Center for Arms Control and Non-Proliferation

The FY 2007 Pentagon Spending Request

by Christopher Hellman [contact information]

February 5, 2006

Top Line Funding - The Bush Administration is requesting $439.3 billion for the Department of Defense in Fiscal Year 2007, which begins on October 1, 2006. This is $28.5 billion more than the current level of $410.7 billion, an increase of 7 percent. This figure does not include funding for the nuclear weapons activities of the Department of Energy, which is considered part of total Defense Department spending. Nor does this figure include the costs of ongoing military operations in Iraq and Afghanistan.

The Office of Management and Budget estimates that total annual funding for the Defense Department alone will grow to $502.1 billion by Fiscal Year 2011. Total Pentagon spending, not including funding for the Department of Energy or for actual combat operations for the period FY07 through FY11 will exceed $2 trillion. Meanwhile, in January the Congressional Budget Office estimated that the deficit for FY06 will be $360 billion.

Funding for Contingency Operations (Supplemental Appropriations) - In addition to its annual budget request, the Pentagon also announced that it will shortly request $70 billion in supplemental funding for combat operations for Fiscal Year 2006, which is in addition to $50 billion in FY06 supplemental funding approved by Congress as part of their regular 2006 budget work. In addition, the request includes plans to seek a $50 billion bridge fund request to cover Iraq and Afghanistan operations during the first part of FY07. Congress has already approved over $300 billion in supplemental funding for operations in Iraq and Afghanistan.

Missile Defense - The Administration is requesting $10.4 billion for missile defense in FY07, up roughly $1.7 billion from the current $8.7 billion. Missile defense continues to receive more funding than any other weapons program in the annual Pentagon budget. This total does not include $669 million for the SBIRS-High satellite program. The Airborne Laser program is transitioning from a deployment program to more of a technology demonstration program.

Shipbuilding - The request includes funding for the continued development of the Aircraft Carrier Replacement Program ($1.1 billion), the DD(x) Destroyer Program ($3.4 billion), and the Littoral Combat Ship ($840 million). It includes $2.6 billion for the purchase of one SSN-774 Virginia class nuclear attack submarine.

Aircraft - The request includes $2.7 billion for 30 of the Navys F/A-18E/F Super Hornet [although news reports indicate that an additional six aircraft are being funded through supplemental appropriations], $2.3 billion for procurement of 16 V-22 Osprey tilt-rotor aircraft, and $5.3 billion for continued development of the F-35 Joint Strike Fighter and the procurement of the first five aircraft. The request also includes $2.8 billion for the F-22 Raptor fighter but includes no aircraft, but instead funds advanced procurement and RDT&E for a 60 aircraft multi-year procurement beginning in FY08.

Military Personnel - The request includes an increase in base pay of 2.2 percent. According to the Pentagon, base pay already has risen 25 percent since 2001. There are also targeted pay increases for specific skills, and $1.9 billion for recruiting and retention.

Homeland Defense - The request contains $16.7 billion for Pentagon activities related to homeland security including detection of and protection against weapons of mass destruction, emergency preparedness and response, and protecting critical infrastructure. NOTE: A footnote on the budgets Table Homeland Security Funding By Agency (Table S-5) indicates that DoDs contribution to homeland security has been revised upward significantly due to a change in methodology. Thus the budget shows a $16.4 billion DoD contribution to homeland security in FY06, rather than the $9.5 billion shown in last years request. The increase in DoDs contribution over last year is 1.6 percent.

Cooperative Threat Reduction (CTR) - The Administration is requesting $372.1 million for the CTR (also known as Nunn-Lugar) program, 10.4 percent below the current level of $415.5 million. Further, the request recommends a reduction (or rescission) of $4.5 million in current funding. The CTR program assists Russia and the former Soviet republics safeguard weapons of mass destruction and related technologies.

THE FY'07 PENTAGON "TOP LINE" REQUEST

The Bush Administration has requested the following funding for the military.

TABLE 1. TOP LINE REQUEST (budget authority in $billions)

	FY’06	FY’07	FY’08	FY’09	FY’10	FY’11	TOTAL FY’07- FY’11
DOD Military(051)	410.8	439.3	435.2	447.9	461.1	474.8	2,258.3
DOE and Other	23.7	23.4	23.9	24.3	28.8	25.3	125.7
TOTAL (050)	434.5	462.7	460.9	474.7	487.9	502.1	2,388.3
TABLE NOTES All "Function 050" and "Out Year" figures are estimates. For the last several years, the Defense Department has released fewer and fewer figures to accompany their budgets. As recently as the FY'04 request, the Pentagon released DoD, DoE and total 050 funding projections for the entire Future Year's Defense Plan. No longer. Now such projections are done only for those areas of defense spending the Pentagon wishes to highlight. The projected “Out Year” figures here are undoubtedly low. For example, the Pentagon says that defense funding (Function 051) for FY'07 will be $439.3 billion, yet OMB's figure is a mere $422.6 billion. Figures do not include funding for operations in Iraq and Afghanistan. Totals may not add up due to rounding. SOURCES: Department of Defense, Office of Management and Budgetís "Analytical Perspectives," Current Services Budget Authority by Function, Category and Program [Table 25-12].)

TABLE 2. FY’07 BUDGET REQUEST BY FUNCTION INCREASE/DECREASE FROM FY’06 (budget authority in $billions)

	FY’06	FY’07 Requested	+/-	%
Military Personnel	106.8	110.8	4	3.7%
Operations & Maintenance	142.6	152	9.4	6.6%
Procurement	76.2	84.2	8	10.5%
RDT&E	71	73.2	2.2	3.1%
Military Construction	8	12.6	4.6	57.5%
Family Housing	4	4.1	0.1	2.5%
Working Capital Funds	2.2	2.4	0.2	9.1%
TOTAL (051)	410.8	439.3	28.5	6.9%
TABLE NOTES *Totals may not add up due to rounding.

TABLE 3. PERCENTAGE OF TOTAL DEFENSE SPENDING: 051 Account (budget authority in billions)

	FY’07 Requested	Percentage of Total
Military Personnel	110.8	25.2%
Operations & Maintenance	152	34.6%
Procurement	84.2	19.2%
RDT&E	73.2	16.7%
Military Construction	12.6	2.9%
Family Housing	4.1	0.9%
Working Capital Funds	2.4	0.5%
TOTAL (051)	439.3
TABLE NOTES *Totals may not add up due to rounding.

TABLE 4. FY’07 BUDGET REQUEST BY SERVICE INCREASE/DECREASE FROM FY’05 (budget authority in billions)

	FY’06	FY’07 Requested	+/-	%
Army	99.1	111.8	12.7	12.8%
Navy/Marine Corps	122.5	127.4	4.9	4.0%
Air Force	124.1	130.4	6.3	5.1%
Defense Wide	65.1	69.7	4.6	7.1%
TOTAL (051)	410.8	439.3	28.5	6.9%
TABLE NOTES *Totals may not add up due to rounding.

TABLE 5. PERCENTAGE OF TOTAL DEFENSE SPENDING: 051 Account (budget authority in billions)

	FY’07 Requested	Percentage of Total
Army	111.8	25.4%
Navy/Marine Corps	127.4	29.0%
Air Force	130.4	29.7%
Defense Wide	69.7	15.9%
TOTAL (051)	439.3
TABLE NOTES *Totals may not add up due to rounding. **Totals do not include supplemental appropriations for combat operations in Iraq and Afghanistan. SOURCES: DoD, Fiscal Year 2006 Budget Request, February 2006.

THE FY'07 REQUEST FOR SELECTED WEAPONS SYSTEMS

The breakdown by selected weapon systems provides funding requests, per unit costs and total program costs for the Pentagon's major weapons programs.

TABLE 6. FY’07 REQUEST FOR SELECTED WEAPONS SYSTEMS (budget authority in millions)

	FY’07 Request	Quantity	Per Unit Cost	Total Program Cost
F/A-18E/F Fighter	2,732.40	30	95.2	43,982.9
F-22 Fighter	2,781.70	——	338.8	61,323.7
F-35 Fighter (JSF)	5,290.10	5	104.4	256,617.6
C-17 Transport Aircraft	3,061.40	12	328.9	59,208.2
C-130J Cargo Aircraft	1,631.70	13	117.4	6,223.2
B-2 Bomber	415.5	——	2,114	44,40
V-22 Osprey Aircraft	2,291.50	16	110.2	50,486.1
E/A-18G Jamming Aircraft	1,277.60	12	96.2	8,659.5
MH-60R “Seahawk” Helicopter	935.1	25	44	11,187.7
MH-60S “Knighthawk” Helicopter	628.9	18	28.5	7,720.6
Aircraft Carrier Replacement Program (CVN-21)	1,093.10	——	12,004.40	36,013.2
DDG-51 Destroyer	355.8	——	1,012.20	62,759.0
DDG-1000 (DDx) Surface Combatant	3,361.40	2		8,060.8*
Littoral Combat Ship (LCS)	840.4	2	656.9	1,313.7*
SSN-774 “Virginia” Attack Submarine	2,621.70	1	3,132.70	93,979.8
LPD-17 “San Antonio” Landing Ship	297.5	——	1,347.50	12,127.7
LHA Replacement Vessel [LH/LHA®]	1,170.40	1	N/A	N/A
Trident II D-5 Missile	1,081.70	——	65.9	36,981.8
Tactical Tomahawk Cruise Missile	373.1	350	1.24	4,210.1
Joint Direct Attack Munition (JDAM)	274.5	10,661	0.026	5,477.9
Joint Stand-off Weapon (JSOW)	153	397	0.46	4,778.6
Joint Air to Surface Standoff Missile (JASSM)	228.1	234	0.93	4,643.4
Small Diameter Bomb	213.1	1,343	0.075	1,809.2
Stryker Interim Armored Vehicle (IAV)	809.2	100	4.2	10,405.5
Future Combat System (FCS)	3,745.60	——	N/A	161,420.0
Family of Medium Tactical Vehicles (FMTV)	697	3,988	0.22	18,053.3
Expeditionary Fighting Vehicle (AAAV)	444.5	15	12.3	12,579.0
HMMWV “Humvee” Vehicles	582.6	3,091	N/A	N/A
TABLE NOTES *“Total Program Cost” for these systems reflects only the cost of Research, Development, Testing and Evaluation (RDT&E). ** “Per Unit Costs” and “Total Program Costs” are based on DoD’s Selected Acquistion Report, November 15, 2006, with the exception of the B-2 Bomber, which is no longer listed. ‚“Per Unit Costs‚” are derived by dividing total program costs by the number of systems purchased, and include both procurement and research & development funding. SOURCES: DoD, Program Acquisition Costs By Weapon System, Procurement Programs (P-1),and RDT&E Programs (R-1),February, 2006. "Per Unit Costs" and "Total Program Costs" are based on DoD's Selected Acquistion Report, November 15, 2005, with the exception of the B-2 Bomber, which is no longer listed. . "Per Unit Costs" are derived by dividing total program costs by the number of systems purchased, and include both procurement and research & development funding.

The FY'07 Request for Ballistic Missile Defense

February 6, 2006 The ballistic missile defense program receives more funding than any other weapons system in the annual Pentagon budget. Background: As part of its Fiscal Year 2002 budget request, the Defense Department announced a major restructuring of the Ballistic Missile Defense Office (BMDO). Funding for a range of programs within BMDO were absorbed and redistributed in to five major areas of research. These are the Terminal, Midcourse and Boost Segments, the Ballistic Missile Defense Segment, and Ballistic Missile Defense Sensors. As part of the FY'02 reorganization, some specific missile defense programs were absorbed in to the general research areas and have, from a funding prospective, effectively disappeared. Such changes continue in the FY'07 request. The BMD System Segment and the Terminal Segment have disappeared. Meanwhile, a half-dozen subsections under "BMD" have appeared. "Navy Area-Wide" was terminated in January, 2001, when it violated the Nunn-McCurdy amendment, which calls for the cancellation of a program that experiences significant cost growth. The Space Based Infra-Red System-High (SBIRS-High) continues to be funded outside the MDA budget.

TABLE 7. FY’07 REQUEST FOR BALLISTIC MISSILE DEFENSE (budget authority in millions)

	FY’06 Total	FY’07 Request
Terminal Defense (MDA)	1,139.8	1,038.3
Boost Defense (MDA)	471.7	631.6
Midcourse Defense (MDA)	2,442.2	2,877.0
AEGIS BMD (MDA)	915.7	1,031.9
BMD Sensors (MDA)	278.2	514.5
Space Tracking & Surveillance (MDA)	231.5	390.6
BMD Technologies (MDA)	149.3	206.7
Advanced Concepts (MDA)	274.9	374.5
BMD System Interceptors (MDA)	209.3	405.5
BMD Test & Targets (MDA)	608.7	591.9
Other Programs (MDA)	960.7	1,247.9
Joint Theater Air Missile Defense Org. (Joint Staff)	80.7	54.6
Military Construction	——	——
O&S (Army, Navy & Air Force)	111.7	137.7
MEADS/Patriot (Army)	305	340.1
Patriot PAC-3 & Patriot MODs (Army)	559.7	559
Total Ballistic Missile Defense	8,739.1	10,401.8
Space Based Infra-Red System-High (SBIRS-High) (Air Force)	696.6	668.9
GRAND TOTAL Ballistic Missile Defense	9,435.7	11,070.7

The FY'07 REQUEST FOR UNMANNED AERIAL VEHICLES (UAVs)

Unmanned Aerial Vehicles (UAVs) continue to prove their worth on the modern battlefield. The newest weapon in the U.S.
arsenal is the armed UAV. The administration is requesting over $1.7 billion to develop both combat and surveillance UAVs.

In all, the Pentagon plans to spend $11.6 billion from FY'07 through FY'11 to procure 322 UAVs. The Pentagon projects that this will increase the missions available to combat commanders from 12 to 21 (75 percent).

TABLE 7. FY’07 Request for Unmanned Aerial Vehicles (UAVs) (in millions)

	FY’07 Total	Number	FY’08 Total	Number
Global Hawk (Air Force)	687.3	5	752.2	6
Predator (Air Force)	217.9	9	348.9	26
Shadow (Army)	186.6	11	48.9	——
Small UAV (Army)	19.8	100	10.2	20
Fire Scout (Navy)	94.2	——	142.7	4
Extended Range (Army)	134.1	——	118.2	——
J-UCAS (Navy)	——	——	239.2	——
J-UCAS (Air Force)	305	——	——	——
Broad Area Maritime (Navy)	——	——	26.4	——
TOTALS	1,644.90		1,686.70
SOURCES: DoD’s Program Acquisiton Costs By Weapon System, February 2007.

FY'07 DISCRETIONARY SPENDING REQUEST

The Fiscal Year 2007 budget request includes $873 billion for discretionary spending (the money the President and Congress must decide and act to spend each year), roughly $460 billion of which will go to the Pentagon. The "National Defense" category of the federal budget for FY'07 accounts for over half of all discretionary spending (53 percent). [NOTE: These totals do NOT include funding for military operations in Iraq and Afghanistan.]

The other category of federal spending is mandatory spending, money that is spent in compliance with existing laws that govern the particular program or function. Mandatory spending includes entitlements, money or benefits provided directly to individuals such as Social Security, Medicare, Medicaid, Food Stamps, and Federal Retirement. It also includes interest payments on the national debt.

GRAPH I. DISCRETIONARY BUDGET REQUEST FOR FY 2007 (in billions)

Spending Category	Billions of US dollars
Defense		460
Education		56.8
Health		53.1
Justice		39.7
Veternan Benefits		35.8
International Affairs		35.1
Housing Assitance		31.5
Natural Resources & Environment		27.9
Science & Space		26.1
Transportation		22.8
Training, Employment & Social Services		18
General Government		17.1
Other Income Security		16.3
Economic Development		11.7
Social Security & Medicare		9.8
Agriculture		5.6
Energy		3.8
Notes: The “Social Security & Medicare” funding in this graph refers to administrative costs associated with these programs, and does not reflect actual benefits paid out.