战略与国际研究中心-Defense-Spending-and-the-New-CBO-Budget-Projections-for-FY2020_11页_1mb

Summary of Defense Spending and the New CBO Budget Projections for FY2020-FY2029

Core Content

The Center for Strategic and International Studies (CSIS) published a detailed analysis by Anthony H. Cordesman on the U.S. federal budget projections from the Congressional Budget Office (CBO) for the period FY2020 to FY2029. The report outlines the growing fiscal challenges related to federal debt and deficits, while also emphasizing the increasing share of mandatory spending in the overall budget.

Main Points

• Federal Deficit and Debt:

  • The CBO projected a federal budget deficit of $960 billion in 2019, with an average of $1.2 trillion between 2020 and 2029.
  • The deficit as a percentage of GDP is expected to fluctuate between 4.4% and 4.8%, significantly higher than the average over the past 50 years.
  • Federal debt held by the public is projected to rise from 79% of GDP in 2019 to 95% in 2029, the highest level since post-World War II.
  • The CBO's projection of debt-service costs increased by nearly $300 billion compared to previous estimates, with $200 billion linked to increased mandatory spending.

• Economic Growth and Fiscal Projections:

  • The CBO estimates an average economic growth rate of 1.8%, which is lower than the 2.9% used by the Office of Management and Budget (OMB).
  • As a result, the federal debt is projected to rise from 78% of GDP to 87% by 2029, versus OMB's projection of a decline to 71%.

• Defense Spending Trends:

  • Defense spending is expected to rise from $737 billion in FY2020 to $905 billion in FY2029, a 23% increase in Budget Authority (BA) and a 25% increase in Budget Outlays.
  • Despite this increase, the share of defense spending in the overall federal budget is projected to fall from 3.9% of GDP in 1994 to 2.8% in 2029, due to the rapid growth of mandatory spending.

• Mandatory Spending Dominance:

  • Mandatory spending (Social Security, health, and welfare) is expected to dominate the federal budget, accounting for 61% of total outlays in FY2020 and 64% in FY2029.
  • Total mandatory spending over the decade is projected to reach $36,306 billion, which is 52% of total adjusted outlays.
  • Discretionary defense spending is projected to be $7,866 billion over FY2020-FY2029, or 10% of total spending.

Key Information

• Defense Spending Components:

  • Military Retirement: Expected to cost $711 billion from FY2020 to FY2029, with $239 billion in offsetting receipts, resulting in a net cost of $472 billion.
  • Veterans Programs: Projected to cost $1,397 billion over the same period, with no offsetting receipts.
  • Civilian Retirement: Not included in the cost estimates, only total civilian retirement costs.

• Comparison to Other Powers:

  • The U.S. defense spending is currently higher than its major competitors and potential threats.
  • However, there is a lack of comparative assessments of military spending efficiency and effectiveness across nations.

• Assumptions in CBO Projections:

  • The CBO assumes no major new overseas operations, no significant increase in defense spending due to strategic competition with China and Russia, and no continuation of the under-costing of defense in the Department of Defense (DoD) budget.
  • It also assumes no new budget legislation, no need for action to deal with a recession or civil crisis, and no changes in current federal medical programs or Social Security.

• Criticism of CBO Assumptions:

  • The assumptions appear unrealistic given the current geopolitical climate and the ongoing debates over domestic spending.
  • The report suggests that defense spending may need to remain above 3% of GDP to sustain the U.S. role in international affairs, possibly approaching 4%.
  • If political compromise continues, the deficit and debt could be much higher than CBO's projections, or significant tax increases may be necessary.

Conclusion

The CBO's projections highlight the growing fiscal burden from mandatory spending and the increasing pressure on defense spending. While defense spending is expected to rise, its share of the federal budget will continue to shrink due to the rapid growth of other entitlement programs. The U.S. is projected to have the highest level of federal debt since post-World War II, with significant implications for the economy and national security. The report emphasizes the need for a more comprehensive and realistic assessment of defense spending in relation to other national priorities.