by Travis Sharp
The $700 billion financial bailout package has drawn the ire of citizens throughout the United States. Both conservatives and liberals have voiced concern that the package bails out Wall Street titans, who caused the financial crisis in the first place, by placing an enormous burden on middle- and working-class taxpayers. At a time when people are losing their homes and struggling to make ends meet, many Americans find the $700 billion cost of the package to be simply unacceptable.
What many Americans probably don’t realize is that the United States is likely to spend $711 billion, more than the cost of the financial bailout, on national defense in the fiscal year that began on October 1, 2008.
How was this figure for defense spending calculated? The Bush administration requested $541 billion for National Defense (budget function 050) in fiscal year (FY) 2009. This $541 billion request is comprised of $515.4 billion for the Department of Defense (DOD), $15.6 billion for Department of Energy-administered nuclear weapons activities, $5.6 billion for non-DOD defense activities, and $4.4 billion for additional mandatory defense spending.
The administration also submitted a $70 billion placeholder FY 2009 request for ongoing military operations in Iraq and Afghanistan, which was passed by Congress and President Bush in June 2008. This $70 billion, however, will not be enough to fund Iraq and Afghanistan through all of FY 2009. Don’t forget that $195 billion was spent on the wars in FY 2008.
Secretary of Defense Robert Gates suggested in February 2008 that $170 billion might be needed to fund Iraq and Afghanistan through all of FY 2009. Using this $170 billion estimate, which remains a reasonable projection even if troop withdrawals from Iraq commence in early 2009, a combined total of at least $711 billion will be spent by the United States on national defense in FY 2009.
A troubled economy and soaring defense spending are not the only factors contributing to the gathering storm. Declining tax revenues and growing mandatory spending are also clouding the fiscal skies. The Bush administration’s tax cuts helped increase the gross national debt by over 70 percent (approximately $4 trillion) since FY 2001, forcing the government to spend more on debt interest payments despite generating less tax revenue. Federal spending on both mandatory programs (like Social Security) and debt interest payments, if current trends hold, will consume two-thirds of government revenues by 2015, crowding out other spending priorities like defense, education, and housing assistance.
In short, the United States is approaching a time when budgetary choices desperately need to be made.