Defense Spending Soars, While President Continues to Aim at Domestic Programs

03/10/2008 04:43 pm ET | Updated May 25, 2011

With Congress drafting its 2009 budget blueprint and President Bush already promising to veto appropriations bills that exceed his tight funding levels for domestic programs, you might think that domestic discretionary programs -- what Congress funds through the annual appropriations process, such as education, biomedical research, and transportation -- have "exploded" in costs in recent years, as some critics charge. The story is far different.

At the Center on Budget and Policy Priorities, we compared the most recent federal budget during the Bush era (for fiscal 2008) with the last budget approved under President Clinton (the budget for fiscal 2001). (Our report is here.) We found three striking facts:

First, there has been a spending explosion, but it's come in defense-related programs, which have grown 27 times faster than domestic discretionary programs over the past seven years and four times faster than Social Security, Medicare, and Medicaid. Defense-related programs have grown much faster than any other area of the budget.

Second, much of the defense increase is unrelated to the wars in Iraq and Afghanistan and the overall "war on terror."

Third, domestic discretionary spending is actually shrinking as a share of the budget and as a share of the economy.

The numbers tell the story.

* Between 2001 and 2008, domestic discretionary programs fell from 18.4 percent of the budget to 14.7 percent. In other words, these programs are taking up a smaller share of the federal budget "pie."

* They also fell as a share of the economy, from 3.1 percent of Gross Domestic Product (GDP) in 2001 to 2.8 percent in 2008. In other words, these programs are taking up a smaller share of the nation's resources.

Spending on domestic discretionary programs did go up between 2001 and 2008, but only by an average of 0.3 percent per year, after adjusting for inflation and population growth. That's much slower than any other part of the budget.

The picture is very different for defense-related programs, which we defined as funding for the Defense Department and war spending as well as veterans' programs, homeland security, and international programs.

* Since 2001, funding for defense-related programs has jumped by 8 percent per year, after adjusting for inflation and population.

* Between 2001 and 2008, defense-related programs also rose dramatically as a share of the budget, from 21.7 percent to 29.2 percent.

* In addition, they rose from 3.6 percent of GDP to 5.6 percent. To put that increase in perspective, it will take more than two decades, from 2010 to the mid-2030s, for Social Security to grow by 2 percent of GDP; defense-related programs have grown by that much in just seven years.

Of course, a big reason for the big increase in defense-related spending is the Iraq and Afghanistan wars and other costs related to the war on terror. But that's only part of the story. Defense-related spending unrelated to terrorism has grown too, and at a stunning rate.

Excluding the Iraq and Afghanistan wars and the war on terror, defense and related spending grew by 39 percent over the 2001-2008 period as a whole, after adjusting for inflation -- much faster than the major entitlement programs and many times faster than domestic discretionary programs.

Put another way, defense-related spending not connected to terrorism went up by $170 billion between 2001 and 2008, even after adjusting for inflation.

To those who favor the wars and large Pentagon increases, the question should be put: If these very large increases in the regular defense budget and the wars in Iraq and Afghanistan were worthwhile, shouldn't they have been paid for? Instead, rather than raising the revenues needed to cover these costs, such as by raising taxes on those Americans best able to afford them, the president and his supporters enacted massive tax cuts, which they now insist on making permanent.

For 2009, the president's budget is much the same story. He proposes big further defense increases, along with about $20 billion in cuts in domestic discretionary programs below their 2008 level, adjusted for inflation. A broad range of services would be cut, some of which -- such as child care, environmental protection, and job training -- have already seen sizable cuts in recent years.

For example, the administration itself estimates that under the president's budget, 200,000 fewer low-income children would receive child care subsidies in 2009 than in 2007.

The Bush era has witnessed a gradual, multi-year squeeze in domestic discretionary programs coupled with large, sustained increases in defense-related spending -- as well as large tax cuts. While the United States faces serious budget problems that will take real fiscal discipline to address, our problems can't be blamed on an "explosion" in domestic discretionary spending, because there hasn't been one.

Robert Greenstein is Executive Director of the Center on Budget and Policy Priorities.