Report on U.S. Military Power 2012 (11)

Chapter Three National Defense Budget and Weapons R&D and Procurement

I. National Defense Budget

Annual U.S. National Defense budget is prepared for a fiscal year which begins on October 1st and ends on September 30th the following year. The National Defense functions of the federal budget include: DoD military activities; atomic energy defense activities of the Department of Energy; and defense-related activities of other Federal agencies. More specifically, DoD is responsible for budget for DoD military activities which include funding for military personnel, war preparedness, military equipment, R&D, military construction, military housing, etc.; the Department of Energy is responsible for budget for atomic energy defense activities which include the R&D, production and maintenance of nuclear weapons and defense nuclear material, and disposal of defense nuclear waste materials. Government agencies, such as the Selective Service System, Federal Investigation Bureau, and Coast Guard, are responsible for the share of the budget for their defense-related activities.


The overall FY2012 National Defense budget is $690.9 billion, including a $553.1 billion base budget, and a $117.8 billion budget for overseas contingency operations. When compared with that of the previous fiscal year, there is a slight decrease, mainly because the budget for wars in Pakistan and Afghanistan has been reduced by $41.5 billion. In fact, FY2012 National Defense budget has been increased despite a seeming decrease. According to a review in Washington Post, as the core of National Defense budget, the base budget is $553.1 billion, an increase of $4.2 billion from FY2011, and an increase of $25.1billion from FY2010. Compared with FY2001, the base budget has increased by over 80%.

The allocation of the base budget in FY2012 is as follows: functionally, $142.8 billion will go to military personnel, $204.4 billion will go to operation and maintenance, $113 billion to procurement, $75.3 billion to R&D, and $17.6 billion for miscellaneous purposes; accounting respectively for 25.8%, 37%, 20.4%, 13.6%, and 3.2% of the base budget. In light of services and government agencies receiving the fund, the Army receives $144.9 billion, the Navy (including the Marine Corps) $161.4 billion, the Air Force $150 billion, agencies directly affiliated to the DoD and other agencies receive $96.8 billion, accounting respectively for 26.2%, 29.2%, 27.1%, and 17.5% of the base budget.

The allocation of FY2012 National Defense budget has the following characteristics: First, reduction in funding for overseas contingency operations, and increase in base budget. Budget for overseas contingency operations is $117.8 billion, reduced by $41.5 billion from that of FY2011; the base budget is $553.1 billion, increased by $4.2 billion from that of FY2011. Second, increase in funding for operations and maintenance, and reduction in the other areas. When compared with FY2011, funding for procurement in FY2012 is reduced by 0.6%, that for R&D is reduced by 0.4%, and that for miscellaneous purposes is reduced by 0.8%, while funding for military personnel and that for operations and maintenance is increased by 0.8% and 1% respectively. Third, significant cut in Army strength and relatively small cuts in Navy and Air Force. Although both the Army and the Navy has a 0.2% increase in budget allocation in FY2012, the Army will have to be reduced by 80,000 while the Navy and Air Force will be reduced by 6,200 and 4,200 respectively by 2017, as required by the Defense Budget Priorities and Choices. These characteristics show that the National Defense budget allocation is in line with the principle of maintaining combat effectiveness despite budget cuts as required by the strategic guidance document.

We Recommend:
Seaplanes of North Sea Fleet in training at sea	Aviation regiment of South Sea Fleet in flight training	Naval landing ships can perform diverse military tasks
Military training base improves teaching mode	14th Chinese naval escort taskforce arrives in Pakistan	Chinese navy's Su-30MKK2 fighters in attack training