Military budget of the United States The military budget is that portion of the discretionary United States federal budget that is allocated to the Department of Defense , or more broadly , the portion of the budget that goes to any military - related expenditures . This military budget pays the salaries , training , and health care of uniformed and civilian personnel , maintains arms , equipment and facilities , funds operations , and develops and buys new equipment . The budget funds all branches of the U . S . military : the Army , Navy , Air Force , Marine Corps and Coast Guard . Budget for 2011 . For the 2011 fiscal year , the president ' s base budget of the Department of spending on " overseas contingency operations " brings the sum to $ 664 . 84 billion . When the budget was signed into law on 28 October 2009 , the final size of the Department of Defense ' s budget was $ 680 billion , $ 16 billion more than President Obama had requested . An additional $ 37 billion supplemental bill to support the wars in Iraq and Afghanistan was expected to pass in the spring of 2010 , but has been delayed by the House of Representatives after passing the Senate . Emergency and supplemental spending . The recent invasions of Iraq and Afghanistan were largely funded through supplementary spending bills outside the federal budget , which are not included in the military budget figures listed below . Starting in the fiscal year 2010 , however , the wars in Iraq and Afghanistan were categorized as " overseas contingency operations " , and the budget is included in the federal budget . By the end of 2008 , the U . S . had spent approximately $ 900 billion in direct costs on the wars in Iraq and Afghanistan . The government also incurred indirect costs , which include interests on additional debt and incremental costs , financed by the Veterans Administration , of caring for more than 33 , 000 wounded . Some experts estimate the indirect costs will eventually exceed the direct costs . As of June 2011 , the total cost of the wars was approximately $ 3 . 7 trillion . By title . The federally budgeted ( see below ) military expenditure of the United States Department of Defense for fiscal year 2010 , including the wars in Iraq and Afghanistan , is : Programs spending more than $ 1 . 5 billion . The Department of Defense ' s FY 2011 $ 137 . 5 billion procurement and $ 77 . 2 billion RDT & E budget requests included several programs with more than $ 1 . 5 billion . Other military - related expenditures . This does not include many military - related items that are outside of the Defense Department budget , such as nuclear weapons research , maintenance , cleanup , and production , which is in the Department of Energy budget , Veterans Affairs , the Treasury Department ' s payments in pensions to military retirees and widows and their families , interest on debt incurred in past wars , or State Department financing of foreign arms sales and militarily - related development assistance . Neither does it include defense spending that is not military in nature , such as the , counter - terrorism spending by the Federal Bureau of Investigation , and intelligence - gathering spending by NASA . Audit of implementation of budget for 2010 . The US Government Accountability Office ( GAO ) was unable to provide an audit opinion on the 2010 financial statements of the US Government because of ' widespread material internal control weaknesses , significant uncertainties , and other limitations ' . The GAO cited as the principal obstacle to its provision of an audit opinion ' serious financial management problems at the Department of Defense that made its financial statements unauditable ' . In FY 2010 six out of thirty - three DoD reporting entities received unqualified audit opinions . chief financial officer and Under Secretary of Defense Robert F . Hale acknowledged enterprise - wide problems with systems and processes , while the DoD ' s Inspector General reported ' material internal control weaknesses . . . that affect the safeguarding of assets , proper use of funds , and impair the prevention and identification of fraud , waste , and abuse ' . Further management discussion in the FY 2010 DoD Financial Report states ' it is not feasible to deploy a vast number of accountants to manually reconcile our books ' and concludes that ' although the financial statements are not auditable for FY 2010 , the Department ' s financial managers are meeting warfighter needs ' . Audit of 2011 budget . Again in 2011 , the GAO could not " render an opinion on the 2011 consolidated financial statements of the federal government " , with a major obstacle again being " serious financial management problems at the Department of Defense ( DOD ) that made its financial statements unauditable " . In December 2011 , the GAO found that " neither the Navy nor the Marine Corps have implemented effective processes for reconciling their FBWT . " According to the GAO , " An agency ’ s FBWT account is similar in concept to a corporate bank account . The difference is that instead of a cash balance , FBWT represents unexpended spending authority in appropriations . " In addition , " As of April 2011 , there were more than $ 22 billion unmatched disbursements and collections affecting more than 10 , 000 lines of accounting . " Support service contractors . The role of support service contractors has increased since 2001 and in 2007 payments for contractor services exceeded investments in equipment for the armed forces for the first time . In the 2010 budget the support service contractors will be reduced from the current 39 percent of the workforce down to the pre - 2001 level of 26 percent . In a Pentagon review of January 2011 , service contractors were found to be " increasingly unaffordable . " Military budget and total US federal spending . Recently , " Live Science " published a chart showing that the US spends about one - fifth of its budget on the military . But this aggregate view hides how Congress prioritizes spending , when you consider what is discretionary and voted upon each year . A more salient view of these figures segregates ‘ discretionary ’ spending from ‘ mandatory ’ spending . When it comes to discretionary spending , Congress gives 58 % to the military . This amount does not include " hidden " expenses such as the NSA , CIA , debt on wars , veteran ' s benefits , etc . http : / / www . globalresearch . ca / more - than - 50 - of - us - government - spending - goes - to - the - military / 18852 World War II commenced a new era of permanency in the United States military budget . With the advent of the Cold War , the United States began to maintain a standing army and a permanent state of readiness for war that permanently elevated national defense expenditures . At the conclusion of his second term , President Eisenhower said in his Farewell Address : Our military organization today bears little relation to that known by any of my predecessors in peacetime , or indeed by the fighting men of World War II or Korea . Until the latest of our world conflicts , the United States had no armaments industry . American makers of plowshares could , with time and as required , make swords as well . But now we can no longer risk emergency improvisation of national defense ; we have been compelled to create a permanent armaments industry of vast proportions . Added to this , three and a half million men and women are directly engaged in the defense establishment . We annually spend on military security more than the net income of all United States corporations . This conjunction of an immense military establishment and a large arms industry is new in the American experience . The total influence – economic , political , even spiritual – is felt in every city , every State house , every office of the Federal government . We recognize the imperative need for this development . Yet we must not fail to comprehend its grave implications . Our toil , resources and livelihood are all involved ; so is the very structure of our society . In the councils of government , we must guard against the acquisition of unwarranted influence , whether sought or unsought , by the military industrial complex . The potential for the disastrous rise of misplaced power exists and will persist . We must never let the weight of this combination endanger our liberties or democratic processes . We should take nothing for granted . Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals , so that security and liberty may prosper together . The U . S . Department of Defense budget accounted in fiscal year 2010 for about 19 % of the United States federal budgeted expenditures and 28 % of estimated tax revenues . Including non - DOD expenditures , military spending was approximately 28 – 38 % of budgeted expenditures and 42 – 57 % of estimated tax revenues . According to the Congressional Budget Office , defense spending grew 9 % annually on average from fiscal year 2000 – 2009 . Because of constitutional limitations , military funding is appropriated in a discretionary spending account . ( Such accounts permit government planners to have more flexibility to change spending each year , as opposed to mandatory spending accounts that mandate spending on programs in accordance with the law , outside of the budgetary process . ) In recent years , discretionary spending as a whole has amounted to about one - third of total federal outlays . Department of Defense spending ' s share of discretionary spending was 50 . 5 % in 2003 , and has risen to between 53 % and 54 % in recent years . For FY 2010 , Department of Defense spending amounts to 4 . 7 % of GDP . Because the U . S . GDP has risen over time , the military budget can rise in absolute terms while shrinking as a percentage of the GDP . For example , the Department of Defense budget is slated to be $ 664 billion in 2010 ( including the cost of operations in Iraq and Afghanistan previously funded through supplementary budget legislation ) , higher than at any other point in American history , but still 1 . 1 – 1 . 4 % lower as a percentage of GDP than the amount spent on military during the peak of Cold - War military spending in the late 1980s . Admiral Mike Mullen , former Chairman of the Joint Chiefs of Staff , has called four percent an " absolute floor " . This calculation does not take into account some other military - related non - DOD spending , such as Veterans Affairs , Homeland Security , and interest paid on debt incurred in past wars , which has increased even as a percentage of the national GDP . Comparison with other countries . The 2009 U . S . military budget accounts for approximately 40 % of global arms spending . The 2012 budget is 6 – 7 times larger than the $ 106 billion military budget of China , and is more than the next twenty largest military spenders combined . The United States and its close allies are responsible for two - thirds to three - quarters of the world ' s military spending ( of which , in turn , the U . S . is responsible for the majority ) . In 2005 , the United States spent 4 . 06 % of its GDP on its military ( considering only basic Department of Defense budget spending ) , more than France ' s 2 . 6 % and less than Saudi Arabia ' s 10 % . This is historically low for the United States since it peaked in 1944 at 37 . 8 % of GDP ( it reached the lowest point of 3 . 0 % in 1999 – 2001 ) . Even during the peak of the Vietnam War the percentage reached a high of 9 . 4 % in 1968 . Countries such as Canada and Germany spend only 1 . 4 % of GDP on their military . Recent commentary on military budget . In February 2009 , Congressman Barney Frank , D - Mass . , called for a reduction in the military budget : " The math is compelling : if we do not make reductions approximating 25 percent of the military budget starting fairly soon , it will be impossible to continue to fund an adequate level of domestic activity even with a repeal of Bush ' s tax cuts for the very wealthy . I am working with a variety of thoughtful analysts to show how we can make very substantial cuts in the military budget without in any way diminishing the security we need . . . [ American ] well - being is far more endangered by a proposal for substantial reductions in Medicare , Social Security or other important domestic areas than it would be by canceling weapons systems that have no justification from any threat we are likely to face . " Republican historian Robert Kagan has argued that 2009 is not the time to cut defense spending , relating such spending to jobs and support for allies : " A reduction in defense spending this year would unnerve American allies and undercut efforts to gain greater cooperation . There is already a sense around the world . . . that the United States is in terminal decline . Many fear that the economic crisis will cause the United States to pull back from overseas commitments . The announcement of a defense cutback would be taken by the world as evidence that the American retreat has begun . " Secretary of Defense Robert Gates wrote in 2009 that the U . S . should adjust its priorities and spending to address the changing nature of threats in the world : " What all these potential adversaries — from terrorist cells to rogue nations to rising powers — have in common is that they have learned that it is unwise to confront the United States directly on conventional military terms . The United States cannot take its current dominance for granted and needs to invest in the programs , platforms , and personnel that will ensure that dominance ' s persistence . But it is also important to keep some perspective . As much as the U . S . Navy has shrunk since the end of the Cold War , for example , in terms of tonnage , its battle fleet is still larger than the next 13 navies combined — and 11 of those 13 navies are U . S . allies or partners . " Secretary Gates announced some of his budget recommendations in April 2009 . The Congressional Research Service has noted a discrepancy between a budget that is declining as a percentage of GDP while the responsibilities of the DoD have not decreased and additional pressures on the military budget have arisen due to broader missions in the post - 9 / 11 world , dramatic increases in personnel and operating costs , and new requirements resulting from wartime lessons in the Iraq War and Operation Enduring Freedom . Four billion dollars of the five billion dollars in budget cuts mandated by the Congress in the 2013 budget were achieved by declaring that nearly 65 thousand troops were now temporary and no longer part of the permanent forces and so their costs were shifted to the Afghanistan war budget . An April 2012 study by the Program for Public Consultation , in collaboration with the Stimson Center and the Center for Public Integrity showed a representative sample of Americans the size of the military budget from different perspectives and presented with arguments that experts make for and against cutting it . Among other findings , three quarters of respondents favored cutting military expenses as a way to reduce the deficit , including two thirds of Republicans as well as nine in 10 Democrats . Overall , respondents composed a military budget for 2013 that was significantly smaller than for 2012 , with an average cut of 18 % . Republicans cut an average of 12 % and Democrats 22 % . As part of Obama ' s East Asia " pivot " , his 2013 national military request moves funding from the Army and Marines to favor the Navy , but the Congress has resisted this . 2012 " fiscal cliff " . On 5 December 2012 , the Department of Defense announced it was planning for automatic spending cuts , which include $ 500 billion and an additional $ 487 billion due to the 2011 Budget Control Act , due to the " fiscal cliff " . According to the newspaper Politico , the Department of Defense declined to explain to the House of Representatives Appropriations Committee , which controls federal spending , what its plans were regarding the fiscal cliff planning . This was after half a dozen defense experts either resigned from Congress or lost their reelection fights . Lawrence Korb has noted that given recent trends military entitlements and personnel costs will take up the entire defense budget by 2039 . GAO audits . The Government Accountability Office was unable to provide an audit opinion on the 2010 financial statements of the U . S . government due to " widespread material internal control weaknesses , significant uncertainties , and other limitations . " The GAO cited as the principal obstacle to its provision of an audit opinion " serious financial management problems at the Department of Defense that made its financial statements unauditable . " In Fiscal Year ( FY ) 2011 , seven out of 33 DoD reporting entities received unqualified audit opinions . Under Secretary of Defense Robert F . Hale acknowledged enterprise - wide weaknesses with controls and systems . Further management discussion in the FY 2011 DoD Financial Report states " we are not able to deploy the vast numbers of accountants that would be required to reconcile our books manually " . Congress has established a deadline of FY 2017 for the DoD to achieve audit readiness . In addition to FY 2011 , the Department of Defense ' s financial statements were either unauditable or such that no audit opinion could be expressed for FYs 2010 - 1998 . Reform . In a statement of 6 January 2011 Defense Secretary Robert M . Gates stated : " This department simply cannot risk continuing down the same path – where our investment priorities , bureaucratic habits and lax attitude towards costs are increasingly divorced from the real threats of today , the growing perils of tomorrow and the nation ' s grim financial outlook . " Gates has proposed a budget which , if approved by the Congress , would reduce the costs of many DOD programs and policies , including reports , the IT infrastructure , fuel , weapon programs , DOD bureaucracies , and personnel .