Appropriations for intelligence activities represent a significant part of both the federal and defense budget at a time of growing fiscal austerity. In the past, spending levels for intelligence activities were shrouded in secrecy. Today, overall totals of intelligence spending are made public, but the process for appropriating funds for intelligence activities remains complicated and not well understood. Steady, yearly increases in intelligence funding in the past decade helped create an intelligence apparatus that, many experts agree, has been effective at accomplishing its ultimate goal of preventing another terrorist attack on the scale of 9/11. But in the new era of fiscal limits, intelligence officials and Members of Congress are addressing ways to reduce intelligence spending while ensuring continued effectiveness against al-Qaeda and while adapting to new priorities other than counterterrorism. Director of National Intelligence (DNI) James R. Clapper Jr. recently stated that sequestration would require a 7% cut, or roughly $4 billion, to the National Intelligence Program (NIP) budget and warned of reduced global coverage and decreased human and technical intelligence collection. Mr. Clapper also warned of repercussions similar to those that occurred in the 1990s when, in concert with a one-third decrease in active duty military personnel, the intelligence community saw a 23% cut in its budget, resulting in what he characterized as a "damaging downward spiral." The Washington Post on August 29, 2013, published details about the Administration's FY2013 NIP budget request, based on a document provided by former NSA contractor Edward Snowden. Because the document leaked to the news media is classified, CRS is unable to provide a discussion of the specific detail of that budget submission. Nonetheless, the disclosure may drive further public debate about the size of the intelligence budget and about the effectiveness of intelligence spending. This report discusses the historic trend in intelligence spending, as well as broader issues concerning the intelligence budgeting process, and may help Members of Congress contextualize information concerning the FY2013 budget. Total intelligence spending can be understood as the combination of (1) the NIP, which covers the programs, projects, and activities of the intelligence community oriented towards the strategic needs of decision makers, and (2) the Military Intelligence Program (MIP), which funds defense intelligence activity intended to support tactical military operations and priorities. Later sections of this report describe these programs in more detail. It is important to recognize that public comments about intelligence spending do not always distinguish between the NIP, the MIP, and the total of the two, complicating discussions on a subject about which there are already few details. The 9/11 Commission recommended that the amount of money spent on national intelligence be released to the public. In accordance with the Implementing the Recommendations of the 9/11 Commission Act, the Director of National Intelligence (DNI) in 2007 began to announce each year the amount of money appropriated for the NIP. The Intelligence Authorization Act of 2010 also required the President to publicly disclose the amount requested for the NIP in his budget. The Secretary of Defense began to release annual MIP appropriations figures in 2010 and specified those figures back to 2007. These actions have provided public access to previously classified budget numbers for national and military intelligence efforts. Table 1 provides these recently released figures in both nominal and constant 2014 dollars. Unless otherwise noted, values in this report are in constant dollars. Appropriations for intelligence activities amounted to over $78 billion in FY2012, the last year for which there is complete data. The President's budget requested $73 billion for FY2013. This does not take into account sequestration, and actual appropriated amounts are not yet available for 2013. Since peaking in 2010, total intelligence spending has fallen by at least 15%, which largely reflects a decrease in military intelligence spending. The NIP and MIP figures above include funding for Overseas Contingency Operations (OCO)—roughly $10 billion annually for intelligence activities. It can be useful to distinguish OCO funding, including OCO funding for military intelligence, from other defense spending because that funding pays for wartime-related activities that differ from activities funded by the DOD base budget. For broader intelligence spending in the NIP, however, it is not clear what activity is supported by NIP OCO funds or to what extent that activity is qualitatively different than other intelligence operations taking place across the globe. Figure 1 breaks out OCO funds from other MIP and NIP funding. Base budget intelligence spending grew by more than $10 billion, peaking in FY2010, while OCO intelligence spending grew by about $3 billion, peaking in FY2011. Policy makers have remarked that intelligence spending has doubled since September 11, 2001. CRS analysis suggests that the NIP slightly more than doubled in real terms from 2001 to 2012 while the MIP grew at a slower pace. The NIP budget in 2001 (then referred to as the National Foreign Intelligence Program—NFIP) was roughly $24 billion in constant 2014 dollars, or less than half of the NIP budget for FY2012. After sequestration, the NIP budget from 2001 to 2013 will have roughly doubled. Publicly available data suggest the total intelligence budget in FY2001 was roughly $37 billion, or almost half of the $78 billion intelligence budget for FY2012. Total intelligence spending previously peaked in 1989, at 125% above spending in 1980, before declining in the mid-1990s to 80% above spending in 1980. It is possible to estimate that total intelligence spending in 1980 was slightly less than $21 billion, in current dollars. Spending appears to have quadrupled between 1980 and 2010 before declining over the past three years. These estimates are based on information provided by the 1996 Commission on the Roles and Capabilities of the U.S. Intelligence Community, which described the trend in intelligence spending from 1980 to the mid-1990s and the projected spending trend from the mid-1990s to 2001. The commission specified the percentage change at key points in time but not actual spending levels. The Director of Central Intelligence (DCI) also publicly disclosed the amount appropriated for intelligence for FY1997 and FY1998. Using the trends described by the commission and the figure for FY1997, CRS estimated spending in 1980 and 1989. The methodology for the estimates is further explained in the "notes" below Figure 2 . Both the DCI disclosures and the commission appear to combine national and military intelligence spending. Data are not available specifically for national intelligence over this extended timeframe. The vast majority of intelligence spending falls within the national defense function—the budget category that includes the military activities of DOD as well as other national security activities. Using the estimates above, it is possible to separate total intelligence spending from the national defense function and to compare the growth in intelligence spending to the growth in national defense spending without intelligence. Total intelligence spending grew more sharply than other national defense spending in both the 1980s and after 2001. As noted, total intelligence spending previously peaked in 1989, at 125% above spending in 1980, before declining in the mid-1990s to 80% above spending in 1980. In comparison, national defense excluding intelligence grew by 55% from 1980 to its peak in 1985 before declining in the mid-1990s to roughly equal that in 1980. As shown in Figure 2 , total intelligence spending grew from $34.4 billion to $78.4 billion or by about 110% in real terms from 2001 to 2012. National defense excluding intelligence grew by 55% over that time period. As a result of these trends, when measured from 1980, total intelligence spending by 2012 had grown 274%, while national defense spending without intelligence had grown 82% over that time period (see Figure 3 ). Perhaps one of the most critical questions facing Congress is whether intelligence spending will fall in concert with other defense spending. Some argue that as defense spending decreases, intelligence spending should remain flat or rise because a robust intelligence apparatus would be necessary to compensate and provide forewarning to a smaller, more nimble DOD. While plausible, this argument belies the fact that, as demonstrated by Figure 3 , intelligence spending has already been decoupled from defense spending—the two in recent decades have tended to move in the same direction but have changed by different degrees. Another argument about the relationship between defense and intelligence spending concerns the diversity and magnitude of the threats to U.S. interests. Intelligence spending might appropriately be correlated to the diversity of threats. The intelligence community has argued that, especially after September 11, 2001, the range and complexity of threats to the United States has expanded to include not only state actors, but also non-state actors involved in activities such as terrorism, cyber-attacks, and drug trafficking. To fulfill the strategic needs of decision makers, the community must to some degree dedicate resources towards those threats. In comparison, while DOD must do contingency planning to address a diversity of threats, it does not necessarily need to dedicate resources towards each of them. Further, the cost to DOD of addressing new threats may not be as large as the cost associated with challenges from traditional state actors like the Soviet Union. Defense spending might thus be understood to correlate to the total size of the threat to U.S. interests. Hence, this would explain and to some extent justify the divergence of intelligence spending from other national defense spending since the end of the Cold War, when many experts agree the number of threats to U.S. interests multiplied even while the sheer magnitude of the threat may have decreased. The question remains whether, after a decade of sharp growth and after the most critical improvements to intelligence capabilities have by some accounts already been made, intelligence spending can now be pared back while preserving necessary tools and capabilities. DNI James R. Clapper, in March 2013 testimony before the Senate Select Committee on Intelligence, stated that "in my almost 50 years in intelligence, I do not recall a period in which we've confronted a more diverse array of threats, crises and challenges around the world.... Threats are more interconnected and viral."