FY 2013 Military Budget: How Defense Spending Affects the Economy

by Kimberly Amadeo

Military Budget

(Photo Credit: Chris Hondros/Getty Images)

The U.S. spends more on defense than anything else, including Social Security or Medicare. For FY 2013, the Federal government has budgeted $851 billion for security spending, more than the $820 billion requested for Social Security, or the $523 billion for Medicare. Security spending includes the Department of Defense, overseas contingencies, and departments such as Homeland Security, Veterans Affairs and the State Department. If there were no need for defense spending, the budget deficit would be reduced to a mere $50 billion.

Defense Department Base Budget:

Military spending starts with the Department of Defense (DoD). For FY 2013, the President requested $525.4 billion for DoD's Base Budget. This was a $5 billion reduction from the amount approved in the FY 2012 budget. However, the DoD budget is projected to increase to $533.6 billion for FY 2014.(Source: U.S. Office of Management and Budget, FY 2013 Budget Summary Table S-12)

A Leaner, Meaner Defense Department:

The Defense Department achieves savings by focusing on state-of-the-art equipment, such as unmanned surveillance aircraft and upgraded tactical vehicles. It terminated what it called "unnecessary and lower-priority programs," including the C-27 airlift aircraft and a new weather satellite. DoD also reduced spending on the Joint Strike Fighter. It will achieve further savings by consolidating data centers, and

The Department will still maintain ready forces, with a focus on its counterterrorism capability and alliances with organizations such as NATO. It is maintaining pay and benefit levels for 9.6 million active duty personnel, their families, and veterans. It will focus on nuclear deterrence by increased spending in the nuclear weapons complex, as well as nonproliferation.(Source: Department of Defense FY 2013 Budget)

Other Security-related Agencies:

Another $130.6 billion was requested for other security-related agencies. This includes $61 billion for Veterans Affairs, $48 billion for the State Department programs, $39.5 billion for Homeland Security, $11.5 billion for Nuclear Administration and $.5 billion for the Intelligence Community Management Account.

This is less than the $133.5 billion approved in the FY 2012 budget, nd the $159.5 billion spent in FY 2011. (Source: OMB,FY 2013 Budget, Table S-12)

Overseas Contingency Operations:

The FY 2013 budget requests another $88 billion for DoD for the war in Afghanistan. This represents substantial savings from prior years, because military operations in Iraq ended. It is less than the $115.1 billion approved in the FY 2012 budget, the $158.8 billion spent in FY 2011, and the $162.2 billion spent in FY 2010.

The State Department, and other international agencies, will receive $8 billion to fund their role in Overseas Contingency Operations. This is less than the $11.2 billion the State Department received last year. For FY 2014 - FY 2022, $42.4 billion was allocated per year, although not to any specific department. (Source: OMB,FY 2013 Budget, Table S-12)

Benefits Provided by the FY 2013 Military Budget:

A smaller Defense Department makes sense. First, the war in Iraq has ended. Second, Osama bin Laden has been eliminated, putting the al Qaeda "terrorism network on the path of defeat," according to the Defense Department. Third, the DOD is shifting its focus away from maintaining large-scale, prolonged wars. Instead, it's getting rid of "outdated Cold War-era systems" and investing more in intelligence, surveillance and reconnaissance -- the strategy that brought down Osama bin Laden.

Concerns About Cutbacks in Defense Spending:

However, defense spending must be reduced by $487 billion over the next ten years. This is part of the Budget Control Act that was passed by Congress in August 2011 to end the debt ceiling crisis. Even though Congress mandated the budget reductions, many Congressmen say the cuts will jeopardize national security. They are particularly concerned about a cutback of about 100,000 troops, closure of domestic military bases, and termination of some weapons systems. (Source: Reuters, Lawmakers skeptical of cuts in 2013 defense budget, February 15, 2012)

Compare the FY 2013 Military Budget to Prior Years

War on Terror