This Update briefly compares the treatment of funding for national defense in the House and SBC versions of the CBR.

House: The budget authority (BA) and outlay levels specified for national defense in the House budget resolution are largely consistent with the levels projected in the Bush Administration’s defense budget plan submitted in February.² (See table.) The main difference is that the House budget resolution assumes that Congress would not adopt the administration’s proposal to shift to an accrual accounting system to cover the future retirement costs of current civilian Department of Defense (DoD) personnel. Reflecting this assumption, the House budget resolution would provide $3.2 billion less for defense in fiscal year (FY) 2003 than requested and would cut projected funding levels for defense by a roughly comparable amount over each of the following four years. Like the administration’s budget plan, the House budget resolution projects funding levels for defense and other federal programs through FY 2007. Consistent with the administration’s request, the House budget resolution also specifies that $10 billion of the $393.8 billion provided for defense in FY 2003 is for a reserve fund intended to meet unspecified requirements related to the war on terrorism, and that the appropriations committees would be allocated this funding only if it is needed for this purpose.

SBC: The SBC version of the budget resolution would provide essentially the same level of funding for defense through FY 2005 as the House budget resolution. As in the case of the House budget resolution, the SBC version of the budget resolution assumes that civilian DoD retirement costs would not be shifted to an accrual accounting system, thereby reducing funding requirements by several billion dollars a year. The SBC version of the budget resolution would provide somewhat less for defense in FY 2006 and FY 2007. Consistent with the administration’s budget plan, under both the House and SBC versions of the budget resolution, funding for defense would grow by about 13.4 percent in real (inflation-adjusted) terms between FY 2002 and FY 2005.³ Under the administration’s plan and the House budget resolution, funding for defense would continue to increase in FY 2006 and FY 2007 as well. By contrast, funding for defense is projected to stay roughly flat in real terms in those years in the SBC version of the budget resolution.

The SBC version of the budget resolution includes a Reserve Fund for Defense which could be made available to provide the additional funding projected in the administration’s plan, if such funding is deemed necessary after FY 2005. However, tapping this fund would lead to a reduction in the amount of deficit reduction otherwise included in the SBC version of the budget resolution. The SBC version of the budget resolution also differs from the House version in that it projects funding levels for defense (and all other federal programs) through FY 2012, rather than only over the next five years. Under the SBC version of the budget resolution, funding for defense is projected to grow at roughly the rate of inflation over the FY 2006-12 period.⁴

How Realistic Are These Funding Projections?
There currently appears to be broad support for increasing spending on defense. And both the House and SBC versions of the budget resolution would provide significant increases in funding for defense over at least the next several years. However, the extent to which large increases for defense are sustainable over the long term is unclear. Over the long term, the defense mission will have to compete with other priorities of the American public and political leadership, such as holding down or further cutting taxes, reducing the federal debt, ensuring the health of Social Security and Medicare, and providing greater resources for education, health research and other domestic programs. It is unclear whether either budget resolution, or the administration’s plan, makes realistic assumptions about costs and spending requirements in each of these other areas. As such, the realism of their projections for defense spending might also be called into question. It is also unclear whether the level of funding for defense included in either budget resolution, or the administration’s proposal, would, in any case, be sufficient to cover the costs of fully implementing the current—in many ways very expansive—defense plan.

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For more information, contact Steven Kosiak at (202) 331-7990.

The Center for Strategic and Budgetary Assessments (CSBA) is an independent policy research institute established to promote innovative thinking about defense planning and investment strategies for the twenty-first century. CSBA is directed by Dr. Andrew F. Krepinevich. See our website at www.csbaonline.org.

1. The CBR is a resolution intended to guide the actions of Congress, rather than a law. Thus, it does not require the approval of the President, nor can it be vetoed.

2. Budget authority (BA) is the amount of funding the government may obligate through hiring and signing contracts. Outlays are the actual cash expenditures made to liquidate these obligations.

3. The FY 2002 funding level assumed in this calculation does not include the $14 billion in supplemental appropriations related to the war on terrorism recently requested by the administration.

4. The small differences in spending levels for defense included in the House and SBC versions of the budget resolution over the FY 2003-05 period are primarily due to the fact that the House version uses Office of Management and Budget (OMB) estimates as its baseline, while the SBC version uses Congressional Budget Office (CBO) re-estimates of those figures.