DIIG Current Issues No. 19: Fixing the Shortfalls: Defense Budget Trends and Long Term Impact

Defense budgets run in cycles, with  periods of increase followed by periods of decline. For years, defense analysts have been predicting that the defense budget is coming down, but it has been on an historic run for the past decade. The FY 2009 Department of Defense (DoD) Authorization Act was 65 percent higher than in FY 2001 in real dollars. This exceeds even the “Reagan Buildup” from FY 1980-1985. The issue is not whether defense budgets will come down, but when. Neither Congress nor the Defense Department is ready to deal with declining defense budgets. Let’s look at the reasons why this is so and what the solutions might be.

David J. Berteau