1

2/12/2004

The Long-Term Implications of

Current Defense Plans:

Detailed Update for Fiscal Year 2004

Congressional Budget Office

February 2004

•In January 2003, the Congressional Budget Office (CBO) published The LongTerm Implications of Current Defense Plans, which was based on the fiscal year

2003 budget and the Department of Defense’s Future Years Defense Program

(FYDP) of that same year. CBO updated that analysis in July 2003; its publication

The Long-Term Implications of Current Defense Plans: Summary Update for Fiscal

Year 2004 revised CBO’s earlier work to take into account changes incorporated in

the President’s budget for fiscal year 2004 and the 2004 FYDP.

•Because it was a summary, the July 2003 paper omitted many of the detailed data

displays contained in CBO’s January 2003 study. This briefing updates those

omitted displays consistent with the 2004 FYDP. The briefing does not incorporate

changes to the FYDP resulting from Congressional action on the President’s fiscal

year 2004 budget request.

•The updated displays differ in some instances from those contained in CBO’s

January 2003 study. For example, the updated displays of investment spending for

each of the military services provide historical data from 1980 on; the

corresponding displays in the January 2003 study began with data for 2002. In

some cases, corrections to CBO’s historical database of procurement quantities and

spending have caused changes; for example, procurement spending on the C-5

transport plane during the early 1980s is corrected in this update. And in many

instances the color schemes used in the updated displays differ from those in the

corresponding versions published in CBO’s January 2003 study.
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2/12/2004

Figure 1-1 Updated.

Past and Projected Resources for Defense

(Billions of 2004 Dollars of Obligational Authority)

Risk

Investment

Operation

and

Support

.

0

100

200

300

400

500

600

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

Family Housing

Military Personnel Military Construction

Operation and Maintenance

RDT&E

Actual FYDP

Procurement

FY03 Omnibus

and Supplemental;

FY04 Supplemental

CBO Projection

CBO Baseline

for DoD

•This chart updates Figure 1-1 in CBO’s January 2003 study of The Long-Term

Implications of Current Defense Plans. It shows total obligational authority (TOA)

for the Department of Defense (DoD) for the 1980-2022 period. TOA for defense

grew rapidly from the early to mid-1980s, reaching a peak of $420 billion in 1985

(all funds are in inflation-adjusted 2004 dollars). Reflecting the end of the Cold

War, TOA then generally declined during the late 1980s and into the 1990s,

reaching about $283 billion in 1997.

•DoD’s TOA then began to rise, reaching $304 billion by 2000. It has grown even

more rapidly in recent years as U.S. forces have become engaged in operations in

Afghanistan and Iraq. In 2003, DoD’s TOA reached $449 billion, including $74

billion in supplemental funding.

•The 2004 Future Years Defense Program (FYDP)—on which CBO based the

projections shown in this briefing and in its July 2003 report—anticipated that

defense resources (excluding supplemental appropriations) would rise from $383

billion for 2004 to $439 billion for 2009.

•Including supplemental appropriations for 2004, DoD’s obligational authority will

be about $450 billion, or approximately the same amount that the Congress

appropriated for DoD in 2003.
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2/12/2004

Figure 1-1 Updated (Continued).

Past and Projected Resources for Defense

(Billions of 2004 Dollars of Obligational Authority)

Risk

Investment

Operation

and

Support

.

0

100

200

300

400

500

600

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

Family Housing

Military Personnel Military Construction

Operation and Maintenance

RDT&E

Actual FYDP

Procurement

FY03 Omnibus

and Supplemental;

FY04 Supplemental

CBO Projection

CBO Baseline

for DoD

•If the program in the 2004 FYDP was carried out as currently envisioned, the

demand for defense resources, excluding needs for contingencies, would average

$458 billion a year between 2010 and 2022, CBO projects—or about $75 billion

more than the 2004 request and about $10 billion more than the funding DoD

received for 2004.

•That projection uses DoD’s estimated costs for its planned programs and,

consistent with the 2004 FYDP, excludes costs for continued operations in

Afghanistan and Iraq and for other activities conducted as part of the global war on

terrorism.

•CBO also made a “cost risk” projection (shown by the dashed red line in the

figure). CBO projects that resource demands including cost risk will average about

$473 billion a year through 2009 and about $533 billion between 2010 and 2022.

Those values are about 12 percent and 16 percent higher than the amounts without

cost risk. Assumptions underlying the cost risk projection include the following:

• Costs for weapons programs grow as they have since the Vietnam War;

• Operating costs for major equipment grow as they have over the past two

decades; and

• The United States continues to conduct military operations overseas as

part of the continuing global war on terrorism.
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2/12/2004

Figure 1-2 Updated.

Defense Spending as a Share of the Federal Budget and GDP

(Percent)

0

5

10

15

20

25

30

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

Actual FYDP CBO Projection

Risk

Risk

Defense Spending as a Share of

the Budget

Defense Spending as a Share of

GDP

•This chart updates Figure 1-2 of CBO’s January 2003 study of The Long-Term

Implications of Current Defense Plans. It compares past and projected spending for

DoD with overall federal spending and the size of the U.S. economy.

•The same historical pattern characterizes DoD’s spending measured as a share of

federal expenditures or of GDP. Both shares grew through the early 1980s. DoD’s

share of GDP reached a high point in 1986, while its share of federal spending

peaked in 1987. The shares declined thereafter, reaching a low point in 1999.

•Trends in the shares during the period of DoD’s plan and of CBO’s projection are

also similar. Both shares grow through 2004 but begin a gradual and steady decline

thereafter, with or without cost risk.

•The share of GDP attributable to defense spending falls because projected real

(inflation-adjusted) increases in GDP outpace the increases projected for defense

outlays.

•DoD’s share of federal spending declines because real increases projected in

mandatory spending for programs such as Social Security and Medicare outpace

increases projected for defense spending.
5

•This chart updates Figure 2-1 in CBO’s January 2003 study of The Long-Term

Implications of Current Defense Plans. Funds to support DoD’s operations

composed about two-thirds of the defense budget in 2004. Those funds pay for the

salaries and benefits of DoD’s military, civilian, and contractor employees; the

operating costs of the military’s equipment; and the costs of operating and

maintaining defense facilities.

•DoD’s plans anticipate that funding for operation and support (O&S) will grow

from $236 billion in 2004 (excluding supplemental appropriations) to $254 billion

by 2009.

•On the basis of those plans, CBO projects that demands for O&S funding will

continue to rise after 2009, reaching a total of $292 billion a year by 2022 (the end

of CBO’s projection period). Those increases result from:

• Health care costs, which have grown rapidly in the past and which CBO

projects will nearly double over the 2004-2022 period, growing from $28

billion in 2004 to $52 billion in 2022; and

• Real pay raises, which if continued through 2022 at the rate of DoD’s

planned raises through 2009 would cost an additional $36 billion by the end

of the projection period.

2/12/2004

Risk

Figure 2-1 Updated.

Spending for Operation and Support

(Billions of 2004 Dollars of Obligational Authority) .

0

50

100

150

200

250

300

350

400

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

Forces and Logistics

Medical

HQ and Administration

Installations

FY03 Omnibus

and Supplemental;

FY04 Supplemental

Actual FYDP CBO Projection

Contingency Risk Personnel Support, Training, and

Recruiting
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2/12/2004

Risk

Figure 2-1 Updated (Continued).

Spending for Operation and Support

(Billions of 2004 Dollars of Obligational Authority) .

0

50

100

150

200

250

300

350

400

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

Forces and Logistics

Medical

HQ and Administration

Installations

FY03 Omnibus

and Supplemental;

FY04 Supplemental

Actual FYDP CBO Projection

Contingency Risk Personnel Support, Training, and

Recruiting

•As the dashed red lines in the figure show, there are risks that could cause growth

in the demand for O&S resources to be greater than DoD and CBO have anticipated.

Those risks include:

• More rapid growth than expected in DoD’s health care costs—that is, at a

pace consistent with the upper end of current projections for increases in

costs for the health care sector of the U.S. economy as a whole ($13 billion

of cost risk in 2022);

• Continued growth in costs for personnel support ($1 billion of cost risk in

2022);

• Continued growth in the costs of operating aging as well as new, more

complex equipment ($14 billion of cost risk in 2022); and

• Continued involvement by the United States in contingency operations,

such as those in Afghanistan and Iraq, and other operations associated with

the global war on terrorism ($20 billion of cost risk in 2022).
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2/12/2004

.

0

50

100

150

200

250

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

RDT&E

Other Procurement

Command, Control,

and Reconnaissance

Ground Combat

Space

Missile Defenses

Ships

Aircraft

Missiles/Munitions

Risk

Actual FYDP CBO Projection

FY03 Omnibus

and Supplemental;

FY04 Supplemental

Figure 3-1 Updated.

Spending for Investment by Budget Account and Weapon Type

(Billions of 2004 Dollars of Total Obligational Authority)

•This chart updates Figure 3-1 of CBO’s January 2003 study of The Long-Term

Implications of Current Defense Plans. It provides a breakout of the one-third of

DoD’s budget (about $137 billion in 2004) allocated to investment, which funds

development and procurement of DoD’s weapon systems.

•The 2004 FYDP anticipated that investment spending would grow to $171 billion

by 2009—about 25 percent more spending than in 2004. On the basis of that plan,

CBO projects that investment resources will continue to grow, reaching about $186

billion by 2013, and then decline. Over the 2010-2022 period, under the assumption

that weapons costs do not grow as they have historically, investment demands would

average about $175 billion a year.
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2/12/2004

.

0

50

100

150

200

250

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

RDT&E

Other Procurement

Command, Control,

and Reconnaissance

Ground Combat

Space

Missile Defenses

Ships

Aircraft

Missiles/Munitions

Risk

Actual FYDP CBO Projection

FY03 Omnibus

and Supplemental;

FY04 Supplemental

Figure 3-1 Updated (Continued).

Spending for Investment by Budget Account and Weapon Type

(Billions of 2004 Dollars of Total Obligational Authority)

•That projection is larger than the one reported in CBO’s January 2003 study. Over

the 2010-2020 period—the years common to both projections—the investment

resources in CBO’s current projection average about $25 billion a year more. Most

of that increase is associated with:

• Increases in investment spending by the Army, including additional

spending on its Future Combat System ($9 billion a year);

transformation-related RDT&E account ($5 billion a year).

•If the costs of weapons grow in the future as they have over the past 30 years,

resource requirements for planned purchases in 2009 could equal $194 billion, or

about 13 percent more than the 2009 value without cost growth. With cost growth,

funding during the 2010-2022 projection period could average almost $210 billion—

about 20 percent more than average investment resources without cost growth.

• Increases in defense agency funding ($8 billion a year), including a new
9

2/12/2004

Figure 3-2 Updated.

Projected Funding for Top Investment Programs

(Billions of 2004 Dollars of Obligational Authority)

Ships

Combat Aircraft

Missile Defense

Missiles/Munitions

Helicopters

Support Aircraft Mobility Aircraft

Space Army Digitization

0

25

50

75

100

125

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Ground Combat

Actual FYDP CBO Projection Risk

January 2003 Projection

(Excluding Cost Risk)

•This chart replaces the bottom panel of Figure 3-2 of CBO’s January 2003

study of The Long-Term Implications of Current Defense Plans. About half of

DoD’s investment funding is associated with 10 categories of programs. Over

the entire period shown in the graph (2002 to 2022), average annual spending

on those “top 10” program categories equals about $80 billion.

•Almost $17 billion of that amount pays for the Navy’s ship purchases. Fixedwing combat aircraft in the Air Force, Navy, and Marine Corps account for

about $16 billion of the total. Army and Marine Corps ground combat

equipment accounts for another $10 billion, as does spending on missile

defenses.

•If costs grow as they have historically, average annual resource needs for those

top programs will rise to about $105 billion—equaling cost growth of about 30

percent (see the dashed red line displayed in the figure).

•The specific factors that CBO used to produce that cost risk estimate are taken

from an analysis of data from DoD’s selected acquisition reports (SARs),

performed by the RAND Corporation.
10

2/12/2004

Figure 3-3 Updated.

Past and Projected Army Spending for Investment

(Billions of 2004 Dollars of Obligational Authority) .

0

10

20

30

40

50

60

70

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

RDT&E

Other Procurement

Missiles/Munitions

Command, Control,

and Reconnaissance

Aircraft

Ground Combat

Missile Defenses

Actual FYDP CBO Projection

January 2003 Projection

(Excluding Cost Risk)

Risk

•This chart updates Figure 3-3 of CBO’s January 2003 study of The Long-Term

Implications of Current Defense Plans. CBO projects that if current plans were

carried out, by 2012 the Army’s investment spending would exceed its previous

peak, in 1985, of $34 billion, and by 2014 it would reach a new peak of $42 billion.

Spending would decline thereafter, reaching about $34 billion by 2022.

•CBO’s projection for the Army’s investment spending over the 2010-2020 period

averages about $38 billion annually, or about $9 billion more than in the January

2003 projection. That increase occurs despite a number of changes in the Army’s

plans, including:

• Delaying production of the Comanche reconnaissance helicopter from

2005 to 2007 and cutting the number to be purchased;

• Terminating upgrade programs for the Army’s current fleet of ground

combat vehicles (including Abrams tanks and Bradley fighting vehicles);

• Delaying the start of procurement and reducing annual production of the

Future Combat System, which is intended to replace current ground combat

equipment; and

• Transferring funding for the destruction of chemical munitions out of the

Army’s budget.
11

2/12/2004

Figure 3-4 Updated.

Procurement of Army Ground Combat Vehicles

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-1,800

-1,600

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

MLRS M-60 Abrams

Bradley M109A4 M109A5/Paladin

Stryker FCS

Actual FYDP CBO Projection

Steady

State

Steady

State

Billions of 2004 Dollars

Number of Vehicles

•This chart updates the two panels of Figure 3-4 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

steady-state ranges depicted in the chart, see Box 1-3 in the January 2003 study.)

•Purchases of ground combat vehicles (GCVs) during the 1990s averaged about 400

a year, less than half of the upper end of the steady-state purchase quantities that

would sustain the fleet indefinitely.

•The Future Combat System (FCS) is a key element of the Army’s transformation

plans. By 2045, all of the Army’s divisions would be equipped with elements of the

FCS.

•The first FCS vehicles for the Army’s divisions would be bought in 2009. The

Army’s current plan is that by 2011, the level of FCS purchases will be enough to

equip two brigades a year.

•The Army’s current plans differ from its 2003 plans:

•Estimates made by the Army of the average unit costs for the elements of

the FCS are now three times larger than the program’s original cost goals.

•Annual FCS purchases have been reduced by one-third, thereby doubling

overall annual procurement costs.
12

2/12/2004

Figure 3-5 Updated.

Age and Inventory of Army Ground Combat Vehicles

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

HalfLife

Actual FYDP CBO Projection

January 2003 Projection

M-60

Abrams

Number of Vehicles

Years

Bradley

Stryker

Future Combat System

M109A4

Paladin M109A5 MLRS

•This chart updates the two panels of Figure 3-5 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

half-life range shown in the chart, see Box 1-3 in the January 2003 study.) The

chart shows the composition of the Army’s ground combat vehicle fleet (the bottom

part of the chart) and its average age (the red line at the top of the chart).

•The Army’s GCV purchases have been insufficient to halt aging—the ground

combat fleet’s average age has risen steadily, reaching about 12 years in 2004, or

about twice its age in 1990.

•Deliveries of new vehicles will not be sufficient to arrest age growth until 2011,

when the average age of the fleet should stabilize at about 17 years with deliveries

of the first FCS purchases. Although fleet aging halts at that point, for the rest of

the projection period the average age is slightly above the upper bound of the target

half-life range for ground combat vehicles.

•Those findings differ from the results of CBO’s January 2003 analysis. In that

study, the Army’s fleet age is projected to decline rapidly between 2008 and 2020

instead of halting at an average of 17 years. That change occurs primarily because

of the one-third reduction in projected annual FCS procurement and termination of

the Bradley and Abrams upgrade programs.
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2/12/2004

Figure 3-6 Updated.

Procurement of Army Helicopters

0

1

2

3

4

5

6

7

8

9

10

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-250

-200

-150

-100

-50

0

50

100

150

200

250

AH-1 AH-64 RAH-66

UH-60 CH-47

Steady

State

Actual FYDP CBO Projection

Steady

State

Billions of 2004 Dollars

Number of Helicopters

•This chart updates the two panels of Figure 3-6 of CBO’s January 2003 study of The

Long-Term Implications of Current Defense Plans. (For an explanation of the steadystate ranges depicted in the chart, see Box 1-3 in the January 2003 study.) The chart

shows past and projected purchases of helicopters for the Army measured by the

number of helicopters (the top part of the chart) and in billions of 2004 dollars (the

bottom part of the chart).

•The Army plans to increase its annual purchases of new and refurbished helicopters

almost fourfold, from 33 in 2004 to 121 by 2009. Annual purchases are slated to

continue growing during the years of CBO’s projection period, reaching 150 by 2011

and remaining at or above that level through 2017.

•Most of the increase in projected funding will go toward purchases of the RAH-66

Comanche scout helicopter beginning in 2007. Such purchases are projected to reach

a peak of 60 aircraft a year in 2011 and remain at that level through 2018.

•Between 2003 and 2004, the Army made several changes to its plans for procuring

helicopters:

•Total Comanche procurement was reduced from 1,250 helicopters to 650;

•Long-range plans for a Future Transport Rotorcraft were abandoned; and

•The UH-60X, an improved version of the existing Blackhawk helicopter, was

chosen as the Army’s Future Utility Rotorcraft.
14

2/12/2004

Figure 3-7 Updated.

Age and Inventory of Army Helicopters

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

18,000

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

HalfLife

Actual FYDP CBO Projection

Number of Helicopters

Years

UH-1

UH-60

AH-1

AH-64

OH-58

CH-47

RAH-66

•This chart updates the two panels of Figure 3-7 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

half-life range shown in the chart, see Box 1-3 in the January 2003 study.) The

chart shows the age (top part of the chart) and inventory (bottom part of the chart)

of the Army’s attack and utility helicopters.

•Although the Army has bought few helicopters recently and does not anticipate

large annual purchases through 2009, the helicopter fleet’s average age remains

within or close to the target half-life range. Helicopter fleets are only about a third

as big as they were in the 1980s and 1990s, and the equipment retirements that have

brought this about have also kept average ages down.

•Beginning around 2010, projected deliveries of the new Comanche reconnaissance

helicopter and of upgraded and new utility helicopters cause the average age of the

fleet to stabilize and then begin to decline.
15

2/12/2004

Figure 3-9 Updated.

Past and Projected Navy and Marine Corps Spending for Investment

(Billions of 2004 Dollars of Obligational Authority) .

0

10

20

30

40

50

60

70

80

90

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

RDT&E

Other Procurement

Ground Combat

Missiles/Munitions

Command, Control,

and Reconnaissance

Aircraft

Ships

Missile

Defenses

Actual FYDP CBO Projection

January 2003 Projection

(Excluding Cost Risk)

Risk

•This chart updates Figure 3-9 in CBO’s January 2003 study of The Long-Term

Implications of Current Defense Plans. The 2004 FYDP and CBO’s current

projection through 2016 envision providing greater investment resources to the

Department of the Navy (which includes the Marine Corps) than did the 2003

FYDP and CBO’s January 2003 projection.

•Current plans would increase Navy investment from $44 billion in 2004 to

a peak of about $64 billion in 2010.

•After that time, investment resources would gradually decline to $33 billion

by 2022, averaging about $47 billion a year between 2010 and 2022.

•If costs grow as they have in the past, however, the Navy’s investment spending

could rise to a peak of about $74 billion in 2010, average $56 billion a year between

2010 and 2022, and then fall back to about $39 billion by the end of the period.
16

2/12/2004

Figure 3-9 Updated (Continued).

Past and Projected Navy and Marine Corps Spending for Investment

(Billions of 2004 Dollars of Obligational Authority) .

0

10

20

30

40

50

60

70

80

90

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

RDT&E

Other Procurement

Ground Combat

Missiles/Munitions

Command, Control,

and Reconnaissance

Aircraft

Ships

Missile

Defenses

Actual FYDP CBO Projection

January 2003 Projection

(Excluding Cost Risk)

Risk

•Between 2004 and 2009, the Navy’s planned annual shipbuilding grows from 8 to

14 ships a year.

•The Navy and Marine Corps now plan to integrate their tactical aircraft forces

more fully, resulting in less need for new planes than CBO projected in January

2003.

•That change effectively reduces projected purchases of tactical aircraft by

about 500 planes over the next two decades, which in turn reduces projected

investment resources after 2016.

•The reduction in purchases occurs primarily in the Joint Strike Fighter

program.

•The Marine Corps’s plans for items purchased through its procurement account

changed little between the 2003 and 2004 FYDPs.

•Plans to invest heavily in ground combat vehicles (such as the new

Expeditionary Fighting Vehicle and the Future Light Combat Vehicle) to

replace the service’s current inventory of aging equipment will require

substantial resources over the next 20 years.
17

2/12/2004

Figure 3-10 Updated.

Procurement of Battle Force Ships

0

5

10

15

20

25

30

35

40

45

50

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

Submarines Surface Combatants

Amphibious Ships Other

Aircraft Carriers

Steady

State

Billions of 2004 Dollars

Number of Ships

Actual FYDP CBO Projection

Steady

State

•This chart updates the two panels of Figure 3-10 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

steady-state ranges depicted in the chart, see Box 1-3 in the January 2003 study.)

The chart shows past and projected purchases of battle force ships for the Navy

measured by the number of ships (the top part of the chart) and in billions of 2004

dollars (the bottom part of the chart).

•CBO’s projection anticipates increasing ship purchases. Those purchases are a

result of the Navy’s plan to enlarge the fleet from about 300 ships today to 370 ships

by 2022.

•Between 2004 and 2009, the Navy’s annual shipbuilding program almost doubles

in size, to a rate of 14 ships a year.

•Most of the planned increase occurs in the surface combatant force.

•Increases in desired capabilities for LHA(R) and MPF(F) amphibious ships

also contribute to increased funding for shipbuilding.
18

2/12/2004

Figure 3-11 Updated.

Age and Inventory of Battle Force Ships

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

1400

1500

1600

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

Number of Ships

Years

Actual FYDP CBO Projection

Other

Surface Combatants

Amphibious Ships

(Includes MPF(F))

Submarines

Aircraft Carriers

HalfLife

•This chart updates the two panels of Figure 3-11 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

half-life range depicted in the chart, see Box 1-3 in the January 2003 study.) The

chart shows the age (top part of the chart) and inventory (bottom part of the chart)

of the Navy’s battle force ships.

•Beyond 2009, the average age of the Navy’s ship fleet is projected to remain stable

at 14 to 15 years, which is comparable with what CBO projected in January 2003—

an average age within the target half-life value of 14 to 18 years.

•Planned purchases of the new Littoral Combatant Ship (LCS) account for much of

the increase in inventory and reduction in average fleet age.
19

2/12/2004

Figure 3-12 Updated.

Procurement of Navy Fighter and Attack Aircraft

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

20

40

60

80

100

120

140

160

180

A6 and EA-6B AV-8B F/A-18A-D F-14 F/A-18E/F/G JSF UCAV-N

Steady

State

Actual FYDP CBO Projection

Billions of 2004 Dollars

Number of Aircraft

Steady

State

•This chart updates the two panels of Figure 3-12 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

steady-state ranges depicted in the chart, see Box 1-3 in the January 2003 study.)

The chart shows past and projected purchases of fighter and attack aircraft for the

Navy measured by the number of aircraft (the top part of the chart) and in billions of

2004 dollars (the bottom part of the chart).

•The Navy’s and Marine Corps’s plans to more fully integrate their tactical aviation

fleet result in less demand for purchases of new planes than in CBO’s January 2003

projection.

•Average spending on tactical fighter procurement will average $4 billion a year

(without cost risk) in the 2004-2022 period, CBO projects.
20

2/12/2004

Figure 3-13 Updated.

Age and Inventory of Navy Fighter and Attack Aircraft

0

1,000

2,000

3,000

4,000

5,000

6,000

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

Actual FYDP CBO Projection

Number of Aircraft

Years

A-7

F-4 A-6

AV-8B

F/A-18A-D

F-14

F/A-18E/F/G

JSF

UCAV-N

A-4

HalfLife

and EA-6B

•This chart updates the two panels of Figure 3-13 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

half-life range depicted in the chart, see Box 1-3 in the January 2003 study.) The

chart shows the age (top part of the chart) and inventory (bottom part of the chart)

of the Navy’s fighter and attack aircraft.

•Beyond 2009, the average age of the Navy’s tactical aircraft fleet is projected to

remain stable at 11 to 12 years.

•In CBO’s January 2003 projection, the tactical aircraft fleet’s average age

declined to less than 10 years by 2020.

•The increase in projected age in CBO’s current estimate is a result of the

Navy-Marine Corps tactical aviation integration plan.

•Notwithstanding that increase, the average age of the Navy’s fighter and attack

aircraft fleet would be within the target half-life value of 10 to 15 years throughout

the period of CBO’s projection.
21

2/12/2004

Figure 3-14 Updated.

Procurement of Marine Corps Helicopters

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-120

-100

-80

-60

-40

-20

0

20

40

60

80

100

120

AH-1 AH-1Z/UH-1Y V-22 CH-53E CH-53 SLEP

Steady

State

Actual FYDP CBO Projection

Billions of 2004 Dollars

Number of Helicopters

Steady

State

•This chart updates the two panels of Figure 3-14 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

steady-state ranges depicted in the chart, see Box 1-3 in the January 2003 study.)

The chart shows past and projected purchases of helicopters for the Marine Corps

measured by the number of helicopters (the top part of the chart) and in billions of

2004 dollars (the bottom part of the chart).

•CBO’s January 2003 projection replaced the CH-53E helicopter with a new CH53X. CBO’s updated projection, which is based on the Marine Corps’s current

plans, does not replace the CH-53E with a new helicopter; rather, it assumes the

implementation of a service-life extension program for the existing fleet beginning

in 2008 and ending in 2016.

•There are no other significant changes in the projection. Procurement of the V-22

tilt-rotor transport to replace the existing CH-46 fleet accounts for the majority of

the funding projected for purchases of Marine Corps helicopters.
22

2/12/2004

Figure 3-15 Updated.

Age and Inventory of Marine Corps Helicopters

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

Number of Helicopters

Years

Actual FYDP CBO Projection

AH-1

UH-1

CH-46

CH-53

AH-1Z

UH-1Y

V-22

CH-53 SLEP

HalfLife

•This chart updates the two panels of Figure 3-15 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

half-life range depicted in the chart, see Box 1-3 in the January 2003 study.) The

chart shows the age (top part of the chart) and inventory (bottom part of the chart)

of helicopters for the Marine Corps.

•As in CBO’s January 2003 study, the current projection envisions that the average

age of the Marine Corps’s helicopter fleet declines rapidly beginning in 2008 with

increasing deliveries of rebuilt and upgraded utility and attack helicopters and

deliveries of the V-22.
23

2/12/2004

Figure 3-16 Updated.

Procurement of Marine Corps Ground Combat Vehicles

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-700

-600

-500

-400

-300

-200

-100

0

100

200

300

400

500

600

700

Abrams LAV FLCV AAV EFV

Steady

State

Actual FYDP CBO Projection

Billions of 2004 Dollars

Number of Vehicles

Steady

State

•This chart updates the two panels of Figure 3-16 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

steady-state ranges depicted in the chart, see Box 1-3 in the January 2003 study.)

The chart shows past and projected purchases of ground combat vehicles for the

Marine Corps measured by the number of vehicles (the top part of the chart) and in

billions of 2004 dollars (the bottom part of the chart).

•There are no significant changes between CBO’s January 2003 projection and its

updated estimates. Projected purchases of the new Expeditionary Fighting Vehicle

(EFV), which will replace the existing fleet of Amphibious Assault Vehicles

(AAVs), account for the majority of procurement funding for the Marine Corps’s

ground combat vehicles.
24

2/12/2004

Figure 3-17 Updated.

Age and Inventory of Marine Corps Ground Combat Vehicles

0

1,000

2,000

3,000

4,000

5,000

6,000

1990 1995 2000 2005 2010 2015 2020

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

HalfLife

Abrams

LAV

AAV EFV

FLCV

Actual FYDP CBO Projection

Number of Vehicles

Years

•This chart updates the two panels of Figure 3-17 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

half-life range depicted in the chart, see Box 1-3 in the January 2003 study.) The

chart shows the age (top part of the chart) and inventory (bottom part of the chart)

of ground combat vehicles for the Marine Corps.

•There are no significant changes, relative to CBO’s January 2003 estimates, in the

age or inventory of ground combat vehicles.
25

2/12/2004

Figure 3-19 Updated.

Past and Projected Air Force Spending for Investment

(Billions of 2004 Dollars of Obligational Authority) .

0

10

20

30

40

50

60

70

80

90

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

Actual FYDP CBO Projection

RDT&E

Other Procurement

Command, Control,

and Reconnaissance

Space

Missiles/Munitions

Aircraft

Missile Defenses January 2003 Projection

(Excluding Cost Risk)

Risk

•This chart updates Figure 3-19 of CBO’s January 2003 study of The Long-Term

Implications of Current Defense Plans. The 2004 FYDP allocates an average of $1

billion more per year in investment resources to the Department of the Air Force

than the 2003 FYDP did. Air Force investment increases from $50 billion in 2004

to $58 billion in 2009.

•CBO projects sustained increases in purchases of new tactical aircraft, reflecting

continued production of the F/A-22 fighter through 2011 and the beginning of

production of the Joint Strike Fighter (JSF) in 2006.

•Between 2010 and 2020, Air Force investment is higher in CBO’s current

projection than it was in the previous one, averaging $64 billion annually (or $72

billion a year with historical cost growth).

•Funding requirements for intelligence programs increased by about $3

billion a year in the current projection.

•Several other programs as well are now projected to have higher costs,

including certain command and control and space programs.

•CBO projects that replacements for the current long-range bomber force and

Minuteman III ICBM force will begin to be purchased in 2018. Those purchases

cause the rise in projected investment resources that occurs at the end of the

projection period.
26

2/12/2004

Figure 3-20 Updated.

Procurement of Air Force Fighter and Attack Aircraft

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-450

-400

-350

-300

-250

-200

-150

-100

-50

0

50

100

150

200

250

300

350

400

450

A-10 A-7 F-15 F-16 F/A-22 FB-22 JSF UCAV-AF

Steady

State

Billions of 2004 Dollars

Number of Aircraft

Actual FYDP CBO Projection

Steady

State

•This chart updates the two panels of Figure 3-20 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

steady-state ranges depicted in the chart, see Box 1-3 in the January 2003 study.)

The chart shows past and projected purchases of fighter and attack aircraft for the

Air Force measured by the number of aircraft (the top part of the chart) and in

billions of 2004 dollars (the bottom part of the chart).

•F/A-22 unit costs have increased since the January 2003 projection, but DoD’s total

planned purchase has been reduced. Consequently, annual projected procurement

costs are essentially unchanged from the previous projection.

•CBO projects that both purchases and procurement funding for tactical aircraft will

fall within steady-state ranges beginning in 2011.
27

2/12/2004

Figure 3-21 Updated.

Age and Inventory of Air Force Fighter and Attack Aircraft

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

Number of Aircraft

Years

Actual FYDP CBO Projection

A-7

A-10

F-4

F-15

F-5

F-16

F-101

F-111

F-117 F/A-22

JSF

UCAV-AF

FB-22

HalfLife

F-105 F-106

•This chart updates the two panels of Figure 3-21 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

half-life range depicted in the chart, see Box 1-3 in the January 2003 study.) The

chart shows the age (top part of the chart) and inventory (bottom part of the chart)

of fighter and attack aircraft for the Air Force.

•CBO’s updated projection of the average age for Air Force tactical aircraft is

similar to its January 2003 projection.

•The fleet’s average age falls within the target half-life range of 10 to 15

years in the final years of the projection period, once substantial numbers of

the Joint Strike Fighter have been delivered.
28

2/12/2004

Figure 3-22 Updated.

Procurement of Air Force Bombers

0

2

4

6

8

10

12

14

16

18

20

22

24

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-50

-40

-30

-20

-10

0

10

20

30

40

50

B-1 B-2 LRSA

Steady

State

Billions of 2004 Dollars

Actual FYDP CBO Projection

Steady

State

Number of Aircraft

•This chart updates the two panels of Figure 3-22 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

steady-state ranges depicted in the chart, see Box 1-3 in the January 2003 study.)

The chart shows past and projected purchases of bombers for the Air Force

measured by the number of aircraft (the top part of the chart) and in billions of 2004

dollars (the bottom part of the chart).

•CBO projects that a new long-range strike aircraft (LRSA) will begin to be

produced in 2019. The LRSA might either augment the existing fleet of B-52, B-1,

and B-2 long-range bombers, or it might replace portions of the existing fleet.

There are no significant changes relative to CBO’s January 2003 projection.
29

2/12/2004

Figure 3-23 Updated.

Age and Inventory of Air Force Bombers

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

800

850

900

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-50

-40

-30

-20

-10

0

10

20

30

40

50

B-52 B-1

Actual FYDP CBO Projection

Years

Half -Life

FB-111 B-2 LRSA

Number of Aircraft

•This chart updates the two panels of Figure 3-23 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

half-life range depicted in the chart, see Box 1-3 in the January 2003 study.) The

chart shows the age (top part of the chart) and inventory (bottom part of the chart)

of bombers for the Air Force.

•There are no significant changes relative to CBO’s January 2003 projection.
30

2/12/2004

Figure 3-24 Updated.

Procurement of Air Force Airlifters

0

1

2

3

4

5

6

7

8

9

10

11

12

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

C-130 C-5 C-17

Steady

State

Steady

State

Billions of 2004 Dollars

Number of Aircraft

Actual FYDP CBO Projection

•This chart updates the two panels of Figure 3-24 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

steady-state ranges depicted in the chart, see Box 1-3 in the January 2003 study.)

The chart shows past and projected purchases of airlifters for the Air Force

measured by the number of aircraft (the top part of the chart) and in billions of 2004

dollars (the bottom part of the chart).

•Purchases of C-130Js (the Air Force plans to buy 180 of the planes) are now

projected to continue through 2022 rather than end after 2015. Otherwise, there are

no significant changes relative to CBO’s January 2003 projection.
31

2/12/2004

Figure 3-25 Updated.

Age and Inventory of Air Force Airlifters

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

C-130

C-5

C-141

C-17

Number of Aircraft

Years

Actual FYDP CBO Projection

HalfLIfe

•This chart updates the two panels of Figure 3-25 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

half-life range depicted in the chart, see Box 1-3 in the January 2003 study.) The

chart shows the age (top part of the chart) and inventory (bottom part of the chart)

of airlifters for the Air Force.

•Although CBO projects that C-130J purchases will continue through 2022, the low

annual rates at which those aircraft are purchased are expected to result in no

significant change in the average age of the airlifter fleet relative to CBO’s January

2003 projection.
32

2/12/2004

Figure 3-26 Updated.

Procurement of Air Force Tankers

0

1

2

3

4

5

6

7

8

9

10

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-50

-40

-30

-20

-10

0

10

20

30

40

50

KC-10 KC-767

Steady

State

Steady

State

Actual FYDP CBO Projection

Billions of 2004 Dollars

Number of Aircraft

•This chart updates the two panels of Figure 3-26 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

steady-state ranges depicted in the chart, see Box 1-3 in the January 2003 study.)

The chart shows past and projected purchases of tankers for the Air Force measured

by the number of aircraft (the top part of the chart) and in billions of 2004 dollars

(the bottom part of the chart).

•CBO’s January 2003 projection (which was based on the 2003 FYDP) assumed

that new KC-767 tankers would be procured beginning in 2007. CBO now assumes

(on the basis of the 2004 FYDP and DoD’s plans, announced in 2003, for tanker

leasing) that a program to lease new KC-767 tankers will begin in 2006.

•The updated projection assumes that leases will continue through (and beyond)

2022 until all existing tankers have been replaced with KC-767s.
33

2/12/2004

Figure 3-27 Updated.

Age and Inventory of Air Force Tankers

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-50

-40

-30

-20

-10

0

10

20

30

40

50

HalfLife

Actual FYDP CBO Projection

Number of Aircraft

Years

KC-10

KC-135

KC-767

January 2003 Projection

•This chart updates the two panels of Figure 3-27 of CBO’s January 2003 study of

The Long-Term Implications of Current Defense Plans. (For an explanation of the

half-life range depicted in the chart, see Box 1-3 in the January 2003 study.) The

chart shows the age (top part of the chart) and inventory (bottom part of the chart)

of tankers for the Air Force.

•The Defense Department’s proposal to lease new KC-767 tankers would result in

earlier delivery of those aircraft than would the purchases assumed in CBO’s

January 2003 projection. Thus, in CBO’s updated projection, the average age of the

tanker fleet begins to decline sooner than it does in CBO’s January 2003 estimate.

•CBO’s projection of the Air Force’s investment includes DoD’s previously

announced plan to lease 100 KC-767 tankers to replace existing KC-135E tankers.

Leasing is assumed to continue after the the first 100 aircraft become operational

until all KC-135 tankers are replaced with KC-767s.

•In response to Congressional concerns regarding the cost of leasing rather than

purchasing aircraft, the Defense Department late in 2003 proposed a revised plan to

lease 20 KC-767s and purchase the remaining 80 new tankers. However, CBO’s

projection was developed before DoD decided to pursue that revised program.
34

2/12/2004

Figure 3-29 Updated.

Past and Projected Investment Spending for Defense Agencies

(Billions of 2004 Dollars of Obligational Authority) .

0

5

10

15

20

25

30

35

40

45

50

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

Other Defense Agency Investment

RDT&E for Missile Defenses

Actual

FY03 Omnibus

January 2003 Projection

(Excluding Cost Risk)

FYDP CBO Projection

Risk

•This chart updates Figure 3-29 of CBO’s January 2003 study of The Long-Term

Implications of Current Defense Plans. The Defense Department’s budget provides

money for a variety of specialized agencies responsible for performing advanced

research, developing missile defenses, overseeing special operations, and

developing and managing information systems.

•The investment funding allocated to those activities in the 2004 FYDP averages

about $5 billion more per year for the 2004-2009 period than it did in the previous

FYDP and in CBO’s January 2003 projection. Under DoD’s current plans, funding

would increase from $24 billion in 2004 to $28 billion in 2009.

•CBO projects that if current plans were carried out, defense agencies would spend

an average of $24 billion a year on investment between 2010 and 2020 (excluding

cost risk), up from an average of $16 billion a year in CBO’s previous projection.

Most of that increase stems from:

•CBO’s assumption that funding allocated by DoD for transformationrelated activities would remain at the 2009 level (about $5 billion) through

2002, and;

•CBO’s assumption that funding allocated by DoD for work on land- and

space-based interceptors for missile defense would continue at the 2009

level (about $2.6 billion) through 2022.
35

2/12/2004

Appendix.

Abbreviations

AAV Amphibious Assault Vehicle

EFV Expeditionary Fighting Vehicle

DoD Department of Defense

FB-22 Fighter/Bomber-22 (CBO’s proposed long-range interdictor

replacement for the F-15E and F-117)

FCS Future Combat System

FLCV Future Light Combat Vehicle

FYDP Future Years Defense Program

GCV Ground Combat Vehicle

ICBM Intercontinental Ballistic Missile

JSF Joint Strike Fighter

LAV Light Armored Vehicle

LCS Littoral Combatant Ship

LHA(R) Landing Helicopter Assault (Replacement)

(Replacement for Tarawa Class Amphibious Assault Ships)

LRSA Long-Range Strike Aircraft

MPF(F) Maritime Prepositioning Force (Future)

MLRS Multiple Launch Rocket System

RDT&E Research, Development, Testing, and Evaluation

SLEP Service Life Extension Program

UCAV-AF Unmanned Combat Air Vehicle-Air Force

UCAV-N Unmanned Combat Air Vehicle-Navy