8 81.4 43.6 55.0 96.6 105.4 133.8 165.0 109.8 107.4 Research, Development, Test and 31.3 36.5 34.5 38.7 68.8 72.9 77.5 79.6 80.2 78.6 Evaluation Military Construction 5.5 5.1 5.4 5.1 7.3 9.5 14.0 22.1 24.1 21.0 Family Housing 2.9 3.1 3.4 3.5 4.1 4.4 4.0 10.3 1.9 3.1 Other 4.7 -0.4 3.4 5.6 6.6 2.3 0.9 1.3 2.1 0.4 Total Budget Authority, DoD 286.8 293.0 255.7 290.5 483.9 536.5 602.2 673.5 588.0 537.9 1 Numbers may not add due to rounding. 2 FY85 to FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. 4 FY10 excludes OCO budget proposal. Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-8

28 Table 18 Department of Defense Budget Authority by Title – Constant Dollars ($ billions1)

FY852 FY902 FY952 FY002 FY052 FY062 FY072 FY082 FY093 FY104 Military Personnel 155.6 155.6 119.1 103.4 140.3 146.7 132.8 141.1 129.8 141.1 Operation and Maintenance 160.3 156.0 147.7 150.7 204.5 263.8 244.7 186.3 240.1 186.3 Procurement 165.3 116.9 56.3 66.5 105.6 169.6 111.4 107.4 109.8 107.4 Research, Development, Test and 55.4 54.1 45.7 47.4 75.9 81.8 81.2 78.6 80.2 78.6 Evaluation Military Construction 9.8 7.6 7.2 6.3 7.9 22.7 24.4 21.0 24.1 21.0 Family Housing 5.1 4.7 4.4 4.3 4.5 2.9 3.9 2.0 1.9 3.1 Other 8.0 -0.6 4.7 6.8 7.4 9.0 0.2 1.5 2.1 0.4 Total Budget Authority, DoD 559.5 494.3 385.1 385.4 546.1 696.5 598.6 537.9 588.0 537.9 1 Numbers may not add due to rounding. 2 FY85 to FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. 4 FY10 excludes OCO budget proposal. Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-8 current dollars by title as a percentage of the total dollars of Procurement and RDT&E. In FY 1985, RDA was for each fiscal year. nearly 45 percent, but in FY 2010 RDA is slightly less than 35 percent. Since FY 1990, the O&M title has consistently con- sumed the greatest percentage of the budget. The percent- DoD Budget by Service and Defensewide – age for O&M in FY 2010 is low in comparison to recent Current Dollars experience, but the FY 2010 amount does not include the A top-level review of the DoD budget by service substantial supplemental funds that are largely in O&M. also provides some insights into the means available to Perhaps the most troubling trend is in Research, provide for the national defense. The review by service Development and Acquisition (RDA)—the combination also includes current dollars, constant dollars and

Table 19

Department of Defense Budget Authority by Title as Percentage of Annual Total

FY851 FY901 FY951 FY001 FY051 FY061 FY071 FY081 FY092 FY103 Military Personnel 23.6% 26.9% 28.0% 25.4% 25.1% 24.0% 21.9% 20.6% 22.1% 26.2% Operation and 27.1% 30.2% 36.6% 37.4% 37.0% 39.8% 39.9% 38.0% 40.8% 34.6% Maintenance Procurement 33.8% 27.8% 17.1% 18.9% 20.0% 19.6% 22.2% 24.5% 18.7% 20.0% Research, Development, Test 10.9% 12.5% 13.5% 13.3% 14.2% 13.6% 12.9% 11.8% 13.6% 14.6% and Evaluation Military Construction 1.9% 1.7% 2.1% 1.8% 1.5% 1.8% 2.3% 3.3% 4.1% 3.9% Family Housing 1.0% 1.1% 1.3% 1.2% 0.8% 0.8% 0.7% 1.5% 0.3% 0.6% Other 1.6% -0.1% 1.3% 1.9% 1.4% 0.4% 0.1% 0.2% 0.4% 0.1% 1 FY85 to FY08 are actual expenditures. 2 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. 3 FY10 excludes OCO budget proposal. Source: Calculated from Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-8

The Department of Defense Budget 29 the percentage distribution annually. The service and • Defensewide activities – 120.2 percent. Defensewide data in current dollars are in table 20. The FY 2010 Budget Authority proposal for the base Between the FY 1985 budget (reflecting the rebuild- budget is $537.9 billion, or 20 percent below the FY 2008 ing of defense forces), and the FY 1995 budget (reflect- actual expenditures. Without the supplemental funds, the ing the post-Cold War peace dividend), the DoD budget difference is catastrophic for the Army, but not so for the decreased by 11 percent overall, but the decreases in the other services: services was greater because of the 195 percent increase for • Army – a decrease of 43.9 percent; Defensewide agencies. The Defensewide increase reflects programmatic transfers from the services. Between FYs • Navy/Marine Corps – a decrease of 5.6 percent; 1985 and 1995, Army funds decreased by 14.8 percent, Navy/Marine Corps funds by 22.3 percent and Air Force • Air Force – a decrease of 8.5 percent; and funds by 25.7 percent. Defensewide activities had the • Defensewide activities – an increase of 3.1 percent. only increase, but a substantial one, at 195 percent. Without supplemental funds, the base proposal for the Between FYs 1995 and 2000, the national leadership Army is $110 billion below the FY 2008 actual expendi- was concerned that the reduction had gone too far, and tures. The rest of DoD is only $26 billion below the FY DoD experienced a 14 percent increase in funding that 2008 experience. The supplemental proposal for FY 2010 was shared nearly equally among the services: is $130 billion, or just about the FY 2008 experience (the • Army – 15.6 percent; distribution of the supplemental request is unavailable). This comparison highlights the Army’s critical depen- • Navy/Marine Corps – 15.5 percent; dence on supplemental funds. However, dependence • Air Force – 12.4 percent; and on supplemental funding is not good for any number of reasons; one is that supplemental funds sometimes come • Defensewide activities – 9.4 percent. late in the fiscal year, which seriously impacts most man- In the eight years between FYs 2000 and 2008 (the agement decisions, including training and readiness. Sub- last year of actual data that includes supplemental funds), mitting the supplemental budget with the base budget the Defense budget increases 131 percent. The Army may remedy this problem. received more than twice as much as the other services, which is consistent with the land wars in Afghanistan and DoD Budget by Service and Defensewide – Iraq: Constant Dollars • Army – 241.7 percent; Constant dollars reflect real buying power and, there- fore, provide more accurate insights across time. However, • Navy/Marine Corps – 86.1 percent; constant dollars do not reflect programmatic changes. The • Air Force – 90.0 percent; and difference between current and constant dollars for FYs

Table 20 Department of Defense Budget Authority by Component – Current Dollars ($ billions1)

FY852 FY902 FY952 FY002 FY052 FY072 FY082 FY093 FY104 Army 74.3 78.5 63.3 73.2 152.8 218.5 250.1 185.3 140.3 Navy/Marine Corps 99.0 99.9 76.9 88.8 131.7 150.3 165.3 155.6 156.1 Air Force 99.4 92.9 73.9 83.1 127.9 148.9 157.9 149.5 144.4 Defensewide 14.1 21.7 41.6 45.5 71.5 84.5 100.2 97.6 97.1 Total Budget Authority, DoD 286.8 293.0 255.7 290.5 483.9 602.2 673.5 588.0 537.9 1 Numbers may not add due to rounding. 2 FY85 to FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. 4 FY10 excludes OCO budget proposal. Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-10

30 1985 to 2010 is dramatic, as demonstrated by the DoD • Defensewide – 8 percent. totals: in current dollars, the DoD budget increases by $250 A reduction of 45 percent in buying power in two billion annually, or 88 percent; in constant dollars, the DoD years would be catastrophic for the Army. budget decreases by nearly $22 billion, or 4 percent. These comparisons do not reflect adjustments for sub- DoD Budget by Service and Defensewide – stantive programmatic changes; e.g., between FYs 1985 Percentage Distribution and 2010, military endstrength decreased by 723,000, or The percentage analysis provides another way of 33 percent, and this suggests a decrease in military pay— comparing the distribution among the services. Between particularly in constant dollars. See table 21 for funding FYs 1985 and 1995, approximately 11 percent of the dis- by service in constant dollars. tribution shifts from the services to Defensewide agen- In the eight years between FYs 2000 and 2008, the cies. From FY 1995 to FY 2000, the distribution remains actual experience, including the supplemental war funds, constant. After FY 2000, the distribution among the ser- reflects an 81 percent increase in constant dollars. The vices changes; the Army shifts from the smallest to the Army received more than twice as much as the other ser- largest percentage of the budget—except for the FY 2010 base budget. See table 22. vices, which is consistent with the ongoing land wars in Afghanistan and Iraq. Military Forces Between FYs 2000 and 2008, the increases per service The military services—Army, Navy and Marine in constant dollars are: Corps and Air Force (and during time of war, the Coast • Army – 168 percent; Guard)—organize, recruit, equip, train, maintain, supply • Navy/Marine Corps – 46 percent; and mobilize and demobilize the military forces. The ser- vices produce and provide military forces to the Unified • Air Force – 49 percent; and Combatant Commands (UCCs). • Defensewide – 66 percent. Combatant Commands A comparison of FY 2008 (the last year of actual experience) and the FY 2010 budget proposal (without The Unified Combatant Commands or combatant supplemental funds) reflects a decrease in buying power commands operate joint task forces of components from of 23 percent. However, the decrease in buying power for two or more services with a broad and continuing mission. the Army is much greater than for the other services: The combatant commanders are responsible for integrat- ing and synchronizing ready combat and support forces to • Army – 45 percent; execute the assigned missions. • Navy/Marine Corps – 9 percent; DoD has 10 UCCs as specified in Title 10 and the latest • Air Force – 11 percent; and annual Unified Command Plan (UCP). The UCP establishes

Table 21 Department of Defense Budget Authority by Component – Constant Dollars ($ billions1)

FY852 FY902 FY952 FY002 FY052 FY082 FY093 FY104 Army 150.9 136.7 97.1 96.6 171.8 258.8 188.4 140.3 Navy/Marine Corps 191.9 167.9 114.1 116.6 147.6 170.6 158.2 156.1 Air Force 189.7 155.8 110.0 108.8 143.3 161.7 151.9 144.4 Defensewide 27.0 33.9 63.9 63.4 83.4 105.4 100.1 97.1 Total Budget Authority, DoD 559.5 494.3 385.1 385.4 546.1 696.5 598.6 537.9 1 Numbers may not add due to rounding. 2 FY85 to FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. 4 FY10 excludes OCO budget proposal. Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-10

The Department of Defense Budget 31 Table 22

Department of Defense Budget Authority by Component as Percentage of Annual Total

FY851 FY901 FY951 FY001 FY051 FY071 FY081 FY092 FY103 Army 25.9% 26.8% 24.8% 25.2% 31.6% 36.3% 37.1% 31.5% 26.1% Navy/Marine Corps 34.5% 34.1% 30.1% 30.6% 27.2% 25.0% 24.5% 26.5% 29.0% Air Force 34.7% 31.7% 28.9% 28.6% 26.4% 24.7% 23.4% 25.4% 26.8% Defensewide 4.9% 7.4% 16.3% 15.7% 14.8% 14.0% 14.9% 16.6% 18.1% 1 FY85 to FY08 are actual expenditures. 2 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. 3 FY10 excludes OCO budget proposal. Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-10

the missions and geographic responsibilities among the pressed, and still lack a proper balance between combatant commanders. Currently there are six regional out-tempo and home-tempo, between [counter- UCCs—i.e., responsible for a geographical area or area of insurgency] capabilities and conventional capa- responsibility (AOR)—and four functional UCCs, such as bilities, between readiness today and readiness U.S. Special Operations Command (USSOCOM). tomorrow. And that . . . is the second reason this budget of ours acts as a strategy for the future: It The military services provide the funding for their seeks balance. forces under UCC command, except for some O&M funds for each UCC and USSOCOM. USSOCOM prepares a By investing more heavily in critical enablers, budget for the support and management of unique training aviation, Special Forces, cyber operations, civil and equipment requirements of special operations forces affairs, language skills, it rightly makes winning (SOF). The FY 2010 base budget includes $5.6 billion the wars we are in our top operational priority. By in O&M funds for the combatant commands, mostly for adjusting active Army [brigade combat team] military and civilian endstrength and to improve capabil- growth to 45, it helps ensure our ability to impact ity and capacity.12 the fight sooner, increase dwell time sooner, and reduce overall demand on our equipment.13 Military Services Both the Army and the Marine Corps are ahead of The services produce, train, maintain and provide the schedule in growing the forces—the Army will be at military forces to the combatant commands. After eight 547,000 personnel and the Marine Corps will be at continuous years of war and given the current strategic 202,000 personnel by the end of FY 2010. environment and the unpredictable future, the services— The FY 2010 USSOCOM budget supports an increase particularly the Army and the Marine Corps—are reset- of 2,349 military and civilian authorizations, including: ting, reconstituting and revitalizing forces. The services are also transforming their doctrine, equipment, military • 1,048 authorizations to provide one Special Forces skills and training to produce future armed forces essential (SF) battalion; to the joint team. In addition, DoD is growing the Army, • 791 authorizations for Air Force Special Operations Marine Corps and special operations forces to sustain the Command; operational demands and allow more time at home station for ground forces. • 157 authorizations for Naval Special Warfare Command; Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, observes, • 163 authorizations for Marine Corps Forces Special Operations Command; After nearly eight years of war, we are the most capable and combat-experienced military we • 62 authorizations for Joint Special Operations have ever been—the best I have ever seen—cer- Command; tainly, without question, the world’s best counter- • 139 authorizations for Theater Special Operations insurgency force. Yet for all this success, we are Commands; and

32 14 Table 23 • 11 reductions at Headquarters, USSOCOM. Conventional Forces Summary A summary of the force structure across all services is in table 23. Army1 FY08 FY09 FY10 Active Component (AC) Brigade 40 42 44 Endstrength Combat Teams The DoD budget proposes a total endstrength of more Reserve Component (RC) Brigade 28 28 28 than three million active, National Guard and Reserve Combat Teams servicemembers and civilian employees in FY 2010—an AC Multi-Functional Support 33 35 37 increase of 64,000 over FY 2009. The FY 2009 total Brigades includes almost 1.5 million active personnel, 845,000 in RC Multi-Functional Support Brigades 46 50 52 the Selected Reserve and 745,000 civilian employees. AC Functional Support Brigades 35 41 42 The proposal includes an increase in all three groups. RC Functional Support Brigades 73 74 74 Army Prepositioning Ships2 6 6 7 The military personnel serve in positions that involve Navy3 essentially military functions; the civilian employees Aircraft Carriers 11 11 11 serve in positions that involve essentially government functions. In addition, DoD relies upon thousands of con- Surface Combatants 107 111 113 tractor personnel who free up servicemembers and DoD Amphibious Warfare Ships 32 31 31 civilians. The contractor personnel conduct a wide range Attack Nuclear Submarines 53 54 53 of support including research, manufacturing and main- Ballistic & Guided Missile Submarines 18 18 18 taining equipment and providing services and support to Support, Logistics, Mine Warfare 61 62 61 military servicemembers and their families, retirees and Ships their families and the civilian workforce as authorized. Department of the Navy Maritime & U.S. Army Pacific Command 16 16 17 Military Endstrength. The DoD budget proposes a mili- Ammunition Prepositioning Ships tary endstrength of 2.3 million personnel, with 1.5 million Roll-on, Roll-off; Aviation Support; 67 65 64 on active duty and 845,000 in the Selected Reserve. The Hospital; and Reserve Ships budget proposal and historical military endstrength data Navy Carrier Air Wings 10 10 10 are in table 24. Marine Air Wings 3 3 3 Patrol Wings 4 4 4 The endstrength reductions from FY 1985 to FY 2000 Helicopter Antisubmarine and were substantial—34 percent in the active component 4 4 4 Combat Support Wings (AC) and 20 percent in the Selected Reserve. Since the Primary Authorized Aircraft—Navy 2,138 2,120 2,187 reduction in the reserve component (RC) was less than in Primary Authorized Aircraft—Marine the AC, the result was that the Selected Reserve became 1,082 1,220 1,214 Corps a greater portion of the total force—increasing from 32 Air Force4 to 37 percent of total military personnel; the nation was placing a greater reliance on the Selected Reserve. Active Fighter Squadrons 40 38 32 Reserve Fighter Squadrons 31 29 28 Between the FY 2000 and the FY 2010 budget pro- Reserve Air Defense Squadrons 4 4 4 posals, the endstrength of both the active component and Bombers (Combat-Coded) 96 96 96 Selected Reserve increased—the active component by 2.4 Air Force Prepositioning Ships2 2 2 2 percent and the reserve component by 6.7 percent. The Marine Corps5 growth for the Marine Corps was the greatest among the services at 17 percent, followed by the Army at 14 percent. Expeditionary Forces 3 3 3 These increases are part of the multiyear growth of land Active Infantry Battalions 27 27 27 forces in response to the continuing war. The result of this Reserve Infantry Battalions 9 9 9 growth is an active military endstrength distribution in FY Defense Logistics Agency (DLA)2 2010 of 37 percent Army, 22 percent Air Force, 22 percent DLA Prepositioning Ships 1 1 1 Navy and 14 percent Marine Corps. In summary, between Source: 1 2008 Army Posture Statement (FY10 number modified by 2009 FYs 2000 and 2010 the Army grows by 65,000 Soldiers Army Posture Statement), Addenda G, Modernization; 2 Highlights of the Department of the Navy FY 2010 Budget, p. 4-6; 3 Highlights of the and the Marine Corps grows by 29,000. See table 24. Department of the Navy FY 2010 Budget, pp. 4-4, 4-6, 4-10; 4 Air Force Public Affairs Office;5 Highlights of the Department of the Navy FY 2010 Civilian Endstrength. The DoD budget proposes a Budget, p. 4-16 civilian endstrength of 745,000. Between FYs 1985 and

The Department of Defense Budget 33 Table 24 Department of Defense Personnel Endstrength (in thousands1)

Active Military3 FY852 FY902 FY952 FY002 FY052 FY062 FY072 FY082 FY09 FY10 Army 781 751 509 482 492 505 522 544 532 547 Navy 571 583 435 373 362 350 338 332 325 324 Marine Corps 198 197 174 173 180 180 186 199 194 202 Air Force 602 539 400 356 352 349 333 327 317 332 Active Guard and Reserve, Full-time 55 74 65 65 69 74 72 72 78 79 Total Active Military 2,207 2,144 1,583 1,449 1,455 1,458 1,451 1,474 1,446 1,484 Selected Reserve4 Army 718 740 604 549 522 536 543 557 558 563 Navy 129 152 100 87 76 71 70 68 67 66 Marine Corps 41 44 40 39 40 40 39 38 40 40 Air Force 185 202 188 179 182 180 177 175 174 176 Total Selected Reserve 1,073 1,138 933 854 820 826 829 838 839 845 Total Military 3,280 3,282 2,516 2,303 2,275 2,284 2,280 2,312 2,285 2,329 Civilians (Full-time equivalents)3 1,129 1,073 849 698 692 700 695 708 725 745 1 Numbers may not add due to rounding. 2 FY85 to FY08 are actual amounts. Remaining years are estimates. Source: 3 Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller) June 2009, Table 7-5; 4 DoD Green Book, Financial Summary Table O

2000, the decline in civilian endstrength was similar to Table 25 that of the military with a reduction of 30 percent. Since Military Personnel Budget FY 2000, civilian endstrength has grown by 47,000, ($ billions1) or 7 percent. The civilian endstrength data are also in 2 3 4 table 24. FY08 FY09 FY10 Army 61.3 52.8 58.1 Military Personnel Navy 28.8 28.0 29.4 The Military Personnel title includes the military pay Marine Corps 13.9 13.6 14.7 appropriations for all active and reserve components. Air Force 32.3 31.7 33.4 The FY 2010 budget includes a 2.9 percent pay raise for Contribution to Military 2.8 3.7 5.1 military members. The FY 2010 base budget proposes Retirement Fund $141.1 billion in military pay and benefits for service- Total 139.0 129.8 141.1 members and their families, a nearly 9 percent increase 1 Numbers may not add due to rounding. over the FY 2009 level; however, the FY 2010 proposal 2 FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations includes pay and benefits for the increase of 38,000 mili- (OCOs) with the FY 2009 budget, but not the remaining $75 billion that tary members. The Military Personnel title by component was requested again with the FY 2010 budget. 4 FY10 excludes OCO budget proposal. is in table 25. Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730- BA) and Department of Defense National Defense Budget Estimates A comparison of Army endstrength to budget funds for FY 2010 (Green Book), Office of the Under Secretary of Defense reveals that while the Army portion of total military end- (Comptroller), June 2009, Table 6-6 strength remained constant at 48 percent from FYs 2008 However, the Military Pay portion for the Army still is through 2010, the Army’s portion of the Military Pay low when compared to the FY 2008 experience. appropriation decreased from 44 percent to 41 percent. The Army endstrength includes a very substantial number Military Accrual Payments of reserve component Soldiers and, arguably, a greater The Military Personnel title includes pay and allow- portion of lower-grade members than the other services. ances and contributions to two accrual accounts—

34 medical and retirement. The accrual method requires accrual for each service; however, the FY 2010 base the services to estimate future medical and retirement budget includes $16.5 billion for military retirement benefits annually, and to contribute that amount from accrual. The DoD contribution to the military retirement the current budget. The subsequent paragraphs provide accrual equals 12 percent of the total Military Personnel information on each of the accrual accounts. proposal and 3 percent of the total base budget proposal. See table 27 for retirement accrual information. Military Medical Accrual. The DoD budget for FY 2010 includes $10.6 billion for military medical accrual. This Table 27 amount is virtually the same as in FY 2009, but down by Retirement Accrual in Military Personnel Budgets $1.3 billion or 11 percent from the FY 2008 experience ($ billions1) data. Service FY082 FY093 FY104 The military medical accrual accounts consume 7.5 percent of all Military Personnel funds and 2 percent of Army 5.6 5.2 6.3 the base budget for FY 2010. This has been consistent Navy 3.3 3.4 3.9 for many years. The Army contributes $5 billion or 47 Marine Corps 1.6 1.8 2.1 percent of the funds and 48 percent of the endstrength. See table 26 for medical accrual information. Air Force 3.6 3.6 4.2 Military Retirement Accrual. The DoD budget for FY Total 14.1 14.0 16.5 2010 does not specifically identify military retirement 1 Numbers may not add due to rounding. 2 FY08 are actual expenditures. Table 26 3 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. Medical Accrual in Military Personnel Budgets 4 ($ billions1) FY10 excludes OCO budget proposal. Source: Department of Defense National Defense Budget Estimates 2 3 4 for FY 2010 (Green Book), Office of the Under Secretary of Defense Medical Accrual FY08 FY09 FY10 (Comptroller), June 2009 Military Pay, Army 3.3 3.0 3.1 Reserve Personnel, Army 0.8 0.7 0.7 The sum of the medical and retirement accruals in the FY 2010 base budget is $27 billion, or 19 percent, of Mili- National Guard Personnel, Army 1.3 1.2 1.2 tary Personnel funds and 5 percent of the total DoD base Subtotal 5.4 4.9 5.0 budget. The accruals are for an entitlement that is a func- Military Pay, Navy 2.0 1.8 1.8 tion of military endstrength and the statutes that authorize Reserve Personnel, Navy 0.3 0.2 0.2 the benefits. Subtotal 2.3 2.0 2.0 Civilian Personnel Military Pay, Marine Corps 1.2 1.1 1.1 The federal budget system has no single appropria- Reserve Personnel, Marine 0.2 0.1 0.1 tion for civilian personnel pay; the appropriation that Corps employs the civilian personnel pays the civilian person- Subtotal 1.4 1.2 1.2 nel. Most DoD civilian personnel work in operation and Military Pay, Air Force 2.1 1.8 1.8 maintenance functions, and therefore, most civilian pay is in the Operation and Maintenance title. Reserve Personnel, Air Force 0.3 0.2 0.2 National Guard Personnel, The federal government categorizes civilian per- 0.4 0.4 0.4 Air Force sonnel into four groups: General Service (GS), Wage Subtotal 2.8 2.4 2.4 Board, Foreign National Direct Hires and Indirect Hires. Total Medical Accrual 11.9 10.5 10.6 A summary of civilian pay by these categories is in table 28. 1 Numbers may not add due to rounding. 2 FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations Civilian pay is a function of endstrength, grades and (OCOs) with the FY 2009 budget, but not the remaining $75 billion that pay rates, and work hours. The President proposes a 2 was requested again with the FY 2010 budget. 4 FY10 excludes OCO budget proposal. percent pay increase for the civilian workforce. Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense Civilian endstrength, like military endstrength, (Comptroller), June 2009 declined dramatically from FY 1985 to FY 2000—38.2

The Department of Defense Budget 35 Table 28 are partially due to the transition of systems from development to fielded systems); and Civilian Pay ($ billions1) • $11.7 billion for full-spectrum training, combat FY082 FY093 FY104 training center rotations and recruiting and retention efforts to maintain combat readiness.15 General Schedule 49.4 54.0 60.2 Wage Board 10.2 10.4 8.1 The O&M appropriations consume the largest part of the DoD budget at 51 percent. The actual experience in FY Total in the United States 59.6 64.4 68.3 2007 was 38 percent with supplemental funds. Foreign National Direct Hires 0.4 0.4 0.3 Total Direct Hires 60.0 64.9 68.6 The difference between the FY 2008 experience and the FY 2010 base budget is $71 billion, or 28 percent. Indirect Hires 1.2 1.3 1.4 When the OCO budget proposal is included, the total Total Civilian Pay 61.2 66.2 70.0 rises to $276.2 billion, 8 percent more than the FY 2008 1 Numbers may not add due to rounding. experience. For the Army, the change between FY 2008 2 FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations and FY 2010 is $58 billion or 59 percent (using the base (OCOs) with the FY 2009 budget, but not the remaining $75 billion that budget) but is virtually the same when the OCO funds are was requested again with the FY 2010 budget. 4 FY10 excludes OCO budget proposal. added. The O&M data in Total Obligational Authority are Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense in table 29. (Comptroller), June 2009, Table 6-14 Defense Health Program percent. Since FY 2000, civilian endstrength increased by The Defense Health Program (DHP) provides funding 47,000 or 7 percent, with most of that growth in just two for medical and dental services to active servicemembers years—37,000 between FYs 2008 and 2010, a 5 percent and their families, and to other eligible beneficiaries world- increase. The civilian pay funds during those two years wide. The DHP includes funds for TRICARE benefits that increase by $8.8 billion or 14 percent. provide for the health care of eligible active duty family Operation and Maintenance members, retired servicemembers and their eligible family members, and the eligible surviving members of deceased The FY 2010 base budget proposes $185.7 billion active duty and retired members. The DHP also provides in Total Obligation Authority for Operation and Mainte- veterinary services, medical command headquarters, spe- nance, which includes appropriations for both the active cialized services for the training of medical personnel, and and reserve components. The O&M appropriation includes occupational and industrial health care. funds for individual training, unit training to maintain readiness, sustaining the forces, supporting mobilization The DHP includes O&M, Procurement and RDT&E and supporting current operations. appropriations and Medicare-Eligible Retiree Health Care Fund (MERHCF) accrual funds. Actually, O&M and In the Budget Request Summary Justification, DoD MERHCF provide 98 percent of Defense Health Care provides summary information on a significant part of costs. The O&M in DHP accounts for 9 percent of all O&M, including: DoD O&M. • $64.6 billion for readiness, measured in terms of tank Between FYs 2005 and 2010, the DHP funds increase miles driven per month, ship steaming days under- by 131 percent. way per quarter and flying hours per month; The DHP is one element of DoD health support; in • $35.7 billion for administrative support functions addition, the Medical Accrual fund (return to table 26) that include headquarters support, internal audit, per- includes MILPERS contributions to medical accrual but sonnel support, communications, transportation and not military pay for military doctors and other health care intelligence; providers. The combination of Defense health care costs • $33 billion for basic operation and maintenance of ($37 billion) and Medical Accrual ($10.6 billion) equals bases worldwide; $47.6 billion or 9 percent of the total DoD budget in FY 2010. See table 30. • $12.8 billion for maintenance of equipment at or above the percentage of depot maintenance require- In FY 2001, the Defense Health Care Program pro- ments funded in FY 2009 (the increased requirements vided benefits to 8.4 million eligible beneficiaries; in FY

36 Table 29 Operation and Maintenance (Total Obligational Authority, $ billions1)

FY082 FY093 FY104 Enacted Estimate Base Supplemental Total Army 98.1 100.8 40.2 60.9 101.1 Navy/Marine Corps 50.8 52.2 42.1 10.0 52.1 Air Force 52.3 56.2 43.7 10.4 54.1 Defensewide 55.5 63.9 57.2 8.8 66 Transfers Accounts 3.5 2.5 0.4 2.9 Total 256.7 276.6 185.7 90.5 276.2 1 Numbers may not add due to rounding. 2 FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. 4 FY10 excludes OCO budget proposal. Source: Department of Defense Budget, Fiscal Year 2010, Military Personnel Programs (M-1) and Operation and Maintenance (O-1), Exhibit O-1, pp. 19–20

Table 30 acquiring modern equipment to replace worn equipment and older technology. RDA provides U.S. forces with the Defense Health Care Program Funding ($ billions1) best systems capabilities in the world. The FY 2010 base budget includes $186 billion for RDA; the supplemental 2 2 3 4 FY00 FY08 FY09 FY10 proposal includes $28.8 billion, bringing the RDA total to Operation and 11.7 23.9 24.6 27.0 $214.8 billion, $30 billion less than the FY 2008 experi- Maintenance ence. See table 31. Procurement 0.3 0.5 0.3 0.3 Research, RDA Trends in Current Dollars Development, Test 0.3 1.0 0.9 0.6 One could certainly make a logical case for needing and Evaluation relatively consistent RDA expenditures to maintain a MERHCF4 receipts 7.9 8.7 9.1 research and development and industrial base and to Total5 12.3 33.3 34.5 37.0 avoid laying off skilled employees, who are then replaced 1 Numbers may not add due to rounding. some years later during the next up-swing. However, this 2 FY00 and FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations simply is not the experience. (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. Between FYs 1985 and 2000, RDA expenditures 4 FY10 excludes OCO budget proposal. 4 Medicare-Eligible Retiree Health Care Fund. decreased by 26 percent—although RDT&E does 5 Defense Health Care Program includes direct Health Care costs but increase, reflecting deliberate decisions at the end of the excludes Medical Accrual account and military health care providers. Source: DoD Defensewide Justification Documentation, PBA-19 Cold War to “skip a generation” of equipment acquisi- tions. Between FYs 2000 and FY 2008, RDA expendi- 2010, the DHP will provide benefits to 9.3 million or 10 tures increase by 161 percent, with Procurement up 100 percent more eligible beneficiaries. The beneficiary popu- percent. The combination of extreme usage, combat lation drives health care costs; the number of service- damage and losses, plus the need for new technology and members is a key driver of the beneficiary population. materiel solutions, are the primary factors that contribute Between FYs 2000 and 2010, active duty endstrength to this very large increase. increases by 65,000 or 14 percent; therefore, the benefi- ciary population is likely to increase.16 RDA in the FY 2010 budget declines in both FY 2009 and FY 2010, down 24 percent in FY 2010 from the FY Research, Development and Acquisition 2008 experience. Virtually all the decline is in Procure- The Research, Development and Acquisition (RDA) ment—this reflects Secretary Gates’ intent and decisions budget includes funds for researching and developing to refocus DoD as discussed in the paragraphs above. See new and emerging technologies and materiel and for figure 7 for trends.

The Department of Defense Budget 37 Table 31 RDA by Military Services Research, Development and Acquisition The distribution of the RDT&E funds remains by Military Service fairly consistent among the services and Defensewide (Budget Authority, $ billions1) organizations from FYs 2008 to 2010. The distribution of Procurement funds changes dramatically—Army RDT&E FY082 FY093 FY104 Procurement funds drop by $40 billion, more than 65 Army 12.4 12.0 10.4 percent; Defensewide drops by $17 billion. The Army base Navy/Marine Corps 18.4 19.9 19.3 budget for Procurement is $21.1 billion—very close to the Air Force 26.5 26.8 28.0 OCO budget proposal of $21.4 billion for Procurement in FY 2010. Presumably, a very large share of the OCO funds Defensewide and Other 22.2 21.5 20.9 will go to the Army to replace combat losses and worn-out Total RDT&E 79.5 80.2 78.6 equipment, and to modernization for the forces engaged in Procurement combat. Army 61.4 24.9 21.1 The drop in Army Procurement funds reflects Secretary Navy/Marine Corps 47.3 38.4 43.8 Gates’ decisions summarized in the Priorities paragraph. Air Force 32.7 37.1 36.4 The implications of a $40 billion decrease on the industrial base will be significant. See table 31 for RDA data. Defensewide and Other 23.6 9.4 6.1 Total Procurement 165.0 109.8 107.4 Select Major Weapon Systems Total RDA 244.5 190.0 186.0 The Program Acquisition Costs by Weapon Systems 1 Numbers may not add due to rounding. section of the DoD budget provides a list of 79 major 2 FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations weapon systems that account for nearly 62 percent of all (OCOs) with the FY 2009 budget, but not the remaining $75 billion that Procurement and 38 percent of all RDT&E funds in FY was requested again with the FY 2010 budget. 4 FY10 excludes OCO budget proposal. 2010. The list includes only those systems with a separate Source: Department of Defense National Defense Budget Estimates budget line and does not include systems that combine a for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-6 group of line items, such as command, control, commu- nications, computers, intelligence, surveillance and recon- The FY 2010 procurement decreases from FY 2008 naissance (C4ISR). by nearly $58 billion; however, the FY 2010 supplemental The major weapon systems list with RDA funding is in for OCO of $17.6 billion for reconstitution—presumably tables 32–36; 32 contains aircraft; 33 contains missiles and almost all for Procurement—offsets about 30 percent of munitions; 34 contains missile defense and ground vehi- the reduction. cles; 35 contains shipbuilding and maritime systems; and 36 contains space and command, control, communications, RDA Trends in Constant Dollars computers and intelligence (C4I). Between FYs 1985 and 2000, RDT&E decreased by 14 percent and Procurement decreased by nearly 60 Special Operations RDA percent in real buying power. Over the same 15 years, In 1987, the U.S. Special Operations Command was military endstrength declined by 34 percent; i.e., Procure- formed with the mission of organizing, training and equip- ment reductions outpaced the endstrength drawdown. ping special operations forces from the Army, Navy and Air Force, and for the combatant commanders. In recognition In the next eight years, from FYs 2000 to 2008, of the unique capabilities of special operations forces in the RDT&E increased by nearly 73 percent and Procurement war against terrorism, USSOCOM’s mission was expanded increased by 155 percent in constant dollars. In the budget to lead, plan, synchronize and, as directed, execute global proposal, between FYs 2008 and 2010, RDT&E declines operations against terrorist networks. by 4 percent and Procurement declines by 37 percent in The USSOCOM statutory charter, Title 10, U.S. real buying power. Bear in mind, however, that the FY Code, Section 167, provides the command with certain 2008 and earlier years include supplemental funds, FY budget authority (similar to the military departments) that 2009 includes the first but not the second request for sup- is unique among the combatant commands (COCOM). plement funds, and FY 2010 does not include any supple- The command is responsible for developing and acquir- mental funds. The RDA budget in constant dollars is in ing “special operations-peculiar” equipment. The FY 2010 figure 8. budget proposal for RDA is $2.2 billion.

38 Figure 7 Research, Development and Acquisition Budget Authority – Current Dollars ($ billions1)

250 244.6 211.3 79.6 190.0 186.0 200 178.3 165.4 77.5 150 128.1 72.9 80.2 78.6 117.9 68.8 31.3 93.6 100 36.5 78.1 165.0 38.7 34.5 133.8 50 96.8 105.4 109.8 107.4 81.4 96.6 43.6 54.9 0 FY85 FY90 FY95 FY00 FY05 FY06 FY07 FY08 FY09 FY102

Procurement Research, Development, Test and Evaluation

1 Totals exclude overseas contingency operations. 2 Includes proposed cancellation for reappropriation to offset a portion of additional Emergency Request for overseas contingency operations. Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-8

Figure 8 Research, Development and Acquisition Budget Authority – Constant Dollars ($ billions)

251.4 250 220.7 221.0 190.6 81.8 192.6 200 55.4 181.5 186.0 171.0 81.3 81.2 150 54.1 75.9 78.2 78.6 113.9 101.7 100 165.3 47.4 169.6 45.4 139.7 116.9 50 105.6 112.4 111.4 107.4 56.3 66.5 0 FY85 FY90 FY95 FY00 FY05 FY06 FY07 FY08 FY09 FY10

Procurement Research, Development, Test and Evaluation

Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-8

The Department of Defense Budget 39 Table 32 Research, Development and Acquisition Selected Major Weapon Systems – Aircraft ($ millions) FY101 Service Aircraft Procurement2 RDT&E RDA3 AH-64 Longbow Apache 219.2 150.8 370.0 CH-47 Chinook 1,052.0 10.8 1,062.8 Army Light Utility Helicopter (LUH) 326.0 326.0 UH-60 Black Hawk Utility Helicopter 1,431.4 33.5 1,464.9

C-40A Clipper 74.4 74.4 E-2C/D Hawkeye 606.2 364.6 970.8 E-6 Mercury 102.6 102.6 EA-18G Growler 1,632.4 55.4 1,687.8 Navy/ EA-6B Prowler 85.0 97.6 182.6 Marine Corps F/A-18E/F Super Hornet 1,061.0 127.7 1,188.7 H-1 Huey/Super Cobra 835.4 32.8 868.2 MH-60R Multimission Helicopter 943.2 82.0 1,025.2 MH-60S Fleet Combat Support Helicopter 492.9 49.1 542.0 P-8A Poseidon 1,825.1 1,162.4 2,987.5

A-10 Thunderbolt 262.5 9.7 272.2 B-2 Spirit 284.0 415.4 699.4 C-17 Globemaster 690.5 161.9 852.4 C-5 Galaxy 772.7 95.3 868.0 Air Force F-16 Falcon 244.6 141.0 385.6 F-15E Eagle 92.9 311.2 404.1 F-22 Raptor 445.9 569.3 1,015.2 KC-X New Tanker 439.6 439.6

C-130J Hercules 2,061.0 231.3 2,292.3 C-12 Liberty 105.0 105.0 RQ-4 Global Hawk 667.9 783.2 1,451.1 Joint Cargo Aircraft (JCA) 319.1 9.4 328.5 F-35 Joint Strike Fighter (JSF) 6,827.5 3,599.4 10,426.9 DoD/Joint Predator and Reaper Unmanned Aircraft Systems 1,140.8 145.1 1,285.9 (UAS) V-22 Osprey 2,751.3 109.1 2,860.4 T-6A Texan II Joint Primary Aircraft Training System 282.2 282.2 (JPATS) Shadow and Raven UAS 191.8 33.0 224.8 1 FY10 data are estimates. 2 Procurement includes initial spares. 3 RDA equals sum of Procurement and Research, Development, Test and Evaluation. Source: DoD FY 2010 Budget Request Summary Justification, Major Weapons Systems

40 Table 33 Research, Development and Acquisition Selected Major Weapon Systems – Missiles and Munitions ($ millions) FY101 Service Missiles/Munitions Procurement2 RDT&E RDA3 Javelin Advanced Antitank Weapon 289.6 289.6 Army High Mobility Artillery Rocket System (HIMARS) 354.2 27.7 381.9 Evolved Seasparrow Missile (ESSM) 51.4 51.4 Rolling Airframe Missile (RAM) 74.8 74.8 Navy Standard Family of Missiles 249.2 182.2 431.4 Tactical Cruise Missile 283.1 13.2 296.3 Trident II Ballistic Missile 1,060.5 74.9 1,135.4 Advanced Medium Range Air-to-Air Missile (AMRAAM) 437.3 53.6 490.9 Air Intercept Missile–9X (AIM–9X) 135.6 8.2 143.8 Chemical Demilitarization4 1,707.3 1,707.3 Joint Air-to-Ground Missile (JAGM) 208.8 208.8 DoD/Joint Joint Air-to-Surface Standoff Missile (JASSM) 52.7 29.5 82.2 Joint Direct Attack Munition (JDAM) 203.0 203.0 Joint Standoff Weapon (JSOW) 145.3 10.0 155.3 Small Diameter Bomb (SDB) 142.1 197.7 339.8 1 FY10 are estimates. 2 Procurement includes initial spares. 3 RDA equals the sum of Procurement and RDT&E. 4 Includes $146.5 million Military Construction. Source: DoD FY 2010 Budget Request Summary Justification, Major Weapons Systems

Table 34 Research, Development and Acquisition Selected Major Weapon Systems – Missile Defense ($ millions) FY101 Service Missile Defense Procurement2 RDT&E RDA3 Aegis Ballistic Missile Defense 168.7 1,690.8 1,859.50 Terminal High Altitude Area Defense (THAAD) 420.3 697.2 1,117.50 DoD/Joint Patriot Medium Extended Air Defense (MEADS) 16.4 569.2 585.6 Patriot/Patriot Advanced Capability-3 (PAC-3) 393.2 11.2 404.4 Missile Defense* 1,115.4 8,186.1 9,301.5 Ground Vehicles Armored Security Vehicle (ASV) 149.8 149.8 Family of Heavy Tactical Vehicles (FHTV) 1,436.1 1,436.1 Family of Medium Tactical Vehicles (FMTV) 1,620.0 1,620.0 Army M1 Abrams Tank Upgrade Program 369.4 101.7 471.1 Stryker Family of Armored Vehicles 388.6 90.3 478.9 High Mobility Multipurpose Wheeled Vehicle (HMMWV) 1,746.9 1,746.9 Marine Corps Expeditionary Fighting Vehicle (EFV) 293.5 293.5 Joint Light Tactical Vehicle (JLTV) 90.1 90.1 DoD/Joint Mine-Resistant Ambush Protected (MRAP) 5,456.0 5,456.0 1 FY10 are estimates. 2 Procurement includes initial spares. 3 RDA equals the sum of Procurement and RDT&E. * Includes Military Construction and Base Realignment and Closure. Source: DoD FY 2010 Budget Request Summary Justification, Major Weapons Systems

The Department of Defense Budget 41 Table 35 Research, Development and Acquisition Selected Major Weapon Systems – Shipbuilding and Maritime Systems ($ millions)

FY101 Service Shipbuilding and Maritime Systems Procurement2 RDT&E RDA3 CVN-21 Carrier Replacement 1,223.7 173.6 1,397.3 DDG 1000 Destroyer 1,084.1 539.1 1,623.2 DDG 51 Aegis Destroyer 2,241.3 2,241.3

Navy/ Littoral Combat Ship (LCS) 1,517.3 360.5 1,877.8 Marine Corps LPD-17 Amphibious Transport Dock Ship 1,056.9 5.3 1,062.2 SSN 774 Virginia-Class Submarine 4,027.2 154.8 4,182.0 CVN Refueling Complex Overhaul (RCOH) 1,775.4 1,775.4 T-AKE Auxiliary Dry Cargo and Ammunition Ship 940.1 940.1 DoD/Joint Joint High Speed Vessel (JHSV) 361.8 11.5 373.3 1 FY10 are estimates. 2 Procurement includes initial spares. 3 RDA equals the sum of Procurement and RDT&E. Source: DoD FY 2010 Budget Request Summary Justification, Major Weapon Systems

Table 36 Research, Development and Acquisition Selected Major Weapon Systems – Space and Command, Control, Communications, Computers and Intelligence ($ millions)

FY101 Service Space Procurement2 RDT&E RDA3 Navy Mobile User Objective System (MUOS) 516.1 387.5 903.6 Advanced Extremely High Frequency (AEHF) Satellite 1,843.5 464.3 2,307.8 Evolved Expendable Launch Vehicle (EELV) 1,295.3 26.5 1,321.8 Global Positioning System (GPS) 60.7 867.1 927.8 Air Force National Polar-Orbiting Operational Environmental 3.9 396.6 400.5 Satellite System (NPOESS) Space-based Infrared Systems (SBIRS) 500.9 512.6 1,013.5 Wideband Global Satellite (WGS) Communications 264.1 71.0 335.1 C4I Future Combat Systems (FCS) 328.0 2,653.0 2,981.0 Army Single Channel Ground and Airborne Radio (SINCGARS) 135.0 135.0 Warfighter Info Network–Tactical (WIN–T) 557.7 180.7 738.4 DoD/Joint Joint Tactical Radio System (JTRS) 187.4 876.4 1,063.8 1 FY10 are estimates. 2 Procurement includes initial spares. 3 RDA equals the sum of Procurement and RDT&E. Source: DoD FY 2010 Budget Request Summary Justification, Major Weapon Systems

42 The following six weapon systems or groups of Chinese inventories; by 2008, there were some 5,900. line items account for 55 percent of all Procurement for North Korea and Iran currently have hundreds of deploy- FY 2010: able short- and medium-range ballistic missiles capable of • $285.9 million for SOF Operational Enhancements, attacking deployed forces in Asia and the Middle East. The including $11.9 million in OCO funds; budget seeks to leverage emerging intercept technologies to defeat launched missiles in their ascent phase—after • $227.5 million for non-standard aviation; the boost phase and prior to the threat missile’s apogee. • $146.8 million for the MH-60 SOF Modernization This ascent phase intercept (API) would allow the use Program; of multiple elements in a larger battlespace and enable a “shoot-look-shoot” approach to defeating a threat. • $114.5 million for CV-22 SOF Modification; The budget increases emphasis on near-term devel- • $112.5 million for SOF Ordnance Replenishment, opment and fielding of capabilities against short- and including $51.2 million in OCO funds; and medium-range ballistic missile threats. This is in response • $101.9 million for Rotary Wing Upgrades and to the warfighter’s expressed needs to bolster transport- Sustainment. able regional defense capabilities to provide more robust The FY 2010 procurement proposal, even with OCO, protection to deployed forces, allies and friends against is $1.8 billion or 40 percent below the FY 2008 experience. existing threats. The budget also maintains a ground- See table 37 for RDT&E and Procurement amounts. based midcourse capability to defeat a limited long-range rogue state attack or accidental launch against the United Table 37 States.18 Research, Development and Acquisition The FY 2010 budget includes multiple appropriations U.S. Special Operations Command ($ billions1) and is $1.4 billion or 13 percent below the FY 2008 budget experience. See table 38 for appropriation data, and table FY082 FY093 FY10 39 for a list of funds by major BMD programs. RDT&E5 0.5 0.5 0.4

6 Procurement 3.0 1.6 1.8 Table 38 Total 3.5 2.1 2.2 Missile Defense Program Funding by Title 1 Numbers may not add due to rounding. ($ millions1) 2 FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations FY082 FY093 FY10 (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. RDT&E 9,605.0 9,372.4 8,186.1 Source: 5 Department of Defense Fiscal Year 2010 Budget Request, RDT&E Programs (R-1), May 2009; 6 Department of Defense Fiscal Year Procurement 994.9 1,218.6 998.6 2010 Budget Request, Procurement Programs (P-1), May 2009 Military Construction 169.5 30.2 Base Realignment Missile Defense Agency 110.0 160.0 86.6 and Closure (BRAC) The mission of the Missile Defense Agency (MDA) is Total 10,709.9 10,920.5 9,301.5 to develop the Ballistic Missile Defense System (BMDS) 1 Numbers may not add due to rounding. to protect the United States, its allies and deployed forces 2 FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations from attacks by ballistic missiles of all ranges in all phases (OCOs) with the FY 2009 budget, but not the remaining $75 billion that of flight. The MDA is the successor to the Ballistic Missile was requested again with the FY 2010 budget. Source: DoD FY 2010 Budget Request Summary Justification, Major Defense Organization and the Strategic Defense Initiative Weapons Systems Organization. The FY 2010 budget requests $7.8 billion to provide greater capability to the warfighter and to reshape In response to the warfighters’ expressed needs for the missile defense program.17 additional theater defensive capabilities, the budget increases the acquisition plans for THAAD batteries and The FY 2010 budget reshapes the program in response interceptors. In FY 2010, the budget provides an addi- to arising threats, including the proliferation of ballistic tional $8 million to begin meeting the full funding policy missiles and the threat to forces deployed. In 2003, there and $30 million to increase the production line from three were 4,700 ballistic missiles outside of U.S., Russian and to four interceptors per month. The budget also increases

The Department of Defense Budget 43 Table 39 Missile Defense Program Funding by Major Systems ($ millions)

FY081 FY092 FY10 Ballistic Missile Defense (BMD) Midcourse Defense 2,198.7 1,507.5 982.9 BMD Boost Defense 503.5 400.8 186.7 BMD Terminal Defense 1,034.5 956.7 719.5 BMD Test and Targets 619.0 911.7 966.8 BMD Technology, Aegis, Sensors, and Interceptors 2,225.6 2,442.9 2,606.2 Patriot/Patriot Advanced Capability-3 (PAC-3) 1,005.4 1,037.1 404.4 Patriot Medium Extended Air Defense System (MEADS) 401.6 460.8 585.6 Terminal High Altitude Area Defense (THAAD) 881.4 882.4 1,117.5 BMD Command and Control, Battle Management and Communications (C2BMC) 440.0 288.3 340.0 BMD Enabling Programs 416.9 402.8 369.1 Advanced Concepts/Special Programs 193.2 175.7 301.6 Aerostat Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System 464.9 355.3 360.1 (JLENS) Other 325.2 1,098.5 361.1 Total 10,709.9 10,920.5 9,301.5 1 FY08 are actual expenditures. 2 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. Source: DoD FY 2010 Budget Request Summary Justification, Major Weapons Systems the acquisition plans for Aegis BMD SM-3 interceptors. respectively. DoD has identified more than 4,200 projects Additional funding is included for Aegis BMD to move to to capitalize on these funds in the following categories: the full funding policy. • $4.2 billion in O&M accounts to improve, repair and Facilities and Infrastructure Investment modernize DoD facilities, including energy-related Defense installations, including their associated envi- improvements; ronment, sustain regular home stationing, support train- • $1.3 billion in MILCON for hospitals; ing of new recruits and unit training, deployment to meet • $240 million in MILCON for child development the nation’s needs in periods of crisis, contingency and centers; combat, and the forward presence of U.S. forces. Installa- tions need to ensure a productive, safe and efficient work- • $100 million in MILCON for warrior transition place, and also offer a decent quality of life for military complexes; members and families. “America’s security depends upon • $535 million for other MILCON projects, such as defense installation assets that are available when and housing for servicemembers and their families, where needed, and with the right capabilities to support current and future mission requirements.”19 energy conservation and National Guard facilities; • $300 million to develop energy-efficient technologies; Worldwide, DoD currently manages more than 539,000 facilities on approximately 29 million acres of land, with a • $120 million for the Energy Conservation Invest- plant replacement value exceeding $700 billion.20 ment Program (ECIP); The American Recovery and Reinvestment Act • $555 million for a temporary expansion of Hom- (ARRA) of February 2009 provides Military Construc- eowners’ Assistance Program (HAP) benefits for tion and Operation and Maintenance funds available for private home sale losses of DoD military and civil- obligation through the end of FY 2013 and FY 2010, ian personnel; and

44 • $15 million for DoD Inspector General oversight See table 41 for the Military Construction budget and audit of ARRA execution. proposal by service.

In April 2009, DoD submitted an OCO funding Table 41 request for FY 2009 of $2.3 billion. The funds support the realignment of forces into and within Afghanistan; Military Construction by Service ($ billions1) intelligence, surveillance and reconnaissance capabilities; access to child care; and improvement of support facili- Service FY082 FY093 FY104 ties for wounded warriors and their families. Army 5.3 4.8 3.7 In the FY 2010 budget, DoD requests $1.4 billion Navy/Marine Corps 2.5 3.6 3.8 for OCO to continue the support for the increase of U.S. Air Force 1.3 1.1 0.9 forces in Afghanistan, specifically in the Regional Com- Defensewide 2.5 3.1 3.1 mands in the south and east. Total 11.6 12.6 11.5 The FY 2010 budget requests $23 billion for Military 1 Numbers may not add due to rounding. Construction and Family Housing. This is a decrease of 2 FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations $1.9 billion from the FY 2009 budget, with the decreases (OCOs) with the FY 2009 budget, but not the remaining $75 billion that primarily in the Base Realignment and Closure (BRAC) was requested again with the FY 2010 budget. 4 FY10 excludes OCO budget proposal. and Family Housing programs. See table 40. Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense Table 40 (Comptroller), June 2009, Table 6-6 Military Construction and Family Housing ($ millions) Family Housing

FY09 FY10 Safe, desirable and affordable housing is a key con- Request Request tributor to the quality of life of servicemembers and their Military Construction 11,283 12,835 families. The preferred approach is to provide a housing allowance to the servicemembers and rely on the local NATO Security Investment 241 276 Program community to provide housing for military families. If the market cannot supply sufficient quantities of quality Base Realignment and Closure IV 393 397 and affordable housing, DoD uses privatization to supply Base Realignment and Closure 9,065 7,480 housing. If privatization is not feasible, then DoD provides 2005 government-owned or government-leased housing. Family Housing Construction/ 1,457 489 Improvements In the early 1990s, DoD recognized that more than Family Housing Operation and 60 percent of DoD-owned family housing (approxi- 1,741 1,444 Maintenance mately 180,000 units) was inadequate and affordable Chemical Demilitarization 134 147 private housing was unavailable. The traditional means for remedying the problem was Military Construction; Family Housing Improvement 1 3 Fund however, the construction was projected to cost $20 billion and to take 30 years to complete at expected Energy Conservation Investment 80 90 Program funding levels. DoD proposed private-sector participa- tion to replace construction funds in implementing a Homeowners Assistance 5 23 long-term housing solution. Program Total 24,400 22,515 Congress authorized the Military Housing Privatiza- Source: Statement of Mr. Wayne Arny, Deputy Under Secretary of tion Initiative (MHPI) with the National Defense Autho- Defense (Installations and Environment), Before the Subcommittee on rization Act of 1996. The Housing Revitalization Act of Military Construction, Veterans Affairs and Related Agencies of the House Appropriations Committee, 19 May 2009 1997 established a Family Housing Improvement Fund (FHIF) and authorized entering into limited partnerships, Military Construction making guaranteed loans and conveying DoD-owned 21 The Military Construction title includes separate appro- property to stimulate private-sector participation. priations for Army, Navy, Air Force and Defense agencies Privatization has enabled the military services to lever- and is a significant source of facilities investment funding. age housing dollars by 10 to 1, with $2.5 billion in federal

The Department of Defense Budget 45 investments generating $25 billion in housing develop- an operational reserve force, the reserve component is ment at privatized installations. The projects include 50 moving toward a rotational status with a goal of not more years of maintenance and replacement where necessary. than one year mobilized in a six-year period. When mobi- See table 42 for Family Housing funds by service. lized, reservists receive the same pay and allowances as full-time active component personnel. Table 42

Family Housing by Service The National Guard is subject to state and territo- ($ billions1) rial laws that define their use in peacetime; the services’ Reserve forces are federal troops and always subject to Family Housing Operations FY082 FY093 FY104 federal control. Army 0.7 0.7 0.5 The reserve component provides nearly 36 percent of Navy/Marine Corps 0.3 0.4 0.1 the total military endstrength for 7.8 percent of the base Air Force 0.7 0.6 0.5 budget in FY 2010 (return to table 17 for the base budget Defensewide 0.1 0.1 0.1 and to table 9 for endstrength data). See table 43 for National Guard and Reserve funding data by service. Subtotal 1.8 1.8 1.2

Family Housing Construction5 Table 43

Army 0.4 0.6 0.3 Reserve Component Funding by Service 1 Navy/Marine Corps 0.4 0.4 0.4 ($ billions ) Air Force 0.3 0.4 0.1 Military Personnel FY052 FY082 FY093 FY104 Defensewide Reserve5 7.9 9.3 9.0 9.6 Subtotal 1.1 1.4 0.8 National Guard6 9.0 12.2 11.1 12.2 Total 2.9 3.2 2.0 Operation and Maintenance 1 Numbers may not add due to rounding. Reserve5 5.9 7.3 7.3 7.2 2 FY08 are actual expenditures. 3 FY09 includes $65 billion enacted for overseas contingency operations National Guard6 9.5 12.7 12.1 12.2 (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. Military Construction 4 FY10 excludes OCO budget proposal. 5 Excludes DoD Family Housing Improvement Fund. Reserve5 0.3 0.2 0.4 0.5 Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 769) National Guard6 0.7 0.9 1.2 0.5 Reserve Component Total7 33.3 42.6 41.1 42.2 The reserve component includes members and units 1 Numbers may not add due to rounding. 2 FY05 and FY08 are actual expenditures. of the Army and Air National Guard and the Army, Navy, 3 FY09 includes $65 billion enacted for overseas contingency operations Air Force, Marine Corps and Coast Guard Reserve. (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. Reserve component units are located in communities, and 4 FY10 excludes OCO budget proposal. their members are volunteers from the local communities. 5 Reserve includes Army, Navy, Marine Corps and Air Force. 6 National Guard includes Army and Air Force. The members of the reserve component are assigned to 7 Includes Medicare Retirement Contributions but excludes Recovery Account. one of three categories—the Ready Reserve, including Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730) the Selected Reserve, Individual Ready Reserve (IRR), and Inactive National Guard; the Standby Reserve; and Defensewide Programs the Retired Reserve.22 In addition to the appropriations that are grouped into The budget includes funding for the Ready Reserve, titles, the DoD budget includes a number of other smaller with emphasis on the Selected Reserve forces who train dollar amount appropriations and specific programs of to the same standards as the active force. The Standby particular congressional interest. The most significant are Reserve and the Retired Reserve are not funded and can described below. be activated only under a full mobilization with a formal declaration of war by Congress. Environmental Restoration Program Since 2001, the reserve component has been transi- DoD serves as the custodian and environmen- tioning to an operational role from a strategic reserve. As tal steward of nearly 30 million acres of land at more

46 than 3,700 locations. The military’s first environmental require the department to submit an annual report to Con- mandate from Congress was in 1872 for custodial respon- gress. Over the past 10 years, DoD has invested nearly sibility to protect the natural resources at Yellowstone $42 billion to ensure the success of its environmental pro- National Park. The environmental responsibility today grams. In FY 2008 alone, DoD obligated approximately includes activities at active installations, BRAC installa- $4.3 billion in environmental activities.23 See table 44 for tions and Formerly Used Defense Sites (FUDS). budget information by service.

The Defense Environmental Restoration Program Table 44 has evolved over the last 20 years to include enhancing Environmental Restoration Program the overall sustainability of land, air and water resources ($ millions) and supporting the military mission. The department cat- 1 2 3 egorizes the environmental programs into four areas: FY08 FY09 FY10 Army 456.8 415.9 • Conservation—to protect and enhance the natural and cultural resources; Navy/Marine Corps 290.2 285.9 Air Force 495.3 494.3 • Restoration—to identify, assess and remediate contamination from hazardous substances, military Defensewide 3.4 13.2 11.1 Formerly Used Defense Sites munitions and pollutants from previous military 290.7 267.7 operations in the Defense Environmental Restora- (FUDS) tion Program; Total 3.4 1,546.2 1,474.9 1 FY08 are actual expenditures. • Compliance—to ensure that DoD operations meet 2 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that or exceed federal, state, local and host nation envi- was requested again with the FY 2010 budget. ronmental requirements; and 3 FY10 excludes OCO budget proposal. Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730) • Pollution Prevention—to promote the reduction or elimination of the amount of waste, including haz- Chemical Destruction Program ardous and toxic chemicals, that enters the environ- ment by focusing on the source of pollution instead As a signatory of the Chemical Weapons Conven- of the end result. tion (CWC), which went into force in 1997, the United States has an obligation to destroy stockpiles of chemical The DoD funds for Conservation, Compliance and agents, munitions and any other chemical warfare mate- Pollution Prevention programs are in a number of appro- rials that are not in the chemical weapon stockpile. The priations, with the bulk in Operation and Maintenance CWC goal is to destroy all chemical weapons stockpiles and some funds in Military Construction, RDT&E, Pro- worldwide by 2007, with exceptions to April 2012. The curement and the Defense Working Capital Fund. DoD Chemical Demilitarization Program is for destroy- The DoD funds for Restoration activities are in the ing those chemical weapons. The task involves dispos- Environmental Restoration (ER) and BRAC accounts. In ing of some 30,000 tons of chemical agents and about 3.3 FY 1997, Congress established five separate ER accounts, million weapons and storage vessels. In 1991, DoD des- one each for the Army, Navy, Air Force, Defense Agen- ignated the Secretary of the Army as the Defense Execu- cies and FUDS. The Army is the executive agent for tive Agent for the program and assigned the destruction management of FUDS properties, and the U.S. Army of chemical warfare-related materiel to the Army. The Corps of Engineers is the executor for all aspects of U.S. Army’s Chemical Materials Agency (CMA) mission the program. includes that of the former Program Manager for Chemi- The ER funds are executed within O&M appropria- cal Demilitarization. tions and, therefore, no actual execution data are available The program experienced technological difficulties from the accounting system for the ER program. The ER and community concerns with respect to safety and assur- program continues to advance and demonstrate progress ance of doing the job in a risk-free way, which slowed over the years. down construction of facilities. However, the United The Comprehensive Environmental Response, Com- States had destroyed 11,506 tons as of the end of FY pensation and Liability Act; the Resource Conservation 2007.24 The FY 2009 budget for the Chemical Demili- and Recovery Act; and various other laws and regulations tarization Program focuses on achieving the long-term

The Department of Defense Budget 47 outcome of compliance with the CWC, while meeting the Table 46 annual performance objectives of no chemical releases Counternarcotics Program Budget Authority and zero exposures to ensure achieving the outcome of ($ millions) worker, public and environmental safety. See table 45. FY081 FY092 FY103 Table 45 45.6 1,284.7 1,059.0 Chemical Agents and Munitions 1 FY08 are actual expenditures. Destruction Program 2 FY09 includes $65 billion enacted for overseas contingency operations ($ millions1) (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. 3 2 3 4 FY10 excludes OCO budget proposal. FY08 FY09 FY10 Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730) Research, Development, Test and Evaluation the nation through 25 major closures, 24 major realign- 25 Procurement 1,512.7 1,505.6 1,560.8 ments and 765 lesser actions. BRAC 2005 has a six-year implementation period, from November 2005 to 15 Sep- Operation and Maintenance tember 2011. The round focuses on the reconfiguration of operational capacity to maximize warfighting capability Construction 104.2 144.3 146.5 and efficiency. Total 1,616.9 1,649.9 1,707.3 1 Numbers may not add due to rounding. The first BRAC round began on 3 May 1988, when 2 FY08 are actual expenditures. Secretary of Defense Frank C. Carlucci chartered the first 3 FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that Base Realignment and Closure Commission to recom- was requested again with the FY 2010 budget. mend military installations within the United States, its 4 FY10 excludes OCO budget proposal. Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730) commonwealths, territories and possessions for realign- ment or closure. Mr. Carlucci and subsequent Secretaries In the DoD budget justification material, the RDT&E, of Defense, Presidents and Congress recognized that DoD Procurement and O&M requests for Chemical Demilitar- was maintaining excessive bases and facilities, which ization are, in fact, carried as a single line entry in the consume a great deal of resources and billions of dollars. Procurement title. The Military Construction request is However, all the parties also recognize that DoD bases carried in the MILCON title. and facilities are economic engines for local communi- Counternarcotics Program ties and even regions. Therefore, the decision to close or even realign work among bases is very contentious. Since The Counternarcotics (CN) Program is another special 1988, the actions of each President and Congress indicate line entry in the DoD budget. Most CN activities involve their acceptance of the BRAC approach as a fair way of combating narcotics trafficking and include detection and addressing this difficult issue. monitoring of drug movement using military command, control, communications and intelligence resources, as In addition to the first BRAC round, which began well as military operational planning capabilities. in 1988, subsequent rounds were enacted in 1991, 1993 and 1995. DoD credits the first four BRAC rounds with The CN activities involve extensive use of reserve 97 major closures, 55 major realignments and 235 minor component personnel. The funds appropriated under this actions. DoD estimates that the closings and realignments line are restricted to the CN purpose and may be trans- in the four rounds saved approximately $18 billion though ferred to appropriations that are available for use by FY 2001 and a further $7 billion per year since.26 the reserve component. This applies particularly to the National Guard, which is active in a number of coopera- The BRAC program is substantial, representing a tive antidrug programs. See table 46 for budget data. $38.6 billion requirement from FY 2006 through FY 2011, and $5.3 billion in annual savings after full implementa- Base Realignment and Closure tion. The costs and savings estimates for BRAC 2005, the The current BRAC round consists of the 2005 Base current and fifth round, are intable 47. Closure and Realignment Commission’s recommenda- BRAC 2005 focuses on reconfiguring operational tions that became law on 9 November 2005. Identified capacity and includes a great deal of military construc- as BRAC 2005, this is the largest round; it includes rec- tion, which makes up approximately 70 percent of this ommendations affecting more than 800 locations across BRAC program compared to about 33 percent in previous

48 Table 47 Base Realignment and Closure Account 2005 Costs and Savings by Fiscal Year ($ millions)

Costs FY06 FY07 FY08 FY09 FY10 FY11 FY06–FY11 One-time BRAC account 1,502.5 5,634.1 8,478.4 8,765.6 7,479.5 2,299.7 34,159.8 One-time non-BRAC accounts 27.9 5.2 9.2 308.1 202.6 207.6 760.6 Annual recurring, non-BRAC 2.0 147.6 55.8 92.8 1,529.8 1,828.2 3,656.2 account Total Costs 1,532.4 5,786.9 8,543.4 9,166.5 9,211.9 4,335.5 38,576.6 Savings One-Time Savings 110.2 98.7 207.5 163.6 181.1 761.1 Recurring Savings 53.8 644.8 1,533.1 2,764.7 4,198.6 5,326.3 14,521.3 Total Savings 53.8 755.0 1,631.8 2,972.2 4,362.2 5,507.4 15,282.4 Source: DoD Base Realignment and Closure, 2005 BRAC Commission, Executive Summary, Fiscal Year (FY) 2010 Budget Estimates, Exhibit BC-02, BRAC Implementation Cost BRAC rounds. As a result, the original estimates for the With the war on terrorism, the mix and volumes of round have increased as construction costs have grown. material have changed. For example, DoD purchased certain items to have on hand if they were required, but In part, the construction in this round relates to the DoD some of these items (such as preventive vaccines) may and Army decisions to recapitalize facilities to accommo- never be purchased by customers. Therefore, FY 2010 date larger Army units and a growing force, and to improve continues to include an infusion of appropriated funds, but facilities such as training ranges, reserve component infra- much smaller than the FY 2008 experience. See table 48. structure and quality-of-life facilities. Other DoD deci- sions include accelerating the closure of Walter Reed Army Table 48 Medical Center in Washington, D.C., and applying lessons learned to improve other medical facilities. Defense Management and Revolving Funds Budget Authority Working Capital and Revolving Funds ($ millions1) DoD operates a number of industrial and commercial FY082 FY093 FY104 activities using Working Capital and Revolving Funds in Army 3,559.6 102.2 38.5 order to be efficient and responsive to warfighting needs. Navy/Marine Corps 619.7 1.6 The funds operate in a commercial business manner—they Air Force -934.0 61.5 64.2 sell their services and products to the military services and Defensewide including other authorized customers, charging rates that generally Defense Commissary 5,673.6 1,324.0 1,352.3 recover the cost of their operations. Agency The intent is for the funds to operate on a break-even Army Conventional basis over the budget cycle. The funds establish an activity Ammunition group rate to recover the full costs plus any adjustment for Total4 8,918.9 1,489.3 1,455.0 prior-year operating gains or losses. The funds charge the 1 Numbers may not add due to rounding. 2 FY08 are actual expenditures. customers at the established rates, and the payments are 3 FY09 includes $65 billion enacted for overseas contingency operations effectively revenue to the funds. The payments from other (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was requested again with the FY 2010 budget. Defense organizations are generally from appropriated 4 FY10 excludes OCO budget proposal. funds, which then become part of the fund’s cash on hand. Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730) Initially, Congress finances the corpus of the funds The department operates four working capital funds— with appropriated money. From time to time, the fund the Army Working Capital Fund, the Navy Working may request additional appropriated money from Con- Capital Fund, the Air Force Working Capital Fund and gress for capitalization. the Defensewide Working Capital Fund. Five revolving

The Department of Defense Budget 49 funds—Pentagon Reservation Maintenance Revolving revealed underlying flaws in the priorities, cul- Fund, Buildings Maintenance Fund, National Defense Stock- tural preferences, and reward structures of Amer- pile Transaction Fund, Conventional Ammunition Working ica’s defense establishment—a set of institutions Capital Fund and Defense Coalition Support Account—are largely arranged to prepare for conflicts against for control and financial accounting purposes. other modern armies, navies, and air forces. Pro- The four working capital funds include a mix of the grams to directly support, protect, and care for activities listed below: the man or woman at the front have been devel- oped ad hoc and funded outside the Base budget. • supply management; Put simply, until recently there has not been an • depot maintenance; institutional home in the Defense Department for • ordnance; today’s warfighter. Our contemporary wartime needs must receive steady long-term funding and • information services; a bureaucratic constituency similar to conven- • commissary operations; tional modernization programs. I intend to use 28 • printing and publications; the FY10 budget to begin this process. • transportation; Secretary Gates was clearly considering the signifi- cant amount of funding and his concern with priorities • financial operations; when he expressed the following principle: • distribution depots; It is important to remember that every defense • research and development (Navy); dollar spent to over-insure against a remote or • industrial plant equipment services; and diminishing risk—or, in effect, to “run up the score” in a capability where the United States • defense reutilization and marketing service. is already dominant—is a dollar not available to The Defensewide Working Capital Fund includes take care of our people, reset the force, win the the Defense Logistics Agency, the Defense Finance and wars we are in, and improve capabilities in areas Accounting Service and the Defense Information Ser- where we are underinvested and potentially vul- vices Agency. Each organization operates different activi- nerable. That is a risk I will not take.29 ties within the single Defensewide Fund. Secretary Gates and Chairman of the Joint Chiefs Keep America Strong and Secure of Staff Admiral Mullen describe the budget proposal as The DoD budget proposes $663.8 billion for FY 2010, representing “a budget crafted to reshape the priorities of including $533.8 billion in discretionary budget authority America’s defense establishment. If approved, these rec- to fund base defense programs and $130 billion to support ommendations will profoundly reform how this depart- overseas contingency operations, primarily in Iraq and ment does business.”30 The reshaping diminishes risk by Afghanistan.27 This proposal is for significant funding for terminating programs and balancing low-intensity needs the defense component of national security. with conventional capabilities. The Budget Priorities and In remarks to Congress in January 2009, Secretary Resources section, above, provides insights into the sig- Gates describes concerns with prior budgets and the nificant reshaping initiatives in the current budget pro- budget formulation process: posal. Overall, the budget top line at $664 billion com- Our struggles to put the defense bureaucra- pares favorably with outlays for the most recently com- cies on a war footing these past few years have pleted fiscal year—$667 billion in FY 2008.

50 Endnotes 1 Robert M. Gates was sworn in as Secretary of Defense on 18 December 2006. 2 U.S. Department of Defense, Office of the Assistant Secretary of Defense (Public Affairs), Speech, Defense Bud- get Recommendation Statement, as prepared for delivery by Secretary of Defense Robert M. Gates, Arlington, VA, Budget Press Briefing, 6 April 2009, http://www.defenselink.mil/speeches/speech.aspx?speechid=1341. 3 News Transcript, U.S. Department of Defense, Office of the Assistant Secretary of Defense (Public Affairs), 5 Feb- ruary 2007. Presenters: Secretary of Defense Robert M. Gates, Under Secretary of Defense (Comptroller) Tina Jo- nas and Director, Force Structure, Resources and Assessment for the Joint Staff, Vice Admiral Steve Stanley, http:// www.defenselink.mil/transcripts/transcript.aspx?transcriptid=3881. 4 “DoD Releases Fiscal 2010 Budget Proposal,” U.S. Department of Defense, News Release No. 304-09, 7 May 2009, http://www.defenselink.mil/releases/release.aspx?releaseid=12652. 5 U.S. Department of Defense, Defense Budget Recommendation Statement, Budget Press Briefing, 6 April 2009. 6 Testimony as delivered by Secretary of Defense Robert M. Gates and Chairman of the Joint Chiefs of Staff Navy Admiral Mike Mullen to the House Armed Services Committee, 13 May 2009, http://www.jcs.mil/speech. aspx?id=1181. 7 U.S. Department of Defense, Defense Budget Recommendation Statement, Budget Press Briefing, 6 April 2009. 8 Testimony Delivered by Secretary of Defense Robert M. Gates, to the Defense Subcommittee of the Senate Appro- priations Committee, Wednesday, 9 May 2007, http://www.defenselink.mil/speeches/speech.aspx?speechid=1150. 9 U.S. Department of Defense, Defense Budget Recommendation Statement, Budget Press Briefing, 6 April 2009. 10 Ibid. 11 Office of the Secretary of Defense (Comptroller), Department of Defense Budget Titles,http://www.defenselink.mil/ comptroller/icenter/budget/budgtitles.htm. 12 DoD FY 2010 Budget Request Summary Justification, Special Topics, Combatant Commands,http://www.de - fenselink.mil/comptroller/defbudget/fy2010/fy2010_SSJ.pdf. 13 Gates and Mullen testimony to the House Armed Services Committee, 13 May 2009. 14 United States Special Operations Command, FY 2010 Budget Highlights, http://www.socom.mil/Docs/FY2010_Bud- get_Highlights.pdf. 15 DoD FY 2010 Budget Request Summary Justification, pp. 1-8 and 1-9,http://www.defenselink.mil/comptroller/def - budget/fy2010/fy2010_SSJ.pdf. 16 DoD Defensewide Justification Documentation, Defense Health Program,Volume 1, PB-11B, http://www.de- fenselink.mil/comptroller/defbudget/fy2010/budget_justification/pdfs/09_Defense_Health_Program/VOL_1/Vol_I_ Sec_6-C_PB-11B_MEDICAL_WORKLOAD_10PB_DHP.pdf 17 DoD FY 2010 Budget Request Summary Justification, Services and Defense Agencies, p. 1-58, http://www.de- fenselink.mil/comptroller/defbudget/fy2010/fy2010_SSJ.pdf. 18 Missile Defense Agency, Fiscal Year 2010 Budget Estimates, http://www.mda.mil/mdaLink/pdf/budgetfy10.pdf. 19 Office of the Deputy Under Secretary of Defense, Installations and Environment,http://www.acq.osd.mil/ie/index. shtml. 20 Statement of Mr. Wayne Arny, Deputy Under Secretary of Defense (Installations and Environment), before the Sub- committee on Military Construction, Veterans Affairs, and Related Agencies of the House Appropriations Commit- tee, 19 May 2009, http://www.acq.osd.mil/ie/download/posture_stmt_fy10.pdf.

The Department of Defense Budget 51 21 Office of the Deputy Under Secretary of Defense, Installations and Environment, Military Housing Privatization, http://www.acq.osd.mil/housing/housing101.htm. 22 DoD FY 2009 Budget Request Summary Justification, 4 February 2008, page 107,http://www.defenselink.mil/comp - troller/defbudget/fy2010/fy2010_SSJ.pdf. 23 Defense Environmental Programs, Annual Report to Congress, Fiscal Year 2008, http://deparc.xservices.com/do/ home. 24 ExpectMore.gov, Program Assessment, Chemical Demilitarization, http://www.whitehouse.gov/omb/expectmore/ summary/10000050.2005.html. 25 Statement of Mr. Wayne Arny, Deputy Under Secretary of Defense (Installations and Environment), before the Sub- committee on Military Construction, Veterans Affairs and Related Agencies of the House Appropriations Commit- tee, 22 April 2009, http://www.acq.osd.mil/ie/download/arny_042209.pdf. 26 Donna Miles, “BRAC Deadline Expires; DoD to Begin Closure, Realignments,” American Forces Information Ser- vice, 9 November 2005, http://www.defenselink.mil/news/Nov2005/20051109_3280.html. 27 “DoD Releases Fiscal 2010 Budget Proposal,” 7 May 2009. 28 U.S. Department of Defense, Defense Budget Recommendation Statement, Budget Press Briefing, 6 April 2009. 29 Ibid. 30 Ibid.

52 The Army Budget

Introduction The Secretary and the Chief of Staff go on to state The Army requests $142.1 billion in Total Obligational that “the Army remains the best led, best trained, and best equipped Army in the world, but it also remains out Authority (TOA) in the base budget proposal for Fiscal 4 Year (FY) 2010—1 October 2009 to 30 September 2010. of balance.” They also observe that the continuing The proposal is $2 billion greater than the FY 2009 enacted demand for land forces has stretched Soldiers and their budget of $140.1 billion.1 families, and has limited the Army’s flexibility in meeting other contingencies: The Army also requests an additional $83.1 billion in FY 2010 to support ongoing overseas contingency opera- In 2007, our Army initiated a plan based on four tions (OCOs) (including the continuing military operations imperatives: sustain our Soldiers and families; in Iraq and Afghanistan), resetting the force and continuing prepare our forces for success in the current con- programs for which the Army is the executive agent—the flicts; reset returning units to rebuild readiness; Afghanistan Security Forces Fund, the Joint Improvised and transform to meet the demands of the 21st Explosive Device Defeat Fund (JIEDDF) and the new Pak- century. We have made progress in all of these istan Counterinsurgency Capability Fund. and are on track to meet the two critical chal- lenges we face: restoring balance and setting con- With the base and supplemental budgets, the Army is ditions for the future.5 requesting a total of $225.2 billion in FY 2010. The FY 2010 budget fully funds the all-volunteer In addition to the FY 2010 request, the Army requests force at accelerated levels: 547,400 for the active com- an additional $90.8 billion for FY 2009 for OCOs.2 The ponent (AC), 358,200 for the Army National Guard and sum of this supplemental request and the enacted $140.1 205,000 for the Army Reserve. In addition, the budget billion is $230.9 billion, $5.7 billion more than the FY continues the initiatives begun in 2007 to restore balance 2010 total. and set conditions for the future. The budget requests ade- quate resources to: The Army notes that the budget proposal for FY 2010 enables the Army to continue to protect America’s national • complete current operations effectively—to engage security interests and to transform to meet the challenges and destroy the enemy, and to assist the host coun- of today and the future. Then Secretary of the Army Pete tries in achieving a basic level of peace that will Geren and Chief of Staff of the Army General George W. enable personal dignity, economic growth and politi- Casey, Jr., discuss these challenges in their letter transmit- cal stability; and ting the 2009 Army Posture Statement to Congress: • generate the capability and capacity to deter future Our nation is in its eighth year of war, a war in which challenges or decisively defeat future enemies. our Army—Active, Guard, and Reserve—is fully engaged. The Army has grown to more than one Top Line Analysis million Soldiers, with 710,000 currently serving The analysis in this chapter begins with the top line, on active duty and more than 255,000 deployed to i.e., budget totals, and subsequently examines the individ- nearly 80 countries worldwide. Our Soldiers and ual appropriations. In response to congressional require- Army Civilians have performed magnificently, not ments, the budget generally presents funding data for three only in Afghanistan and Iraq, but also in defense fiscal years—the prior year (FY 2008), the current year of the homeland and in support to civil authorities (FY 2009) and the budget year (FY 2010). The FY 2010 in responding to domestic emergencies.3 base budget and supplemental requests are in table 49.

The Army Budget 53 Table 49 particularly the land forces, to stop the violent extremists, putting great strains on the Army, Soldiers and their fami- Army Budget Summary lies. In 2007, the Army initiated a plan to rebalance the Total Obligational Authority ($ billions) force—by growing the Army and by pursuing four imper- atives: sustain, prepare, reset and transform. The Army is 1 2 3 FY08 FY09 FY10 seeking to balance the continuous demands of the current Base proposal4 128.9 140.1 142.1 war and the requirement to generate adequate quantities Overseas contingency 121.7 90.83 83.1 of forces for the full spectrum of operations. The FY 2010 operations (OCOs) proposal5 budget specifically provides funds for growing the force Total 250.6 230.9 225.2 and for the four imperatives. 1 The actual amounts of the base budget and OCO budget are unavailable from Army sources. Army documents state that OCO Global Commitments actuals were $13.8 billion for Military Personnel, $53.6 billion for Operation and Maintenance, $2.7 billion for the Afghanistan Security The budget supports the Army’s primary focus—con- Forces Fund and $4.3 billion for Joint Improvised Explosive Device Defeat; they do not identify Military Construction or Procurement. tinuing the support of the combined counterinsurgency Therefore, the total is the actual experience, the base proposal is from operations in Iraq and Afghanistan, which includes train- the President’s Budget and the OCO is the difference between these. 2 FY09 includes the enacted base budget and bridge supplemental. ing each nation’s indigenous forces and building their 3 FY09 supplemental and FY10 are estimates. ability to establish peace and maintain stability. The Army 4 Includes Environmental Restoration Act (ERA). 5 Includes OCO, Homeowner’s Assistance Program, Iraq Security Forces has 140,000 Soldiers in active combat theaters. Funds, Pakistan Counterinsurgency Capability Fund, Joint Improvised Explosive Device Defeat Fund (JIEEDF) and Army Working Capital Fund In addition to commitments to operations in Iraq and (AWCF). Source: FY 2010 President’s Budget Highlights, Assistant Secretary of Afghanistan, the Army’s global commitments include the Army for Financial Management and Comptroller, May 2009; more than 255,000 Soldiers deployed (including the Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), 140,000 Soldiers in active combat theaters) in nearly 80 June 2009, Table 6-6 countries around the world. In addition, more than 4,100 Three points are evident from the data in table 49: Army civilians and more than 33,000 contractor person- nel are also forward-deployed. See figure 9. 1. The base budget proposal increases annually. 2. The war supplemental proposal decreases annually. Grow the Army In January 2007, the President requested and Con- 3. The base is not increasing as much as the supple- gress approved an increase of 74,200 Soldiers in the Army mental proposals are decreasing; therefore, the total by FY 2012. The initiative was titled “Grow the Army.” decreases annually. The distribution includes increases of 65,000 in the active The FY 2010 total is 2.5 percent less than the FY Army, 8,200 in the Army National Guard and 1,000 in the 2009 total, and the FY 2009 total is 7.9 percent less than Army Reserve. that of FY 2008. The Army budget supports the accelerated growth of Army Land Forces the active component to an endstrength of 547,400 Sol- diers, the Army National Guard to 358,200 Soldiers and the The Army budget is a plan for the next fiscal year Army Reserve to 206,000 Soldiers by the end of 2010. plus a proposal for resources to implement the plan. The budget focuses on the Army mission—to provide trained In the 2009 Army Posture Statement, the Secretary and ready land forces with the capability of operating and the Chief of Staff of the Army observe that the Army across the spectrum of operations and as part of the joint has grown to more than one million Soldiers, with 710,000 force available to a combatant commander—and the currently serving on active duty. The FY 2010 budget sup- vision for implementing that mission now and into the ports 547,400 active component Soldiers, and thousands future. Land forces are essential to the Army mission— of Army National Guard and Army Reserve Soldiers also they wrest control of land and people from hostile forces serve on active duty. and are essential for defense and stability operations in Sustain. The budget provides funds to sustain the quality environments where governments are nonexistent, unsta- of the all-volunteer force, including focusing on recruit- ble or contending with counterinsurgency. ment and retention; care of Soldiers, families and civil- Entering the ninth year of war against violent extrem- ians; care for wounded warriors; and support for families ist groups, the nation continues to rely on the joint forces, of fallen Soldiers.

54 Figure 9 Army Global Commitments 265,000 Soldiers deployed/forward stationed in nearly 80 countries overseas1 as of 15 September 2009

Other Operations and Exercises 3,390 Soldiers

Alaska U.S. Army Europe 13,200 Soldiers 38,600 Soldiers Bosnia OEF-Afghanistan CONUS Support Base 10 Soldiers OIF-Iraq 4,700 Soldiers2 43,500 Soldiers KFOR 99,400 Soldiers South Korea 1,400 Soldiers OEF/OIF-Kuwait 17,200 Soldiers3 11,200 Soldiers Honduas JTF-GTMO MFO Qatar JTF-BRAVO 600 Soldiers 700 Soldiers OEF-Philippines Hawaii 1,000 Soldiers 300 Soldiers 200 Soldiers 21,400 Soldiers JTF-HOA 1,200 Soldiers

Army Personnel Strength AC Stationed Overseas: 102,100 Component RC Authorized for Mobilization/ On Current Orders AC Stationed Stateside: 450,300 Active (AC) 552,4004 N/A Reserve (RC) 1 Includes active component stationed overseas. Army Reserve 207,400 31,000 2 Reserve component mobilized stateside. Army National Guard 362,000 68,100 3 Part of active component stationed overseas. 4 1,120,800 Stationed overseas – 102,100; stationed stateside – 450,300.

GTMO = Guantánamo JTF = Joint Task Force MFO = Multinational Force & Observers OIF = Operation Iraqi Freedom HOA = Horn of Africa KFOR = Kosovo Force (NATO) OEF = Operation Enduring Freedom CONUS = Continental United States

Source: National Defense Budget Estimates for FY 2010, Green Book, Office of the Under Secretary of Defense (Comptroller), June 2009, Table 7-5 for AC and Civilian component Department of the Army Fiscal Year (FY) 2010 Budget Estimates, Justification Books for Army National Guard and Army Reserve, May 2009

Prepare. The budget for preparing the forces includes missions. To reset the force, the Army budget provides readying Soldiers, units and equipment to succeed in the funds to revitalize Soldiers and families; repair, replace current conflicts, especially in Iraq and Afghanistan. This and recapitalize equipment; and retrain Soldiers. The includes continuing to adapt institutional, collective and Army is using a standard reset model and is continuing individual training to enable Soldiers to succeed in combat a reset pilot program to further improve the effectiveness and prevail against adaptive and intelligent adversaries. and efficiency of the Army Force Generation (ARFOR- It also includes continuing to acquire the best available GEN) process. equipment to both protect Soldiers and maintain a tech- Transform. Transforming the force involves continu- nological advantage over adversaries. ously improving to meet the needs of the combatant com- Reset. Reset focuses on restoring deployed units to a level manders in the changing security environment of the 21st of personnel and equipment readiness necessary for future century. The Army budget includes funds for adopting

The Army Budget 55 modular organizations, accelerating delivery of advanced mobilization of Army National Guard and Army Reserve technologies, operating the reserve component in support units is one year mobilized to five years demobilized. The of the active forces, restationing forces and transforming planning objective for the active component is one year leader development. deployed to two years at home station. Transformation includes the reorganization of the Budget Basics Army into standardized modular organizations centered Knowledge of certain basics federal budgeting terms around brigade combat teams (BCTs). The active and and practices is essential to an understanding of this anal- reserve components are increasing the number of BCTs ysis—for example, the appropriation structure and the and support brigades to meet operational requirements to different means of expressing the amount of funding. This create a more deployable, adaptable and versatile force. paragraph provides an introduction to or a review of the The Army plan was to grow to 76 BCTs and approxi- key budgeting terms and practices for better understand- mately 227 support brigades; in June 2009, Secretary of ing the subsequent analysis. Defense Robert M. Gates cut the active Army from 48 to The Army generally expresses the budget proposal 45 BCTs. as Total Obligational Authority in its briefing material. Army Force Generation The Defense Department generally expresses the budget proposal in terms of Budget Authority (BA), as observed The basic underpinning of the four imperatives is in the prior section, and the Office of Management and the ARFORGEN initiative. The ARFORGEN process Budget generally expresses the President’s Budget in involves systematically increasing unit readiness over terms of Outlays, as observed in the federal section. Since time and increasing the availability of trained, ready and each term has a unique definition, the dollar amounts for cohesive units. The ARFORGEN process includes allo- the same fiscal year are different. cating resources based on a unit’s mission and deploy- ment sequence, regardless of component. The Army budget proposal to Congress includes both BA and TOA: The process involves a six-year cycle in which units proceed through three pools to meet operational require- • Budget Authority is the authority provided by law to ments with increased predictability: incur financial obligations that will result in Outlays. • Reset and Train. These forces redeploy from • Total Obligational Authority is the sum of: operations, receive and stabilize personnel, reset ◦ Budget Authority for a given fiscal year; equipment and conduct individual and collective training. The phase culminates in a brigade-level ◦ balances of Budget Authority brought forward collective training event. Units in this force pool from prior years that remain available for obliga- are not ready or available for major combat opera- tion in the fiscal year; and tions; however, they should be ready to respond to ◦ amounts authorized to be credited to a specific homeland defense requirements and provide defense fund or account during that year, including trans- support to civil authorities. fers between funds or accounts. • Ready. These forces continue mission-specific collec- The federal budget process requires a separate sub- tive training and are eligible for sourcing if necessary mission for “emergency requirements,” i.e., where the to meet joint requirements. Their collective training is future circumstance are unknown or unpredictable. As designed to focus on directed Mission Essential Task the emergency situation becomes clearer, the administra- List (METL) tasks, such as stability operations. tion submits a supplemental proposal to Congress. The • Available. These forces are in their planned deploy- military operations in Afghanistan and Iraq were consid- ment windows and are fully trained, equipped and ered such an emergency situation. However, President resourced to meet operational requirements. Obama decided that a budget proposal for OCOs could be prepared along with the base budget, and has acted The ARFORGEN process applies to the active and accordingly. reserve components and relies upon a fundamental change in strategy for the Army National Guard and the An organization may be designated as an execu- Army Reserve—a change from a strategic reserve to an tive agent when, typically, there is a nexus between an operational force. The planning objective for involuntary organization’s experience and a particular program. For

56 example, certain appropriations are in the DoD budget • Defense Working Capital Fund, Army. proposal, but the funds for the program are executed In addition, the Army receives funds allocated spe- by the Army. This difference, between where the funds cifically for Base Realignment and Closure (BRAC). are requested and where the funds are executed, needs to be considered when making comparisons across the Budget Formulation Process years. The Army Budget Formulation process is critical The Army budget is prepared in current dollars, and because it produces the only product—the budget—that therefore all tables and figures are in current dollars, unless is approved by DoD and the President and is submitted specifically noted otherwise. The difference between to Congress for authorizations and appropriations. Army current and constant dollars is: Budget Formulation responds to DoD Planning, Program- ming, Budgeting and Execution (PPBE), and DoD PPBE • Current dollars are a measure of spending or rev- responds to the federal process that is governed by the enues in a given year that has not been adjusted for Office of Management and Budget (OMB) and is respon- differences in prices (such as inflation). sive to Congress. • Constant dollars are a measure of spending (or The federal budget formulation process begins with revenues) in a given year that has been adjusted for differences in prices (such as inflation) between that dollar guidance from the OMB to the departments, includ- year and a base year. ing DoD. DoD distributes the guidance, or controls, to the services and other DoD agencies. Headquarters, Depart- Army Appropriations ment of the Army distributes the dollar controls and pro- The Army appropriations are listed below and dis- mulgates guidance among the Army commands, Army cussed in subsequent paragraphs. service component commands and direct reporting units. • Military Personnel, Army; The Army, like all federal agencies, prepares its budget using the appropriation structure prescribed by Congress. • Reserve Personnel, Army; The Army process includes accumulating and integrating • National Guard Personnel, Army; budget proposals from across the Army; reviewing, ana- lyzing and prioritizing the budget requests; and obtain- • Operation and Maintenance, Army; ing approval and preparing hundreds of exhibits and other • Operation and Maintenance, Army Reserve; detail justification material. • Operation and Maintenance, Army National Guard; The Army submits its budget proposal to the DoD Comptroller for joint DoD and OMB review. DoD issues • Aircraft Procurement, Army; draft Program Budget Decisions (PBDs) and the Army • Missile Procurement, Army; prepares reclamas. At the end of process, the Secretary of the Army or the Assistant Secretary of the Army for • Procurement of Weapons and Tracked Combat Vehi- Financial Management and Comptroller (ASA[FM&C]) cles, Army; meets with the Secretary or Deputy Secretary of Defense • Procurement of Ammunition, Army; to resolve major budget issues. As approved, the Army • Other Procurement, Army; budget becomes part of the President’s Budget that is sub- mitted to Congress in February. • Research, Development, Test and Evaluation, Army; Congress reviews the budget with the intent of provid- • Military Construction, Army; ing appropriation acts to the President before the begin- • Military Construction, Army National Guard; ning of the fiscal year. However, if no congressional budget agreement is reached by 1 October, Congress passes Con- • Military Construction, Army Reserve; tinuing Resolution Acts (CRA), which allow the depart- • Family Housing Construction, Army; ments to continue operating within stipulated restrictions. • Family Housing Operations, Army; When the President signs the appropriation acts into law, first the U.S. Treasury, then DoD and next the • Chemical Agents and Munitions Destruction, Army; Army receives funds for execution. The various appro- • Environmental Restoration Fund, Army; and priations carry specific restrictions. For example, most

The Army Budget 57 appropriations expire at the end of one or three or five • FY 2008–$250 billion; fiscal years, and money generally cannot be moved across • FY 2009–$231.0 billion; and appropriations without prior congressional reprogram- ming approval. • FY 2010–$225.2 billion.

Budget Documents The FY 2010 sum is nearly $6 billion less than for FY 2009, and $25 billion or 10 percent less than the FY The Army budget includes separate documents for each 2008 actual experience. Since the FY 2009 and FY 2010 appropriation. In fact, the ASA (FM&C) lists about 35 doc- proposals are similar, the following observations refer to uments, which contain perhaps 10,000 pages of detail.6 comparisons of the sum of the FY 2010 base and OCO In addition to actual budget documents, other docu- proposals with the FY 2008 experience: ments such as the 2009 Army Posture Statement and testi- • The Operation and Maintenance, Army (OMA) mony to Congress provide other pertinent information on appropriation consistently consumes the greatest the budget and the Army’s resource needs. This analysis portion of the budget—37 percent in FY 2010. integrates key information from the many sources, orga- nizes the information under topical categories and pro- • Military Personnel, Army (MPA) consumes the vides insights on the budget. next greatest portion at 22 percent and increases by $5 billion or 12 percent more than the FY 2008 Budget Summary experience. The Army budget is a plan for the next fiscal year • Procurement is the third largest at 14 percent, but along with a proposal for resources to implement the declines by $30.3 billion or 50 percent from the FY plan. The budget is built with participation from across 2008 experience. Within the Procurement group, the Army and includes a great deal of detailed data, such as appropriation, budget activity, program, function and between FYs 2010 and 2008: component; within these there are various levels of detail. ◦ the Aircraft appropriation increases by $1.1 The budget reflects the recommendations as reviewed and billion or 18 percent; approved by many organizations. The budget integrates, ◦ the Missiles appropriation decreases by $0.5 prioritizes and balances operational, functional and pro- billion or 21 percent; grammatic requirements; it is presented with thousands of pages of justification material to the Secretary of Defense, ◦ the Weapons and Tracked Combat Vehicles appro- OMB and, ultimately, Congress. priation decreases by $6.2 billion or 66 percent; Congress requires budget information for at least three ◦ the Ammunition appropriation decreases by $0.2 years—the prior year (i.e., last completed), the current billion or 7 percent; and year and the budget year. In addition, Congress requires ◦ the Other Procurement appropriation decreases that the budget comply with the appropriation structure by $24.4 billion or 60 percent. and associated mandates and restrictions. • The combination of MPA and OMA is 59 percent of The intent of the multiyear display of data is to facili- the FY 2010 budget proposal. Adding the Military Pay tate comparisons across the years; however, comparisons and Operation and Maintenance appropriations for the are more challenging with annual supplemental budgets. Army National Guard and the Army Reserve increases The prior-year data include all supplemental funds. The this to 69 percent of the FY 2010 budget proposal. current-year data include enacted base and supplemental funds, commonly described as “bridge” funds, if enacted. • Research, Development and Acquisition (RDA, The budget-year data distinguishes base and supplemen- comprising Procurement and Research, Develop- tal proposals. These distinctions make multiyear compari- ment, Test and Evaluation) equals $41 billion or 18 sons and trend analyses very difficult. percent of the FY 2010 budget proposal. Budget by Appropriation • All of the other appropriations account for the remaining 13 percent of the FY 2010 budget proposal. The sum of the base budget and OCO funds for the three fiscal years is: A summary of the Army budget proposal is in table 50.

58 Table 50 Army Summary Total Obligational Authority by Component and Appropriation Group ($ billions1)

FY08 FY09 FY10 Appropriation Base Base Actual2 OCO OCO Enacted Estimate Personnel 45.0 36.5 11.0 41.3 9.0 Medicare-Eligible Retiree Health Care Fund 3.1 2.9 3.1 Operation and Maintenance 82.8 31.3 51.4 31.3 52.2 Total Procurement 60.9 23.2 13.5 21.1 9.5 Aircraft 5.9 4.9 0.8 5.3 1.6 Missiles 2.4 2.2 0.8 1.4 0.5 Weapons and Tracked Combat Vehicles 9.4 3.2 2.5 2.5 0.8 Ammunition 2.7 2.3 0.3 2.1 0.4 Other Procurement 40.5 10.7 9.1 9.9 6.2 Research, Development, Test and Evaluation 12.5 12.0 0.1 10.4 0.1 Military Construction 5.3 4.7 1.2 3.7 0.9 Army Family Housing 1.1 1.0 0.8 Homeowners' Assistance Program 0.0 0.0 Base Realignment and Closure (BRAC) 4.1 4.4 4.2 Environmental Restoration, Army3 0.5 0.4 Army National Guard Personnel 9.2 6.6 1.6 7.6 0.8 Medicare-Eligible Retiree Health Care Fund 1.3 1.2 1.2 Operation and Maintenance 6.9 5.8 0.5 6.3 0.3 Military Construction 0.6 0.9 0.4 Army Reserve Personnel 4.7 3.9 0.3 4.3 0.3 Medicare-Eligible Retiree Health Care Fund 0.7 0.7 0.7 Operation and Maintenance 2.7 2.6 0.2 2.6 0.2 Military Construction 0.1 0.3 0.4 Chemical Demilitarization 1.5 1.6 1.7 Army Working Capital Fund 1.3 0.1 0.4 0.0 Joint Improvised Explosive Device Defeat Fund 4.3 3.5 0.6 1.5 Afghanistan Security Forces Fund 3.0 5.6 7.5 Iraq Security Forces Fund 1.0 Pakistan Counterinsurgency Capability Fund 0.4 0.7 Total 250.6 140.2 90.8 142.1 83.1 1 Numbers may not add due to rounding. 2 FY08 are actual Total Obligational Authority including base and supplemental. 3 ERA is executed in Operation and Maintenance, Army for FY08 but the budget proposal is in a separate line for FY09 and FY10. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-6

The Army Budget 59 Overseas Contingency Operations The FY 2008 OCO budget proposal for Procurement The OCO funds provide the incremental costs for was $21.1 billion; the FY 2010 OCO proposal is $9.5 bil- military and intelligence operations, force protection, lion—a decrease of $11.6 billion. The base proposal for Procurement in FY 2008 was $23.8 billion; the FY 2010 training, overseas facilities and base support, communica- base proposal is $21.1 billion—a decrease of $2.7 billion. tions, transportation, maintenance, supplies, weapons and equipment refurbishment or replacement, and other essen- The sum of the base and OCO for FY 2008 was $44.9 tials for U.S. forces. The funds also support deployed per- billion; the sum for FY 2010 is $30.6 billion—a decrease sonnel with special pay and benefits, food, medical and of $14.3 billion or 32 percent. other services, and training and equipping of Iraqi and The subsequent discussion focuses on the individual Afghan security forces. appropriations. The Army budget material provides information on Personnel the distribution of the OCO funds in FYs 2009 and 2010, but provides information only on Military Personnel, The American Soldier is the nucleus of Army forces Operation and Maintenance, the Afghanistan Security and the ultimate Army capability. Soldiers operate the Forces Fund and the Joint Improvised Explosive Devices high-technology systems of the modern Army and Soldiers Defeat Fund (JIEDDF) for the FY 2008 experience. provide “boots on the ground” to close with the enemy in close combat. Soldiers are the ultimate representatives of However, the FY 2008 budget proposal included another the America people as they interact with the local people $23.3 billion for Procurement, Research, Development, in stability and counterinsurgency operations. Test and Evaluation (RDT&E), Military Construction and the Army Working Capital Fund that is not included in the The American Soldier serves in one of three Army budget material. See table 51. components: the active Army, Army National Guard and Army Reserve. Table 51 The Army civilian workforce constitutes the fourth Overseas Contingency Operations component and provides expertise and continuity for the ($ billions1) other components at home and abroad. Contractor per- FY082 FY09 FY10 sonnel also support and often serve alongside Soldiers. Military Personnel 13.8 12.9 10.1 In addition, Soldiers receive support from their fami- Operation and Maintenance 53.6 52.1 52.7 lies, who endure hardships and make many sacrifices. More than half of all Soldiers are married, and Army fam- Procurement 21.1 13.5 9.5 ilies include more than 700,000 children. Research, Development, 0.1 0.1 0.1 Test and Evaluation (RDT&E) The Army budget supports retaining and recruiting Military Construction quality Soldiers to sustain the all-volunteer force. The 0.7 1.2 0.9 (MILCON) budget supports the Army’s commitment to meeting adequate quality-of-life standards for Soldiers and their Army Working Capital Fund 1.4 0.4 (AWCF) families, to providing a safe and conducive work envi- ronment for Soldiers, Army civilians and contractors, Afghanistan Security Forces 2.7 5.6 7.5 and to training and professional development for Soldiers Iraq Security Forces 1.0 and civilians. Pakistan Counterinsurgency 0.4 0.7 Endstrength Joint Improvised Explosive 4.3 3.6 1.5 Devices Defeat Fund The Army proposes and Congress authorizes the number Total 97.7 90.8 83.1 of Soldiers and Army civilians who serve in and work for the Army, i.e., endstrength. Endstrength is managed separately 1 Numbers may not add due to rounding. 2 FY 2008 execution data are incomplete and unavailable from Army by each of the components: active Army, Army National sources; the FY 2008 supplemental proposal included a total of $23.3 Guard, Army Reserve and Army civilians. billion—$21.1 billion for Procurement, $0.1 billion for RDT&E, $0.7 billion for MILCON and $1.4 billion for AWCF. At the end of the Cold War, endstrength was on the Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; DoD FY decline. Military endstrength declined by an additional 30 2010 Budget Request Summary Justification, Overseas Contingency percent and civilian endstrength by 42 percent between Operations FYs 1990 and 2000. The Army National Guard and Army

60 Reserve continued to decline until FY 2005; the active Corps. The President’s intent was to better pursue the war and civilian components increased slightly. Between FYs on terrorism, to reduce the excessive demands on land 2005 and 2010: force units and to reduce the stress on Soldiers, Marines • the active Army increases by 11 percent; and their families. Under this plan, Army endstrength increases as follows: • the Army National Guard increases by 7.5 percent; • the active component from 482,400 in the FY 2007 • the Army Reserve increases by 8.5 percent; and President’s Budget request to 547,400 by FY 2012, • the civilian component increases by 8 percent. an increase of 65,000; See figure 10 for endstrength trends from the Cold • the Army National Guard from 350,000 in the FY War to the FY 2010 budget proposals for the active Army, 2007 President’s Budget request to 358,200 by FY Army National Guard, Army Reserve and Army civilians. 2013, an increase of 8,200; and The growth in endstrength is largely the result of • the Army Reserve from 200,000 in the FY 2007 President George W. Bush’s decision in January 2007 to President’s Budget request to 206,000 by FY 2013, increase the overall endstrength of the Army and Marine an increase of 6,000.

Figure 10 Personnel Endstrength (personnel in thousands) 2,000

1,750

1,500

1,250

1,000 Active Army

750

Army National Guard 500

Army Reserve 250

Army Civilians

0 FY85 FY90 FY95 FY00 FY05 FY06 FY07 FY08 FY09 FY10

Source: National Defense Budget Estimates for FY 2010 Green Book, Office of the Under Secretary of Defense (Comptroller), June 2009, Table 7-5 for AC and Civilian component, Department of the Army FY 2010, Budget Estimates, Justification Books for Army National Guard and Army Reserve, May 2009

The Army Budget 61 The FY 2010 budget supports the following Table 52 endstrength: Military Personnel Appropriations • 547,400 in the active component, an increase of ($ billions1) 15,000 over FY 2009 that achieves the Army’s goal FY082 FY093 FY104 two years ahead of schedule; Military Personnel, Army 47.9 50.4 53.6 • 358,200 in the Army National Guard, an increase National Guard Personnel, Army 9.2 9.4 9.6 of 5,600 over FY 2009 that achieves the goal three Reserve Personnel, Army 4.7 4.9 5.3 years ahead of schedule; and Total5 61.8 64.7 68.5 • 205,000 in the Army Reserve, which represents no 1 Numbers may not add due to rounding. change and is within 1,000 Soldiers of the goal. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. The endstrength for each military component is 5 Includes Medicare-Eligible Retiree Health Care Fund. funded by a separate appropriation. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Military Military Personnel Personnel Programs (M-1), May 2009 The federal budget process requires separate appro- priations for military pay and allowances for each of the Military Accrual Accounts military components. Collectively, the three are the Mili- The military accrual accounts for retirement and tary Personnel (MILPERS) group. The Army military health care involve funding for expenses regardless of pay appropriations are Military Personnel, Army (MPA), when the payment is made. The amount is a function National Guard Personnel, Army (NGPA) and Reserve of entitlements and endstrength; the increase in military Personnel, Army (RPA). endstrength increases the contributions to the Retired Each of the three MILPERS appropriations is cen- Pay Accrual and Health Accrual accounts. The payments trally managed and provides the funds for pay and allow- in the FY 2010 budget proposal are $13.1 billion, or 19 ances, monetary benefits and incentives and subsistence. percent of the Military Personnel group. See table 53. The active Army appropriation differs from the reserve component’s appropriations, e.g., MPA includes funds Table 53 for permanent change of station (PCS). The NGPA and Military Retired Pay Accruals RPA include funds for certain training, e.g., annual train- ($ billions1) ing, inactive duty training (drills), active duty for school Retired Pay Accrual FY082 FY093 FY104 training or a special training. The reserve appropriations also provide for the pay and benefits for active Guard and Military Personnel, Army (MPA) 5.6 5.2 6.4 National Guard Personnel, Army Reserve Soldiers, who provide the backbone of manag- 0.9 0.9 1.1 ing day-to-day requirements, supporting unit and Soldier (NGPA) mobilization and demobilization, and recruiting and Reserve Personnel, Army (RPA) 0.5 0.5 0.6 retaining a quality force. Subtotal 7.0 6.6 8.1 The MPA appropriation pays all Soldiers on active Health Fund Accrual5 duty regardless of their component. Currently, 710,000 Military Personnel, Army (MPA) 3.1 2.9 3.1 Soldiers are serving on active duty.7 The overall end- National Guard Personnel, Army 1.3 1.2 1.2 strength in FY 2010 will likely be about the same; (NGPA) however, the mix will change with the Grow the Army initiative. The active component endstrength will increase Reserve Personnel, Army (RPA) 0.7 0.7 0.7 in FY 2010, and the number of reserve component Sol- Subtotal 5.1 4.8 5.0 diers on active duty will likely decrease. Total 12.1 11.4 13.1 The budget proposal provides a 2.9 percent military 1 Numbers may not add due to rounding. 2 FY08 are actuals. basic pay raise, an increase of 6.5 percent for the basic 3 FY09 are enacted base and supplemental proposal. allowance for housing, and an increase of 5 percent for 4 FY10 are base and supplemental proposal. 5 Medicare-eligible Retiree Health Fund Contribution. subsistence. The President’s Budget for the Military Per- Source: Department of the Army FY 2010 Budget Estimates, MPA, NGPA sonnel appropriations is in table 52. and RPA Justification Books, May 2009

62 The Retired Pay Accrual account consumes $8.1 compensation accounts for a considerable portion of the billion or 11.8 percent of the Military Personnel group in O&M appropriations. Therefore, pay raise rates are key FY 2010. contributors to increases in the Military Personnel appro- The Health Accrual account consumes $5 billion or priations and the O&M appropriations. The President’s 7.3 percent of the Military Personnel group in FY 2010. Budget proposal for FY 2010 includes a military pay raise of 2.9 percent and a civilian pay raise of 2.0 percent, both Civilian Personnel beginning on 1 January 2010. The Army civilian endstrength proposal is 250,100, or 22.5 percent of total military personnel. The civilian per- Operation and Maintenance sonnel data by the various appropriations are in table 54. The Operation and Maintenance (O&M) appropria- tions provide the resources for the day-to-day costs of Table 54 operating the Army, including training and achieving Civilian Endstrength readiness, sustaining and managing the forces, installa- (in thousands) tion operations, Soldier and family programs and more. Percentage The O&M appropriations contribute to the four impera- Direct hires FY09 FY10 FY10 tives: Sustain, Prepare, Reset and Transform. Operation and 132.7 140.1 56.0% The O&M group includes three appropriations: Maintenance, Army Operation and • Operation and Maintenance, Army (OMA) for the Maintenance, Army 28.1 29.1 11.6% active component; National Guard Operation and • Operation and Maintenance, Army National Guard Maintenance, Army 11.9 11.9 4.8% (OMNG); and Reserve • Operation and Maintenance, Army Reserve (OMAR). Research, Development, 17.4 17.2 6.9% Test and Evaluation The base budget proposal for the O&M group in FY Military Construction 5.5 5.7 2.3% 2010 accounts for 28 percent of the base budget; with the Family Housing 0.5 0.5 0.2% supplemental, the O&M group accounts for 37 percent. In Army Working Capital FY 2008, the actual expenditures for the O&M group also 29.8 29.6 11.8% Fund account for 37 percent of all expenditures. Subtotal 226.0 234.0 93.6% The individual appropriations include up to four Indirect hires Budget Activities (BAs); each BA includes Budget Activ- Operation and 15.8 15.4 6.2% ity Groups (BAGs); each BAG includes subactivity Maintenance, Army groups (SAGs). The title of each activity or subactivity is Other 0.8 0.7 0.3% generally descriptive of the purposes, projects or types of Subtotal 16.6 16.1 6.4% activities that it finances. The four BAs are: Total 242.6 250.1 100.0% • BA1: Operating Forces; Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009 • BA2: Mobilization; • BA3: Training and Recruiting; and The Operation and Maintenance group employs more than 72 percent of the civilian workforce; civilian pay • BA4: Administration and Servicewide Support. consumes more than 25 percent of the O&M appropri- The reserve component uses only two of the four BAs: ation group. Typically, civilian pay consumes approxi- mately 11 percent of the budget. • BA1: Operating Forces; and Pay Raise Rates • BA4: Administration and Servicewide Support. Military compensation accounts for the major The budget data on OMA, OMNG and OMAR with portion of the Military Personnel appropriations; civilian BA and BAG levels of detail are in table 55.

The Army Budget 63 Table 55 Army Operation and Maintenance ($ millions1)

Operation and Maintenance, Army (OMA) FY082 FY093 FY104 BA1: Operating Forces Land Forces 4,229.6 4,667.4 4,782.2 Land Forces Readiness 3,083.0 3,161.5 3,414.5 Land Forces Readiness Support 58,990.2 44,983.4 10,724.3 Subtotal BA1 66,302.8 52,812.3 18,921.1 BA2: Mobilization Mobility Operations 347.9 313.3 332.2 Subtotal BA2 347.9 313.3 332.2 BA3: Training and Recruiting Accession Training 568.4 712.7 721.8 Basic Skills and Advanced Training 2,088.8 2,533.4 2,683.5 Recruiting and Other Training and Education 1,223.0 1,333.2 1,302.4 Subtotal BA3 3,880.2 4,579.3 4,707.7 BA4: Administration and Servicewide Support Security Programs 2,050.1 1,685.4 1,017.1 Logistics Operations 5,187.5 4,645.3 2,070.3 Servicewide Support 4,666.8 3,828.8 3,782.3 Support of Other Nations 403.1 429.5 444.1 Subtotal BA4 12,307.5 10,589.0 7,313.8 Subtotal OMA 82,838.4 68,293.8 31,274.9 Operation and Maintenance, Army National Guard (OMNG) BA1: Operating Forces 6,294.6 5,683.2 5,640.9 BA4: Administration and Servicewide Support 563.4 442.4 616.1 Subtotal OMNG 6,858.0 6,125.6 6,257.0 Operation and Maintenance, Army Reserve (OMAR) BA1: Operating Forces 2,568.1 2,551.1 2,464.9 BA4: Administration and Servicewide Support 156.7 128.4 155.3 Subtotal OMAR 2,724.7 2,679.5 2,620.2 Total Operation and Maintenance (excludes Security Forces) 92,421.1 77,098.9 40,152.1 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base only Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Operation and Maintenance Programs (O-1), May 2009 Operation and Maintenance, Army Overview and warfighter and family support programs. These pro- The OMA budget provides funds for realistic training grams provide a full range of services to Soldiers and their at unit and individual levels, recruiting of the all-volun- families, helping them respond to transitions, separations teer force, weapon system maintenance and servicewide and deployments. support for logistic operations, transportation and commu- The appropriation also provides the DoD contribu- nications. The budget increases funds to family programs tion to the North Atlantic Treaty Organization (NATO),

64 and funds the Army’s executive agent responsibili- Columbia. The Army National Guard forces support the ties for U.S. European Command (USEUCOM), U.S. nation’s global operations and Homeland Defense/Home- Southern Command (USSOUTHCOM) and U.S. Africa land Security missions. Command (USAFRICOM). The OMNG account includes two Budget Activities: Budget Activity 1: Operating Forces. In the base bud- BA1: Operating Forces, and BA4: Administration and get, Budget Activity 1 (BA1) includes $18.9 billion for Servicewide Activities. The total FY 2010 budget pro- FY 2010. BA1 consumes 60 percent of the appropriation posal is $6.3 billion—$0.6 billion less than the FY 2008 and is larger than many appropriations. experience. The BA includes three Budget Activity Groups: Budget Activity 1: Operating Forces. The Operating • Land Forces ($4.8 billion) provides resources for Forces BA includes the same three BAGs as the OMA: executing the ground operational tempo and flying- Land Forces, Land Forces Readiness and Land Forces hour training strategy, the operations of forces such Readiness Support. BA1 funds provide for the day-to- as brigade combat teams and modular support bri- day operational and readiness training activities of the gades, echelons above brigades, theater-level assets Army National Guard forces. and special force-related training activities. This Budget Activity 4: Administration and Servicewide Ac- BAG increases by nearly $0.5 billion over the FY tivities. This activity provides funds for staff manage- 2008 actual. ment, servicewide communications, manpower manage- • Land Forces Readiness ($3.4 billion) includes ment and other personnel support. activities essential to operational readiness, such as Operation and Maintenance, Army Reserve depot maintenance, participation in joint exercises, Overview communications infrastructure, intelligence support for combatant commands and combat development. The Army has called to active duty 100,000 Army This BAG increases by nearly $0.4 billion over the Reserve Soldiers to support the war on terrorism. To FY 2008 actual. meet the demands of the continuing war, the Army Reserve has converted from a strategic reserve force to • Land Force Readiness Support ($10.7 billion) an operational force. provides for infrastructure maintenance and support, management headquarters, unified command The Army Reserve is transforming low-demand support, and special activities of the operating units with low operational tempo (OPTEMPO) cost forces, to include contingency operations. This BAG to high-demand units with high OPTEMPO cost. The decreases by more than $48 billion from the FY Army Reserve is also redistributing 16,000 spaces from 2008 actual. the Tables of Distribution and Allowances (TDA) orga- nizations to high-demand units between FYs 2008 and For FY 2008–FY 2010 funding comparisons of 2013. OMA’s other Budget Activities—BA2: Mobilization, BA3: Training and Recruiting and BA4: Adminstration The OMAR appropriations include two Budget and Servicewide Support—see table 55. Activities: BA1: Operating Forces, and BA4: Adminis- tration and Servicewide Activities. Operation and Maintenance, Army National Guard Overview The OMAR appropriation provides funds for: With the demands of the continuing war, the Army • operational, logistical, administrative, engineering National Guard has converted from a strategic reserve and management support; force to an operational force. This involves transforming • installation management, maintenance of real into modular, capabilities-based forces capable of seam- property and record maintenance; lessly integrating with other Army formations in joint and combined expeditionary and campaign operations. • personnel support to retirees, veterans and their families; and The OMNG appropriation provides funds to operate and maintain Army National Guard units in 50 states • civilian pay, information systems, networks, tele- and four territories, including Puerto Rico, the U.S. communications, supplies, fuel, equipment and Virgin Islands, the Territory of Guam and the District of base operations support.

The Army Budget 65 The FY 2010 OMAR budget request provides training The RDA proposal accounts for 19 percent of the and support for an average strength of 205,000 Soldiers total Army budget for FY 2010; by comparison, RDA and includes a mobilization offset for 24,000 mobilized accounts for 30 percent of the DoD budget. Soldiers. The OMAR budget also provides funding for The budget continues the Army’s investment strat- 11,900 Army civilian employees, including 9,000 Military egy that balances acquisitions for current operations and Technicians. pursuit of technological opportunities for future acquisi- Budget Activity 1: Operating Forces. The budget pro- tions. The investments involve: posal for BA1 is $2.5 billion. The funds are distributed • modernization programs that develop and among the same three SAGs as OMA and OMNG: Land procure new systems with improved warfighting Forces, Land Forces Readiness and Land Forces Readi- capabilities; ness Support. • recapitalization programs that rebuild or provide Budget Activity 4: Administrative and Servicewide Ac- selected upgrades to systems that are currently tivities. The proposal for BA4 is $0.2 billion. This activity fielded to ensure operational readiness and a zero- provides funds for staff management, servicewide com- time, zero-mile system; and munications, manpower management and other personnel support. The activities include dollars for civilian pay and • maintenance programs that repair or replace end other support costs (e.g., travel, contracts, supplies and items, parts, assemblies and subassemblies that wear services) for civilian and military, and for Army Manage- out or break. ment Headquarters Activities, including the Office of the In light of the quantity and diversity of materiel Chief, Army Reserve and United States Army Reserve systems, the Army follows a systematic approach to pur- Command. suing and acquiring materiel capabilities. The approach Research, Development and Acquisition involves developing, producing and sustaining materiel solutions from RDT&E to the post-production acquisi- The Research, Development and Acquisition (RDA) tions that sustain fielded systems. The Army describes title refers to the aggregation of the Research, Develop- this acquisition approach as four phases: ment, Test and Evaluation (RDT&E) appropriation and the Army’s five Procurement appropriations. The RDA • Concept and Technology Development—includes appropriations provide funds for materiel capabilities to concept exploration, decision review and advance support current operations, and to develop and field mate- development of components. riel capabilities. • Systems Development and Demonstration— The RDA budget proposal is $43.2 billion for FY includes systems integration, systems demonstration 2010; this includes base and supplemental proposals for and interim progress review. RDT&E, the five Procurement appropriations and the Joint Improvised Explosive Device Defeat Fund. See table 56. • Production and Deployment—includes low-rate initial production, full-rate production decision Table 56 review, and full-rate production and deployment. Army Research, Development and Acquisition ($ millions) • Operations and Support—includes supply mainte- nance, transportation, sustaining engineering, data FY081 FY09 FY10 management, information technology supportability, Research, Development, 12.6 12.1 10.5 safety, environmental management, etc. Test and Evaluation Procurement 65.5 40.2 32.7 The Army is both pursuing future technologies and Total 78.1 52.3 43.2 spinning out emerging technologies to existing systems 1 FY08 are actuals. to stay ahead of adversaries and to provide a decisive 2 FY09 are enacted and include Joint Improvised Explosive Device edge to America’s Soldiers. Defeat Fund (JIEDDF). 3 FY10 are estimates and include JIEDDF. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of However, the RDT&E proposal is down 16 percent the Army for Financial Management and Comptroller, May 2009; from the FY 2008 experience. Procurement is down nearly Department of Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1) and Research, Development, Test and Evaluation $35 billion, or more than 50 percent from the FY 2008 Programs (R-1), May 2009 experience and $7.5 billion from the FY 2009 proposal.

66 Top Ten Weapon Systems The RDT&E base budget proposal declines from The RDA budget involves research into many dif- the FY 2008 experience by nearly 4 percent in FY 2009, ferent technologies and the acquisition of hundreds of and another 13 percent between FYs 2009 and 2010. The weapon and other materiel systems. However, just ten funding proposal for six of the BAs decline; only BA7: weapon systems account for 37.5 percent of all RDA Operational Systems Development, increases. funds in FY 2010. Of the top ten, the RDT&E for the Future Combat Systems (FCS) remains the largest Future Combat Systems (FCS) is the single largest item single RDT&E program at $2.6 billion, or 25 percent of in RDA. all funds. See table 58 for RDT&E by BA. The top ten systems in RDA, in terms of dollars, are The Army RDT&E proposal accounts for 13 percent shown in table 57. of DoD RDT&E. The other services are investing much more in RDT&E than is the Army. Research, Development, Test and Evaluation The Research, Development, Test and Evaluation The follow paragraphs provide information on each base budget is 7 percent of the total base budget proposal. RDT&E BA. The RDT&E appropriation enables the Army to explore Budget Activities 1–3: Science and Technology. BA1: and examine new technologies and transition emerging Research, BA2: Applied Research and BA3: Advanced technology into weapon and materiel systems, system Technology Development are collectively known as the upgrades and other products for the warfighter. Science and Technology (S&T) Program. The Army S&T Master Plan focuses on developing and transitioning tech- The RDT&E budget includes seven Budget nology into weapon systems, system upgrades and other Activities; each includes Program Elements (PEs) that products for the warfighter. contain one or more projects. The individual projects encompass a wide range of research, e.g., independent The S&T program for FY 2010 accounts for $1.8 laboratory research; avionic, ballistics, engineering, billion or 17.7 percent of the RDT&E budget. However, the information technology, medical and warfighter tech- S&T budget vacillates with an increase of $171 million or nologies; test ranges and facilities; and product improve- 6 percent between FYs 2008 and 2009, then a decrease of ment programs. $1.2 billion or 39 percent between FYs 2009 and 2010.

Table 57 Research, Development and Acquisition Programs1 Top Ten Systems ($ millions2)

RDT&E Procurement Total RDA2 Future Combat Systems (FCS) 2,653.0 327.9 2,981.0 Ammunition 1,733.0 1,733.0 Black Hawk Utility Helicopter (UH-60) and Utility Helicopter Modifications 33.5 1,424.1 1,457.6 Family of Medium Tactical Vehicles (FMTV) 1,158.5 1,158.5 Chinook Cargo Helicopter Modernization (CH-47) 1,014.0 1,014.0 Patriot Medium Extended Air Defense System (MEADS) and Patriot 580.4 409.6 990.0 Advanced Capability-3 (PAC-3) Family of Heavy Tactical Vehicles (FHTV) 813.0 813.0 Warfighter Information Network-Tactical (WIN-T) 180.7 544.2 724.9 Bradley Program Modifications 526.0 526.0 Apache Longbow Attack Helicopter (AH-64) Modifications 426.0 426.0 Total 3,447.6 8,376.3 11,824.0 1 Research, Development & Acquisition (RDA) equals Procurement plus Research, Development, Test and Evaluation (RDT&E). 2 Numbers may not add due to rounding. Source: Department of Defense Program Acquisition Costs by Weapon System, May 2009; FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009

The Army Budget 67 Table 58 Research, Development, Test and Evaluation ($ millions1)

FY082 FY093 FY104 Basic Research5 373 438 377 Applied Research5 1,177 1,230 781 Advanced Technology Development5 1,320 1,400 695 Advanced Component Development and Prototypes 1,235 1,011 908 System Development and Demonstration 5,206 5,167 4,659 Management Support 1,473 1,170 1,149 Operational Systems Development 1,766 1,675 1,922 Total 12,550 12,090 10,492 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. 5 Basic Research, Applied Research and Advanced Technology Development together are summarized as Science and Technology. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009 The S&T totals by BA plus the high-dollar PEs are in BA1: Basic Research to BA7: Operational System De- table 59. velopment. BA7 involves leveraging technology to en- hance performance and increase capability through new Budget Activity 4: Advanced Component Develop- ment and Prototypes. BA4 involves examining technol- systems or product improvement programs for existing ogies for FCS and Soldiers and assessing advantages and systems. disadvantages of each technology, their costs and imple- BA7 is $1.9 billion or 18.3 percent of RDT&E—15 mentation impact. If successful, the technology can move percent more than for FY 2009 but just 8 percent more into further development or into production. than the FY 2008 experience. A list of the BA7 PE/proj- The BA4 program for FY 2009 accounts for $0.9 bil- ects is in table 63. lion or 9 percent of the RDT&E budget. BA4 is down 16.5 percent from FY 2008, but up 82 percent from FY Procurement 2007. The individual PEs are very volatile from year to The Army Procurement proposal for FY 2010 is year. See table 60. $32.7 billion for the Procurement appropriations plus the Joint Improvised Explosive Device Defeat Fund. The Budget Activity 5: System Development and Demon- total includes the base budget and supplemental propos- stration. BA5 is by far the largest RDT&E activity, with als. This is $7.5 billion less than the FY 2009 proposal, nearly $5 billion or 44 percent of all RDT&E funds. BA5 and $32.8 billion or one half the FY 2008 experience. remains rather consistent from year to year. See table 61. The Army Procurement proposal is actually the sum Budget Activity 6: Management Support. BA6 pro- of five separate appropriations: vides for a wide variety of support activities and ac- counts for nearly 11 percent of all RDT&E. The FY 2010 • Aviation Procurement, Army; proposal is 1.8 percent below the FY 2009 proposal and • Missiles Procurement, Army; 22 percent below the FY 2008 experience; the major- ity of the decrease in funding is in the Other line. Two • Weapons and Tracked Combat Vehicles Procure- PEs—Army Kwajalein Atoll ($164 million) and Army ment, Army; Test Ranges ($355 million)—account for 45 percent of • Ammunition Procurement, Army; and all the BA6 dollars. A list of the BA6 PE/projects is in table 62. • Other Procurement, Army; Budget Activity 7: Operational System Development. • plus the Joint Improvised Explosive Device Defeat The RDT&E Budget Activities are a continuum from Fund.

68 Table 59 Research, Development, Test and Evaluation Science and Technology Total Obligational Authority($ millions1)

BA1: Basic Research FY082 FY093 FY104 In-house Laboratory Independent Research 19.7 16.8 19.7 Defense Research Sciences 164.6 198.1 173.0 University Research Science (Health) 79.5 89.6 88.4 University and Industry Research Centers 109.5 130.3 96.1 Subtotal 373.3 434.8 377.2 BA2: Applied Research Medical Technology 181.5 188.2 99.0 Electronics and Electronic Devices 124.1 99.7 61.4 Weapons and Munitions Technology 101.0 102.3 41.1 Combat Vehicle and Automotive Technology 87.1 89.0 55.9 Missile Technology 67.1 56.7 50.7 Ballistic Technology 89.5 88.0 61.8 Sensors and Electronic Survivability 61.2 75.3 50.6 Materials Technology 60.3 80.9 27.2 Military Engineering Technology 55.2 58.8 54.8 Other 349.6 367.1 278.5 Subtotal 1,176.6 1,206.0 781.0 BA3: Advanced Technology Development Warfighter Advanced Technology 65.5 73.4 37.6 Medical 299.4 321.3 72.9 Aviation 99.5 106.3 60.1 Weapons and Munitions 84.7 109.1 66.4 Combat Vehicle and Automotive 242.3 263.9 89.6 Missile and Rocket Advanced Technology 77.2 76.7 64.0 Night Vision 62.6 70.7 40.3 Electronic Warfare Advanced Technology 41.9 33.1 19.2 Advanced Tactical Computer Science and Sensor Technology 69.3 62.0 41.6 Other 277.6 283.5 203.3 Subtotal 1,320.0 1,400.0 695.0 Total Science and Technology5 2,869.9 3,040.8 1,853.2 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. 5 Basic Research, Applied Research and Advanced Technology Development together are summarized as Science and Technology. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

The Army Budget 69 Table 60 Research, Development, Test and Evaluation BA4: Advanced Component Development and Prototypes Total Obligational Authority ($ millions1) FY082 FY093 FY104 Army Missile Defense Systems Integration 128.8 90.8 14.7 Army Space Systems Integration 58.1 47.8 117.5 Air and Missile Defense Systems Engineer 155.7 118.8 209.5 Advanced Tank Armament System (ATAS) 127.7 79.4 90.3 Soldier Support and Survivability 36.9 32.6 31.8 Warfighter Info Network – Tactical 309.1 393.1 180.7 Soldier Systems – Advanced Development 26.2 41.6 71.8 Medical Systems – Advanced Development 25.2 30.2 31.3 Tank and Medium Caliber Ammunition 46.2 40.7 33.9 Logistics and Engineering Equipment – Advanced Development 133.0 44.0 56.4 Other 187.7 92.5 70.3 Total 1,234.6 1,011.5 908.2 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

Table 61 Research, Development, Test and Evaluation BA5: System Development and Demonstration Total Obligational Authority($ millions1) FY082 FY093 FY104 Armed, Deployable OH-58D Kiowa Warrior Reconnaissance/Attack Helicopter 176.1 135.2 65.5 Future Combat Systems (FCS) Manned Ground Vehicles and Common Ground Vehicle 635.8 782.7 368.6 FCS Unmanned Ground Vehicles 78.8 103.0 125.6 FCS System of Systems Engineering and Program Management 1,292.5 1,414.8 1,067.2 FCS Sustainment and Training Research and Development 724.4 556.3 749.2 Non-Line-of-Sight Launch System 246.1 208.0 88.7 Non-Line-of-Sight Cannon 133.1 89.5 58.2 Command, Control and Communications Systems – Engingeering Development 9.2 9.8 89.0 Electronic Warfare Development 53.8 36.2 267.1 Army Tactical Command and Control Hardware and Software 109.9 65.3 90.9 Landmine Warfare/Barrier – Engineering Development 172.1 116.7 82.3 Weapons and Munitions 63.4 57.9 34.9 Joint Air-to-Ground Missile (JAGM) 118.1 127.4 Patriot/Medium Extended Air Defense System (MEADS) Combined Aggregate Program 401.6 429.8 569.2 (CAP) Manned Ground Vehicle 100.0 Other 1,108.9 1,043.2 775.3 Total 5,205.7 5,166.5 4,659.1 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

70 Table 62 Research, Development, Test and Evaluation BA6: Management Support Total Obligational Authority ($ millions1)

FY082 FY093 FY104 Major Test and Evaluation 64.5 64.4 51.8 Army Kwajalein Atoll 180.8 174.0 163.5 Concept Experimentation 28.9 33.9 23.4 Army Test Ranges/Facilities 349.9 346.4 354.7 Army Technology Test Instrumentation and Targets 89.3 80.7 72.9 Technical Information Activities 44.5 44.4 51.6 Survivability/Lethality Analysis 40.7 40.9 45.0 Munitions Standardization, Effectiveness, Safety 39.8 47.9 45.1 Support of Operation Testing 73.0 74.7 77.9 Army Evaluation Center 59.3 63.2 66.3 Program-wide Activities 72.4 73.5 77.8 Other 430.3 125.9 119.1 Total 1,473.4 1,169.9 1,149.1 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

Table 63 Research, Development, Test and Evaluation BA7: Operational Systems Development Total Obligational Authority ($ millions1)

FY082 FY093 FY104 Multiple Launch Rocket System (MLRS) Product Improvement Program (PIP) 42.4 59.6 27.7 Aerostat Joint Project Office 464.9 355.3 360.1 Combat Vehicle Improvement Programs 42.8 143.0 190.3 End Item Industrial Preparation Activities 91.3 90.8 68.5 Maneuver Control 43.6 37.0 21.4 Aircraft Modifications/PIPs 327.3 459.4 209.4 Distributed Common Ground/Surface Systems 128.3 68.7 188.4 Aerial Common Sensor (ACS) 210.0 Information System Security Program 52.0 43.1 76.6 Global Combat Support System 125.5 104.6 144.7 Satellite Communications (SATCOM) Ground Environment 45.3 58.9 40.1 Tactical Unmanned Aerial Vehicles 188.3 103.9 232.0 Missile/Air Defense PIPs 29.2 37.7 39.3 Other 185.1 112.5 113.8 Total 1,766.0 1,674.5 1,922.3 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

The Army Budget 71 Table 64 In addition, individual systems within each appro- priation are identified by a Budget Line Item Number Procurement Summary by Appropriation ($ billions1) (BLIN). A system may, in fact, be a system of systems, e.g., the Army Data Distribution System (ADDS), which FY082 FY093 FY104 includes three radio systems. Aircraft 6.0 5.7 6.9 The following paragraphs provide information on Missiles 2.5 2.9 1.9 each of the procurement appropriations. Weapons and Tracked 9.5 5.7 3.2 Combat Vehicles Aircraft Procurement, Army Ammunition 2.7 2.6 2.4 The Aircraft Procurement, Army appropriation Other Procurement 40.6 19.8 16.1 includes funds for the procurement of aircraft, aircraft Joint Improvised Explosive modifications, spare parts, and repair and support equip- 4.3 3.5 2.1 Device Defeat Fund ment and facilities. The FY 2010 base budget proposal is Total 65.5 40.2 32.7 $6.9 billion, an increase of $1.2 billion over FY 2009 and 1 Numbers may not add due to rounding. $1 billion over FY 2008. This is the only Procurement 2 FY08 are actuals. appropriation that increases in FY 2010. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. The Aircraft appropriation, the second largest Pro- Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; curement appropriation, accounts for 21 percent of the Department of Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009 Procurement budget. See table 65. The budget proposal for the Procurement appropria- Missile Procurement, Army tions is in table 64. The Missile Procurement, Army appropriation includes The Army Procurement budget accounts for 14.5 funds for the procurement of missiles, missile modifica- tions, spare parts, and support equipment and facilities. percent of the total budget for FY 2010, while the DoD Procurement budget accounts for 19.3 percent of the The budget proposal for FY 2010 is $1.9 billion— DoD budget. $1.0 billion or 35 percent less than FY 2009 and $0.5 billion or 23 percent less than the FY 2008 experience. From another perspective, the Army Procurement The Missile appropriation proposal is the smallest Pro- proposal is 25 percent of the DoD Procurement proposal curement appropriation. See table 66. for FY 2010. However, the Army Procurement experi- ence in FY 2008 was 39.7 percent of DoD Procurement. Weapons and Tracked Combat Vehicles The very substantial decline in FY 2010, with no sub- Procurement, Army stantial programmatic changes to justify this drop, sug- The Weapons and Tracked Combat Vehicles appro- gests that the Army reset, transform and modernization priation includes funds for four budget activities: Tracked programs cannot achieve the necessary level of support Combat Vehicles, Modification of Tracked Combat Vehi- in FY 2010. cles, Weapons and Other Combat Vehicles, and Modifica- The Procurement appropriations include various tion of Weapons and Other Combat Vehicles. budget activities, among them: The Army budget proposal for FY 2010 is $3.2 bil- • procuring end items, such as the Apache Longbow lion—nearly 43 percent less than for FY 2009, and 66 percent less than the FY 2008 experience. See table 67. Weapon Systems and Stryker; • modifying existing systems, typically to enhance Ammunition Procurement, Army capability, reduce operating costs and extend system The Ammunition Procurement appropriation includes life; funding for the acquisition of ammunition end items and ammunition production base support. The Ammunition • acquiring spares, which are typically depot-level appropriation is somewhat different from the other Pro- reparables; and curement appropriations because the budget lines are • improving facilities that support the manufacture and really consolidations of types of munitions, and not par- modification of systems. ticular systems. The Army budget proposal for FY 2010

72 Table 65 Aircraft Procurement, Army Total Obligational Authority ($ millions1)

FY082 FY093 FY104 Aircraft QTY $ QTY $ QTY $ UH-60 Black Hawk Utility Helicopter (Multiyear Procurement) 77 1,238.6 68 1,006.1 83 1,332.7 CH-47 Chinook Cargo Helicopter 6 156.8 27 562.2 39 1,001.3 C-12 Cargo Airplane 6 45.0 AH-64 Apache Helicopter Block III 8 161.3 Armed Reconnaissance Helicopter 197.1 Light Utility Helicopter (LUH) 42 228.9 44 256.4 54 326.0 Sky Warrior MQ1 Unmanned Aerial Vehicle (UAV) 36 651.4 RQ-11 Raven UAV 876 79.6 Other 316.7 446.4 227.0 Subtotal 1,941.0 2,468.2 3,824.3 Modifications Guardrail/Airborne Reconnaissance Low 178.5 147.7 111.7 Multi-sensor Airborne Reconnaissance (Multiyear 236.3 23.2 75.5 Procurement) AH-64 Apache Modifications 5 817.0 12 962.5 4 741.7 CH-47 Cargo Helicopter Modifications (Multiyear 41 1,157.8 23 678.8 102.9 Procurement) Utility/Cargo Airplane Modifications 20.2 16.5 39.5 Utility Helicopter Modifications 65.9 27.0 69.2 Kiowa Warrior 88.8 117.1 6 235.1 Airborne Avionics 169.1 174.5 241.3 Global Air Traffic Management Rollup 58.4 79.0 103.1 RQ-7 Unmanned Aerial System Modifications 609.4 Other 90.9 79.2 163.1 Subtotal 2,882.9 2,305.5 2,492.5 Spares Spare Parts (Aircraft) 9.2 6.9 25.3 Subtotal 9.2 6.9 25.3 Support Equipment and Facilities Aircraft Survivability Equipment (ASE) 47.8 56.7 25.9 ASE Infrared Countermeasure 814.3 585.5 298.0 Airborne Communications 21.1 11.1 Common Ground Equipment 85.0 108.6 111.4 Aircrew Integrated Systems 54.2 48.1 77.5 Air Traffic Control 110.9 122.4 77.0 Other 9.8 10.0 9.2 Subtotal 1,122.0 952.4 610.1 Total 5,955.1 5,733.0 6,952.2 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009

The Army Budget 73 Table 66 Missile Procurement, Army Total Obligational Authority ($ millions1)

FY082 FY093 FY104 Missiles QTY $ QTY $ QTY $ Patriot Advanced Capability (PAC-3) 108 479.7 108 540.6 59 348.4 Surface-Launched Advanced Medium Range Air-to- 13 72.9 Air System (SLAMRAAM) Hellfire 2,850 252.6 2,945 274.1 2,373 250.9 Javelin 1,320 278.5 1,320 377.9 1,334 289.6 Tube-Launced Optically-Tracked, Wire-Guided (TOW) 2,255 85.3 8,400 426.4 2,459 167.3 2 System Guided Multiple Launch Rocket System (MLRS) 2,070 263.7 2,652 309.2 3,306 354.2 Rockets High Mobility Artillery Rocket System (HIMARS) 57 225.1 57 245.3 46 209.1 Army Tactical Missile System (ATACMS) 84 84.8 Other 3.5 66.6 32.0 Subtotal 1,673.2 2,240.1 1,724.4 Modifications of Missiles Patriot 515.2 515.4 44.8 Improved Target Acquisition (ITAS)/TOW 238.0 136.7 7.0 MLRS 4.8 1.9 22.4 HIMARS 10.5 16.4 71.0 Subtotal 768.8 670.3 145.2 Spares and Repair Parts 24.2 24.8 22.3 Support Equipment and Facilities 8.3 10.5 9.8 Total 2,474.5 2,945.7 1,901.7 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009 is $2.4 billion—5 percent below that of FY 2009 and 10.4 • OPA2: Communications and Electronics Equipment percent below the FY 2008 experience. The Ammuni- – 42 percent of OPA; tion appropriation is only 7 percent of the Procurement budget. See table 68. • OPA3: Other Support Equipment – 23 percent of OPA; and Other Procurement, Army • OPA4: Spares and Repair Parts – less than 1 percent. The budget proposal for Other Procurement, Army (OPA) is $16.1 billion—more than 49 percent of all Army The $16.1 billion in FY 2010 is $3.7 billion or 18.7 Procurement funds—in FY 2010. percent less than for FY 2009 and $24.4 billion or 60 The OPA appropriation includes three principal percent less than the FY 2008 actual expenditures. The budget activities plus spare and repair parts. The principal greatest reductions are in OPA1. See table 69. activities involve very different types of equipment: OPA1: Tactical and Support Vehicles. The OPA1 pro- • OPA1: Tactical and Support Vehicles – 35 percent posal for FY 2010 is $5.7 billion or 35 percent of OPA. of OPA; This is $2.5 billion or 30 percent less than for FY 2009

74 Table 67 Weapons and Tracked Combat Vehicles Total Obligational Authority ($ millions1)

FY082 FY093 FY104 Tracked Combat Vehicles QTY $ QTY $ QTY $ Abrams 3.0 Bradley 524 1,677.9 94 394.8 Future Combat Systems (FCS) 50.8 128.0 FCS Spin-Outs 24.1 1 285.9 Stryker 677 2,792.1 88 1,309.0 388.6 Other 34.1 80.2 42.0 Subtotal 4,554.9 1,939.1 716.5 Modifications of Tracked Combat Vehicles Armored Breacher Vehicle 10 44.8 13 63.3 Fire Support Team (FIST) Vehicle Modifications 54 160.4 33.3 70.2 Bradley Fighting Vehicle Systems (BFVS) Modifications 181.9 852.0 770.0 Howitzer M109A6 Paladin 60.4 28.8 134.1 Abrams Upgrade Program 260 1,238.7 111 580.5 22 185.6 Improved Recovery Vehicle 116 281.5 120 369.1 12 96.8 Joint Assault Bridge 10.3 11 40.3 22 70.6 M1 Abrams Tank Modifications 1,123.1 766.5 183.8 Production Base Support 7.7 8.7 6.6 Subtotal 3,108.8 2,679.3 1,581.0 Total Tracked Combat Vehicles 7,663.7 4,618.4 2,297.5 Weapons and Other Combat Vehicles Howitzer, Light Towed, 105mm, M119 127 117.2 90 112.6 70 95.6 M240 Medium Machine Gun 7.62mm 11,050 101.5 7,932 84.0 2,010 32.9 Machine Gun, .50-caliber M2 Roll 3,934 57.3 6,167 99.6 4,825 84.6 M249 Machine Gun, 5.56mm Squad Automatic Weapon (SAW) 10,870 45.9 5,150 22.1 1,550 7.5 MK-19 Grenade Machine Gun (40mm) 4,098 64.4 785 17.3 349 7.7 Mortar Systems 695 53.6 351 17.0 315 14.8 Sniper Rifle M107, .50-caliber 0.8 0.2 0.2 XM320 Grenade Launcher Module 8,457 30.2 9342 31.7 8,383 29.9 XM110 Semi-Automatic Sniper System 801 10.4 439 7.4 448 6.2 Carbine M4, 5.56mm 112,423 178.3 88,964 150.6 12,000 20.5 Shotgun, Modular Accessory System 5,167 10.1 4,918 9.1 3,738 6.9 Common Remotely Operated Weapons Stations (CROWS) 700 223.2 1,215 279.5 1,000 235.0 Howitzer, 155mm, Light Weight 203 470.6 38 112.9 53 157.6 Future Handgun System (FHS) 1.8 4.5 Subtotal 1,363.5 945.8 703.9 Modifications of Weapons and Other Combat Vehicles 369.7 70.9 189.2 Support Equipment and Facilities 48.0 30.7 20.8 Total Weapons and Other Combat Vehicles 1,781.2 1,047.4 913.9 Total 9,444.9 5,665.8 3,211.4 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009

The Army Budget 75 Table 68 and $19 billion or 77 percent less than the FY 2008 expe- rience. See table 70. Ammunition Procurement Total Obligational Authority ($ millions1) OPA2: Communications and Electronics Equipment. FY082 FY093 FY104 The OPA2 proposal for FY 2010 is $6.7 billion, 42 per- Small and Medium Caliber 972.4 921.5 796.9 cent of OPA. This is $1.4 billion or 17.7 percent less than for FY 2009 and $4.6 billion or 41 percent less than the Mortars 177.8 200.9 177.3 FY 2008 experience. See table 71. Tank 177.3 166.4 121.2 OPA3: Other Support Equipment. The OPA3 proposal Artillery 263.3 263.5 317.6 for FY 2010 is $3.6 billion or 23 percent of OPA. This Artillery Fuzes 4.2 19.9 27.7 is $0.2 billion or 6.6 percent more than for FY 2009 and Mines/Countermine 58.8 59.3 88.7 $0.7 billion or 16 percent less than the FY 2008 experi- ence. See table 72. Rockets 214.4 216.0 314.7 Demolitions, Grenades, OPA4: Initial Spares. The OPA4 proposal for FY 2010 186.8 231.6 164.0 Signals is $35 million in the base budget, less than 1 percent of Non-Lethal Ammunition OPA; there are no funds in the OCO proposal. 74.8 69.4 39.4 Equipment Installations and Facilities Production Base 345.7 191.5 151.9 Improvements Army installations and facilities are the platforms for generating, projecting and sustaining Army forces. Ammunition 134.3 153.7 145.8 Demilitarization Army installations, facilities and infrastructure support training, readiness and transformation, and sustain opera- Other 93.6 63.5 77.3 tions around the world with reach-back capability. Army Total 2,703.4 2,557.2 2,422.5 installations provide safe workplaces for Army civilians 1 Numbers may not add due to rounding. and many of the contractors who support the Army. Army 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. installations provide homes, communities and quality of 4 FY10 are base and supplemental proposal. life for Soldiers and their families. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Procurement The locations of installations and facilities in the Programs (P-1), May 2009 United States and around the world are generally the result of the 40-year Cold War strategy. However, DoD Table 69 and the Army are pursuing new strategic stationing to Other Procurement, Army create a global infrastructure to better respond to world- ($ millions1) wide threats. The Army is integrating and synchroniz- FY082 FY093 FY104 ing various initiatives including Global Defense Posture Realignment (GDPR), Base Realignment and Closure OPA1: Tactical and 24,742 8,187 5,696 Support Vehicles (BRAC) and Army transformation to produce modern power-projection capabilities. OPA2: Communications 11,392 8,172 6,729 and Electronics Equipment As part of GDPR, the Army is returning more than OPA3: Other Support 50,000 Soldiers and their families from Germany and 4,381 3,443 3,670 Equipment elsewhere to installations in the United States. BRAC 2005 implementation involves completing some 1,200 OPA4: Spares and Repair 43 36 36 Parts stationing actions by the statutory deadline of 15 Sep- tember 2011. The Grow the Army initiative increases Total 40,559 19,838 16,130 the active Army by 65,000, the Army National Guard by 1 Numbers may not add due to rounding. 2 FY08 are actuals. 8,200 and the Army Reserve by 1,000 Soldiers—all with 3 FY09 are enacted base and supplemental proposal. stationing implications. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of The budget continues the initiatives to provide Sol- the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Procurement diers with modern barracks and family housing commen- Programs (P-1), May 2009 surate with the service they provide to the nation. Funding

76 Table 70 Other Procurement, Army OPA1: Tactical, Non-Tactical and Support Vehicles Total Obligational Authority ($ millions1) FY082 FY093 FY104 Tactical and Support QTY $ QTY $ QTY $ High-Mobility Multipurpose Wheeled Vehicles (HMMWV) 17,012 2,796.9 10,995 1,676.0 10,214 1,532.2 Family of Medium Tactical Vehicles 6,802 2,147.0 3,724 1,017.5 5,532 1,620.2 Family of Heavy Tactical Vehicles 3,095.8 1,978.6 1,436.1 Modification of In-Service Equipment 1,085.4 492.1 10.3 Amored Security Vehicles 685 568.9 345 318.7 150 149.8 All Other Vehicles and Trailers 15,034.4 2,689.2 941.8 Subtotal 24,728.4 8,172.1 5,690.4 Non-Tactical Heavy Armored Sedan 20 3.8 13 2.3 8 2.0 Passenger Carrying Vehicles 37 5.6 107 8.6 0.3 Other Non-Tactical Vehicles 4.0 3.4 3.0 Subtotal 13.4 14.3 5.3 Subtotal OPA1 24,741.8 8,186.5 5,695.7 Total OPA 40,558.7 19,838.0 16,129.8 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009

Table 71 Other Procurement, Army OPA2: Communications and Electronic Equipment Total Obligational Authority ($ millions1) FY082 FY093 FY104 QTY $ QTY $ QTY $ Joint Communications 8.2 672.9 574.4 Satellite Communications 46,722 445.1 36,674 305.2 29,138 485.5 Command, Control and Communications (C3) System 30.8 31.4 23.0 Combat Communications 2,777.0 573.2 416.4 Intelligence Communications 8.3 1.5 1.4 Information Security 311.1 222.7 94.8 Long Haul Communications 84.7 371.2 58.7 Base Communications 430.6 645.9 967.4 Tactical Intelligence and Related Activities (TIARA) 14 1,795.2 32 1,093.1 23 429.8 Electronic Warfare (EW) 345.1 607.3 383.2 Tactical Surveillance 77,952 3,123.4 84,487 2,374.1 67,095 2,112.9 Tactical Command and Control (C2) 97 1,575.3 81 879.4 154 746.1 Automation 417.0 351.4 426.8 Audio Visual Systems (A/V) 13.4 19.2 7.9 Modifications to Tactical Systems and Equipment 15.1 15.1 Support 12.0 8.6 0.5 Subtotal OPA2 11,392.2 8,172.2 6,728.7 Total OPA 40,558.7 19,838.0 16,129.8 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009

The Army Budget 77 Table 72 Other Procurement, Army OPA3: Other Support Equipment ($ millions)

FY081 FY092 FY102 QTY $ QTY $ QTY $ Smoke/Obscurant Systems 255.6 74.5 200.8 Bridging Equipment 210.3 414.3 207.0 Engineer Equipment (Non-Construction) 247.6 324.4 173.2 Combat Service Support Equipment 1 382.5 237.5 20 470.1 Petroleum Equipment 164.0 66.0 142.6 Water Equipment 51.2 51.0 10.2 Medical Equipment 86 89.6 304 73.1 273 45.1 Maintenance Equipment 305.4 61.8 150.7 Construction Equipment 292 264.5 779 394.8 442 294.5 Rail Float Containerization Equipment 1 212.9 1 193.7 1 205.0 Generators 241.8 254.8 208.3 Materiel Handling Equipment 189 216.1 157 169.9 121 189.8 Training Equipment 484.9 450.6 458.5 Test Measuring and Diagnostic Equipment 252.2 78.1 139.0 Other Support Equipment 1,002.7 594.6 774.9 Subtotal OPA 33 4,381.4 3,443.1 3,669.8 Total OPA 40,558.7 19,838.0 16,129.8 1 Numbers may not add due to rounding. 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009 for construction, renovation and disposal of facilities and The MILCON appropriations provide funding for infrastructure is in the Military Construction (MILCON) construction projects involving new and renovated facili- group, Army Family Housing (AFH) and BRAC. The ties. The MILCON appropriations provide five-year funds, MILCON, AFH and BRAC funds are essential to achieve i.e., the FY 2010 appropriations remain available for obli- strategic stationing for the 21st century. The FY 2010 gation until 30 September 2014. A summary of the three budget proposal includes $5.4 billion for MILCON, $0.8 MILCON appropriations from the FY 2010 budget is in billion for AFH and $4.2 billion for BRAC. table 73. The subsequent subparagraphs provide insights into each of the MILCON appropriations. Military Construction Military Construction, Army. The FY 2010 MCA bud- The FY 2010 budget proposal reduces MILCON by get proposal is $4.6 billion, which is down $1.3 billion or $1.7 billion from FY 2009, and $0.6 billion from the FY 22 percent from FY 2009 and down $0.7 billion or 13 per- 2008 experience. The MILCON appropriations include cent from the FY 2008 experience. MCA provides funds Military Construction, Army (MCA) for the active com- for engineering and construction projects to improve op- ponent; Military Construction, Army National Guard erational and quality-of-life infrastructure—where Sol- (MCARNG); and Military Construction, Army Reserve diers train, work and live in the United States and over- (MCAR). The MILCON proposals for the active Army seas. See table 74. and the Army National Guard decline in FY 2010, but The FY 2010 proposal reflects a shift from the prior increase for the Army Reserve. year when 75 percent of the funds were for accommodating

78 Table 73 Table 75 Military Construction Military Construction, Army National Guard 1 ($ millions ) ($ millions1)

2 3 4 FY08 FY09 FY10 Facility Categories FY092 FY103 Military Construction, Army 5,289.2 5,922.3 4,584.7 Replace Aging Facilities 462.0 154.0 Military Construction, Army 560.3 883.3 426.5 Modularity 160.0 92.0 National Guard Grow the Army 87.0 80.0 Military Construction, Army 148.1 282.6 374.9 Reserve Barracks Initiative 73.0 Total 5,997.6 7,088.2 5,386.1 Planning and Design 19.0 24.0 1 Numbers may not add due to rounding. Minor Construction 61.0 10.0 2 FY08 are actuals. 3 FY09 are enacted base and supplemental proposal. Other 21.0 66.0 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of Total 883.0 426.0 the Army for Financial Management and Comptroller, May 2009; 1 Numbers may not add due to rounding. Department of Defense Fiscal Year 2010 Budget Request, Military 2 FY09 are enacted base and supplemental proposal. Construction, Family Housing, and Base Realignment and Closure 3 FY10 are base and supplemental proposal. Programs (C-1) and Financial Summary Tables, May 2009; Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009 Table 74 The budget proposal pursues providing state-of-the-art, Military Construction, Army community-based installations and training sites. See ($ millions1) table 75. 2 3 Facility Categories FY09 FY10 Military Construction, Army Reserve. The MCAR ap- Grow the Army 3,275.0 898.0 propriation proposal is for $375 million in FY 2010, a Replace Aging Facilities 629.0 1,168.0 32 percent increase over FY 2009. The Grow the Army Modularity 266.0 393.0 category is by far the largest program. See table 76.

Planning and Design 179.0 178.0 Table 76 Barracks Initiative 71.0 226.0 Military Construction, Army Reserve Global Defense Posture 40.0 272.0 ($ millions1)

Minor Construction 23.0 23.0 Facility Categories FY092 FY103 Improve Quality of Life 59.0 Replace Aging Facilities 72.0 45.0 Overseas Contingency Operations 1,229.7 923.9 Grow the Army 180.0 305.0 Other 151.0 503.0 Planning and Design 3.0 22.0 Total 5,922.7 4,584.9 Minor Construction 15.0 3.0 1 Numbers may not add due to rounding. Other 13.0 2 FY09 are enacted base and supplemental proposal. 3 FY10 are base and supplemental proposal. Total 283.0 375.0 Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009 1 Numbers may not add due to rounding. 2 FY09 are enacted base and supplemental proposal. 3 FY10 are base and supplemental proposal. the Grow the Army initiative. In FY 2010, Replace Aging Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Facilities consumes the greatest portion at 25 percent of Army for Financial Management and Comptroller, May 2009 the funds. Military Construction, Army National Guard. The Family Housing MCARNG appropriation proposal is for $426 million in The Army Family Housing (AFH) budget proposal is FY 2010—51 percent less than for FY 2009 and 29 per- for $0.8 billion, a decrease of 17 percent ($166 million) cent less than the FY 2008 experience. from FY 2009 and 31 percent ($0.3 billion) from FY 2008. The proposal focuses on replacing aging facilities, The AFH appropriation includes two separate accounts: preparing facilities to support the conversion of the force Family Housing Construction ($0.2 billion) and Family to the modular design and the Grow the Army initiative. Housing Operations ($0.5 billion). See table 77.

The Army Budget 79 Table 77 Table 78 Army Family Housing Army Family Housing ($ millions1) New Construction Units $ millions1 Construction FY092 FY103 Baumholder, Germany 38 18.0 New/Replace Construction 246.0 50.0 Wiesbaden, Germany 250 32.0 Improvement4 219.0 Subtotal 288 50.0 Planning and Design 1.0 4.0 Privatization Subtotal 247.0 273.0 Fort Richardson, Alaska 1,242 46.0 Operations Fort Wainwright, Alaska 176 52.0 Operation and Utilities 239.0 170.0 Fort Irwin, California 90 30.0 Maintenance 252.0 116.0 Fort Knox, Kentucky 129 14.0 Leasing 193.0 206.0 Fort Knox, Kentucky 205 26.7 Privatization 32.0 32.0 Fort Polk, Louisiana 144 18.4 Subtotal 716.0 524.0 Fort Bragg, North Carolina 11 5.4 Total 963.0 797.0 Fort Sill, Oklahoma 78 20.3 1 Numbers may not add due to rounding. 2 FY09 are enacted base and supplemental proposal. Fort Eustis, Virginia 8 6.5 3 FY10 are base and supplemental proposal. 4 Residential Communities Initiative equity transferred to Family Housing Subtotal 2,083 219.3 Improvement Fund. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Total 2,371 269.3 Army for Financial Management and Comptroller, May 2009 1 Numbers may not add due to rounding Source: FY 2010 President’s Budget Highlights, Assistant Secretary of AFH supports the operation, maintenance, leasing, the Army for Financial Management and Comptroller, May 2009; Department of Defense Fiscal Year 2010 Budget Request, Military privatization and construction of Army family housing Construction, Family Housing, and Base Realignment and Closure worldwide and the implementation of the Army Family Programs (C-1), May 2009 Housing Master Plan. The AFH construction program pro- Base Realignment and Closure vides for building new housing units at locations where In addition to the Military Construction appropria- building is more economical than revitalizing, or where tions, Congress appropriates funds for Base Realignment adequate off-post housing is not available. The construc- and Closure to close excessive installations and save oper- tion program also includes site preparation, demolition and ation and maintenance costs, and to relocate forces and initial outfitting with fixtures and integral equipment, along other organizations to improve installation efficiency. with associated facilities such as roads, driveways, side- walks, utility systems and community facilities. The current round, BRAC 2005, focuses on the recon- figuration of operational capacity to maximize warfight- The Army follows the DoD policy for providing quality ing capability and efficiency. The BRAC proposal for FY housing to military families: First, provide a housing allow- 2010 is $4.2 billion—5 percent less than in FY 2009 and ance to the servicemembers and rely on the local commu- just slightly higher than in FY 2008. See table 79. nity to provide housing for military families; second, if the market cannot supply sufficient quantities of quality The first BRAC round began with the Defense Base and affordable housing, then use privatization to supply Realignment and Closure Act of 1988 (Public Law 100- housing; third, if privatization is not feasible, then provide 526), which had a goal of identifying and closing unneeded government-owned or government-leased housing. military installations in the United States. Subsequently, Congress authorized three additional rounds in FY 1991, Privatization involves private-sector participation to FY 1993 and FY 1995. By 13 July 2001 the closures (112) replace construction funds in implementing a long-term and realignments (27) from the first four rounds of BRAC housing solution. Privatization enables the Army to lever- were complete. age housing dollars and replace inadequate housing stock rapidly rather than over 30 years. See table 78 for the list In addition, since 1990 the Army has executed an of privatization locations as well as new construction in the aggressive overseas closure program. The Army closed FY 2010 budget proposal. 680 installations overseas, the majority in Europe; this

80 Table 79 Table 80 Base Realignment and Closure1 Environmental Restoration, Army ($ millions) ($ millions) FY082 FY093 FY103 FY081 FY092 FY102 BRAC 104.0 88.0 99.0 456.8 415.9 BRAC 2005 4,023.0 4,315.0 4,081.0 1 ERA is executed in Operation and Maintenance, Army; therefore, no FY08 actual data are available. Total 4,127.0 4,403.0 4,180.0 2 FY09 is enacted; FY10 is budget proposal. Both are base budget only. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the 1 BRAC is a DoD-centralized summary appropriation with budget year Army for Financial Management and Comptroller, May 2009 information passed from each DoD component. 2 FY08 are actuals 3 FY09 is enacted; FY10 is budget proposal. Both are base budget only. • compliance to ensure that DoD operations meet or Source: FY 2010 President’s Budget Highlights, Assistant Secretary of exceed federal, state, local and host nation environ- the Army for Financial Management and Comptroller, May 2009; Department of Defense National Defense Budget Estimates for FY 2010 mental requirements; and (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-6 • pollution prevention to promote the reduction or elimination of the amount of waste, including haz- was comparable to closing 12 of the Army’s largest ardous and toxic chemicals, that enters the environ- installations. ment by focusing on the source of pollution rather In summary, the Army recognizes that installations than on the end result. and facilities are essential to support the expeditionary Army at war, to support training and force readiness and Chemical Demilitarization Program to provide Soldiers and their families with the quality The FY 2010 budget proposes $1.5 billion in the Chem- of life they deserve. The budget proposes resources to ical Agents and Munitions Destruction, Army (CAMD,A) support unit restationing, endstrength growth and the account, which is slightly more than the amount in FYs transition to a modular force. The budget also proposes 2009 and 2008. The Chemical Demilitarization Program resources to provide high-quality housing, schooling and provides for the destruction of the U.S. stockpile of lethal support services that are essential to helping retain the chemical agents and munitions and related (non-stockpile) all-volunteer force. materiel. The program complies with the United States’ obligation to destroy all such weapons under the Chemi- Environmental Restoration, Army cal Weapons Convention (CWC) of 1997. See table 81. The Environmental Restoration, Army (ERA) pro- posal is $0.4 billion, $40 million or 9 percent less than for Table 81 FY 2009. The accounting for ERA execution is in OMA; Chemical Agents and Munitions Destruction, Army therefore, no FY 2008 actual obligation data are available. ($ millions1) See table 80. FY082 FY093 FY103 BA1: Operation and The ERA program focuses on reducing risks to human 1,181.5 1,152.7 1,146.8 health and the environment at active installations, BRAC Maintenance BA2: Research and installations and Formerly Used Defense Sites (FUDS). 312.8 288.9 401.3 The Army is the DoD executive agent for FUDS and Development therefore responsible for clean-up at all DoD FUDS prop- BA3: Procurement 18.4 64.1 12.7 erties. Congress requires DoD to comply with federal, Total3 1,512.7 1,505.6 1,560.8 state and local environmental laws, as well as applicable 1 Numbers may not add due to rounding. 2 FY08 are actuals. host-nation environmental standards. The Environmental 3 FY09 is enacted; FY10 is budget proposal. Both are base budget only. Restoration program includes: Source: FY 2010 President’s Budget Estimates, Chemical Agents and Munitions Destruction • conservation to protect and enhance the natural and cultural resources; Army Working Capital Fund • restoration to identify, assess and remediate contami- The Army Working Capital Fund (AWCF), also known nation from hazardous substances, military munitions as the Defense Working Capital Fund, Army (DWCF,A) and pollutants from previous military operations in operates numerous commercial-like and industrial the Defense Environmental Restoration Program; facilities that provide essential services and support for

The Army Budget 81 readiness and sustainability of the warfighting forces. The Customer Rates AWCF includes two activity groups: Supply Management The AWCF needs to recover the costs of what it and Industrial Operations (previously reported as Depot acquires and the costs of operations in order to break Maintenance and Ordnance). even. The customer rates are the result of the analysis of the full costs of operations. The AWCF uses the customer The AWCF, like all DWCFs, operates under a revolv- rates to adjust the prices of what it sells to recover the full ing fund concept—i.e., the AWCF relies on revenue costs of operations. The customer rates establish the ulti- from sales to finance operations rather than submitting a mate price that customers pay for materiel. The rates vary budget proposal for direct appropriations from Congress. by activity group: The AWCF operates as a business-like enterprise, manag- ing cash in real-time and expenses over time. The AWCF • Supply Management buys and maintains assigned stocks of materiel for sale to its customers; and maintains cash on hand to support current operations; and generates adequate revenue to cover the full costs of oper- • Industrial Operations maintains end items and ations on a break-even basis over time, without making depot-level reparables and manufactures, renovates, a profit or incurring a loss. Since the AWCF operates stores and demilitarizes munitions for all services without direct appropriations, the fund operates without a within DoD and for foreign military customers. fiscal year limitation on obligating money. Rate changes are expressed as a percent of change from the previous year. The rate changes in the budget Revenues and Expenses proposal are in table 83. The AWCF generates revenue from the sale of mate- riel and services and accumulates expenses for the mate- Table 83 rial that it buys and in-house operating costs. The net of Army Working Capital Fund revenue minus expenses generated a profit in FYs 2007 Customer Rate Changes and 2008, but a slight loss is projected for FY 2009. FY08 FY09 FY101 The AWCF is a big business, with annual revenue Supply Management 2.4% 0.7% 2.1% averaging about $15 billion. The bulk of the revenue is Industrial Operations2 12.6% -3.6% -8.2% from sales to Army customers. The FY 2010 revenue 1 FY10 price change to customer reflects lower sales based on fewer equates to 10 percent of the Army base budget, or more deployed forces in support of Operation Iraqi Freedom. Negative Industrial Opns price change to customer results from return of positive than 6 percent of the total budget, suggesting that between accumulated operating results. 6 and 10 percent of the Army budget is expended on 2 Previously reported as Depot Maintenance and Ordnance. Source: FY 2010 President’s Budget Estimates, Army Working Capital purchases of materiel from the AWCF. See table 82 for Fund revenue and expense data.

Table 82 Direct Appropriated Funds Army Working Capital Fund The AWCF requests direct appropriated funds from Revenues and Expenses Congress to cover expenses that are not directly related to ($ millions1) the cost of doing business. The AWCF may also request direct appropriation for increases in capacity and capabil- Revenue FY081 FY09 FY10 ity to meet mobilization and wartime surge requirements Supply Management 10,002.9 9,543.3 7,951.2 and thereby ensure stabilized and competitive rates for Industrial Operations3 6,477.3 6,632.7 6,308.5 peacetime customers. Total 16,480.2 16,176.0 14,259.7 The budget requests $38 million in direct appropria- Expenses tions for FY 2010—a negligible amount. The three-year Supply Management 9,400.3 9,032.9 8,045.4 trend suggests that the AWCF has achieved a new base- Industrial Operations3 6,318.6 6,608.1 6,419.2 line and no longer needs to grow to meet wartime capac- Total 15,718.9 15,641.0 14,464.6 ity. See table 84. 1 Numbers may not add due to rounding. 2 FY08 are actuals. Remaining years are estimates. Capital Investment 3 Previously reported as Depot Maintenance and Ordnance. Source: FY 2010 President’s Budget Estimates, Army Working Capital The AWCF also requests direct appropriated funds Fund for capital investment. The Supply Management Capital

82 Table 84 51 percent of the total military endstrength—the Army National Guard provides 32 percent, and the Army Reserve Army Working Capital Fund provides 18 percent. Direct Appropriation ($ millions1) The RC enables the Army to accomplish its missions at FY082 FY093 FY104 home and abroad—this is particularly true with the require- ment for land forces to conduct the continuing war, which War Reserve Secondary 5.0 102.2 38.5 Items demands a quick response time from the RC. In response, the RC is transforming from a strategic reserve force to an Supplemental Funding operational force that includes creating a rotational force Army Prepositioned Stocks 1,057.9 443.2 policy, manning units at a higher level with deployable per- Spares, Combat Losses 120.1 sonnel, equipping units and replacing late-deploying units Spares, Operation Iraqi with high-demand deploying units. 134.5 Freedom Demands The rotational force policy involves an Army Force Fuel 6.9 Generation process model for the RC that includes a pre- Subtotal 1,319.4 443.2 dictable mobilization cycle. All reserve component forces Total 1,324.4 545.4 38.5 rotate into the Alert pool and are available for mobilization 1 Numbers may not add due to rounding. on a periodic basis. The RC forces may be called to active 2 FY08 are actuals. duty once every six years, if required. 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. Since the 11 September 2001 terrorist attacks on the Source: FY 2010 President’s Budget Estimates, Army Working Capital Fund United States, more than 348,000 Army National Guard and 172,000 Army Reserve Soldiers have been called to Investment includes replacing outdated automation hard- active duty and deployed in support of operations in Iraq, ware and software. Industrial Operations Capital Investment Afghanistan, Guantánamo Bay, the Balkans, the Sinai and includes equipment modernization, automation hardware elsewhere. These RC Soldiers deployed with active com- and software and minor construction. See table 85. ponent Soldiers to secure the homeland by providing secu- rity augmentation for key assets, airports, special events Table 85 and Air Force bases.8 Army Working Capital Fund This is the context for the FY 2010 RC budgets. The Capital Budget ($ millions1) Army National Guard and the Army Reserve prepare and execute three appropriations: Military Personnel, Opera- FY082 FY093 FY104 tion and Maintenance and Military Construction. These Supply Management 88.8 63.7 58.8 appropriations were discussed in the MILPERS, O&M and Industrial Operations5 213.5 213.7 244.6 MILCON appropriation groups, respectively. Total 302.3 277.4 303.4 Army National Guard 1 Numbers may not add due to rounding. 2 FY08 are actuals. The Army National Guard is the oldest component of 3 FY09 are enacted base and supplemental proposal. 4 FY10 are base and supplemental proposal. the armed forces, tracing its origin to militia companies that 5 Previously reported as Depot Maintenance and Ordnance. were formed in 1637. The Army National Guard provides Source: FY 2010 President’s Budget Estimates, Army Working Capital Fund the 50 states, three territories and the District of Columbia with units trained and equipped to protect life and property. Army Reserve Component The Army National Guard maintains properly trained and equipped units that may be mobilized for federal duty for The Army reserve component (RC) provides trained, war, national emergency or as otherwise needed. equipped and ready Soldiers and cohesive units to meet global requirements across the full spectrum of opera- Following the 2001 terrorist attacks, more than 50,000 tions. The RC forces deliver combat, combat support and Guardsmen were called up by states and the federal gov- combat service support capability to the Army. ernment to provide security at home and combat terrorism abroad. At one point in 2005, half of the combat brigades The RC includes both the Army National Guard and in Iraq were Army National Guard units; this level of reli- the Army Reserve. The RC contributes a substantial part ance on the Guard had not occurred since the first years of the Army’s land forces capabilities by providing nearly of World War II.

The Army Budget 83 The Army National Guard military endstrength com- Table 86 prises the Selected Reserve and the Individual Ready Army National Guard Personnel Summary Reserve (IRR). Military Endstrength • The Selected Reserve is the most readily available (thousands1) group of Soldiers and includes Troop Program Units FY082 FY092 FY102 (TPUs), Active Guard and Reserve (AGR) Soldiers Selected Reserve 360 366 360 and Individual Mobilization Augmentees (IMAs). Paid Drill Strength 331 335 327 • The Individual Ready Reserve (IRR) is a manpower Full-time Active Strength 26 29 31 Inactived Personnel/ pool comprising principally trained Soldiers who 3 2 2 Individual Ready Reserve have served previously in the active component or the Selected Reserve and who have some period of Technicians 28 29 29 time remaining for their military service obligation. Dual Status 26 26 27 The IRR also includes the Inactive National Guard, Other Than Dual Status 2 3 3 Other Civilians (excludes consisting of Soldiers in an inactive status who 03 1 1 muster once a year with their assigned unit but do technicians) 1 Numbers may not add due to rounding. not participate in training activities. 2 Numbers shown represent average instead of begin or end numbers. 3 Number is fewer than 500. In addition, the Army National Guard includes techni- Source: Department of the Army, FY2010 Budget Estimates, National Guard Personnel, Army, Table PB-30G (NGPA) and PB-31R (OMNG), cians and civilian employees. Technicians work full-time May 2009, and Congressional Reporting Requirement Exhibit at various functions including organizing, administer- ing, instructing, training and recruiting new personnel; Table 87 and maintaining supplies, equipment and aircraft. The Army National Guard technicians include dual status Military Technicians and Key Contributions other competitive technicians. The Military Technicians 44 percent of Combat Units maintain military membership, train with their units and (includes Field Artillery and Air Defense) perform full-time work in their units. Competitive techni- 9 percent of Field Artillery (20 percent of Combat Structure) cians are not required to maintain military membership. 1 percent of Air Defense The budget proposes Army National Guard Selected (2 percent of Combat Structure) Reserve endstrength of 360,000 Soldiers with armories 19 percent of Combat Support and training facilities in more than 2,800 communities. 27 percent of Combat Service Support See table 86 for endstrength information. Source: National Guard Future Force Allocations The Army National Guard forces provide a great deal Table 88 of specific capabilities; seetable 87. Army National Guard Budget Summary ($ millions1) The Army National Guard provides 32 percent of the 2 3 4 Army’s military endstrength but consumes only 7 percent FY08 FY09 FY10 National Guard Personnel, of the total Army budget in FY 2010. The Army National 9,156 9,400 9,690 Army Guard budget includes three appropriations: Military Per- Operation and sonnel (NGPA), Operation and Maintenance (OMNG) Maintenance, Army 6,858 6,126 6,257 and Military Construction (MCARNG). The Army Pro- National Guard curement appropriations include funds for equipment for Military Construction, Army 562 932 426 the ARNG. In addition, the Army National Guard receives National Guard state funds for state-related functions. The Army National Total 16,576 16,458 16,373 Guard appropriation data are in table 88. Each of these 1 Numbers may not add due to rounding. 2 FY08 are actuals. appropriations was discussed in the MILPERS, O&M and 3 FY09 are enacted base and supplemental proposal. MILCON appropriation groups. 4 FY10 are base and supplemental proposal. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Army Reserve Department of Defense Fiscal Year 2010 Budget Request, Operation and Maintenance Programs (O-1), Department of Defense National The Army Reserve provides trained Soldiers and ready Defense Budget Estimates for FY 2010 (Green Book), Office of the Under units with critical combat support and combat service Secretary of Defense (Comptroller), June 2009, Table 6-6

84 support capabilities. The Army Reserve is a federal force the President can mobilize all members of the Selected that supports peacetime, contingency and wartime opera- Reserve and up to 30,000 members of the Individual tions. The Army Reserve is the newest of the Army com- Ready Reserve. ponents—established in 1908 by Congress initially as the In addition, the Army Reserve includes technicians Medical Reserve Corps. and civilian employees. Technicians work full-time at Since 1990, Army Reserve Soldiers have mobilized various functions including organizing, administering, and deployed in support of every American military oper- instructing, training, and recruiting new personnel; and ation, including peacekeeping and humanitarian missions. maintaining supplies, equipment and aircraft. The tech- After the 2001 attacks on America and the subsequent war nicians include dual status Military Technicians and on terrorism, more than 172,000 Army Reserve Soldiers other competitive technicians. The Military Technicians mobilized and deployed in support of operations in Iraq, maintain military membership, train with their units, and Afghanistan, Guantánamo Bay, the Balkans, the Sinai and perform full-time work in their units. Competitive techni- elsewhere.9 cians are not required to maintain military membership. The continuing activation of Army Reserve Soldiers The Army Reserve proposes a total endstrength in FY and units demonstrates the transformation of the Army 2010 of 205,000 members, which includes the Selected Reserve from a strategic reserve to an operational force. Reserve and the IRR. See table 89 for endstrength information. The Army Reserve military endstrength comprises three groups of Soldiers: Selected Reserve, Individual Table 89 Ready Reserve and Retired Reserve. The distinctions Army Reserve Personnel Highlights among the three groups of Army Reserve Soldiers are: Military Endstrength (thousands) • Selected Reserve—the most readily available group FY08 FY09 FY10 of Army Reserve Soldiers—includes: Selected Reserve 194 202 205 ◦ Troop Program Units—Soldiers who typically Paid Drill Strength 179 186 189 train in units on selected weekends and perform annual training; Full-time Active Strength 16 16 16 Individual Ready Reserve 72 64 70 ◦ Active Guard and Reserve—Soldiers who serve Technicians 9 9 8 full-time on active duty in units and organiza- tions of the Army Reserve, or who directly Dual Status (Military/Civilian) 8 8 8 Other than Dual Status support Army Reserve Soldiers; and 1 1 0 (Civilian) ◦ Individual Mobilization Augmentees—Soldiers Other Civilians (excludes 3 3 3 who are assigned to high-level headquarters technicians) where they would serve if mobilized. Most Source: Department of the Army, FY2010 Budget Estimates, National IMAs train annually for two weeks. Guard Personnel, Army, Table PB-30G (NGPA) and PB-31R (OMNG), May 2009, and Congressional Reporting Requirement Exhibit • Individual Ready Reserve—trained Soldiers who may be called upon to replace Soldiers in active With the transition to the modular brigade structure, and Reserve units. Many in the IRR have left active the Army Reserve will include 12 multifunctional and 48 duty and still have a Reserve commitment, while functional support brigades. The multifunctional brigades others have chosen to remain in the Army Reserve will perform operational roles including Combat Avia- but not as a unit member or Individual Mobilization tion, Combat Support (Maneuver Enhancement), Sustain- Augmentee. ment, Fires and Battlefield Surveillance. The functional • Retired Reserve—retirees from the active Army, brigades will perform broad support roles—including Air Army National Guard and Army Reserve who Defense, Engineer, Explosive Ordnance Disposal, Mili- remain part of the Army Reserve family. tary Police, Signal and others—on a theater-wide basis. The budget proposal includes funding for 205,000 The Army Reserve provides many specific combat Soldiers in the Selected Reserve, including 70,000 in the support and combat service support capabilities, as sum- Individual Ready Reserve. In the event of an emergency, marized in tables 90 and 91.

The Army Budget 85 Table 90 Table 92 Army Reserve Army Reserve Budget Summary Key Contributions ($ millions1)

2 3 4 1 percent of Army Combat Units FY08 FY09 FY10 26 percent of Combat Support Reserve Personnel, Army 4,732.0 4,583.0 5,029.0 41 percent of Combat Service Support Operation and Maintenance, Army 2,726.0 2,801.0 2,620.0 Source: Army Reserve Public Affairs Reserve Military Construction, Army Table 91 148.0 283.0 375.0 Reserve Army Reserve Total 7,606.0 7,667.0 8,024.0 Key Units 1 Numbers may not add due to rounding. 2 FY08 are actuals. The Army Reserve contributes to the Army's Total Force 3 FY09 are enacted base and supplemental proposal. by providing 100 percent of the: 4 FY10 are base and supplemental proposal. Source: Department of Defense National Defense Budget Estimates Chemical Brigades for FY 2010 (Green Book), Office of the Under Secretary of Defense Internment Brigades (Comptroller), June 2009, Table 6-6 Judge Advocate General Unit The budget proposals for these appropriations were Medical Groups discussed in the MILPER, O&M and MILCON appro- Railway Units priation groups. Training & Exercise Divisions Summary Water Supply Battalions The Army’s FY 2010 base budget proposal is $142.1 . . . more than two-thirds of the Army's: billion and the OCO supplemental proposal is $83.1 Civil Affairs Units billion for a total budget proposal of $225.2 billion. The Psychological Operations Units Secretary and the Chief of Staff of the Army state that the Transportation Groups budget continues the initiatives to remedy the strains of Motor Battalions eight years of war. Chemical Battalions The budget proposal continues the initiatives to rebal- Hospitals ance the force, beginning with growing the Army and gen- Medical Brigades erating adequate quantities of agile and flexible forces to Theater Signal Commands meet the continuous demands of the current war and the . . . and nearly half of the Army's: requirement for the full spectrum of operations, includ- ing transforming the reserve component to a deployable, Petroleum Battalions brigade-centric operational force. The budget also con- Adjutant General Units tinues to pursue four imperatives: Sustain, Prepare, Reset Petroleum Groups and Transform. The FY 2010 budget requests adequate Transportation Command resources to complete current operations effectively—to Terminal Battalions engage and destroy the enemy, and assist the host coun- Public Affairs Units tries in achieving a basic level of peace that will enable Source: Army Reserve website personal dignity, economic growth and political stabil- ity—and generate the capability and capacity to deter The Army Reserve accounts for 18 percent of the future challenges or decisively defeat future enemies. Army’s military endstrength but only 3.6 percent of the total Army budget in FY 2010. The Army Reserve budget The Army states that the sum of the base and OCO includes three appropriations: Military Personnel (RPA), budget proposals Operation and Maintenance (OMAR) and Military Con- provides the resources necessary to grow and struction (MCAR). The Army Procurement appropria- sustain the force, build readiness, support tions include funds for equipment for the USAR. See the deployed operations in Iraq and Afghanistan, Army Reserve appropriation data in table 92. reset the force and transform the Army to ensure

86 continued full-spectrum capabilities in support of Only the Aircraft Procurement, Army (APA) appro- combatant commanders and the nation.10 priation increases in FY 2010; every other Procurement Specifically, the budget supports the increase in the appropriation declines. The APA base budget proposal all-volunteer force at the accelerated Grow the Army is $6.9 billion or 21 percent of all Procurement funds, levels of 547,400 for the active component, 358,200 an increase of $1.2 billion over that of FY 2009 and $1 for the Army National Guard and 205,000 for the Army billion over that of FY 2008. Reserve. The budget also continues the reorganization The very substantial decline in Procurement funds— of the active and reserve components into standardized brigade combat teams and support brigades with the and a fairly large decline in RDT&E—from the FY 2008 revised objective of 73 brigade combat teams (45 in the experience suggest substantial programmatic changes active component and 28 in the Army National Guard) beyond the cancellation of the Future Combat Systems and 227 support brigades. Brigade Combat Team (FCS BCT) program. The FCS cancellation includes an exception—the budget continues The Army budget supports retaining and recruit- to fund the spin-out of the initial increment of the FCS ing quality Soldiers to sustain the all-volunteer force. It also supports the Army’s commitment to meet adequate program to seven infantry brigades in the near term and quality-of-life standards for Soldiers and their families, additional programs for information and communications to provide a safe and conducive work environment for networks, unmanned ground and air vehicles and sensors, Soldiers, Army civilians and contractors and to provide and an integration effort aimed at follow-on spin-outs to training and professional development of the Soldiers and all Army brigades. civilians who are the Army. For comparison, the sum of the base and OCO budgets In addition to the ongoing efforts to increase the for the three fiscal years is $250 billion for the FY 2008 number of brigade combat teams and associated support actual experience, $231.0 billion enacted and proposed in brigades, the Army’s Research, Development and Acqui- FY 2009; and $225.2 billion proposed in FY 2010. sition budget proposal provides funds for the most modern and lethal equipment. The FY 2010 sum is nearly $6 billion less than for FY 2009, and $24.8 billion or 10 percent less than the FY The RDT&E base budget proposal is down 16 percent 2008 actual experience, due largely to the $32.8 billion of the FY 2008 experience. The Army base and supple- mental budget proposal for Procurement, including the decline in the Procurement appropriations. The Army is Joint Improvised Explosive Device Defeat Fund, is $32.7 achieving the Grow the Army goals ahead of schedule, billion—$7.4 billion less than the FY 2008 proposal, but but the decline in funds for Procurement is of concern a very large drop ($32.8 billion or nearly 50 percent) from for resetting the force and transforming the Army, particu- the FY 2008 experience. larly the reserve component.

Endnotes

1 FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009, http://www.army.mil/aps/09/index.html 2 Ibid. 3 2009 Army Posture Statement, The Honorable Pete Geren and General George W. Casey, Jr., to the Committees and Subcommittees of the U.S. Senate and the House of Representatives, May 2009, http://www.asafm.army.mil/budget/ fybm/FY10/pbhl.pdf. 4 Ibid. 5 Ibid. 6 Assistant Secretary of the Army (Financial Management and Comptroller), Budget Material, http://www.asafm.army. mil/budget/fybm/fybm.asp.

The Army Budget 87 7 2009 Army Posture Statement, May 2009. 8 Office of the Secretary of Defense (OSD), Reserve Components, Noble Eagle/Enduring Freedom/Iraqi Freedom, Defense Manpower Data Center, as of 10 March 2009, http://www.defenselink.mil/news/Mar2009/d20090310ngr.pdf. 9 Ibid. 10 FY 2010 President’s Budget Highlights, ASA(FM&C) May 2009.

88 Appendix I Glossary of Budget Terms

Appropriation is the specific authority to obligate and expend funds provided for in appropriation bills, which are prepared by the appropriation committees, passed by Congress and signed into law by the President. Appropriations are provided in line-item detail. The time over which monies may be obligated is specified, varying from one year for personnel and operation and maintenance to two years for research, development, test and evaluation and three years (normally) for procurement and construction (extended to five years for shipbuilding). Authorization is substantive legislation that provides the authority for an agency to carry out a particular program. Authorization may be annual, for a specified number of years, or indefinite. Most national defense activities require annual authorization before Congress may appropriate funds. Budget authority (BA) is the authority to enter into obligations that will result in the payment of government funds. Budget authority is normally provided in the form of appropriations. The defense budget as presented to Congress is expressed in terms of budget authority. Constant dollars measure the value of purchased goods and services at price levels that are the same as the base or reference year. Constant dollars do not reflect adjustments for inflationary changes that have occurred or are forecast to occur outside the base year. Current or “then year” dollars are the dollar figures in the budget (or in the accounting records) actually associated with the stated date (past, present or projected). When a price or cost is stated in current dollars, it contains all inflationary increases expected to occur in a program over the duration of the spendout of an appropriation. Current dollars are also called “then year” dollars or “budget” dollars. Deficit is the amount by which outlays exceed receipts. The reverse is called “surplus.” The Department of Defense (DoD) Budget, which carries the Federal Account Number 051, includes funding of DoD itself. The budget that comes under the jurisdiction of the Secretary of Defense, it is frequently referred to as the “Pentagon budget.” Discretionary spending is what the President and Congress must decide to spend for the next fiscal year through 13 annual appropriation bills. Two of the annual appropriation bills (the Department of Defense Appropriation Bill and the Military Construction Appropriation Bill) pertain to the Department of Defense. Emergency spending is spending which the President and Congress have designated as an emergency requirement. Such spending is not subject to limits established on discretionary spending or “pay-as-you-go” rules established for direct (mandatory) spending. Entitlement authority is a provision of law that legally obligates the federal government to make specified payments to any person or government that meets the eligibility requirements established by that law. Example: Social Security. Fiscal year (FY) is the federal government’s accounting period. It begins 1 October and ends 30 September, and is designated by the calendar year in which it ends. Gross domestic product (GDP) measures the market value of all goods and services produced during a particular period by individuals, businesses and government in the United States, whether they are U.S. or foreign citizens or American- owned or foreign-owned firms. GDP is currently used as the most reliable indicator of U.S. economic activity. Gross national product (GNP) measures the market value of all goods and services produced during a particular period by U.S. individuals, businesses and government, including income earned by U.S.-owned corporations overseas and by U.S. residents working abroad but excluding income earned in the United States by residents of other nations.

Appendix I 89 National Defense Budget, which carries the Federal Account Number 050 as a designator, includes not only the Department of Defense (military) budget, but also funding for defense-related activities of the Department of Energy (primarily weapons activities and related support) and miscellaneous military activities of federal agencies. Obligations are binding agreements that will result in outlays, immediately or in the future. Outlays are the measure of government spending. They are the payments actually made for goods and services and interest payments during a particular year. These payments (outlays) lag obligations because of the sequential cycle of congressional appropriations, contracting, placing orders, receiving goods or services and (finally) making payments. Receipts are collections from taxes or other payments to the federal government. Supplemental appropriation is enacted subsequent to a regular annual appropriations act when the need for funds is too urgent to be postponed until the next regular annual appropriation act. Total Obligational Authority (TOA) is a DoD term that includes the total value of the direct program regardless of the method of financing. As a practical matter TOA totals in the aggregate do not differ significantly from budget authority (BA). TOA is used in managing the service budgets, as it is the most accurate reflection of program value. The differences are attributed principally to offsetting receipts, such as recoveries from foreign military sales, and financing adjustments. For example, application of sales receipts will increase TOA but not BA. Legislation transferring unobligated funds for which the purpose has changed are reflected in the BA with no effect on TOA.

90 Appendix II The Budget Process

This appendix provides a summarized description of the budget process at the national (federal) level. The overall process has three fundamental phases: formulation; subsequent actions by Congress and the President to provide a legally executable budget; and actual execution. The entire cycle is a continuum. While the last approved budget is being executed, the next budget is undergoing review and approval in Congress. When passed by Congress and signed by the President, it becomes the Budget of the United States for the following fiscal year. Concurrently, formulation of the next budget for submission to Congress is taking place within the departments and agencies. For purposes of this paper, we will focus primarily on formulation and on the review and approval aspects of the cycle. The Budget of the United States First is a review of the overall process at the national level, followed by a description of actions within the Department of Defense (DoD) providing the DoD part of the President’s Budget. From an overall perspective, this process has a lead time of at least nine months before formal submission to Congress and 18 months before the fiscal year actually begins. In the spring, the President establishes general budget and policy guidelines while the Office of Management and Budget (OMB), working with federal departments and agencies, establishes policy directives and levels covering the budget year plus the four following years. The budget calendar for major budget events during the review and approval process is summarized in the figure below.

Budget Calendar

Date Action

Between first Monday in January Transmission of the President’s Budget to Congress and first Monday in February

April 15 Action on the congressional budget resolution scheduled for completion May 15 House consideration of annual appropriations bills may begin

June 15 Action on reconciliation scheduled for completion

June 30 Action on appropriations by the House scheduled for completion

Throughout this period Hearings; committee reports; reconciliation by conference committees; floor votes; appropriations bills; more floor votes; signature or veto by the President

October 1 Fiscal Year begins

Post-October 1 Continuing resolution of all appropriations bills not yet signed

Appendix II 91 Most agencies submit budget requests to OMB in the fall, followed by a review of details and resolution of issues. For the Department of Defense, the OMB review is concurrent with the review in the Office of the Secretary of Defense (OSD) during the September-to-December period. By the end of December, all decisions are complete, including issues requiring involvement by the President or other White House policy officials. The budget is then finalized and budget documents prepared. This is now the President’s Budget. Transmittal to Congress is scheduled by law on or after the first Monday in February of each year. As a practical matter, this has been an early February event, and additional delays sometimes occur in special cases such as a new President. Congress receives the budget proposals and approves, modifies or disapproves them. Through the process of a budget resolution, it agrees on levels for total spending, receipts and other matters. This resolution provides the framework for congressional committees to prepare the required appropriations bills. In so doing, Congress votes on budget authority— the authority to incur legally binding authorizations of the government. In a separate process, Congress usually enacts legislation that authorizes agencies to carry out particular programs and may limit the amounts that can be appropriated for various programs. Normally, authorizations precede appropriations, but this is not always the case. The Congressional Act of 1994 requires that Congress consider budget totals before completing action on the separate appropriations. To do this, the budget committees formulate a budget resolution setting levels for budget authority, both in total and by functional areas (such as national defense, energy, transportation, etc.). The budget resolution is scheduled for adoption by the whole Congress by April 15, but delays are frequent. This resolution allocates amounts to the appropriations committees that have jurisdiction over the programs, and these committees are required, in turn, to allocate amounts to their respective subcommittees. Budget resolutions are not laws and do not require presidential approval. The appropriations committees in both the House and Senate are divided into subcommittees that hold hearings and review detailed budget justification in their jurisdictional areas. Appropriations bills are initiated in the House. After a bill has been approved by the committee and the whole House, it is forwarded to the Senate, where a similar review takes place. When disagreements occur between the two houses of Congress, a conference committee meets to resolve these differences. The report of the conference committee is returned to both houses for approval. It then goes to the President as an enrolled bill for approval or veto. If actions on one or more appropriations bills are not completed by the beginning of the fiscal year (1 October), Congress enacts a continuing resolution to authorize continued operations at some designated level for a specified time, pending a regular appropriation. Continuing resolutions require presidential approval and signature. So far, the actions described pertain to annual appropriations included in 13 separate appropriations bills. These apply to what is described as discretionary spending because of the need for annual budget authority by Congress. While the majority of federal programs are dependent on annual appropriations, the discretionary portion covers only about one-third of annual federal outlays. The rest of federal expenditures come from budget authority in permanent laws which do not need to be reenacted annually. This applies to the large entitlement programs and the interest on the public debt, which are funded by permanent law. Therefore, the majority of outlays in a year are not controlled through separate appropriations actions for the year. The terms used are “discretionary” for the annual appropriations and “direct spending” for those based on permanent laws. Congress may enact new legislation or change existing legislation relating to direct spending, but need take no action on an annual basis, in which case the spending continues in accordance with existing law. Without legislative change, it is on automatic pilot. For more information on the budget process at the federal level, see A Citizen’s Guide to the Federal Budget, Fiscal Year 2002 (the most recent edition available online) and A Brief Introduction to the Federal Budget Process, Congressional Research Report 96-912, last updated on 20 October 1997.

92 The Department of Defense Budget Process Agencies of the U.S. government submit and justify budget packages for inclusion in the President’s Budget. The Department of Defense budget is an important segment of the discretionary funding portion. The DoD budget submitted for inclusion in the President’s Budget is a product of its Planning, Programming, Budgeting and Execution process (PPBE). DoD prepares a Future Years Defense Program (FYDP) spanning six years; the FYDP is periodically updated. The first year for the FYDP is the basis for the next budget requiring congressional action. Actually, a two-year budget is prepared in even-numbered years, but Congress acts on only one year at a time, and the second year’s budget is updated and resubmitted the following year. The specific calendar of events varies somewhat from year to year, but the basic cycle goes something like this: Defense Fiscal Guidance (DFG) provided in March is followed by revised programs from the services. This is in the form of a Program Objective Memorandum (POM) each service provides to OSD in May or early June. The OSD review leads to a Program Decision Memorandum (PDM) in August/September. In the meantime, budgets for the next fiscal year are being prepared based on OSD guidance and directives. Budget Execution Submissions (BESs) are made to OSD by the beginning of October, and the DoD budget now undergoes a detailed review within OSD. The October-to-December review is actually a joint review by OSD and OMB. Decisions are made through a series of Program Decision Memoranda under supervision of a senior review panel, the Defense Resources Board. After the Secretary of Defense makes final decisions on major issues, the budget is presented to OMB and the President for final review and incorporation into the President’s Budget. With OMB and presidential approval, the backup documentation for submission to Congress is completed and the DoD budget request (now part of the President’s Budget) is delivered in early February. Next comes the congressional justification, review and approval period, ending with the authorization and appropriations bills, passed by Congress and signed by the President. Ideally, all this is completed by the beginning of the fiscal year on 1 October. If not, operations continue with an appropriate Continuing Resolution. A schematic of the basic flow is shown in the figure on page 116. After a series of hearings, Congress provides both authorization and appropriations bills. While authorization is important for program approvals, it is the appropriations bills that provide DoD with the authority to obligate funds and make payments (Outlays) against these obligations. Appropriations for the Department of Defense are covered by two separate bills: the Military Construction Appropriations Bill, which addresses Military Construction and Family Housing, and the Department of Defense Appropriations Bill for all other DoD appropriations. These bills incorporate a number of individual appropriations covering Military Personnel, Operation and Maintenance, Procurement, RDT&E (Research, Development, Test and Evaluation), Military Construction and Family Housing. They are identified in the appropriations bills by title and military service. At the start of the new fiscal year, providing the bills are passed and signed by the President, the execution phase begins. Before funds can be obligated, however, OMB must apportion the funds to DoD and Treasury warrants must be issued. DoD, in turn, subapportions for further allocation to operating agencies. The services play a subordinate role to DoD in all of this, in both the formulation and justification of their respective portions of the DoD budget. All the services conform to the same calendar and procedures with respect to the DoD budget process. At any one time a number of concurrent actions involving different budgets are occurring. Using the Department of the Army (DA) as an example, the present budget-related actions look something like this: DA is executing the FY 2009 budget that extends through September 2009 while concurrently justifying its portion of the FY 2010 Army budget in Congress. At the same time DA is also engaged in the Pentagon in updating the program through FY 2017 and getting ready for the next Army budget proposal to DoD. This remains a dynamic, ongoing process.

Appendix II 93 DoD Budget Process

DoD Budget

OMB President’s Budget Congress

Budget Committees Budget Resolutions

Armed Services Committees Authorization Bills

Appropriations Committees Appropriation Bills

OMB Apportionment Treasury Warrants

DoD

94 Appendix III Glossary of Acronyms A/V Audio Visual System CMA Chemical Materials Agency ABL Airborne Laser CN Counternarcotics AC Active Component COCOM combatant Command ACE Armored Combat Earthmover CRA Continuing Resolution Act ACS Aerial Common Sensor CROWS common Remotely Operated Weapons ADDS Army Data Distribution System Stations AEHF Advanced Extremely High Frequency CSAR-X combat Search and Rescue X AFH Army Family Housing CWC chemical Weapons Convention AGR Active Guard and Reserve DHP Defense Health Program AIM XXI Abrams Integrated Management for the DHS Department of Homeland Security 21st Century DLA Defense Logistics Agency AIM–9x Air Intercept Missile–9X DoD Department of Defense AMRAAM Advanced Medium Range Air-to-Air DWCF,A defense Working Capital Fund, Army Missile ECIP Energy Conservation Investment Program AOR Area of Responsibility EFLV evolved Expendable Launch Vehicle APA Aircraft Procurement, Army EFV Expeditionary Fighting Vehicle API Ascent Phase Intercept ER Environmental Restoration ARFORGEN Army Force Generation ERA Environmental Restoration, Army ARRA American Recovery and Reinvestment Act ESSM evolved Seasparrow Missile ASA(FM&C) Assistant Secretary of the Army for EW Electronic Warfare Financial Management and Comptroller FCS Future Combat Systems ASE Aircraft Survivability Equipment FHIF Family Housing Improvement Fund ASV Armored Security Vehicle FHS Future Handgun System ATACMS Army Tactical Missile System FHTV family of Heavy Tactical Vehicles ATAS Advanced Tank Armament System FIST Fire Support AWCF Army Working Capital Fund FMTV family of Medium Tactical Vehicles BA Budget Authority; Budget Activity FUDS formerly Used Defense Sites BAG Budget Activity Group FY Fiscal Year BCT Brigade Combat Team GDP Gross Domestic Product BEA Bureau of Economic Analysis GDPR Global Defense Posture Realignment BFVS Bradley Fighting Vehicle System GFD Gross Federal Debt BLIN Budget Line Item Number GPS Global Positioning System BMD Ballistic Missile Defense GS General Service BMDS Ballistic Missile Defense System GTMO Guantánamo BRAC Base Realignment and Closure GWOT Global War on Terror C2 Command and Control HAP Homeowners’ Assistance Program C2BMC command and Control, Battle Management and Communications HIMARS high Mobility Artillery Rocket System C3 Command, Control and Communications HMMWV high Mobility Multipurpose Wheeled Vehicle C4I Command, Control, Communications, Computers and Intelligence HOA Horn of Africa C4ISR command, Control, Communications, IMA Individual Mobilization Augmentees Computers, Intelligence, Surveillance and IRR Individual Ready Reserve Reconnaissance ISR Intelligence, Surveeillance and CAMD,A chemical Agents and Munitions Reconnaissance Destruction, Army ITAS Improved Target Acquisition CAP Combined Aggregate Program JAGM Joint Air to Ground Missile CBO Congressional Budget Office JASSM Joint Air-to-Surface Standoff Missile

Appendix III 95 JCA Joint Cargo Aircraft OPTEMPO operational Tempo JDAM Joint Direct Attack Munition PAC-3 Patriot Advanced Capability-3 JHSV Joint High Speed Vessel PBD Program Budget Decision JIEDDF Joint Improvised Explosive Device Defeat PCS Permanent Change of Station Fund PE Program Elements JLENS Joint Land Attack Cruise Missile Defense PIP Product Improvement Program Elevated Netted Sensor System PPBE Planning, Programming, Budgeting and JLTV Joint Light Tactical Vehicle Execution JPATS Joint Primary Aircraft Training System PSIC Public Safety Interoperable JSF Joint Strike Fighter Communications JSOW Joint Standoff Weapon RAM Rolling Airframe Missile JTF Joint Task Force RC Reserve Component JTRS Joint Tactical Radio System RCOH Refueling Complex Overhaul KFOR Kosovo Force RDA Research, Development and Acquisition LCS Littoral Combat Ship RDA Research, Development and Acquisition LPD Landing Platform Dock RDT&E Research, Development, Test and LUH Light Utility Helicopter Evaluation MCA Military Construction, Army RPA Reserve Personnel, Army MCAR military Construction, Army Reserve S&T Science and Technology MCARNG military Construction, Army National SAG Subactivity Group Guard SATCOM Satellite Communications MDA Missile Defense Agency SAW Squad Automatic Weapon MEADS CAP medium Extended Air Defense System SBIRS Space-based Infrared Systems Combined Aggregate Program SDB Small Diameter Bomb MERHCF medicare-Eligible Retiree Health Care SEP System Enhancement Program Fund SF Special Forces METL mission Essential Task List SINCGARS Single Channel Ground and Airborne MFO Multinational Force and Observers Radio MHPI military Housing Privatization Initiative SM3 Standard Missile 3 MILCON military Construction SOF Special Operations Forces MILPERS military Personnel START Strategic Arms Reduction Treaty MKV multiple Kill Vehicle TARP Troubled Asset Relief Program MLP Mobile Landing Platform TDA Tables of Distribution and Allowances MLRS multiple Launch Rocket System THAAD Terminal High Altitude Area Defense MPA Military Personnel, Army TIARA Tactical Intelligence and Related Activities MRAP mine Restistant Ambush Protected TOA Total Obligational Authority MUOS mobile User Objective System TOW Tube-Launched Optically-Tracked, Wire- NATO north Atlantic Treaty Organization Guided NGPA national Guard Personnel, Army TPU Troop Program Unit NPOESS national Polar-Orbiting Operational TSAT Transformational Satellite Communications Environmental Satellite System UAS Unmanned Aircraft System NSA National Security Agency UAV Unmanned Aerial Vehicles O&M operation and Maintenance UCC Unified Combatant Command OCO Overseas Contingency Operation UCP Unified Command Plan OEF Operation Enduring Freedom USAFRICOM U.S. Africa Command OIF Operation Iraqi Freedom USEUCOM U.S. European Command OMA operation and Maintenance, Army USSOCOM U.S. Special Operations Command OMAR operation and Maintenance, Army Reserve USSOUTHCOM U.S. Southern Command OMB Office of Management and Budget WGS Wideband Global Satellite OMNG operation and Maintenance, Army National Communications Guard WIN-T Warfighter Information Network–Tactical OPA Other Procurement, Army WTCV Weapons and Tracked Combat Vehicles

96 Appendix IV References

The Federal Budget Budget of the U.S. Government, Fiscal Year 2010, Government Printing Office, Main Page. http://www.gpoaccess.gov/usbudget/ “DoD Releases Fiscal 2010 Budget Proposal,” News Release No. 304-09, 7 May 2009. http://www.defenselink.mil/releases/release.aspx?releaseid=12652 The Department of Defense Budget Defense Budget Materials, FY 2010 Budget, Under Secretary of Defense (Comptroller). http://www.defenselink.mil/comptroller/Budget2010.html The Army Budget FY 2010 Budget Materials, ASA(FM&C), Military Deputy for Budget (ABO). http://www.asafm.army.mil/budget/fybm/fybm.asp 2009 Army Posture Statement, General George W. Casey, Jr., Army Chief of Staff, and Peter Geren, Secretary of the Army, May 2009 http://www.army.mil/aps/09/2009_army_posture_statement_web.pdf

Appendix IV 97 With two major campaigns ongoing, the economic crisis and resulting budget pressures will force . . . [the Department of Defense to] critically and ruthlessly separate . . . those things that are desirable in a perfect world from those things that are truly needed in light of the threats America faces and the missions we are likely to undertake in the years ahead. . . . This is, after all, about more than just dollars: It goes to the heart of our national security.

Secretary of Defense Robert M. Gates, statement submitted to the Senate Armed Services Committee, 27 January 2009

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