The Army Budget

fiscal year 2010

an analysis
 Author
Frank A. DiStasio, Jr.

Principal Researcher
Lucinda M. Custer

Editors
Danielle Giovannelli
Sandra J. Daugherty

Cover Photograph
U.S. Army Sergeant Robert Newman, Bravo Company, 1st Battalion, 4th
Infantry Regiment, U.S. Army Europe, watches the sunrise after a dismounted
patrol mission near Forward Operating Base Baylough, Zabul, Afghanistan, 19
March 2009. (U.S. Army photograph by Staff Sergeant Adam Mancini/Released)

Graphics and design

Kevin Irwin

Technical support
Master Print, Inc.

© 2009 by
The Association of the United States Army
All rights reserved.

Reproduction of this report, in whole or in part,

is authorized with appropriate acknowledgment of the source.

Institute of Land Warfare

Association of the United States Army
2425 Wilson Boulevard, Arlington, Virginia 22201-3385
703-841-4300
www.ausa.org

ii
 Contents
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
The Budget Message of the President of the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
The Federal Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The President's Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Budget Top Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Budget Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Background on the Federal Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Budget Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Funding Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Appropriations and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Discretionary and Mandatory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Budget Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
National Defense Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
National Defense Outlays and Gross Domestic Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Discretionary and Mandatory Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Discretionary for Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Discretionary for Non-Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Mandatory Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Homeland Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Economic Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Gross Domestic Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Gross Federal Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Balancing the Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Borrowing and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Congressional Budget Office Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
The Department of Defense Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
The DoD Budget and the Federal Conundrum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Budget Priorities and Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Strategic Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Budget Analysis – Top Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Support for Troops in the Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Budget Titles and Service Analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
DoD Budget by Title – In Current Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
DoD Budget by Title – In Constant Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
DoD Budget by Title – Percentage Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
DoD Budget by Service and Defensewide – Current Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
DoD Budget by Service and Defensewide – Constant Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
DoD Budget by Service and Defensewide – Percentage Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Military Forces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Combatant Commands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Military Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Endstrength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Military Endstrength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Civilian Endstrength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Military Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Military Accrual Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Military Medical Accrual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Military Retirement Accrual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Civilian Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Operation and Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Defense Health Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Research, Development and Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
RDA Trends in Current Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

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 RDA Trends in Constant Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
RDA by Military Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Select Major Weapon Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Special Operations RDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Missile Defense Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Facilities and Infrastructure Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Military Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Family Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Reserve Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Defensewide Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Environmental Restoration Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Chemical Destruction Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Counternarcotics Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Base Realignment and Closure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Working Capital and Revolving Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Keep America Strong and Secure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
The Army Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Top Line Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Army Land Forces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Global Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Grow the Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Army Force Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Budget Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Army Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Budget Formulation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Budget Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Budget Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Budget by Appropriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Overseas Contingency Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Endstrength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Military Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Military Accrual Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Civilian Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Pay Raise Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Operation and Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Operation and Maintenance, Army Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Operation and Maintenance, Army National Guard Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Operation and Maintenance, Army Reserve Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Research, Development and Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Top Ten Weapon Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Research, Development, Test and Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Aircraft Procurement, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Missile Procurement, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Weapons and Tracked Combat Vehicles Procurement, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Ammunition Procurement, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Other Procurement, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Installations and Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Military Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Military Construction, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Military Construction, Army National Guard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Military Construction, Army Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Family Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Base Realignment and Closure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Environmental Restoration, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Chemical Demilitarization Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Army Working Capital Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Revenues and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

iv
 Customer Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Direct Appropriated Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Capital Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Army Reserve Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Army National Guard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Army Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Appendix I – Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Appendix II – The Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Appendix III – Glossary of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Appendix IV – References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Tables – Federal
1. Budget of the U.S. Government, Fiscal Year 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Budget Authority by Function and Subfunction – 050 National Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Outlays by Function and Subfunction – 050 National Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Discretionary and Mandatory Outlays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. Supplemental Funds for Overseas Contingency Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6. Discretionary Budgetary Authority by Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7. Mandatory Outlays by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8. Homeland Security by Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9. Homeland Security by Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10. Gross Domestic Product and Annual Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
11. Gross Domestic Product and Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
12. Federal Receipts and Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
13. Gross Federal Debt by Source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14. Interest as a Percentage of Outlays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
15. Comparisons of Deficit Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Tables – Department of Defense
16. Overseas Contingency Operations by Appropriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
17. Department of Defense Budget Authority by Title – Current Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
18. Department of Defense Budget Authority by Title – Constant Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
19. Department of Defense Budget Authority by Title as Percentage of Annual Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20. Department of Defense Budget Authority by Component – Current Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
21. Department of Defense Budget Authority by Component – Constant Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
22. Department of Defense Budget Authority by Component as Percentage of Annual Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
23. Conventional Forces Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
24. Department of Defense Personnel Endstrength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
25. Military Personnel Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
26. Medical Accrual in Military Personnel Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
27. Retirement Accrual in Military Personnel Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
28. Civilian Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
29. Operation and Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
30. Defense Health Care Program Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
31. Research, Development and Acquisition by Military Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
32. Research, Development and Acquisition – Selected Major Weapon Systems – Aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
33. Research, Development and Acquisition – Selected Major Weapon Systems – Missiles and Munitions . . . . . . . . . . . . . . . . . . . . . . . 41
34. Research, Development and Acquisition – Selected Major Weapon Systems – Missile Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
35. Research, Development and Acquisition – Selected Major Weapon Systems – Shipbuilding and Maritime Systems . . . . . . . . . . . . . 42
36. Research, Development and Acquisition – Selected Major Weapon Systems – Space and Command, Control, Communications,
Computers and Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
37. Research, Development and Acquisition – Special Operations Command . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
38. Missile Defense Program Funding by Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
39. Missile Defense Program Funding by Major Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
40. Military Construction and Family Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
41. Military Construction by Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
42. Family Housing by Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
43. Reserve Component Funding by Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
44. Environmental Restoration Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
45. Chemical Agents and Munitions Destruction Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
46. Counternarcotics Program Budget Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

v
 47. Base Realignment and Closure Account 2005 – Costs and Savings by Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
48. Defense Management and Revolving Budget Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Tables – Army
49. Army Budget Summary – Total Obligational Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
50. Army Budget Summary – Total Obligational Authority by Component and Appropriation Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
51. Overseas Contingency Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
52. Military Personnel Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
53. Military Retired Pay Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
54. Civilian Endstrength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
55. Army Operation and Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
56. Army Research, Development and Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
57. Research, Development and Acquisition Programs – Top Ten Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
58. Research, Development, Test and Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
59. Research, Development, Test and Evaluation – Science and Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
60. Research, Development, Test and Evaluation – BA4: Advanced Component Development and Prototypes . . . . . . . . . . . . . . . . . . . . 70
61. Research, Development, Test and Evaluation – BA5: System Development and Demonstration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
62. Research, Development, Test and Evaluation – BA6: Management Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
63. Research, Development, Test and Evaluation – BA7: Operational Systems Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
64. Procurement Summary by Appropriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
65. Aircraft Procurement, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
66. Missile Procurement, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
67. Weapons and Tracked Combat Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
68. Ammunition Procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
69. Other Procurement, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
70. Other Procurement, Army – OPA1: Tactical, Non-Tactical and Support Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
71. Other Procurement, Army – OPA2: Communications and Electronic Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
72. Other Procurement, Army – OPA3: Other Support Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
73. Military Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
74. Military Construction, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
75. Military Construction, Army National Guard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
76. Military Construction, Army Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
77. Army Family Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
78. Army Family Housing – New Construction and Privatization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
79. Base Realignment and Closure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
80. Environmental Restoration, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
81. Chemical Agents and Munitions Destruction, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
82. Army Working Capital Fund – Revenues and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
83. Army Working Capital Fund – Customer Rate Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
84. Army Working Capital Fund – Direct Appropriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
85. Army Working Capital Fund – Capital Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
86. Army National Guard Personnel Summary – Military Endstrength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
87. Army National Guard Key Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
88. Army National Guard Budget Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
89. Army Reserve Personnel Highlights – Military Endstrength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
90. Army Reserve Key Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
91. Army Reserve Key Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
92. Army Reserve Budget Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Figures – Federal
1. National Defense Outlays and Gross Domestic Product (GDP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. Federal Surplus/Debt and Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3. The Federal Government Dollars for FY 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Figures – Department of Defense
4. National Defense Budget Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5. Department of Defense Top Line FY 2001–FY 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6. FY 2010 Overseas Contingency Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7. Research, Development and Acquisition Budget Authority – Current Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8. Research, Development and Acquisition Budget Authority – Constant Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Figures – Army
9. Army Global Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10. Personnel Endstrength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

vi
 Foreword
The U.S. Army is engaged in a multifaceted battle; Soldiers are in combat with enemies in Iraq, Afghanistan and
elsewhere around the world, while at home Army leaders are fighting to get Soldiers the funding they need to continue
the warfight and strengthen national security. To maintain its status as the best fighting force in the world, the U.S. Army
must have the best equipment, technology and, most important, personnel—all of which requires full funding from the
federal government.
The new year brought a new administration with its own strategy for pursuing the war on terrorism (now known as
overseas contingency operations, or OCOs), but the Army cannot afford to assume that funding will automatically be kept
at current levels. The current warfight and those of the future are unpredictable; defense funding must provide a hedge
against risks and contingencies. To execute current operations, reset our forces while maintaining a high operational
tempo, and develop future capabilities to sustain the highest-quality force, timely, predictable and comprehensive
funding is crucial.
The size of the Army, and indeed the defense force as a whole, must be sufficient to accomplish our national security
goals; the active Army must be at least 700,000 Soldiers strong, and defense spending must be at least 5 percent of the
U.S. Gross Domestic Product. In addition, the radically changed role of the reserve component must result in redesigned
structures, pay and benefits (including retirement) that reflect the way that component of the U.S. armed forces is now
used.
Fiscal Year 2010 Army Budget—An Analysis details the resources required for the Army to accomplish its missions
today and tomorrow. It examines the Army’s proposed budget in the context of the federal and Department of Defense
budgets and breaks down requests—from Soldiers’ pay to research and development—according to funding authority
and programs. The analysis explains budget terminology and procedures, including the OCO funding process that is
necessary for the Army to sustain the current level of operations and provide for Soldiers and their families.
The Association of the United States Army fully supports the Army—active Army, Army National Guard, Army
Reserve, Army civilians and the families and communities who stand behind them all—as it faces its many challenges.
Fiscal Year 2010 Army Budget—An Analysis is just one of many ways we speak out on issues important to the American
Soldier, American landpower and the security of the nation and the world.

GORDON R. SULLIVAN
General, United States Army Retired
President, AUSA

September 2009

vii
 The Budget Message
of the
President of the United States

To the Congress of the United States:

I have the honor to transmit to you the Budget of the United States Government for Fiscal Year 2010.
In my February 26th budget overview, A New Era of Responsibility: Renewing America’s Promise, I provided
a broad outline of how our Nation came to this moment of economic, financial, and fiscal crisis; and how my
Administration plans to move this economy from recession to recovery and lay a new foundation for long-term
economic growth and prosperity. This Budget fills out this picture by providing full programmatic details and
proposing appropriations language and other required information for the Congress to put these plans fully into
effect.
Specifically, this Budget details the pillars of the stable and broad economic growth we seek: making long
overdue investments and reforms in education so that every child can compete in the global economy, undertaking
health care reform so that we can control costs while boosting coverage and quality, and investing in renewable
sources of energy so that we can reduce our dependence on foreign oil and become the world leader in the new
clean energy economy.
Fiscal discipline is another critical pillar in this economic foundation. My Administration came into office facing
a budget deficit of $1.3 trillion for this year alone, and the cost of confronting the recession and financial crisis has
been high. While these are extraordinary times that have demanded extraordinary responses, it is impossible to put
our Nation on a course for long-term growth without beginning to rein in unsustainable deficits and debt. We no
longer can afford to tolerate investments in programs that are outdated, duplicative, ineffective, or wasteful.
That is why the Budget I am sending to you includes a separate volume of terminations, reductions, and savings
that my Administration has identified since we sent the budget overview to you 10 weeks ago. In it, we identify
programs that do not accomplish the goals set for them, do not do so efficiently, or do a job already done by another
initiative. Overall, we have targeted more than 100 programs that should be ended or substantially changed, moves
that will save nearly $17 billion next year alone.
These efforts are just the next phase of a larger and longer effort needed to change how Washington does
business and put our fiscal house in order. To that end, the Budget includes billions of dollars in savings from steps
ranging from ending subsidies for big oil and gas companies, to eliminating entitlements to banks and lenders
making student loans. It provides an historic down payment on health care reform, the key to our long-term fiscal
future, and was constructed without commonly used budget gimmicks that, for instance, hide the true costs of war
and natural disasters. Even with these costs on the books, the Budget will cut the deficit in half by the end of my
first term, and we will bring non-defense discretionary spending to its lowest level as a share of GDP since 1962.
Finally, in order to keep America strong and secure, the Budget includes critical investments in rebuilding our
military, securing our homeland, and expanding our diplomatic efforts because we need to use all elements of our
power to provide for our national security. We are not only proposing significant funding for our national security,
but we are also being careful with those investments by, for instance, reforming defense contracting so that we are
using our defense dollars to their maximum effect.
I have little doubt that there will be various interests—vocal and powerful—who will oppose different aspects
of this Budget. Change is never easy. However, I believe that after an era of profound irresponsibility, Americans

ix
are ready to embrace the shared responsibilities we have to each other and to generations to come. They want to put
old arguments and the divisions of the past behind us, put problem-solving ahead of point-scoring, and reconstruct
an economy that is built on a solid new foundation. If we do that, America once again will teem with new industry
and commerce, hum with the energy of new discoveries and inventions, and be a place where anyone with a good
idea and the will to work can live their dreams.
I am gratified and encouraged by the support I have received from the Congress thus far, and I look forward
to working with you in the weeks ahead as we put these plans into practice and make this vision of America a
reality.

Barack Obama
The White House

7 May 2009

x
 The Federal Budget
The President’s Perspective
President Barack Obama sent a budget overview doc-
ument, A New Era of Responsibility: Renewing America’s
Promise, to Congress on 26 February 2009. In his opening
message the President notes,
Government has failed to fully confront the deep,
systemic problems that year after year have only
become a larger and larger drag on our economy.
From the rising costs of health care to the state
of our schools, from the need to revolutionize
how we power our economy to our crumbling
infrastructure, policymakers in Washington have
chosen temporary fixes over lasting solutions.
Regaining our economic strength also is critical
to our national security. It is a major source of our
global leadership, and we must not let it waver.
That’s why this Budget makes critical investments
in rebuilding our military, securing our homeland,
and expanding our diplomatic efforts because to
provide for the security of the United States we
need to use all elements of our power. Moreover,
to honor the service of those who have worn our
military’s uniform, we will make the investments
necessary to take care of our veterans.1
The President concludes his message with the state-
ment, “This Budget is a first step in that journey.”2
Three months later, on 7 May 2009, the new adminis-
tration transmitted the Budget of the United States Govern-
ment for Fiscal Year 2010 to Congress. In his transmittal
letter to Congress, President Obama states, “This Budget
fills out this picture [from A New Era of Responsibility] by
providing full programmatic details and proposing appro-
priations language and other required information for the
Congress to put these plans fully into effect.”3
The Budget includes the President’s plans for specific
programs and projects of the departments and agencies
and estimates of the funds necessary to implement those
plans. The Analytical Perspectives document includes
analyses of federal spending and other non-spending
information, e.g., economic and accounting analyses;
information on federal receipts and collections; informa-
tion on federal borrowing and debt; the baseline or current
services estimates; and other technical presentations.
In his transmittal letter, President Obama observes
that the Budget seeks stable and broad economic growth
including “long overdue investments and reforms in edu-
cation,” health care reform and investing in renewable
sources of energy; fiscal discipline to begin reining in
unsustainable deficits and debt; and a separate volume of
terminations, reductions and savings. He says,
. . . the Budget will cut the deficit in half by the end
of my first term, and we will bring non-defense
discretionary spending to its lowest level as a
share of [Gross Domestic Product] since 1962.
Finally, in order to keep America strong and
secure, the Budget includes critical investments
in rebuilding our military, securing our homeland,
and expanding our diplomatic efforts because we
need to use all elements of our power to provide
for our national security. We are not only propos-
ing significant funding for our national security,
but we are also being careful with those invest-
ments by, for instance, reforming defense con-
tracting so that we are using our defense dollars
to their maximum effect.4
The rest of this section of the Budget analysis pro-
vides a national perspective on the Budget of the United
States Government and the fundamental context for
understanding the Department of Defense (DoD) and the
Army budgets.
Budget Top Line
In the Budget of the United States Government for
Fiscal Year 2010, President Obama estimates Budget
Authority of $2.873 trillion and Outlays of $3.042 trillion5
The Federal Budget 1
to support the operations of the departments and agencies.
The data behind these totals are aggregated and subdi-
vided in many different ways; many of those are intro-
duced in this analysis.
The Budget for FY 2010 estimates Budget Author-
ity of $3.82 trillion for FY 2009; the FY 2010 Budget
Authority is $947 billion, or 24.8 percent, less than the FY
2009 estimate.6 However, the FY 2009 estimate includes
supplemental funds.
A more equitable comparison for the FY 2010 esti-
mate is with President Bush’s base budget estimate for FY
2009. President Bush’s Budget Authority estimate for FY
2009 was $2.528 trillion, while President Obama’s esti-
mate for FY 2010 is $2.873 trillion, an increase of $345
billion or 13.6 percent.7
In summary, President Obama’s Budget Authority
estimate for FY 2010 is lower than the FY 2009 estimate,
which includes the supplemental, but greater than Presi-
dent Bush’s base estimate for FY 2009. As this compari-
son suggests, it is difficult to draw definitive conclusions
from just the top line.
President Obama estimates Outlays of $3.48 trillion
for FY 2009 and requests $3.042 trillion for FY 2010. The
FY 2010 Outlays are a decrease of $438 billion or 12.6
percent from the FY 2009 estimate.8 However, President
Obama’s Outlays estimate for FY 2010 is $427 billion, or
16.3 percent, greater than President Bush’s base estimate
for FY 2009 of $2.615 trillion, which did not have supple-
mental funds.9
The top-line tables in the Budget include the amount
expended during the last completed fiscal year, the amount
appropriated for the current year (or an estimate if the
appropriations have not been enacted) and the President’s
proposal for the next budget year. The top-line totals from
the FY 2010 Budget are in table 1.
Table 1
Budget of the U.S. Government, Fiscal Year 2010
($ billions)
FY081 FY092
Budget Authority 2,842 3,820
Outlays 2,508 3,480
Actual amounts.
1
2
Appropriated and estimates.
3
Budget proposals.
Source: Budget of the United States Government, Fiscal Year 2010,
Analytical Perspectives, Table 25–1
A comparison of the data in table 1 reveals an increase
in Budget Authority of 30.6 percent between FYs 2008
2
and 2009, then a decrease of 21.2 percent between FYs
2009 and 2010. A comparison of the FY 2008 actual expe-
rience to the FY 2010 proposal reveals only a 3 percent
increase, which is effectively no increase after two years
of inflation, cost increases and pay raises. This suggests
the need for improved productivity, reduction or elimina-
tion of programs, supplemental funds or some combina-
tion of these alternatives.
The Outlays increase by 34 percent between FYs
2008 and 2009 and, despite a decrease from FY 2009,
Outlays also increase by 20.4 percent between FYs 2008
and 2010. The FY 2010 Outlays exceed Budget Author-
ity, which occurs because Outlays are the sum of expen-
ditures of Budget Authority from earlier years as well as
FY 2010.
The top-line Outlays are essential for analyzing
whether the Budget is balanced, i.e., whether revenues
and expenditures are equal. If expenditures exceed reve-
nues, then the federal government will operate at a deficit
and have to borrow to meet Outlays.
Budget Overview
Each administration prepares plans and requests
resources in the Budget to accomplish those plans. As
the following comments highlight, the Budget is greatly
influenced by the current recession.
On 17 February 2009, less than a month after his inau-
guration, President Obama signed into law the American
Recovery and Reinvestment Act of 2009 to expend funds
on projects to modernize infrastructure, create jobs and
stimulate and transform the economy. Nine days later, on
26 February 2009, the President issued the Budget over-
view, A New Era of Responsibility: Renewing America’s
Promise. In the section “Jumpstarting the Economy and
Investing for the Future,” the President identified certain
pillars upon which to build a new foundation for the
economy. These include:
• reforming the education system to prepare children
to compete in the 21st century;
FY103 • lowering health care costs and ensuring broader
2,873 health care coverage;
3,042
• beginning a comprehensive approach to transform
energy supply and slow global warming; and
• restoring America’s place in the world and keeping
America safe by:
◦ investing in the armed forces;
◦ providing for wounded warriors; and
 ◦ increasing “investments in other elements of
our national power—like diplomacy, economic
development, and education—so that we end the
reliance on our military alone to defeat emerging
threats.”10
On 7 May 2009, President Obama transmitted to Con-
gress the Budget of the United States Government for
Fiscal Year 2010, which is consistent with these “pillars.”
Background on the Federal Budget
This section introduces key budget terms, data and
processes that are useful for understanding the Budget
and this analysis.
Budget Terms
The federal government uses very specific terms to
define the various funding authorities and to account for
budget execution.
Funding Authority. Funding authority refers to the
various types of funding power granted by Congress to
allow agencies to obligate the government to make pay-
ments or to make payments on behalf of the government.
Three types of funding authority are important in this
analysis: Budget Authority, Total Obligational Authority
and Outlay Authority. Each type has a unique definition
and, therefore, each will be a different dollar amount for
the same fiscal year.
• Budget Authority (BA) is the authority provided
by law to incur financial obligations that will result
in Outlays.
• Total Obligational Authority (TOA) is the sum of:
◦ Budget Authority for a given fiscal year;
◦ balances of Budget Authority brought forward
from prior years that remain available for obliga-
tion in the fiscal year; and
◦ amounts authorized to be credited to a specific
fund or account during that year, including trans-
fers between funds or accounts.
• Outlay Authority is the authority to make actual
payments for liquidating obligations, including inter-
est payments, during a fiscal year. Outlays occur
when funds are transferred, checks are issued or cash
is distributed to liquidate obligations. Outlays may
be for payment of obligations incurred in the current
or prior years.
In summary, Budget Authority and Total Obligational
Authority refer to funds available for use by government
officials, which is somewhat analogous to the monies
available in a personal line of credit. Outlays refer to the
actual amount of cash on hand to make payments during
the fiscal year, i.e., to liquidate the checks.
In this section, tables and figures display Budget
Authority and Outlays. Outlays are important at the
national level because the relationship between Outlays
and revenues drives the federal debt or surplus, which
is an overall federal issue and not an individual depart-
ment issue. The DoD and Army sections display dollars in
term of Budget Authority or Total Obligational Authority
because the agencies focus on the availability of funds to
initiate actions and support programs and projects.
Appropriations and Authorizations. An appropriation
provides legal authority for federal agencies to incur obli-
gations and to make payments out of the U.S. Treasury
for specified purposes. Appropriations bills, such as the
Department of Defense bill and the Department of Home-
land Security bill, contain funds for specific purposes and
restrict the movement of funds among the appropriations.
Appropriations bills require Congress to stipulate the
amount of funds every year and may include supplemen-
tal bills.
An authorization is an act of Congress that establishes
or continues a federal program or agency and sets forth
the guidelines to which it must adhere. Authorization acts
may also require federal action, such as the Social Secu-
rity authorization that requires federal payments to all
qualified persons.
Discretionary and Mandatory. These terms refer to
whether or not the funds are controllable through the
annual congressional appropriation process. BA and
Outlays may be discretionary or mandatory.
• Discretionary funds—such as funds for defense,
homeland security, space exploration, foreign aid,
agriculture, commerce, highway construction, justice
and law enforcement, education and housing—are
annually appropriated by Congress and enacted into
law.
• Mandatory funds flow from enacted authorization
laws—i.e., laws that may have been enacted years
before that set criteria for an entitlement—and not
from the annual appropriations process. Examples
include Social Security, Medicare and Medicaid.
The Glossary of Budget Terms in the final section of
this document provides an explanation of frequently used
federal budget terms.
The Federal Budget 3
Budget Data
All of the budgetary tables and figures in this analy-
sis display Budget Authority, Total Obligational Author-
ity or Outlays, or some combination of the three. The
content of each type varies across time—the President’s
plan for the budget year is an estimate, the current-year
amount reflects congressional appropriations and the
prior-year amount reflects actual outlays for the complete
fiscal year.
The congressional appropriation process ideally
takes about seven or eight months from budget submis-
sion to enactment by the beginning of the fiscal year on 1
October. With the submission in May this year, Congress
has about four and a half months to review the submis-
sion and appropriate funds prior to the beginning of the
new fiscal year. Actual execution begins on 1 October,
about a year and a half after the initial estimates were
made.

• The prior-year and earlier BA dollars are actual
appropriated amounts including supplemental and
rescission actions. The prior-year and earlier Outlay
dollars are the sum of actual obligations, expen-
ditures and disbursements during the fiscal year
regardless of the fiscal year of the BA and include
supplemental dollars.
• The current-year BA and Outlay dollars—in this
case FY 2009—summarizes the entire BA and
Outlay authority enacted at the time the Budget was
prepared. It includes supplemental dollars appropri-
ated, but it does not include supplemental requests
not yet enacted.
• The budget-year and any future-year BA and Outlay
dollars are estimates and do not include supplemen-
tal requests.
The budget formulation process involves “bottom
up” input from perhaps thousands of organizations.
With so many participants and so many organizational
layers, the process requires fairly substantial lead time.
For example, the FY 2010 Budget incorporates propos-
als that were prepared, reviewed, integrated, analyzed,
modified and consolidated across the government during
calendar year 2008. Normally, this formulation process
culminates with the President’s Budget submission to
Congress in February 2009; however, with the change of
administration, the FY 2010 Budget was not submitted
until 7 May 2009.
Table 2
National Defense Classification
Congress uses a functional classification system to
allocate budgetary resources that is not synonymous
with the agencies of government. Budgets are generally
assigned to the single budget function that best reflects
the agency’s major purpose; for example, DoD is placed
in National Defense. A budget function may include a
few subfunctions, and a portion of an agency’s budget
may be assigned to a subfunction that is not in its primary
function; for example, part of the Department of Energy’s
budget for nuclear energy is in a subfunction of National
Defense.
The National Defense function includes three
subfunctions:
• 051 Department of Defense–Military;
• 053 Atomic Energy Defense Activities; and
• 054 Defense-related Activities.
The President’s Budget proposes $692.8 billion in BA
for National Defense in FY 2010. The BA for National
Defense and the individual subfunctions are in table 2.
The Department of Defense–Military subfunction
includes the budget for the military services and defense
agencies. The DoD–Military subfunction BA proposal is
$667.7 billion in FY 2010—virtually the same as in FY
2009 and only slightly less than in FY 2008. In FY 2000,
prior to the war on terrorism, the DoD–Military BA was

Budget Authority by Function and Subfunction – 050 National Defense

($ billions*)

FY08 FY09 FY10 FY11 FY12 FY13 FY14

051 Department of Defense–Military 674.7 663.7 667.7 596.0 605.1 615.7 629.3
053 Atomic Energy Defense Activities 16.6 22.9 17.7 17.5 17.3 17.3 17.2
054 Defense-related Activities 4.9 7.0 7.4 7.1 7.0 7.0 7.1
Total 696.2 693.6 692.8 620.6 629.4 640.0 653.6
* Numbers may not add due to rounding.
Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 5.1

4
$290.3 billion; for FY 2010 it increased by $377.4 billion,
or 130 percent.
The estimate for DoD–Military in FY 2011 is $71.7
billion less than that of FY 2010—a reduction of 10.7
percent in one year that would require a substantial reduc-
tion in forces, operations or acquisitions, or some combi-
nation of the three.
The Outlays for DoD–Military in FY 2010 are $685.1
billion. See table 3.
The DoD–Military Outlays for FY 2010 are $20
billion more than for FY 2009—an increase of 3 percent.
The FY 2010 DoD–Military Outlays are an increase of
143.7 percent from the $281.1 billion experience in FY
2000—prior to the war on terrorism.
The estimate for FY 2011 DoD–Military Outlays is
7.8 percent lower than for FY 2010; achieving this size
reduction in one year would require a reduction in forces,
operations or acquisitions.
The FY 2001 to FY 2009 BA and Outlays include
supplemental funding for the war on terrorism. The FY
2010 BA and Outlays include appropriated supplemen-
tal funds but not other supplemental funds that were
requested but not appropriated at the time of the Budget
submission. The scope and duration of operations in Iraq
or Afghanistan will affect the final Outlays for FY 2010
and beyond.
National Defense Outlays and Gross
Domestic Product
The press, politicians and even members of the Depart-
ment of Defense sometimes compare National Defense
Outlays to the Gross Domestic Product (GDP). Such
comparisons do not provide insights into the adequacy of
Table 3
the Budget to accomplish the national security mission,
objectives and plans; at best they provide relational points
of reference for comparisons at different points in time.
The comparison is sensitive to both the change in GDP
and defense spending. The percentages for FYs 2009 and
2010 are higher, in part, because the GDP is flat or esti-
mated to grow only slightly.
The historical trends for the past 25 years illustrate the
fact that defense spending peaked during the Reagan-era
buildup and reached a low point at the end of the 1990s
drawdown. For example, the National Defense Outlays as
percentages of the GDP were:
• 5.2 percent in FY 1990 at the end of the Cold War;
• 3 percent in FY 2000 at the end of the “peace divi-
dend” decade; and
• 4.8 percent in FY 2010 with operations in Afghani-
stan, Iraq and elsewhere.
This completes the introduction to the National
Defense functional category. See figure 1 for the National
Defense Outlays as a percentage of GDP.
Discretionary and Mandatory Funds
The federal budget consists of discretionary funds—
funds appropriated explicitly by Congress in the annual
appropriations process—and mandatory funds that
require payment based on a condition such as age of
the population for Social Security. The DoD budget is
discretionary.
The Summary Tables submitted with the President’s
Budget include data on discretionary and mandatory
Outlays. For FY 2010, the Budget proposes $1.368 tril-
lion in discretionary Outlays, $2.009 trillion in mandatory
Outlays, $136 billion in net interest and $11 billion for

Outlays by Function and Subfunction – 050 National Defense

($ billions*)

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

051 Department of Defense–Military 528.6 594.7 665.0 685.1 631.8 608.2 611.4 620.5
053 Atomic Energy Defense Activities 17.1 17.1 18.5 20.6 19.9 18.8 17.3 17.2
054 Defense-related Activities 5.7 4.3 6.8 7.2 7.0 7.1 7.1 7.1
Total 551.4 616.1 690.3 712.9 658.7 634.1 635.8 644.8
050 National Defense as percentage of all Outlays 20.2% 20.7% 17.3% 19.9% 18.2% 17.5% 16.7% 16.7%
050 National Defense as percentage of Gross
4.0% 4.3% 4.8% 4.8% 4.2% 3.9% 3.6% 3.5%
Domestic Product
* Numbers may not add due to rounding.
Source: Budget of the United States Government, FY 2010, Historical Tables 3.1, 3.2 and 10.1

The Federal Budget 5

Figure 1

National Defense Outlays and Gross Domestic Product (GDP)

($ billions)

20,000

$18,386
$17,498
$16,470
17,500

$15,500
$14,729
$14,222

$14,240
15,000

$13,642
$13,010
$12,235

12,500
$9,708

10,000
$7,325

7,500
$5,735
$4,142

5,000

2,500

3.0 4.0 4.0 4.0 4.3 4.8 4.8 4.2 3.9 3.6 3.5
6.1 5.2 3.7
0
FY85* FY90* FY95* FY00* FY05* FY06* FY07* FY08* FY09 FY10 FY11 FY12 FY13 FY14

National Defense Outlays as

percentage of Gross Domestic Product

* FY85–FY08 are actual data. Remaining years are estimates.

Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 3.1

6
Disaster Costs. The distribution is 38.5 percent discretion-
ary, 56.6 percent mandatory and 4.6 percent net interest.
The discretionary amount includes $673 billion, or 49
percent, for defense and $695 billion, or 51 percent, for all
other departments and agencies, such as agriculture, com-
merce, education, housing, highway construction, justice,
law enforcement, space exploration, foreign aid, etc. See
table 4.
Table 4
support ongoing overseas contingency operations11,
while increasing efforts in Afghanistan and drawing
down troops from Iraq responsibly;
• supports a transparent budget process, which simul-
taneously and separately requests estimated base
budget and overseas contingency operations costs;
• expands concurrent receipt of military retired pay
and Veterans Disability Compensation for those dis-
abled upon retirement from active duty; and

Discretionary and Mandatory Outlays • improves efforts to care for wounded servicemem-
($ billions )
1
bers and to treat mental health needs.12
FY08 FY09 FY10 The Funding Highlights specifically note that:
Discretionary 1,120 1,279 1,368 • the base Budget is $533.7 billion, which excludes
  Defense (051) 593 666 673 funding from the American Recovery and Rein-
  Non-Defense 528 613 695 vestment Act of 2009 and $130 billion for overseas
contingency operations (OCOs). Note that the total
Mandatory 1,610 2,516 2,009
of the base and OCO is $663.7 billion, or $4 billion
  Social Security 612 662 696
less than the DoD–Military subfunction amount of
  Medicare 386 425 453 $667.7 billion in table 2;
  Medicaid 201 259 290
• the base Budget incorporates funds for items pre-
  TARP 2
247 viously in emergency supplementals for ongoing
  Placeholder 250 activities, including certain medical services, family
  Other entitlements 411 673 571 support initiatives, security assistance to foreign
Net Interest 253 139 164
governments, and enhancements to intelligence, sur-
veillance and reconnaissance;
Disaster Costs 3
4 11
The Funding Highlights also note that the Budget:
Total 2,983 3,938 3,552
1
Numbers may not add due to rounding. • supports additional permanent forces in the Army
Troubled Asset Relief Program.
and Marine Corps (547,400 and 202,000, respec-
2

3
An estimate based on the statistical probability of a major disaster
requiring federal assistance for relief and reconstruction.
Source: Budget of the United States, Fiscal Year 2010, Summary Table
S-4
Discretionary for Defense
In absolute terms, the discretionary defense funds
increase each year in FYs 2008, 2009 and 2010: $593
billion, $668 billion and $673 billion, respectively.
However, as a percentage of all discretionary funds, the
defense funds decrease each year: 53 percent in FY 2008,
52 percent in FY 2009 and 49 percent in FY 2010.
In the Office of Management and Budget’s (OMB’s)
Funding Highlights, Department of Defense, it is noted
that the DoD budget:
• provides $533.7 billion for the Department of
Defense base budget in FY 2010, a 4 percent
increase over 2009;
• includes $75.5 billion in supplemental appropria-
tions for FY 2009 and $130 billion for FY 2010 to
tively, by the end of FY 2009, two to three years
ahead of schedule), to reduce stress on servicemem-
bers and their families and ensure heightened readi-
ness for a full spectrum of military operations;
• includes funding for a 2.9 percent pay raise;
• continues to sustain and modernize barracks and
dormitories and works to end all inadequate housing
for military families;
• builds or renovates base facilities at a level sufficient
for safe operation of all structures;
• requests sufficient funding to enable DoD to con-
tinue its efforts to meet the requirements of the
2005 Base Realignment and Closure (BRAC)
Commission;
• includes funding to complete additional Army
wounded warrior complexes at posts throughout
the continental United States, as well as at sites in
Alaska, Hawaii and Germany;

The Federal Budget 7

 Table 5
Supplemental Funds for Overseas Contingency Operations
($ billions)
Enacted
FY01 FY02 FY03 FY04 FY05
13 17 72 91 76
Source: “DoD Releases Fiscal 2010 Budget Proposal,” News Release No. 304-09, 7 May 2009, Summary Charts, “Department of Defense Topline”
• expands pilot programs, along with Department of
Veterans Affairs, to expedite processing of injured
troops through the Disability Evaluation System; and
• expands the number of mental health professionals
integrated with their deployed units.
Support for Overseas Contingency Operations. In addi-
tion to the FY 2010 baseline Budget, the President pro-
poses $130 billion in supplemental funds for overseas con-
tingency operations and $76 billion in additional supple-
mental funds for FY 2009. The total enacted from FY 2001
to FY 2009 is $806 billion, and another $206 billion was
proposed by the President in the current Budget. See table
5 for funding by fiscal year.
Supplemental funding peaked in FY 2008, and the FY
2009 total of appropriated and requested funds is $142
billion, or 24 percent less than for FY 2008. The FY 2010
request is $130 billion, $36 billion less than for FY 2008
and $12 billion less than for FY 2009. The President and
the Secretary of Defense have stated that the continuing
costs of the war have been moved into the base Budget,
but table 5 still displays the incremental costs of ongoing
military operations in Iraq and Afghanistan.
Discretionary for Non-Defense
The President’s Budget proposes a total of $695 billion
in discretionary Outlays for all of the non-defense depart-
ments and agencies of government, an increase of 13
percent over FY 2009. However, the Budget Authority for
non-defense departments is down 28 percent, from $793
billion to $569 billion. In the case of many federal pro-
grams, the term “discretionary” is somewhat misleading
since a large portion of the funds for most agencies is for
payroll and essential services.
The Budget Authority proposal for the five largest non-
defense departments—Health and Human Services, Trans-
portation, Veterans Affairs, Education and Housing and
Urban Development—in terms of funding is $281 billion,
or nearly 51 percent of all non-defense discretionary funds.
Of those five, only the budget proposal for Veterans Affairs
is increasing from FY 2009; Health and Human Services
and Education are both down significantly from FY 2009.
8
Requested
FY06 FY07 FY08 FY09 FY09 FY10
118 166 187 66 76 130
Back in FY 2000, discretionary Budget Authority
was split 53 percent for non-defense and 47 percent for
defense. In FY 2010, the proposal is 46 percent for non-
defense and 54 percent for defense. Since 2002, the dis-
tribution has consistently favored defense. See table 4 for
Outlays and table 6 for Budget Authority by agency.
In his Budget message, the President proposes funds
to tackle significant structural impediments to long-term
economic growth, including investments in education,
clean energy, health care and infrastructure. However,
with the economy currently in a recession, finding addi-
tional funds for the non-defense departments will be
difficult.
Mandatory Funds
The FY 2010 Budget estimates mandatory Outlays at
$2.033 trillion or 56 percent of total Outlays. Mandatory
programs involve statutory entitlements that obligate the
federal government to make payments subject to some
criteria until the law is amended or repealed, such as
making Social Security payments to everyone who meets
the qualification requirements.
The estimate for Health plus Medicare consumes 38
percent of mandatory Outlays in FY 2010. To the extent
that the federal government provides additional health
care, mandatory Outlays will increase. See table 7 for
mandatory Outlays by entitlement program.
Homeland Security
The Department of Homeland Security (DHS) oper-
ates with discretionary non-defense funds. The Home-
land Security Act of 2002 established the Department of
Homeland Security with the primary mission to:
• prevent terrorist attacks within the United States;
• reduce the vulnerability of the United States to ter-
rorism; and
• minimize the damage, and assist in the recov-
ery, from terrorist attacks that do occur within the
United States.
 Table 6

Discretionary Budgetary Authority by Agency

($ billions*)

FY08 FY09 FY10

Agency
Actual Estimate Proposal
Legislative Branch 4.0 4.6 5.0
The Judiciary 5.8 6.1 6.6
Agriculture 26.1 31.9 25.7
Commerce 7.9 17.3 13.8
Defense–Military 666.0 662.3 663.6
Education 57.2 147.9 46.7
Energy 24.1 72.6 26.4
Health and Human Services 72.2 102.8 80.5
Homeland Security 50.0 44.9 41.4
Housing and Urban Development 47.2 54.3 43.7
Interior 11.7 14.3 12.0
Justice 23.6 29.7 24.0
Labor 11.8 17.7 13.2
State 22.1 25.7 27.5
Transportation 16.6 64.9 57.5
Treasury 12.2 12.9 13.4
Veterans Affairs 43.6 49.2 53.0
Corps of Engineers 9.0 15.8 5.1
Other Defense­–Civil Programs .2 .2 .3
Environmental Protection Agency 7.5 14.9 10.5
Executive Office of the President .3 .4 .6
General Services Administration .3 6.7 .7
International Assistance Programs 18.4 21.3 23.7
National Aeronautics and Space Administration 17.2 18.8 18.7
National Science Foundation 6.1 9.5 7.0
Office of Personnel Management .3 .2 .2
Small Business Administration 1.6 1.3 .8
Social Security Administration (On-budget) 3.0 4.4 3.5
Social Security Administration (Off-budget) 5.0 5.3 5.8
Other Independent Agencies (On-budget) 8.4 8.6 13.7
Other Independent Agencies (Off-budget) .2 .3 .3
Total Discretionary Budget Authority 1,179.7 1,466.6 1,245.0
Total Discretionary less Judiciary and Legislative Branches 1,169.9 1,456.0 1,233.3
Total Discretionary less Judiciary and Legislative Branches and Defense 503.9 793.6 569.7
* Numbers may not add due to rounding.
Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 5.4—Discretionary Budget Authority by Agency: 1976–2010

The Federal Budget 9

 Table 7

Mandatory Outlays by Category

($ billions)

Enacted Estimate
Category and Program Change from
FY00 FY08 FY09 FY10 FY00–10
Health 129 227 293 322 150%
Medicare 194 386 425 452 133%
Income security 212 373 454 478 125%
Social Security 406 612 675 696 71%
Veterans Benefits and Services 26 43 50 57 119%
Other mandatory programs -17 -55 678 25 247%
Total 951 1,595 2,558 2,033 114%
Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 8.5, Outlays For Mandatory and Related Programs: 1962–2014

The Homeland Security Act charges DHS with the
responsibility for information analysis and infrastructure
protection; chemical, biological, radiological, nuclear and
related countermeasures; border and transportation secu-
rity; emergency preparedness and response; and coor-
dination (including the provision of training and equip-
ment) with other executive agencies, with state and local
government personnel, agencies and authorities, with the
private sector and with other entities.
DHS consolidated a large number of organizations
and functions to accomplish this mission. In addition, a
vast national network of organizations and institutions
involved in efforts to secure the nation were not consoli-
dated in DHS, but DHS has the responsibility to unify
and lead the national efforts.
The DHS and DoD missions are complementary—
both focusing on deterrence and prevention or, failing
that, on protection and response. DoD is responsible for
homeland defense—to protect U.S. sovereignty, territory,
domestic population and critical defense infrastructure
against external threats and aggression, or other threats
as directed by the President. DoD provides this protec-
tion by generating ready and capable military forces to
deter conflict or, if deterrence fails, to fight and win the
nation’s wars; to contribute to an international environ-
ment of peace; and to support civil authorities at home
and abroad in times of crisis.
Defense, the protection of the United States and its ter-
ritories from attack.
The Homeland Security Act of 2002, Section 889,
requires a homeland security funding analysis in the Pres-
ident’s Budget. The analysis includes homeland security
funding for activities in all federal agencies, including
DHS, DoD and other federal departments, plus state and
local governments and private-sector expenditures.
The President’s Budget for FY 2010 includes $69.8
billion in Budget Authority for homeland security across
all departments. The FY 2009 Budget was $68.8 billion in
the base Budget and $3.4 billion in supplemental funds,
a sum of $72.2 billion, or $3.4 billion greater than the FY
2010 proposal. The largest amount is for DHS at $34.7
billion. The DHS budget proposal is for the entire depart-
ment, but not all DHS funds are for homeland security.
For example, funding for the Coast Guard search-and-
rescue mission is in the DHS budget, but this is not part of
the homeland security function. See table 8 for funding
by department.
DHS and five other departments account for 95
percent of all homeland security funds:
• $19.3 billion for DoD (discretionary defense funds);
• $4.8 billion for the Department of Health and
Human Services;

DoD contributes to homeland security through
its military missions overseas, homeland defense and
support to civil authorities. Homeland defense includes
domestic air defense, maritime intercept operations,
land-based defense of critical infrastructure and assets,
and, when directed by the President or the Secretary of
• $4 billion for the Department of Justice;
• $2 billion for the Department of Energy; and
• $1.8 billion for the Department of State.
The FY 2010 Budget summarizes the Homeland Secu-
rity funds into three critical mission areas (see table 9). The

10
 Table 8

Homeland Security by Agency

(Budget Authority, $ millions*)

FY 2008 FY 2009 FY 2010

Agency
Actual Supplement Enacted Supplement Request
Department of Agriculture 574.6 507.1 574.7
Department of Commerce 206.9 258.1 12.9 267.5
Department of Defense 17,374.4 657.7 19,413.5 365.0 19,303.3
Department of Education 27.1 31.8 30.6
Department of Energy 1,827.3 1,938.8 2,007.5
Department of Health and Human Services 4,300.6 4,626.8 50.0 4,839.8
Department of Homeland Security 29,755.8 2,730.0 34,350.9 2,509.1 34,731.5
Department of Housing & Urban Development 1.9 4.8 4.9
Department of the Interior 50.2 52.7 54.2
Department of Justice 3,277.5 250.0 3,641.3 46.7 3,973.9
Department of Labor 47.8 48.5 52.7
Department of State 1,719.1 1,809.2 1,767.8
Department of Transportation 205.3 220.9 247.9
Department of the Treasury 120.0 133.7 129.8
Department of Veterans Affairs 308.9 304.6 369.1
Corps of Engineers 42.0 42.0 43
Environmental Protection Agency 138.1 157.0 160.1
Executive Office of the President 21.0 19.1 17.0
General Services Administration 143.0 233.0 159.4 369.0 192.0
National Aeronautics and Space Administration 205.2 221.8 220.4
National Science Foundation 365.1 1.0 377.2 29.4 385.5
Office of Personnel Management 2.3 1.9 2.2
Social Security Administration 184.2 214.6 228.8
Smithsonian Institution 91.0 92.3 98.1
Other Agencies 238.5 190.5 142.7
Total, Homeland Security BA less Public Safety
61,227.8 3,871.6 68,818.5 3,382.1 69,845.0
Interoperable Communications (PSIC) and BioShield
  Less Department of Defense 17,374.4 657.7 19,413.5 365.0 19,303.3
Non-Defense Homeland Security BA
43,853.4 3,213.9 49,405.0 3,017.1 50,541.6
excluding BioShield*
  Less Fee-Funded Homeland Security Programs -4,743.8 -5,478.6 -5,414.5
  Less Mandatory Homeland Security Programs -2,887.0 -2,604.3 -7.9 -2,622.7
Net Non-Defense Discretionary BA, excluding
36,222.6 3,213.9 41,322.0 3,009.2 42,504.4
BioShield
  Plus BioShield 1,264.0
Net Non-Defense Discretionary BA 36,222.6 3,213.9 41,322.0 3,009.2 43,768.4
* Numbers may not add due to rounding.
Source: Budget of the United States Government, Fiscal Year 2010, Analytical Perspectives, Table 3-1

The Federal Budget 11

 Table 9
Homeland Security by Mission
(Budget Authority, $ millions*)
FY 2008
Actual
Prevent and Disrupt Terrorist Attacks 27,288.5
Protecting Crucial Infrastructure and Key Assets 28,172.6
Response and Recovery Funding 5,580.8
Total 61,041.9
* Numbers may not add due to rounding.
Source: Budget of the United States Government, Fiscal Year 2010, Analytical Perspectives, Tables 3-2, 3-3 and 3-4
only significant increase in the FY 2010 Budget proposal
is in the area of Prevent and Disrupt Terrorist Attacks.
Economic Considerations
The current economy and predictions for the future
strongly influence the budget top line because the economy
significantly influences the estimates of federal receipts
and collections. The President, members of Congress and
most Americans want a balanced budget—wherein Outlays
equal receipts.
The material already presented in this section focuses
on the Budget and generally the Outlays, which is the
spending part of the equation. The forecast for the economy
is a key consideration in estimating the receipts part of
the equation.
Receipts, or revenue, are primarily a function of two
variables: the size of the economy and tax policy that draws
revenue from the economy. When the economy is strong
and growing, and tax policy remains constant, then revenue
or federal receipts increase. When the economy is weak and
tax policy remains constant, receipts go down. Tax policy
can be modified to generate revenue, but the President, Con-
gress, economists and academics, the business community
and American citizens have differing opinions about the
results of tax policy modification. One theory is that if the
economy remains constant and the tax policy is modified
to increase either the tax rates or the scope of applicability,
receipts will increase. An alternative theory is that if the
economy remains constant and the tax policy is modified to
decrease either the tax rate or the scope of applicability, the
additional money in the nongovernment sector will be spent
by people and businesses. Over time, this will stimulate the
economy and ultimately increase receipts.
Regardless of the economic theory, with no changes
in tax policy and a growing economy, receipts increase.
With greater receipts, it is easier to balance the budget
12
FY 2009 FY 2010
Supplement Enacted Supplement Request
3,126.7 30,739.8 2,142.9 33,048.4
685.0 31,359.8 1,027.3 31,380.3
60.0 6,507.6 210.0 6,378.9
3,871.7 68,607.2 3,380.2 70,807.6
or generate a surplus. The history of the late 1990s illus-
trates this point—a strong economy generated budget
surpluses. Clearly, the fiscal outlook is important to the
federal budget.
Since FY 2002, the federal budgets have generated a
string of deficits that peaked in FY 2004 at $413 billion,
decreased annually between FYs 2005 and 2007, grew by
nearly 300 percent in FY 2008, and grew by an additional
400 percent in FY 2009. The FY 2010 Budget estimates a
very large deficit of $1.258 trillion. See table 10.
Gross Domestic Product
The Gross Domestic Product is the measure of the
health of the U.S. economy. The GDP is the total market
value, or output, of the goods and services produced by
labor and capital located within the United States (regard-
less of nationality of the corporate entity) during a year.
The GDP became the unit of measure in 1991, replac-
ing the Gross National Product. The Bureau of Economic
Analysis (BEA) produces the GDP figures.
The FY 2010 Budget forecasts a 3 percent increase in
GDP over FY 2009. This follows an estimate of only 0.1
percent growth in FY 2009. The Budget forecasts con-
tinuing growth in GDP through FY 2014; however, the
rate of growth is smaller than the increases in government
Outlays. Therefore, the Budget displays annual increases
in the Gross Federal Debt, i.e., the sum of all annual defi-
cits offset by surpluses. See table 10.
Gross Federal Debt
The Gross Federal Debt (GFD) is the sum of all annual
deficits and surpluses across the fiscal years. A large GFD
impacts the national economy by causing the federal
government to borrow to meet Outlay requirements,
and later to service this debt. The annual surpluses and
deficits since FY 1985 and the cumulative GFD trends are
displayed in figure 2.
 Table 10

Gross Domestic Product and Annual Deficit

($ billions1)

Gross Federal Debt Annual Deficit/Surplus

Gross Domestic
Fiscal Year
Product Amount As % GDP Amount As % GDP

FY852 4,142 1,817 43.9% -212 -5.1%

FY90 2
5,735 3,206 55.9% -221 -3.9%
FY95 2
7,325 4,920 67.2% -164 -2.2%
FY002 9,708 5,629 58.0% 236 2.4%
FY012 10,060 5,770 57.4% 128 1.3%
FY02 2
10,378 6,198 59.7% -158 -1.5%
FY03 2
10,804 6,760 62.6% -377 -3.5%
FY04 2
11,504 7,355 63.9% -413 -3.6%
FY052 12,235 7,905 64.6% -318 -2.6%
FY062 13,010 8,451 65.0% -248 -1.9%
FY07 2
13,642 8,951 65.6% -161 -1.2%
FY08 2
14,222 9,986 70.2% -459 -3.2%
FY09 14,240 12,867 90.4% -1,841 -12.9%
FY10 14,729 14,456 98.1% -1,258 -8.5%
FY11 15,500 15,674 101.1% -929 -6.0%
FY12 16,470 16,566 100.6% -557 -3.4%
FY13 17,498 17,440 99.7% -512 -2.9%
FY14 18,368 18,350 99.9% -536 -2.9%
1
Numbers may not add due to rounding.
2
FY08 and earlier years are actual amounts. Remaining years are estimates.
Source: Budget of the United States Government, Fiscal Year 2010, Historical Tables 1.1, 7.1, and 10.1

The GFD for the last completed fiscal year (FY 2008)
was $9.986 trillion—an increase of more than $1 trillion
from FY 2007. The FY 2009 estimate is an increase of
another $3 trillion and the FY 2010 estimate is an increase
of $2.6 trillion.
The annual deficits and the resulting GFD are con-
cerns for several reasons. First, the federal government
borrows money to cover the deficit, then pays interest on
the amount it borrows. If revenues are not adequate to pay
the interest, then additional borrowing pays the interest
and adds to the annual deficit. The annual deficit increases
the GFD in a continuing spiral if unchecked by surpluses.
Second, the borrowing and interest payments divert capital
from productive uses in the economy. Thus, when the
government borrows, it takes money out of the economy;
arguably, this is not good for economic growth.
Balancing the Budget
Formulating a balanced budget is certainly the goal
of the government. However, there is no constitutional or
statutory mandate to balance the federal budget. Achiev-
ing a balanced budget requires controlling spending within
forecasts of receipts. Estimating comparable spending
and receipts is difficult—but getting it close from year to
year is good.
Receipts. Federal receipts are analogous to revenue in the
corporate world or personal income. See table 11 for data
on receipts and GDP.
Between FYs 1985 and 2000, federal receipts
increased at rates greater than GDP growth. By FY
2000, receipts were nearly 21 percent of GDP. However,
between FYs 2000 and 2005, GDP grew by 26 percent but
receipts increased by only 6 percent; between FYs 2005

The Federal Budget 13

 Figure 2

Federal Surplus/Debt and Deficit

($ billions1)

20,000

Gross Federal Debt

17,500

15,000

12,500

10,000

7,500

5,000

2,500

0 Annual Federal
Surplus/Deficit

-2,500
2

09

10

11

12

13

14
85

90

95

00

01

02

03

04

05

06

07

08
FY

FY

FY

FY

FY

FY
FY

FY

FY

FY

FY

FY

FY

FY

FY

FY

FY

FY

1
Numbers may not add due to rounding.
2
Actual expenditures; remaining years are estimates.
Source: Budget of the United States Government, Fiscal Year 2010, Historical Tables 1.1 and 7.1

and 2010, the estimate for GDP growth is 20 percent and
for receipts growth is 8 percent. The reductions in receipts
are due, in large part, to a weaker economy, a collapse in
capital gains because of the stock market downturn and
tax cuts.
The mix of revenue has changed somewhat since FY
2000, as shown in the FY 2000 distribution below:
• 50 percent from individual income taxes;
• 32 percent from Social Security receipts;

The Budget identifies four specific sources of receipts
plus “other.” The FY 2010 distribution is:
• 45 percent from individual income taxes;
• 40 percent from Social Security receipts;
• 8 percent from corporate income taxes;
• 3 percent from excise taxes; and
• 4 percent from other sources.
• 10 percent from corporate income taxes;
• 3 percent from excise taxes; and
• 5 percent from other sources.
Social Security receipts show an increase of 8 percent,
individual income taxes decrease by 5 percent and cor-
porate income taxes decrease by 2 percent. The current
receipts for Social Security exceed entitlement payments;
therefore, the federal government borrows from the
entitlement funds to meet current Outlay requirements.

14
 Table 11

Gross Domestic Product and Receipts

($ billions)

Gross Domestic Percentage Percentage Receipts as % of

Fiscal Year Receipts
Product (GDP) of increase2 of increase2 GDP
FY851 4,142 734 17.7%
FY90 1
5,735 38.5% 1,032 40.6% 18.0%
FY951 7,325 27.7% 1,352 31.0% 18.5%
FY001 9,708 32.5% 2,025 49.8% 20.9%
FY05 1
12,235 26.0% 2,154 6.4% 17.6%
FY06 1
13,010 2,407 18.5%
FY07 1
13,642 2,568 18.8%
FY08 1
14,222 2,524 17.7%
FY09 14,240 2,157 15.1%
FY10 14,729 20.4% 2,333 8.3% 15.8%
FY11 15,500 2,685 17.3%
FY12 16,470 3,075 18.7%
FY13 17,498 3,305 18.9%
FY14 18,368 3,480 18.9%
1
FY85–08 are actual amounts and include Title IX Supplementals. Remaining years are estimates.
2
Percentages for FY90, FY95, FY05, and FY10 are for the previous five years.
Source: Budget of the United States Government, Fiscal Year 2010, Historical Tables 1.1 and 10.1

Table 12

Federal Receipts and Estimates

($ billions1)

FY082 FY09 FY10 FY11 FY12 FY13 FY14

Individual Income Taxes 1,146 953 1,051 1,211 1,381 1,501 1,613
Social Security Receipts 900 899 940 995 1,052 1,115 1,167
Corporate Income Taxes 304 147 179 306 378 417 420
Excise Taxes 67 66 75 73 77 78 79
All Other 107 91 87 100 188 195 202
Total 2,524 2,156 2,332 2,685 3,076 3,306 3,481
1
Numbers may not add due to rounding.
2
FY08 are actual data. Remaining years are estimates.
Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 2.1

As more people become eligible for entitlements in the
future, the government will no longer be able to borrow
from Social Security receipts and, eventually, the other
general revenues will need to pay back all that has been
borrowed to keep Social Security solvent for as long as
possible. See table 12.
Spending. Spending is the focus of most budget analy-
ses and the focus of the DoD and Army chapters of this
book. Federal spending may be discretionary, mandatory
or interest payments.
• Discretionary Outlays are for what the President
proposes in the Budget and Congress provides
through the annual appropriations bills. Examples
include appropriations for defense, homeland secu-
rity, agriculture, commerce, foreign aid, justice and
law enforcement, education, housing, highway con-
struction, space exploration and more.
• Mandatory Outlays are controlled by permanent
law and are not provided annual appropriations, e.g.,
Social Security, Medicare and Medicaid. In addition,

The Federal Budget 15

 Figure 3

The Federal Government Dollars for FY 2010

($ billions*)

Where it Comes From: Where it Goes:

$ 1,051 45% Individual Income Taxes $ 1,394 39% Discretionary

$ 940 40% Social Insurance Receipts $ 707 20% National Defense
$ 179 8% Corporate Income Taxes $ 687 19% Non-Defense
$ 75 3% Excise Taxes
$ 87 4% Other $ 2,197 61% Mandatory
$ 696 19% Social Security
$ 2,332 Total Medicare
$ 452 13%
$ 290 8% Medicaid
$ 623 17% Other Entitlements
$ 136 4% Net Interest

$ 3,591 Total

* Numbers may not add due to rounding.

Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 2.1 and Summary Table S-4

some Budget Authority in annual appropriations is Borrowing and Interest

treated as mandatory when the authorization legisla-
tion either entitles beneficiaries who meet the legal
criteria for eligibility to receive payments or obli-
gates the federal government to make payments until
the law is amended or repealed.
• Interest Outlays are to meet obligations to those
holding federal debt instruments. The federal gov-
ernment pays interest when due.
The FY 2010 receipts and Outlay estimates are
expressed as percentages in figure 3 under “Where It
Comes From” and “Where It Goes,” respectively.
When spending exceeds receipts, the federal govern-
ment needs to borrow money to cover Outlays. The federal
government borrows money from other federal accounts,
such as Social Security, and from private sources through
the sale of debt instruments.
Prior to FY 2000, the largest percentage of the GFD
was held by the private sector. However, since 2000, the
government has been borrowing substantially from other
federal programs. The size and distribution of the GFD
leads to a number of concerns, among them that:
• other federal programs, which provide funds to
cover the GFD, will be unfunded in the future;

16
 Table 13

Gross Federal Debt by Source

($ billions1)

Amount in Federal Percentage

Fiscal Gross Amount Held Percentage Held
Government Held By Federal
Year Federal Debt by Public by Public
Accounts Government
FY852 1,817 310 17% 1,507 83%
FY902 3,206 795 25% 2,411 75%
FY952 4,921 1,316 27% 3,604 73%
FY00 2
5,629 2,219 39% 3,410 61%
FY01 2
5,770 2,450 42% 3,319 58%
FY02 2
6,198 2,658 43% 3,540 57%
FY03 2
6,760 2,847 42% 3,913 58%
FY04 2
7,355 3,059 42% 4,296 58%
FY05 2
7,905 3,313 42% 4,592 58%
FY06 2
8,451 3,622 43% 4,829 57%
FY07 2
8,951 3,916 44% 5,305 59%
FY08 2
9,986 4,183 42% 5,803 58%
FY09 12,867 4,336 34% 8,531 66%
FY10 14,456 4,574 32% 9,882 68%
FY11 15,674 4,801 31% 10,873 69%
FY12 16,566 5,097 31% 11,468 69%
FY13 17,440 5,413 31% 12,027 69%
FY14 18,350 5,755 31% 12,595 69%
1
Numbers may not add due to rounding.
2
FY85–FY08 are actual amounts. Remaining years are estimates.
Source: Budget of the United States Government, Fiscal Year 2010, Historical Table 7.1

• foreign governments, who hold a great deal of the
public debt instruments, may have increasing influ-
ence on the United States; and
• servicing the debt, i.e., making interest payments,
will consume tax receipts, either increase annual
deficit or reduce annual surplus, and deprive the
economy of more productive uses of that money.
A summary of the Gross Federal Debt and the funding
sources is in table 13.
The interest payments to service the GFD are a function
of both the amount of the GFD and interest rates. The GFD
increases with each deficit or decreases with each surplus,
but interest rates are independent of government action to
the extent that the Federal Reserve, an independent agency,
sets the prime rate that influences all other rates.
Even though the federal government began operat-
ing at a deficit in FY 2002, Outlays for interest continued
to decline for another two years. This is an indication of
the impact of low interest rates. See table 14 for interest
payments.
Interest payments, i.e., net interest as shown in table
14, decreased from year to year in FYs 2000 through 2004.
However, starting in FY 2005, interest payments increased
for three years. The FY 2008 experience was virtually the
same as that of FY 2007. The Budget estimates reductions
in interest payments for FYs 2009 and 2010. In part, this is
a function of exceptionally low interest rates.
The point of this analysis is that interest payments
take money away from homeland security, defense and
civilian programs to satisfy earlier debt. Clearly, this is
not a good situation.
Congressional Budget Office Estimates
Article 1, Section 8 of the Constitution gives Con-
gress the sole authority for laying and collecting taxes and

The Federal Budget 17

 Table 14 the deficits are much smaller than those of the President’s
Budget. A comparison of the President’s Budget and the
Interest as a Percentage of Outlays CBO estimates of the deficits is in table 15. The differences
($ billions)
between the President’s Budget and the CBO estimates are
Fiscal Interest as % a result of different spending and revenue assumptions.
Net interest Outlays
Year of Outlays
FY001 222.9 1,789.2 12.5% Observations
FY01 1
206.2 1,863.2 11.1% In his Budget transmittal letter, President Obama
FY021 170.9 2,011.2 8.5% states that he seeks stable and broad economic growth,
FY031 153.1 2,160.1 7.1% investments in education and renewable sources of energy,
health care reform and critical investments in rebuilding
FY04 1
160.2 2,293.0 7.0%
our military, securing our homeland and expanding our
FY05 1
184.0 2,472.2 7.4% diplomatic efforts.
FY06 1
226.6 2,655.4 8.5%
To remedy the recession, the President has proposed
FY07 1
237.1 2,728.9 8.7%
and Congress has provided various supplemental funds
FY081 252.8 2,982.9 8.5% to spur economic recovery. The federal government
FY09 2
142.7 3,997.8 3.6% will operate at a deficit at least until FY 2014; therefore,
FY10 135.9 3,591.1 3.8% the annual deficits will result in increases to the Gross
Federal Debt.
FY11 254.5 3,617.8 7.0%
FY12 348.8 3,632.7 9.6% The Budget estimates the following financial data for
FY13 411.6 3,817.5 10.8% FY 2010:
FY14 460.1 4,016.0 11.5% • $14.73 trillion for Gross Domestic Product;
1
FY00–08 are actual amounts and include Title IX Supplementals.
2
FY09 are appropriated amounts. Remaining years are estimates. • $2.33 trillion in receipts to federal government;
Source: Budget of the United States Government, Fiscal Year 2010,
Historical Table 6.1 • $1.37 trillion in discretionary Outlays:

for paying the debts. As part of the Congressional Budget
and Impoundment Control Act of 1974, Congress created
the Congressional Budget Office (CBO) as an agency
within the legislative branch to provide a neutral bench-
mark for measuring the effects of taxes and spending pro-
posals. The CBO produces an independent estimate of
receipts and outlays for the same years addressed in the
President’s Budget.
The differences are significant between the President’s
Budget and the CBO estimates of the deficits from FYs
2009 to 2014. In each of those years, the CBO estimates of
Table 15
◦ $673 billion in defense discretionary Outlays;
◦ $695 billion in non-defense discretionary Outlays;
• $2 trillion in mandatory Outlays;
• $164 billion in interest payments on the Gross Federal
Debt;
• a $1.26 trillion annual deficit; and
• $14.46 trillion for Gross Federal Debt.
As this data indicates, the GFD will nearly equal the
GDP. Low interest rates are holding interest payments

Comparisons of Deficit Estimates

($ billions)

FY081 FY09 FY10 FY11 FY12 FY13 FY14

President’s Budget 2
-459 -1,841 -1,258 -929 -557 -512 -536
Congressional Budget Office estimate of
-455 -1,186 -703 -498 -264 -257 -250
President’s Budget3
Difference between President’s Budget and
-0.8% -35.6% -44.1% -46.4% -52.6% -49.8% -53.3%
Congressional Budget Office estimates
1
FY08 are actual amounts. Remaining years are estimates.
Sources: 2 Budget of the United States Government, Fiscal Year 2010, Historical Table 1.1, 3 Congressional Budget Office Budget & Economic Outlook:
Fiscal Years 2009–2019, Table 4

18
down in absolute terms. In short, Americans should be
concerned about national prosperity.
Arguably, the United States needs to move from
annual deficits to surpluses; to do so, the government
needs to stimulate the economy. However, economics is
not a “hard” science—there are no absolute rules for stim-
ulating the economy.
The President’s Budget focuses on controlling dis-
cretionary Outlays and modifying mandatory programs.
However, controlling discretionary Outlays is very dif-
ficult because approximately 49 percent are for defense,
and this does not include supplemental funds to support
overseas contingency operations.
The other half of the deficit equation is receipts;
receipts are a function of the health of the economy and
taxing policy. The Budget estimates 3 percent growth
in GDP in FY 2010 and an 8 percent increase in federal
receipts. The federal government will take in receipts at a
rate greater than the growth of the economy. A couple of
questions come to mind: How much can the federal gov-
ernment take in before it becomes a drain on the economy?
And what is the fairest way of raising revenue, i.e., who
is to be taxed and at what rate? These are questions that
deserve serious discussion, bipartisan solutions and the
leadership to make it happen.
* * * * * *
The subsequent chapters of this analysis focus on the DoD
and Army budget proposals and what the funds will buy
and provide to the nation.

Endnotes
1
A New Era of Responsibility, Renewing America’s Promise, President’s Message, Office of Management and Budget,
26 February 2009, http://www.whitehouse.gov/omb/assets/fy2010_new_era/a_new_era_of_responsibility2.pdf.
2
Ibid.
3
Office of Management and Budget (OMB), Budget of the U.S. Government, Fiscal Year 2010, Presidential
Transmittal Letter, President Barack Obama, 7 May 2009, http://www.whitehouse.gov/omb/budget/Message.
4
OMB, Budget of the U.S. Government, Fiscal Year 2010.
5
Budget of the U.S. Government, Fiscal Year 2010, Analytical Perspectives, The Budget System and Concepts,
Table 25–1, “Totals for the Budget and the Federal Government,” http://www.gpoaccess.gov/usbudget/fy10/pdf/
spec.pdf. These numbers are the on-budget amounts, i.e., the total budget minus the off-budget amount (the budget
for entitlements such as Social Security and the U.S. Postal Service). The off-budget numbers are irrelevant to this
analysis.
6
President’s Budget for Fiscal Year 2010, Analytical Perspectives, Table 25–1.
7
Budget of the U.S. Government, Fiscal Year 2009, Analytical Perspectives, The Budget System and Concepts, Table
26–1, “Totals for the Budget and the Federal Government,” http://www.gpoaccess.gov/usbudget/fy09/pdf/spec.pdf.
8
President’s Budget for Fiscal Year 2010, Analytical Perspectives, Table 25–1.
9
Budget of the U.S. Government, Fiscal Year 2009, Analytical Perspectives.
10
A New Era of Responsibility: Renewing America’s Promise, “Jumpstarting the Economy and Investing for the
Future,” p. 30, http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf.
11
“Overseas contingency operations (OCO)” replaces the Bush administration’s term “Global War on Terror (GWOT).”
12
A New Era of Responsibility, p. 53.

The Federal Budget 19

20
 The Department of Defense Budget
Introduction
Robert M. Gates has been the Secretary of Defense for
more than two years,1 but his recommendation for the FY
2010 budget for the Department of Defense (DoD) was
a substantial departure from his prior recommendations.
In addition to the substantial changes, the budget submis-
sion was about three months later than normal because of
the change of presidential administration. The day before
releasing the budget, Secretary Gates took the unusual
step of describing his recommendations to the President:
The President agreed to this unorthodox
approach—announcing the department’s request
before the White House submits a budget to the
Congress—because of the scope and significance
of the changes. In addition, the President and I
believe that the American people deserve to learn
of these recommendations fully and in context,
as the proposed changes are interconnected and
cannot be properly communicated or understood
in isolation from one another. Collectively, they
represent a budget crafted to reshape the priorities
of America’s defense establishment. If approved,
these recommendations will profoundly reform
how this department does business.
In many ways, my recommendations represent
the cumulative outcome of a lifetime spent in the
national security arena and, above all, questions
asked, experience gained, and lessons learned
from over two years of leading this department—
and, in particular, from our experience in Iraq and
Afghanistan. I reached the final decisions after
many hours of consultations with the military
and civilian leadership of the department. I have
also consulted closely with the President. But, I
received no direction or guidance from outside
this department on individual program decisions.
The chairman and vice chairman of the Joint
Chiefs of Staff are in complete accord with these
recommendations. . . .
My decisions have been almost exclusively influ-
enced by factors other than simply finding a way
to balance the books or fit under the “top line”—
as is normally the case with most budget exer-
cises. Instead, these recommendations are the
product of a holistic assessment of capabilities,
requirements, risks and needs for the purpose of
shifting this department in a different strategic
direction. Let me be clear: I would have made
virtually all of the decisions and recommenda-
tions announced today regardless of the depart-
ment’s top-line budget number.2
Similarly, any increase in the defense budget without
an increase in revenue is a dollar not available to take care
of domestic requirements. Without an increase in revenue,
both the federal and the DoD budgets are essentially zero
sum games.
The DoD Budget and the Federal Conundrum
The demands for federal funds—particularly discre-
tionary funds—are great, but funds are not unlimited. DoD
consumes approximately half of the discretionary budget,
as it supports both the troops fighting overseas and actions
to restore military capabilities after eight years of conflict.
The non-defense discretionary funds support all of the
domestic program requirements, excluding entitlements.
If resources are inadequate—whether for defense or
non-defense—the options are:
• reduce the scope of what is to be accomplished;
• identify alternative, less resource-intense means;
• add more resources; or
• some combination of these options.
None of these options are attractive to those charged
with the responsibility for accomplishing the missions or
implementing the programs, nor to some elected officials,
nor to advocate groups who support or oppose the mission
or programs.
The Department of Defense Budget 21
 This chapter of the budget analysis examines the DoD Figure 4
budget in terms of what the funding is for and funding
trends. Given the size, scope and diversity of the DoD National Defense Budget Authority
($ billions)
budget, the analysis does not examine the tens of thou-
sands of details that are aggregated into the funding pro- 696.2 693.6 692.7
posals, as the various DoD budget submissions contain 700
30.3
more than 38,000 pages of material.3 Rather, this analysis
107.0
sheds some light at the macro level on whether the budget 600 158.9
is sufficient considering both the scope of what is to be
accomplished and the resource trends.
500
Budget Priorities and Resources
The budget was made public on 7 May 2009; the 400
accompanying DoD news release notes that the budget 665.9
proposes $663.8 billion for FY 2010. The total includes 300 586.6
$533.8 billion in discretionary budget authority to fund 533.8
base defense programs and $130 billion to support over-
200
seas contingency operations (OCOs), primarily in Iraq
and Afghanistan. DoD also notes that the base budget
represents an increase of $20.5 billion over the $513.3 100
billion enacted for FY 2009, an increase of 4 percent, or
2.1 percent real growth after adjusting for inflation.4  0

The news release observes that the base budget ends
the planned use of supplemental requests to fund over-
seas operations; rather, funds for overseas operations are
in “a separate category in the annual budget request to
ensure greater transparency and accountability to Con-
gress and the American people.” The base budget also
requests funds for other programs that were previously
in supplemental requests, e.g., for support of military
families and providing long-term medical care to injured
servicemembers.
The news release includes figure 4, which shows
$158.9 billion for mandatory, emergency and additional
national defense dollars. However, the news release and
other budget documents state that $130 billion is for support
for OCO, leaving $28.9 billion for mandatory, other emer-
gency and additional national defense funding needs.
Strategic Goals
In determining the content of the budget, Secretary
Gates states that he focused on three principal objectives:
First, to reaffirm our commitment to take care of
the all-volunteer force, which, in my view repre-
sents America’s greatest strategic asset.
Second, we must rebalance this department’s
programs in order to institutionalize and enhance
our capabilities to fight the wars we are in today
and the scenarios we are most likely to face in the
FY08 FY09 FY10
Department of Defense Discretionary
Budget Authority
Mandatory, Emergency and National
Defense Budget Authority
Source: Department of Defense National Defense Budget Estimates
for FY 2010 (Green Book), Office of the Under Secretary of Defense
(Comptroller), June 2009
years ahead, while at the same time providing a
hedge against other risks and contingencies.
Third, in order to do this, we must reform how
and what we buy, meaning a fundamental over-
haul of our approach to procurement, acquisition,
and contracting.5
Consistent with these objectives, the DoD budget
includes the following:
Commitment to troops and their families. The budget
includes an increase in base budget funding of $13
billion, including:
• an $11 billion increase to fund the growth in military
endstrength in the Army and Marine Corps, and to
halt reductions in the Air Force and Navy;
• a $400 million increase to continue the steady
growth in medical research and development;
• a $300 million increase in funding for wounded, ill
and injured, traumatic brain injury and psychological

22
 health programs; the department will spend over $47
billion on health care in FY 2010; and
• a $200 million increase for improvements in child
care, spousal support, lodging and education.  necessary and to protect American interests and allies, the
Rebalancing for contemporary wartime needs. The
budget includes:
• a $2 billion increase in intelligence, surveillance
and reconnaissance (ISR) support for the
warfighter, including:
◦ fielding and sustaining 50 Predator-class
unmanned aerial vehicle orbits by FY 2011
and maximizing their production, a 62 percent
increase in capability over the current level and
127 percent more than a year ago;
◦ increasing manned ISR capabilities such as the
turbo-prop aircraft deployed so successfully as
part of Task Force Odin in Iraq; and
◦ initiating research and development on a number
of ISR enhancements and experimental plat-
forms optimized for today’s battlefield.
• $500 million more to increase the capacity to field
and sustain more helicopters; today, the primary
limitation on helicopter capacity is not airframes
but shortages of maintenance crews and pilots, thus
these funds focus on recruiting and training more
helicopter crews;
• a $500 million increase to boost global partnership
capacity, including training and equipping foreign
militaries to undertake counterterrorism and stability
operations;
• an increase of 2,800 personnel, or 5 percent growth,
in special operations capabilities and funding to buy
more special forces-optimized lift, mobility and refu-
eling aircraft, including increasing the purchasing of
Littoral Combat Ships (LCSs)—a key capability for
presence, stability and counterinsurgency operations
in coastal regions—from two to three ships in FY
2010. The goal is to eventually acquire 55 LCSs;
• an increase in the charter of Joint High Speed Vessel
(JHSV) ships—to improve inter-theater lift capac-
ity—from two to four until the production program
begins deliveries in 2011; and
• stopping the growth of Army brigade combat teams
(BCTs) at 45 versus 48 while maintaining the
planned increase in endstrength of 547,000 to ensure
better-manned units are ready to deploy and to help
put an end to the routine use of stop-loss.
Rebalancing to deter aggression. To project power when
budget:
• increases the number of F-35 Joint Strike Fighters
from the 14 aircraft bought in FY 2009 to 30 in FY
2010, from $6.8 billion to $11.2 billion; the plan is
to buy 513 F-35s over the five-year defense plan
and, ultimately, to buy 2,443 aircraft. The budget
also includes the purchase of 31 FA-18s in FY 2010
for naval aviation;
• retires 250 of the oldest Air Force tactical fighter air-
craft in FY 2010;
• ends production of the F-22 fighter at 187 (183
planes plus four recommended for inclusion in the
FY 2009 supplemental);
• adds $700 million to field more of the United States’
most capable theater missile defense systems, spe-
cifically the Terminal High Altitude Area Defense
(THAAD) System and Standard Missile 3 (SM-3)
programs;
• adds $200 million to fund the conversion of six addi-
tional Aegis ships to provide ballistic missile defense
capabilities;
• increases the number of cyber experts the depart-
ment can train from 80 students per year to 250 per
year by FY 2011;
• maintains the KC-X aerial refueling tanker schedule
and funding; and
• modifies nuclear and strategic forces by:
◦ beginning the replacement program for the
Ohio-class ballistic missile submarine program;
◦ halting the pursuit of a development program
for a follow-on Air Force bomber until we
have a better understanding of the need and the
technology;
◦ examining all strategic requirements during
the Quadrennial Defense Review, the Nuclear
Posture Review and in light of post-START arms
control negotiations;
◦ slowing production of several major surface
combatants and other maritime programs
because of the healthy margin of dominance of
the existing battle fleet at sea;
The Department of Defense Budget 23
 ◦ shifting the Navy Aircraft Carrier program to a
five-year build cycle, placing it on a more fis-
cally sustainable path and resulting in 10 carriers
after 2040;
◦ delaying the Navy CG-X next-generation cruiser
program to revisit both the requirements and the
acquisition strategy;
◦ delaying amphibious ship and sea-basing pro-
grams such as the 11th Landing Platform Dock
(LPD) ship and the Mobile Landing Platform
(MLP) ship to FY 2011 to assess costs and
analyze the amount of these capabilities the
nation needs; and
◦ completing production of the C-17 airlifter
program this fiscal year with the 205 already in
the force and those currently in production.  increasing the size of the defense acquisition workforce,
Acquisitions and acquisition processes. Secretary Gates
recommends reforming the acquisition process to elimi-
nate the contracting cycle of adding layer upon layer of
cost and complexity onto fewer platforms that take longer
to build. Regarding certain acquisitions, the budget:
• terminates the VH-71 presidential helicopter—the
program was to cost $6.5 billion and is now esti-
mated to cost more than $13 billion, and it has fallen
six years behind schedule;
• terminates the Air Force Combat Search and Rescue
X (CSAR-X) helicopter program;
• terminates the $26 billion Transformational Satel-
lite (TSAT) program, and instead will purchase two
more Advanced Extremely High Frequency (AEHF)
satellites as alternatives;
• modifies missile defense by:
◦ restructuring the program to focus on the rogue
state and theater missile threat;
◦ halting the increase of the number of current
ground-based interceptors in Alaska as had
been planned, but continuing to robustly fund
research and development to improve the capa-
bility we already have to defend against long-
range rogue missile threats;
◦ canceling the second airborne laser (ABL) pro-
totype aircraft, keeping the existing aircraft and
shifting the program to a research and develop-
ment effort;
◦ terminating the Multiple Kill Vehicle (MKV)
program because of its significant technical
24
challenges and the need to take a fresh look at
the requirement; and
◦ reducing the Missile Defense Agency program
by $1.4 billion.
• completes the purchase of two navy destroyers in FY
2010, on the condition that contract arrangements
can be worked out; and
• cancels the vehicle component of the Army’s Future
Combat Systems (FCS) program, reevaluates
the requirements, technology and approach, then
relaunches the Army’s vehicle modernization pro-
gram—including a competitive bidding process—to
meet the needs of the full spectrum of conflict.
The budget supports the acquisition goal, in part, by
converting 11,000 contractors and hiring an additional
9,000 government acquisition professionals by 2015,
beginning with 4,100 in FY 2010.
Beyond the acquisition workforce, the budget also
reduces the number of support service contractors from
39 percent of the workforce to the pre-2001 level of 26
percent and replaces them with full-time government
employees. The goal is to hire as many as 13,000 new
civil servants in FY 2010 to replace contractors and up to
30,000 new civil servants in place of contractors over the
next five years.
Chairman of the Joint Chiefs of Staff Admiral Mike
Mullen summarized his observations on the budget:
Some will argue this budget devotes too much
money to these sorts of low-intensity needs, that
it tilts dangerously away from conventional capa-
bilities. It does not. A full 35 percent of the sub-
mission is set aside for modernization, and much
of that will go to what we typically consider
conventional requirements.  It fully funds the
Joint Strike Fighter and F-18E/F Super Hornet
programs, buys another Arleigh Burke-class
destroyer, a nuclear submarine, and a third DDG-
1000 [destroyer]. It invests $11 billion in space-
based programs, including funding for the next-
generation early-warning satellite, and it devotes
$9 billion towards missile defense.
Ground capabilities are likewise supported, with
$3 billion going towards a restructured FCS
program and upgrades to the Abrams and Stryker
weapons systems.6 
Budget Analysis – Top Line
The top-line budget analysis focuses on the budget
totals. The budget process almost always begins with
receiving or setting an upper funding target, then priori-
tizing the requirements to fit within the target. As noted
earlier, Secretary Gates did not follow the normal approach
with this budget, saying he “would have made virtually all
of the decisions and recommendations announced today
regardless of the department’s top-line budget number.”7
This budget was built from the objectives and pri-
orities introduced above; the result is a top line. The FY
2010 news release includes a top-line figure that displays
the base and supplement budgets from FYs 2001 to 2010.
Figure 5
The figure also presents the difference between nominal
growth (current year dollars) and real growth (constant
dollars). See figure 5.
Secretary Gates has previously described the budget
as “staggering” and causing “sticker shock.”8 The cumu-
lative expenditure of $800 billion for the war and the pro-
posal for $684 billion in FY 2010 is certainly staggering—
perhaps even more so with the current economic crisis.
Support for Troops in the Field
Since 11 September 2001, Congress has appropriated
more than $800 billion for overseas contingency opera-
tions. For FY 2009, President Bush requested $141.7
billion but Congress appropriated $65.9 billion; with the

Department of Defense Top Line FY 2001–FY 2010

($ billions)

700 667 662 664

601 76
600 130
187
535
66

479 166 –7
500 468
116
38% 437
Real Growth
–3
80% 76 –8
400
Growth 91 –3
72
345
316 –17
–13
300 6
513 534
480
411 432
200 400
365 377
328
297

100

0
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

Base Budget Non-War Supplementals War Funding Request

War Funding Base Budget Request Base top line in FY09

Constant Dollars

Source: “DoD Releases Fiscal 2010 Budget Proposal,“ U.S. Department of Defense News Release No. 304-09, 7 May 2009

The Department of Defense Budget 25

current budget, President Obama requested the remaining
$75.8 billion to support U.S. forces in combat. In addition,
the Defense budget requests $130 billion for FY 2010.
Secretary Gates observed, “Our contemporary
wartime needs must receive steady long-term funding
and a bureaucratic constituency similar to conventional
modernization programs. I intend to use the FY10 budget
to begin this process.”9
Approximately 83 percent of the supplemen-
tal—$108.5 billion—is for continuing the fight; this
includes $74.1 billion for operations and $34.4 billion for
force protection, defeating improvised explosive devices,
etc. Another $17.6 billion is for reconstitution of the force
as a result of the nearly eight years of continuous combat.
See figure 6. A display of OCO funds by appropriation
title is in table 16.
The continuous war has put a strain on servicemem-
bers and equipment. Accordingly, Secretary Gates is
clearly focusing on the needs of the fighting forces and
reshaping the budget accordingly. In his own words,
“. . . this budget presents an opportunity—one of those
rare chances to match virtue to necessity.”10
Budget Titles and Service Analyses
DoD involves thousands of organizations, functions
and programs. Most of the organizations prepare budget
requests that are aggregated through their vertical chains-
of-command. The Department of Defense:
• trains and maintains a fighting force of 2.2 million
Soldiers, Sailors, Airmen and Marines;
• employs a highly dedicated workforce of 700,000
civilian personnel with a wide range of professions
and technical skills;
• provides world-class health care for 9.2 million eli-
gible servicemembers, families and retirees;
• procures and maintains an arsenal of the world’s
most advanced weapon systems;
• maintains 545,000 facilities at 5,300 sites in the
United States and around the globe; and
• maintains vital intelligence capabilities.
The budget details for military and civilian pay, ben-
efits, equipment acquisition and maintenance, training,
maintenance of facilities and real property, etc., across the
organizations are aggregated into appropriations, which are
the typical focus of budgeting within the military depart-
ments. The appropriations from across the services and
26
other Defense activities are aggregated into eight budget
titles—groupings of like appropriations from among the
approximately 75 DoD appropriations. Each budget title
reflects the specific purpose for the funds and is subject
to different legal and regulatory constraints, including
various time periods for obligating the funds. The annual
appropriations acts use the following budget titles:
• Military Personnel (MILPERS);
• Operation and Maintenance (O&M);
• Procurement;
• Research, Development, Test and Evaluation
(RDT&E);
• Military Construction (MILCON);
• Family Housing;
• Revolving and Management Funds; and
• Other Related Agencies.11
This section of the analysis examines the budget in
terms of budget titles and military services, current and
constant dollars and percentage of distribution. The sub-
headings for the top-line analysis are:
• title in current dollars;
• title in constant dollars;
• title by percentage of distribution;
• service and Defensewide—current dollars;
• service and Defensewide—constant dollars; and
• service and Defensewide—percentage of distribution.
Current dollars are a measure of spending or revenues
in a given year that has not been adjusted for differences
in prices (such as inflation) between that year and a base
year. Constant dollars are a measure of spending (or rev-
enues) in a given year that has been adjusted for differ-
ences in prices (such as inflation) between that year and
a base year.
The analyses begin with data from FY 1985 and
continue to FY 2000 at five-year intervals, and annually
thereafter. The purpose of this data is to reflect:
• the Reagan buildup (FY 1985);
• the final year of the Cold War (FY 1990);
• the drawdown for the peace dividend (FY 1995);
• the new post-Cold War baseline (FY 2000); and
• four years into contingency operations against terror-
ists (FY 2005).
 Figure 6

FY 2010 Overseas Contingency Operations

($ billions)

Commander’s Emergency Response Program Non-DoD Classified

$1.5 billion $3.9 billion
Pakistan Counterinsurgency Capability
$0.7 billion
Military Intelligence
$4.7 billion
Operations Force Protection
$74.1 billion $15.2 billion

Continuing the Fight

$108.5 billion
Improvised Explosive Device Defeat
$1.5 billion
Afghan National Security Forces
$7.5 billion
Coalition Support
$1.9 billion
Military Construction Reconstruction
Total: $130.0 billion $1.4 billion $17.6 billion

Source: “DoD Releases Fiscal 2010 Budget Proposal,“ U.S. Department of Defense News Release No. 304-09, 7 May 2009

Table 16

Overseas Contingency Operations by Appropriation

($ billions)

FY09 FY10
$ change % change
Enacted Request1 Total Request
from FY09 from FY09
Military Personnel 1.2 16.7 17.9 13.6 -4.3 -23.9%
Operation & Maintenance (O&M) 55.2 34.2 89.4 89.1 -0.3 -0.4%
Procurement 6.6 21.8 28.4 21.4 -7.0 -24.6%
Research, Development, Test and Evaluation 0.0 0.4 0.4 0.2 -0.2 -46.5%
Military Construction (MILCON) 0.0 2.1 2.1 1.4 -0.7 -33.8%
Revolving and Management Funds 0.0 0.8 0.8 0.4 -0.4 -53.1%
Subtotal 63.0 76.0 139.0 126.1 -12.9 -9.3%
Additional Request and Non-DoD Classified 2,3
2.9 3.1 6.1 3.9 -2.2 -36.1%
Subtotal 65.9 79.2 145.1 130.0 -15.1 -10.4%
Cancellation of Base Funding (Fuel Savings) 1
0.0 -2.9 -2.9 0.0 2.9 -100.0%
Cancellation of Base Funding (Procurement) 1
0.0 -0.5 -0.5 0.0 0.5 -100.0%
Total 65.9 75.8 141.7 130.0 -11.7 -8.3%
1
Additional request includes $3.4 billion cancelled from the base budget.
2
FY09 includes requested reappropriation of $181.5 million from O&M, Defensewide, to MILCON, Defensewide, to fund National Security Agency (NSA)
project.
3
FY10 includes $6.6 million for a classified NSA MILCON project.
Source: DoD FY 2010 Budget Request Summary Justification, Overview, pp. 5–18

The Department of Defense Budget 27

 The constant-dollar tables provide insights into
changes in buying power at various points in time;
the percentage tables provide insights into priorities at
various points in time.
DoD Budget by Title – In Current Dollars
The military services and the various Defensewide
activities prepare budgets using the appropriation struc-
ture; DoD summarizes the appropriations from across the
services and Defensewide agencies into the budget titles,
which are functional groupings. For example, the Military
Personnel (MILPERS) title includes the military pay and
benefits appropriations for all active and reserve military
servicemembers from all military services. Current and
selected historical data, in current or “then year” dollars,
are in table 17.
In the 15 years between FYs 1985 and 2000, the total
Budget Authority increased by only 1 percent; in the 11
years between FYs 2000 and 2010, the total increases by
85 percent. However, the FY 2010 total BA is for the
base budget only and does not include emergency sup-
plemental funds. The budget data from FY 2001 to FY
2008 includes supplemental funds; the FY 2009 amount
includes enacted supplemental funds but not other
requested supplemental funds. Therefore, comparisons
of FY 2010 and even FY 2009 funds with earlier experi-
ences need to be qualified.
With the $130 billion supplemental request and the
$537 billion baseline for FY 2010 (table 16), the total is
Table 17
$667 billion; this is very close to the $673 billion experi-
ence in FY 2008.
DoD Budget by Title – In Constant Dollars
The use of constant dollars for comparisons of data
over long periods of time allows for comparisons of con-
sistent buying power. For example, the change in the
total BA between FYs 1985 and 2010 is an 87.6 percent
increase in current dollars but a 3.9 percent decrease in
constant dollars.
Neither the FY 1985 nor the FY 2010 dollars include
funding for war operations; therefore, the compari-
son is “apples to apples.” However, the FY 1985 data
include funds for post-Vietnam restoration and a military
endstrength that was 50 percent larger than today. See
table 18.
The reduction in constant dollars and, therefore,
buying power of nearly 4 percent between FYs 1985 and
2010 does not apply uniformly across all budget titles.
The change in buying power for the four largest budget
titles is a decrease of 9 percent for Military Personnel;
an increase of 16 percent for Operation and Maintenance
(O&M); a decrease of 35 percent for Procurement and an
increase of 42 percent for RDT&E.
DoD Budget by Title – Percentage Distribution
Converting the dollar amounts for each title to a per-
centage of the distribution by fiscal year provides insights
into shifting priorities across time. Table 19 presents the

Department of Defense Budget Authority by Title – Current Dollars

($ billions1)

FY852 FY902 FY952 FY002 FY052 FY062 FY072 FY082 FY093 FY104
Military Personnel 67.8 78.9 71.6 73.8 121.3 128.5 131.8 139.0 129.8 141.1
Operation and Maintenance 77.8 88.4 93.7 108.7 179.2 213.5 240.3 256.2 240.1 186.3
Procurement 96.8 81.4 43.6 55.0 96.6 105.4 133.8 165.0 109.8 107.4
Research, Development, Test and
31.3 36.5 34.5 38.7 68.8 72.9 77.5 79.6 80.2 78.6
Evaluation
Military Construction 5.5 5.1 5.4 5.1 7.3 9.5 14.0 22.1 24.1 21.0
Family Housing 2.9 3.1 3.4 3.5 4.1 4.4 4.0 10.3 1.9 3.1
Other 4.7 -0.4 3.4 5.6 6.6 2.3 0.9 1.3 2.1 0.4
Total Budget Authority, DoD 286.8 293.0 255.7 290.5 483.9 536.5 602.2 673.5 588.0 537.9
1
Numbers may not add due to rounding.
2
FY85 to FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was
requested again with the FY 2010 budget.
4
FY10 excludes OCO budget proposal.
Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller),
June 2009, Table 6-8

28
 Table 18

Department of Defense Budget Authority by Title – Constant Dollars

($ billions1)

FY852 FY902 FY952 FY002 FY052 FY062 FY072 FY082 FY093 FY104
Military Personnel 155.6 155.6 119.1 103.4 140.3 146.7 132.8 141.1 129.8 141.1
Operation and Maintenance 160.3 156.0 147.7 150.7 204.5 263.8 244.7 186.3 240.1 186.3
Procurement 165.3 116.9 56.3 66.5 105.6 169.6 111.4 107.4 109.8 107.4
Research, Development, Test and
55.4 54.1 45.7 47.4 75.9 81.8 81.2 78.6 80.2 78.6
Evaluation
Military Construction 9.8 7.6 7.2 6.3 7.9 22.7 24.4 21.0 24.1 21.0
Family Housing 5.1 4.7 4.4 4.3 4.5 2.9 3.9 2.0 1.9 3.1
Other 8.0 -0.6 4.7 6.8 7.4 9.0 0.2 1.5 2.1 0.4
Total Budget Authority, DoD 559.5 494.3 385.1 385.4 546.1 696.5 598.6 537.9 588.0 537.9
1
Numbers may not add due to rounding.
2
FY85 to FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was
requested again with the FY 2010 budget.
4
FY10 excludes OCO budget proposal.
Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller),
June 2009, Table 6-8

current dollars by title as a percentage of the total dollars
for each fiscal year.
Since FY 1990, the O&M title has consistently con-
sumed the greatest percentage of the budget. The percent-
age for O&M in FY 2010 is low in comparison to recent
experience, but the FY 2010 amount does not include the
substantial supplemental funds that are largely in O&M.
Perhaps the most troubling trend is in Research,
Development and Acquisition (RDA)—the combination
Table 19
of Procurement and RDT&E. In FY 1985, RDA was
nearly 45 percent, but in FY 2010 RDA is slightly less
than 35 percent.
DoD Budget by Service and Defensewide –
Current Dollars
A top-level review of the DoD budget by service
also provides some insights into the means available to
provide for the national defense. The review by service
also includes current dollars, constant dollars and

Department of Defense Budget Authority by Title as Percentage of Annual Total

FY851 FY901 FY951 FY001 FY051 FY061 FY071 FY081 FY092 FY103
Military Personnel 23.6% 26.9% 28.0% 25.4% 25.1% 24.0% 21.9% 20.6% 22.1% 26.2%
Operation and
27.1% 30.2% 36.6% 37.4% 37.0% 39.8% 39.9% 38.0% 40.8% 34.6%
Maintenance
Procurement 33.8% 27.8% 17.1% 18.9% 20.0% 19.6% 22.2% 24.5% 18.7% 20.0%
Research,
Development, Test 10.9% 12.5% 13.5% 13.3% 14.2% 13.6% 12.9% 11.8% 13.6% 14.6%
and Evaluation
Military Construction 1.9% 1.7% 2.1% 1.8% 1.5% 1.8% 2.3% 3.3% 4.1% 3.9%
Family Housing 1.0% 1.1% 1.3% 1.2% 0.8% 0.8% 0.7% 1.5% 0.3% 0.6%
Other 1.6% -0.1% 1.3% 1.9% 1.4% 0.4% 0.1% 0.2% 0.4% 0.1%
1
FY85 to FY08 are actual expenditures.
2
FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was
requested again with the FY 2010 budget.
3
FY10 excludes OCO budget proposal.
Source: Calculated from Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense
(Comptroller), June 2009, Table 6-8

The Department of Defense Budget 29

the percentage distribution annually. The service and
Defensewide data in current dollars are in table 20.
Between the FY 1985 budget (reflecting the rebuild-
ing of defense forces), and the FY 1995 budget (reflect-
ing the post-Cold War peace dividend), the DoD budget
decreased by 11 percent overall, but the decreases in the
services was greater because of the 195 percent increase for
Defensewide agencies. The Defensewide increase reflects
programmatic transfers from the services. Between FYs
1985 and 1995, Army funds decreased by 14.8 percent,
Navy/Marine Corps funds by 22.3 percent and Air Force
funds by 25.7 percent. Defensewide activities had the
only increase, but a substantial one, at 195 percent.
Between FYs 1995 and 2000, the national leadership
was concerned that the reduction had gone too far, and
DoD experienced a 14 percent increase in funding that
was shared nearly equally among the services:
• Army – 15.6 percent;
• Navy/Marine Corps – 15.5 percent;
• Air Force – 12.4 percent; and
• Defensewide activities – 9.4 percent.
In the eight years between FYs 2000 and 2008 (the
last year of actual data that includes supplemental funds),
the Defense budget increases 131 percent. The Army
received more than twice as much as the other services,
which is consistent with the land wars in Afghanistan and
Iraq:
• Army – 241.7 percent;
• Navy/Marine Corps – 86.1 percent;
• Air Force – 90.0 percent; and
Table 20
• Defensewide activities – 120.2 percent.
The FY 2010 Budget Authority proposal for the base
budget is $537.9 billion, or 20 percent below the FY 2008
actual expenditures. Without the supplemental funds, the
difference is catastrophic for the Army, but not so for the
other services:
• Army – a decrease of 43.9 percent;
• Navy/Marine Corps – a decrease of 5.6 percent;
• Air Force – a decrease of 8.5 percent; and
• Defensewide activities – an increase of 3.1 percent.
Without supplemental funds, the base proposal for the
Army is $110 billion below the FY 2008 actual expendi-
tures. The rest of DoD is only $26 billion below the FY
2008 experience. The supplemental proposal for FY 2010
is $130 billion, or just about the FY 2008 experience (the
distribution of the supplemental request is unavailable).
This comparison highlights the Army’s critical depen-
dence on supplemental funds. However, dependence
on supplemental funding is not good for any number of
reasons; one is that supplemental funds sometimes come
late in the fiscal year, which seriously impacts most man-
agement decisions, including training and readiness. Sub-
mitting the supplemental budget with the base budget
may remedy this problem.
DoD Budget by Service and Defensewide –
Constant Dollars
Constant dollars reflect real buying power and, there-
fore, provide more accurate insights across time. However,
constant dollars do not reflect programmatic changes. The
difference between current and constant dollars for FYs

Department of Defense Budget Authority by Component – Current Dollars

($ billions1)

FY852 FY902 FY952 FY002 FY052 FY072 FY082 FY093 FY104

Army 74.3 78.5 63.3 73.2 152.8 218.5 250.1 185.3 140.3
Navy/Marine Corps 99.0 99.9 76.9 88.8 131.7 150.3 165.3 155.6 156.1
Air Force 99.4 92.9 73.9 83.1 127.9 148.9 157.9 149.5 144.4
Defensewide 14.1 21.7 41.6 45.5 71.5 84.5 100.2 97.6 97.1
Total Budget Authority, DoD 286.8 293.0 255.7 290.5 483.9 602.2 673.5 588.0 537.9
1
Numbers may not add due to rounding.
2
FY85 to FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was
requested again with the FY 2010 budget.
4
FY10 excludes OCO budget proposal.
Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller),
June 2009, Table 6-10

30
1985 to 2010 is dramatic, as demonstrated by the DoD
totals: in current dollars, the DoD budget increases by $250
billion annually, or 88 percent; in constant dollars, the DoD
budget decreases by nearly $22 billion, or 4 percent.
These comparisons do not reflect adjustments for sub-
stantive programmatic changes; e.g., between FYs 1985
and 2010, military endstrength decreased by 723,000, or
33 percent, and this suggests a decrease in military pay—
particularly in constant dollars. See table 21 for funding
by service in constant dollars.
In the eight years between FYs 2000 and 2008, the
actual experience, including the supplemental war funds,
reflects an 81 percent increase in constant dollars. The
Army received more than twice as much as the other ser-
vices, which is consistent with the ongoing land wars in
Afghanistan and Iraq.
Between FYs 2000 and 2008, the increases per service
in constant dollars are:
• Army – 168 percent;
• Navy/Marine Corps – 46 percent;
• Air Force – 49 percent; and
• Defensewide – 66 percent.
A comparison of FY 2008 (the last year of actual
experience) and the FY 2010 budget proposal (without
supplemental funds) reflects a decrease in buying power
of 23 percent. However, the decrease in buying power for
the Army is much greater than for the other services:
• Army – 45 percent;
• Navy/Marine Corps – 9 percent;
• Air Force – 11 percent; and
Table 21
• Defensewide – 8 percent.
A reduction of 45 percent in buying power in two
years would be catastrophic for the Army.
DoD Budget by Service and Defensewide –
Percentage Distribution
The percentage analysis provides another way of
comparing the distribution among the services. Between
FYs 1985 and 1995, approximately 11 percent of the dis-
tribution shifts from the services to Defensewide agen-
cies. From FY 1995 to FY 2000, the distribution remains
constant. After FY 2000, the distribution among the ser-
vices changes; the Army shifts from the smallest to the
largest percentage of the budget—except for the FY 2010
base budget. See table 22.
Military Forces
The military services—Army, Navy and Marine
Corps and Air Force (and during time of war, the Coast
Guard)—organize, recruit, equip, train, maintain, supply
and mobilize and demobilize the military forces. The ser-
vices produce and provide military forces to the Unified
Combatant Commands (UCCs).
Combatant Commands
The Unified Combatant Commands or combatant
commands operate joint task forces of components from
two or more services with a broad and continuing mission.
The combatant commanders are responsible for integrat-
ing and synchronizing ready combat and support forces to
execute the assigned missions.
DoD has 10 UCCs as specified in Title 10 and the latest
annual Unified Command Plan (UCP). The UCP establishes

Department of Defense Budget Authority by Component – Constant Dollars

($ billions1)

FY852 FY902 FY952 FY002 FY052 FY082 FY093 FY104

Army 150.9 136.7 97.1 96.6 171.8 258.8 188.4 140.3
Navy/Marine Corps 191.9 167.9 114.1 116.6 147.6 170.6 158.2 156.1
Air Force 189.7 155.8 110.0 108.8 143.3 161.7 151.9 144.4
Defensewide 27.0 33.9 63.9 63.4 83.4 105.4 100.1 97.1
Total Budget Authority, DoD 559.5 494.3 385.1 385.4 546.1 696.5 598.6 537.9
1
Numbers may not add due to rounding.
2
FY85 to FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was
requested again with the FY 2010 budget.
4
FY10 excludes OCO budget proposal.
Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller),
June 2009, Table 6-10

The Department of Defense Budget 31

 Table 22

Department of Defense Budget Authority by Component as Percentage of Annual Total

FY851 FY901 FY951 FY001 FY051 FY071 FY081 FY092 FY103

Army 25.9% 26.8% 24.8% 25.2% 31.6% 36.3% 37.1% 31.5% 26.1%
Navy/Marine Corps 34.5% 34.1% 30.1% 30.6% 27.2% 25.0% 24.5% 26.5% 29.0%
Air Force 34.7% 31.7% 28.9% 28.6% 26.4% 24.7% 23.4% 25.4% 26.8%
Defensewide 4.9% 7.4% 16.3% 15.7% 14.8% 14.0% 14.9% 16.6% 18.1%
1
FY85 to FY08 are actual expenditures.
2
FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was
requested again with the FY 2010 budget.
3
FY10 excludes OCO budget proposal.
Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller),
June 2009, Table 6-10

the missions and geographic responsibilities among the
combatant commanders. Currently there are six regional
UCCs—i.e., responsible for a geographical area or area of
responsibility (AOR)—and four functional UCCs, such as
U.S. Special Operations Command (USSOCOM).
The military services provide the funding for their
forces under UCC command, except for some O&M funds
for each UCC and USSOCOM. USSOCOM prepares a
budget for the support and management of unique training
and equipment requirements of special operations forces
(SOF). The FY 2010 base budget includes $5.6 billion
in O&M funds for the combatant commands, mostly for
military and civilian endstrength and to improve capabil-
ity and capacity.12
Military Services
The services produce, train, maintain and provide the
military forces to the combatant commands. After eight
continuous years of war and given the current strategic
environment and the unpredictable future, the services—
particularly the Army and the Marine Corps—are reset-
ting, reconstituting and revitalizing forces. The services
are also transforming their doctrine, equipment, military
skills and training to produce future armed forces essential
to the joint team. In addition, DoD is growing the Army,
Marine Corps and special operations forces to sustain the
operational demands and allow more time at home station
for ground forces.
Admiral Mike Mullen, Chairman of the Joint Chiefs
of Staff, observes,
After nearly eight years of war, we are the most
capable and combat-experienced military we
have ever been—the best I have ever seen—cer-
tainly, without question, the world’s best counter-
insurgency force. Yet for all this success, we are
pressed, and still lack a proper balance between
out-tempo and home-tempo, between [counter-
insurgency] capabilities and conventional capa-
bilities, between readiness today and readiness
tomorrow. And that . . . is the second reason this
budget of ours acts as a strategy for the future: It
seeks balance.
By investing more heavily in critical enablers,
aviation, Special Forces, cyber operations, civil
affairs, language skills, it rightly makes winning
the wars we are in our top operational priority. By
adjusting active Army [brigade combat team]
growth to 45, it helps ensure our ability to impact
the fight sooner, increase dwell time sooner, and
reduce overall demand on our equipment.13
Both the Army and the Marine Corps are ahead of
schedule in growing the forces—the Army will be at
547,000 personnel and the Marine Corps will be at
202,000 personnel by the end of FY 2010.
The FY 2010 USSOCOM budget supports an increase
of 2,349 military and civilian authorizations, including:
• 1,048 authorizations to provide one Special Forces
(SF) battalion;
• 791 authorizations for Air Force Special Operations
Command;
• 157 authorizations for Naval Special Warfare
Command;
• 163 authorizations for Marine Corps Forces Special
Operations Command;
• 62 authorizations for Joint Special Operations
Command;
• 139 authorizations for Theater Special Operations
Commands; and

32
 Table 23 • 11 reductions at Headquarters, USSOCOM.14
Conventional Forces Summary A summary of the force structure across all services
is in table 23.
Army1 FY08 FY09 FY10
Active Component (AC) Brigade
40 42 44
Endstrength
Combat Teams The DoD budget proposes a total endstrength of more
Reserve Component (RC) Brigade than three million active, National Guard and Reserve
28 28 28
Combat Teams
servicemembers and civilian employees in FY 2010—an
AC Multi-Functional Support
33 35 37 increase of 64,000 over FY 2009. The FY 2009 total
Brigades
includes almost 1.5 million active personnel, 845,000 in
RC Multi-Functional Support Brigades 46 50 52
the Selected Reserve and 745,000 civilian employees.
AC Functional Support Brigades 35 41 42
The proposal includes an increase in all three groups.
RC Functional Support Brigades 73 74 74
Army Prepositioning Ships 2
6 6 7 The military personnel serve in positions that involve
Navy3 essentially military functions; the civilian employees
Aircraft Carriers 11 11 11
serve in positions that involve essentially government
functions. In addition, DoD relies upon thousands of con-
Surface Combatants 107 111 113
tractor personnel who free up servicemembers and DoD
Amphibious Warfare Ships 32 31 31
civilians. The contractor personnel conduct a wide range
Attack Nuclear Submarines 53 54 53
of support including research, manufacturing and main-
Ballistic & Guided Missile Submarines 18 18 18
taining equipment and providing services and support to
Support, Logistics, Mine Warfare military servicemembers and their families, retirees and
61 62 61
Ships
their families and the civilian workforce as authorized.
Department of the Navy Maritime
& U.S. Army Pacific Command 16 16 17 Military Endstrength. The DoD budget proposes a mili-
Ammunition Prepositioning Ships tary endstrength of 2.3 million personnel, with 1.5 million
Roll-on, Roll-off; Aviation Support; on active duty and 845,000 in the Selected Reserve. The
67 65 64
Hospital; and Reserve Ships
budget proposal and historical military endstrength data
Navy Carrier Air Wings 10 10 10 are in table 24.
Marine Air Wings 3 3 3
Patrol Wings 4 4 4 The endstrength reductions from FY 1985 to FY 2000
Helicopter Antisubmarine and
were substantial—34 percent in the active component
4 4 4 (AC) and 20 percent in the Selected Reserve. Since the
Combat Support Wings
Primary Authorized Aircraft—Navy 2,138 2,120 2,187 reduction in the reserve component (RC) was less than in
Primary Authorized Aircraft—Marine the AC, the result was that the Selected Reserve became
1,082 1,220 1,214 a greater portion of the total force—increasing from 32
Corps
Air Force4 to 37 percent of total military personnel; the nation was
placing a greater reliance on the Selected Reserve.
Active Fighter Squadrons 40 38 32
Reserve Fighter Squadrons 31 29 28 Between the FY 2000 and the FY 2010 budget pro-
Reserve Air Defense Squadrons 4 4 4 posals, the endstrength of both the active component and
Bombers (Combat-Coded) 96 96 96 Selected Reserve increased—the active component by 2.4
Air Force Prepositioning Ships 2
2 2 2 percent and the reserve component by 6.7 percent. The
Marine Corps5 growth for the Marine Corps was the greatest among the
services at 17 percent, followed by the Army at 14 percent.
Expeditionary Forces 3 3 3
These increases are part of the multiyear growth of land
Active Infantry Battalions 27 27 27
forces in response to the continuing war. The result of this
Reserve Infantry Battalions 9 9 9
growth is an active military endstrength distribution in FY
Defense Logistics Agency (DLA)2 2010 of 37 percent Army, 22 percent Air Force, 22 percent
DLA Prepositioning Ships 1 1 1 Navy and 14 percent Marine Corps. In summary, between
Source: 1 2008 Army Posture Statement (FY10 number modified by 2009 FYs 2000 and 2010 the Army grows by 65,000 Soldiers
Army Posture Statement), Addenda G, Modernization; 2 Highlights of
the Department of the Navy FY 2010 Budget, p. 4-6; 3 Highlights of the and the Marine Corps grows by 29,000. See table 24.
Department of the Navy FY 2010 Budget, pp. 4-4, 4-6, 4-10; 4 Air Force
Public Affairs Office; 5 Highlights of the Department of the Navy FY 2010 Civilian Endstrength. The DoD budget proposes a
Budget, p. 4-16
civilian endstrength of 745,000. Between FYs 1985 and

The Department of Defense Budget 33

 Table 24

Department of Defense Personnel Endstrength

(in thousands1)

Active Military3 FY852 FY902 FY952 FY002 FY052 FY062 FY072 FY082 FY09 FY10
Army 781 751 509 482 492 505 522 544 532 547
Navy 571 583 435 373 362 350 338 332 325 324
Marine Corps 198 197 174 173 180 180 186 199 194 202
Air Force 602 539 400 356 352 349 333 327 317 332
Active Guard and Reserve, Full-time 55 74 65 65 69 74 72 72 78 79
Total Active Military 2,207 2,144 1,583 1,449 1,455 1,458 1,451 1,474 1,446 1,484
Selected Reserve 4

Army 718 740 604 549 522 536 543 557 558 563
Navy 129 152 100 87 76 71 70 68 67 66
Marine Corps 41 44 40 39 40 40 39 38 40 40
Air Force 185 202 188 179 182 180 177 175 174 176
Total Selected Reserve 1,073 1,138 933 854 820 826 829 838 839 845
Total Military 3,280 3,282 2,516 2,303 2,275 2,284 2,280 2,312 2,285 2,329
Civilians (Full-time equivalents) 3
1,129 1,073 849 698 692 700 695 708 725 745
1
Numbers may not add due to rounding.
2
FY85 to FY08 are actual amounts. Remaining years are estimates.
Source: 3 Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller)
June 2009, Table 7-5; 4 DoD Green Book, Financial Summary Table O

2000, the decline in civilian endstrength was similar to Table 25

that of the military with a reduction of 30 percent. Since
FY 2000, civilian endstrength has grown by 47,000, Military Personnel Budget
($ billions1)
or 7 percent. The civilian endstrength data are also in
table 24. FY082 FY093 FY104
Army 61.3 52.8 58.1
Military Personnel Navy 28.8 28.0 29.4
The Military Personnel title includes the military pay Marine Corps 13.9 13.6 14.7
appropriations for all active and reserve components. Air Force 32.3 31.7 33.4
The FY 2010 budget includes a 2.9 percent pay raise for
Contribution to Military
military members. The FY 2010 base budget proposes Retirement Fund
2.8 3.7 5.1
$141.1 billion in military pay and benefits for service-
Total 139.0 129.8 141.1
members and their families, a nearly 9 percent increase 1
Numbers may not add due to rounding.
over the FY 2009 level; however, the FY 2010 proposal 2
FY08 are actual expenditures.
FY09 includes $65 billion enacted for overseas contingency operations
includes pay and benefits for the increase of 38,000 mili-
3

tary members. The Military Personnel title by component
is in table 25.
A comparison of Army endstrength to budget funds
reveals that while the Army portion of total military end-
strength remained constant at 48 percent from FYs 2008
through 2010, the Army’s portion of the Military Pay
appropriation decreased from 44 percent to 41 percent.
The Army endstrength includes a very substantial number
of reserve component Soldiers and, arguably, a greater
portion of lower-grade members than the other services.
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that
was requested again with the FY 2010 budget.
4
FY10 excludes OCO budget proposal.
Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730-
BA) and Department of Defense National Defense Budget Estimates
for FY 2010 (Green Book), Office of the Under Secretary of Defense
(Comptroller), June 2009, Table 6-6
However, the Military Pay portion for the Army still is
low when compared to the FY 2008 experience.
Military Accrual Payments
The Military Personnel title includes pay and allow-
ances and contributions to two accrual accounts—

34
medical and retirement. The accrual method requires accrual for each service; however, the FY 2010 base
the services to estimate future medical and retirement budget includes $16.5 billion for military retirement
benefits annually, and to contribute that amount from accrual. The DoD contribution to the military retirement
the current budget. The subsequent paragraphs provide accrual equals 12 percent of the total Military Personnel
information on each of the accrual accounts. proposal and 3 percent of the total base budget proposal.
See table 27 for retirement accrual information.
Military Medical Accrual. The DoD budget for FY 2010
includes $10.6 billion for military medical accrual. This Table 27
amount is virtually the same as in FY 2009, but down by
Retirement Accrual in Military Personnel Budgets
$1.3 billion or 11 percent from the FY 2008 experience ($ billions1)
data.
Service FY082 FY093 FY104
The military medical accrual accounts consume 7.5
percent of all Military Personnel funds and 2 percent of Army 5.6 5.2 6.3
the base budget for FY 2010. This has been consistent Navy 3.3 3.4 3.9
for many years. The Army contributes $5 billion or 47
Marine Corps 1.6 1.8 2.1
percent of the funds and 48 percent of the endstrength.
See table 26 for medical accrual information. Air Force 3.6 3.6 4.2

Military Retirement Accrual. The DoD budget for FY Total 14.1 14.0 16.5
2010 does not specifically identify military retirement 1
Numbers may not add due to rounding.
2
FY08 are actual expenditures.
Table 26 3
FY09 includes $65 billion enacted for overseas contingency operations
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that
Medical Accrual in Military Personnel Budgets was requested again with the FY 2010 budget.
($ billions1)
4
FY10 excludes OCO budget proposal.
Source: Department of Defense National Defense Budget Estimates
for FY 2010 (Green Book), Office of the Under Secretary of Defense
Medical Accrual FY082 FY093 FY104 (Comptroller), June 2009

Military Pay, Army 3.3 3.0 3.1

Reserve Personnel, Army 0.8 0.7 0.7 The sum of the medical and retirement accruals in the
FY 2010 base budget is $27 billion, or 19 percent, of Mili-
National Guard Personnel, Army 1.3 1.2 1.2
tary Personnel funds and 5 percent of the total DoD base
Subtotal 5.4 4.9 5.0 budget. The accruals are for an entitlement that is a func-
Military Pay, Navy 2.0 1.8 1.8 tion of military endstrength and the statutes that authorize
Reserve Personnel, Navy 0.3 0.2 0.2 the benefits.
Subtotal 2.3 2.0 2.0 Civilian Personnel
Military Pay, Marine Corps 1.2 1.1 1.1 The federal budget system has no single appropria-
Reserve Personnel, Marine
0.2 0.1 0.1
tion for civilian personnel pay; the appropriation that
Corps employs the civilian personnel pays the civilian person-
Subtotal 1.4 1.2 1.2 nel. Most DoD civilian personnel work in operation and
Military Pay, Air Force 2.1 1.8 1.8 maintenance functions, and therefore, most civilian pay is
Reserve Personnel, Air Force 0.3 0.2 0.2
in the Operation and Maintenance title.
National Guard Personnel, The federal government categorizes civilian per-
0.4 0.4 0.4
Air Force sonnel into four groups: General Service (GS), Wage
Subtotal 2.8 2.4 2.4 Board, Foreign National Direct Hires and Indirect Hires.
Total Medical Accrual 11.9 10.5 10.6
A summary of civilian pay by these categories is in
table 28.
1
Numbers may not add due to rounding.
FY08 are actual expenditures.
Civilian pay is a function of endstrength, grades and
2

3
FY09 includes $65 billion enacted for overseas contingency operations
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that pay rates, and work hours. The President proposes a 2
was requested again with the FY 2010 budget.
4
FY10 excludes OCO budget proposal. percent pay increase for the civilian workforce.
Source: Department of Defense National Defense Budget Estimates
for FY 2010 (Green Book), Office of the Under Secretary of Defense Civilian endstrength, like military endstrength,
(Comptroller), June 2009
declined dramatically from FY 1985 to FY 2000—38.2

The Department of Defense Budget 35

 Table 28
Civilian Pay
($ billions1)
FY08 2
General Schedule 49.4
Wage Board 10.2
Total in the United States 59.6
Foreign National Direct Hires 0.4
Total Direct Hires 60.0
Indirect Hires 1.2
Total Civilian Pay 61.2
1
Numbers may not add due to rounding.
2
FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that
was requested again with the FY 2010 budget.
4
FY10 excludes OCO budget proposal.
Source: Department of Defense National Defense Budget Estimates
for FY 2010 (Green Book), Office of the Under Secretary of Defense
(Comptroller), June 2009, Table 6-14
percent. Since FY 2000, civilian endstrength increased by
47,000 or 7 percent, with most of that growth in just two
years—37,000 between FYs 2008 and 2010, a 5 percent
increase. The civilian pay funds during those two years
increase by $8.8 billion or 14 percent.
Operation and Maintenance
The FY 2010 base budget proposes $185.7 billion
in Total Obligation Authority for Operation and Mainte-
nance, which includes appropriations for both the active
and reserve components. The O&M appropriation includes
funds for individual training, unit training to maintain
readiness, sustaining the forces, supporting mobilization
and supporting current operations.
In the Budget Request Summary Justification, DoD
provides summary information on a significant part of
O&M, including:
• $64.6 billion for readiness, measured in terms of tank
miles driven per month, ship steaming days under-
way per quarter and flying hours per month;
• $35.7 billion for administrative support functions
that include headquarters support, internal audit, per-
sonnel support, communications, transportation and
intelligence;
• $33 billion for basic operation and maintenance of
bases worldwide;
• $12.8 billion for maintenance of equipment at or
above the percentage of depot maintenance require-
ments funded in FY 2009 (the increased requirements
36
are partially due to the transition of systems from
development to fielded systems); and
• $11.7 billion for full-spectrum training, combat
FY09 3
FY10 4 training center rotations and recruiting and retention
efforts to maintain combat readiness.15
54.0 60.2
10.4 8.1 The O&M appropriations consume the largest part of
64.4 68.3
the DoD budget at 51 percent. The actual experience in FY
2007 was 38 percent with supplemental funds.
0.4 0.3
64.9 68.6 The difference between the FY 2008 experience and
the FY 2010 base budget is $71 billion, or 28 percent.
1.3 1.4
When the OCO budget proposal is included, the total
66.2 70.0 rises to $276.2 billion, 8 percent more than the FY 2008
experience. For the Army, the change between FY 2008
and FY 2010 is $58 billion or 59 percent (using the base
budget) but is virtually the same when the OCO funds are
added. The O&M data in Total Obligational Authority are
in table 29.
Defense Health Program
The Defense Health Program (DHP) provides funding
for medical and dental services to active servicemembers
and their families, and to other eligible beneficiaries world-
wide. The DHP includes funds for TRICARE benefits that
provide for the health care of eligible active duty family
members, retired servicemembers and their eligible family
members, and the eligible surviving members of deceased
active duty and retired members. The DHP also provides
veterinary services, medical command headquarters, spe-
cialized services for the training of medical personnel, and
occupational and industrial health care.
The DHP includes O&M, Procurement and RDT&E
appropriations and Medicare-Eligible Retiree Health Care
Fund (MERHCF) accrual funds. Actually, O&M and
MERHCF provide 98 percent of Defense Health Care
costs. The O&M in DHP accounts for 9 percent of all
DoD O&M.
Between FYs 2005 and 2010, the DHP funds increase
by 131 percent.
The DHP is one element of DoD health support; in
addition, the Medical Accrual fund (return to table 26)
includes MILPERS contributions to medical accrual but
not military pay for military doctors and other health care
providers. The combination of Defense health care costs
($37 billion) and Medical Accrual ($10.6 billion) equals
$47.6 billion or 9 percent of the total DoD budget in FY
2010. See table 30.
In FY 2001, the Defense Health Care Program pro-
vided benefits to 8.4 million eligible beneficiaries; in FY
 Table 29

Operation and Maintenance

(Total Obligational Authority, $ billions1)

FY082 FY093 FY104

Enacted Estimate Base Supplemental Total
Army 98.1 100.8 40.2 60.9 101.1
Navy/Marine Corps 50.8 52.2 42.1 10.0 52.1
Air Force 52.3 56.2 43.7 10.4 54.1
Defensewide 55.5 63.9 57.2 8.8 66
Transfers Accounts 3.5 2.5 0.4 2.9
Total 256.7 276.6 185.7 90.5 276.2
1
Numbers may not add due to rounding.
2
FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was
requested again with the FY 2010 budget.
4
FY10 excludes OCO budget proposal.
Source: Department of Defense Budget, Fiscal Year 2010, Military Personnel Programs (M-1) and Operation and Maintenance (O-1), Exhibit O-1, pp.
19–20

Table 30 acquiring modern equipment to replace worn equipment

and older technology. RDA provides U.S. forces with the
Defense Health Care Program Funding best systems capabilities in the world. The FY 2010 base
($ billions1)
budget includes $186 billion for RDA; the supplemental
FY002 FY082 FY093 FY104
proposal includes $28.8 billion, bringing the RDA total to
Operation and $214.8 billion, $30 billion less than the FY 2008 experi-
11.7 23.9 24.6 27.0
Maintenance
ence. See table 31.
Procurement 0.3 0.5 0.3 0.3
Research, RDA Trends in Current Dollars
Development, Test 0.3 1.0 0.9 0.6 One could certainly make a logical case for needing
and Evaluation
relatively consistent RDA expenditures to maintain a
MERHCF4 receipts 7.9 8.7 9.1 research and development and industrial base and to
Total 5
12.3 33.3 34.5 37.0 avoid laying off skilled employees, who are then replaced
1
Numbers may not add due to rounding. some years later during the next up-swing. However, this
2
FY00 and FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations simply is not the experience.
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that
was requested again with the FY 2010 budget. Between FYs 1985 and 2000, RDA expenditures
4
FY10 excludes OCO budget proposal.
4
Medicare-Eligible Retiree Health Care Fund. decreased by 26 percent—although RDT&E does
5
Defense Health Care Program includes direct Health Care costs but increase, reflecting deliberate decisions at the end of the
excludes Medical Accrual account and military health care providers.
Source: DoD Defensewide Justification Documentation, PBA-19 Cold War to “skip a generation” of equipment acquisi-
tions. Between FYs 2000 and FY 2008, RDA expendi-
2010, the DHP will provide benefits to 9.3 million or 10 tures increase by 161 percent, with Procurement up 100
percent more eligible beneficiaries. The beneficiary popu- percent. The combination of extreme usage, combat
lation drives health care costs; the number of service-
damage and losses, plus the need for new technology and
members is a key driver of the beneficiary population.
materiel solutions, are the primary factors that contribute
Between FYs 2000 and 2010, active duty endstrength
to this very large increase.
increases by 65,000 or 14 percent; therefore, the benefi-
ciary population is likely to increase.16 RDA in the FY 2010 budget declines in both FY 2009
and FY 2010, down 24 percent in FY 2010 from the FY
Research, Development and Acquisition 2008 experience. Virtually all the decline is in Procure-
The Research, Development and Acquisition (RDA) ment—this reflects Secretary Gates’ intent and decisions
budget includes funds for researching and developing to refocus DoD as discussed in the paragraphs above. See
new and emerging technologies and materiel and for figure 7 for trends.

The Department of Defense Budget 37

 Table 31 RDA by Military Services
Research, Development and Acquisition
The distribution of the RDT&E funds remains
by Military Service fairly consistent among the services and Defensewide
(Budget Authority, $ billions1) organizations from FYs 2008 to 2010. The distribution
of Procurement funds changes dramatically—Army
RDT&E FY082 FY093 FY104
Procurement funds drop by $40 billion, more than 65
Army 12.4 12.0 10.4 percent; Defensewide drops by $17 billion. The Army base
Navy/Marine Corps 18.4 19.9 19.3 budget for Procurement is $21.1 billion—very close to the
Air Force 26.5 26.8 28.0 OCO budget proposal of $21.4 billion for Procurement in
FY 2010. Presumably, a very large share of the OCO funds
Defensewide and Other 22.2 21.5 20.9
will go to the Army to replace combat losses and worn-out
Total RDT&E 79.5 80.2 78.6 equipment, and to modernization for the forces engaged in
Procurement combat.
Army 61.4 24.9 21.1 The drop in Army Procurement funds reflects Secretary
Navy/Marine Corps 47.3 38.4 43.8 Gates’ decisions summarized in the Priorities paragraph.
Air Force 32.7 37.1 36.4 The implications of a $40 billion decrease on the industrial
Defensewide and Other 23.6 9.4 6.1
base will be significant. See table 31 for RDA data.
Total Procurement 165.0 109.8 107.4 Select Major Weapon Systems
Total RDA 244.5 190.0 186.0 The Program Acquisition Costs by Weapon Systems
1
Numbers may not add due to rounding. section of the DoD budget provides a list of 79 major
2
FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations weapon systems that account for nearly 62 percent of all
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that Procurement and 38 percent of all RDT&E funds in FY
was requested again with the FY 2010 budget.
4
FY10 excludes OCO budget proposal. 2010. The list includes only those systems with a separate
Source: Department of Defense National Defense Budget Estimates budget line and does not include systems that combine a
for FY 2010 (Green Book), Office of the Under Secretary of Defense
(Comptroller), June 2009, Table 6-6 group of line items, such as command, control, commu-
nications, computers, intelligence, surveillance and recon-
The FY 2010 procurement decreases from FY 2008 naissance (C4ISR).
by nearly $58 billion; however, the FY 2010 supplemental
The major weapon systems list with RDA funding is in
for OCO of $17.6 billion for reconstitution—presumably
tables 32–36; 32 contains aircraft; 33 contains missiles and
almost all for Procurement—offsets about 30 percent of munitions; 34 contains missile defense and ground vehi-
the reduction. cles; 35 contains shipbuilding and maritime systems; and
36 contains space and command, control, communications,
RDA Trends in Constant Dollars computers and intelligence (C4I).
Between FYs 1985 and 2000, RDT&E decreased
by 14 percent and Procurement decreased by nearly 60 Special Operations RDA
percent in real buying power. Over the same 15 years, In 1987, the U.S. Special Operations Command was
military endstrength declined by 34 percent; i.e., Procure- formed with the mission of organizing, training and equip-
ment reductions outpaced the endstrength drawdown. ping special operations forces from the Army, Navy and Air
Force, and for the combatant commanders. In recognition
In the next eight years, from FYs 2000 to 2008, of the unique capabilities of special operations forces in the
RDT&E increased by nearly 73 percent and Procurement war against terrorism, USSOCOM’s mission was expanded
increased by 155 percent in constant dollars. In the budget to lead, plan, synchronize and, as directed, execute global
proposal, between FYs 2008 and 2010, RDT&E declines operations against terrorist networks.
by 4 percent and Procurement declines by 37 percent in The USSOCOM statutory charter, Title 10, U.S.
real buying power. Bear in mind, however, that the FY Code, Section 167, provides the command with certain
2008 and earlier years include supplemental funds, FY budget authority (similar to the military departments) that
2009 includes the first but not the second request for sup- is unique among the combatant commands (COCOM).
plement funds, and FY 2010 does not include any supple- The command is responsible for developing and acquir-
mental funds. The RDA budget in constant dollars is in ing “special operations-peculiar” equipment. The FY 2010
figure 8. budget proposal for RDA is $2.2 billion.

38
 Figure 7

Research, Development and Acquisition

Budget Authority – Current Dollars
($ billions1)

250 244.6
211.3
200 79.6 190.0 186.0
178.3
165.4 77.5
150 80.2 78.6
128.1 72.9
117.9 68.8
31.3 93.6
100 36.5 78.1
165.0
38.7 133.8
34.5 105.4 109.8 107.4
50 96.8 96.6
81.4
43.6 54.9
0
FY85 FY90 FY95 FY00 FY05 FY06 FY07 FY08 FY09 FY102

Procurement Research, Development,

Test and Evaluation

1
Totals exclude overseas contingency operations.
2
Includes proposed cancellation for reappropriation to offset a portion of additional Emergency Request for overseas contingency operations.
Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller),
June 2009, Table 6-8

Figure 8

Research, Development and Acquisition

Budget Authority – Constant Dollars
($ billions)

251.4
250
220.7 221.0
190.6 81.8 192.6 186.0
200 55.4 181.5
171.0 81.3
150 54.1 78.2 81.2 78.6
75.9
113.9
101.7
100 47.4
165.3 45.4 169.6
139.7
50 116.9 105.6 112.4 111.4 107.4
56.3 66.5
0
FY85 FY90 FY95 FY00 FY05 FY06 FY07 FY08 FY09 FY10

Procurement Research, Development,

Test and Evaluation

Source: Department of Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller),
June 2009, Table 6-8

The Department of Defense Budget 39

Table 32

Research, Development and Acquisition

Selected Major Weapon Systems – Aircraft
($ millions)

FY101
Service Aircraft
Procurement 2
RDT&E RDA3
AH-64 Longbow Apache 219.2 150.8 370.0
CH-47 Chinook 1,052.0 10.8 1,062.8
Army
Light Utility Helicopter (LUH) 326.0 326.0
UH-60 Black Hawk Utility Helicopter 1,431.4 33.5 1,464.9

C-40A Clipper 74.4 74.4

E-2C/D Hawkeye 606.2 364.6 970.8
E-6 Mercury 102.6 102.6
EA-18G Growler 1,632.4 55.4 1,687.8
Navy/ EA-6B Prowler 85.0 97.6 182.6
Marine Corps F/A-18E/F Super Hornet 1,061.0 127.7 1,188.7
H-1 Huey/Super Cobra 835.4 32.8 868.2
MH-60R Multimission Helicopter 943.2 82.0 1,025.2
MH-60S Fleet Combat Support Helicopter 492.9 49.1 542.0
P-8A Poseidon 1,825.1 1,162.4 2,987.5

A-10 Thunderbolt 262.5 9.7 272.2

B-2 Spirit 284.0 415.4 699.4
C-17 Globemaster 690.5 161.9 852.4
C-5 Galaxy 772.7 95.3 868.0
Air Force
F-16 Falcon 244.6 141.0 385.6
F-15E Eagle 92.9 311.2 404.1
F-22 Raptor 445.9 569.3 1,015.2
KC-X New Tanker 439.6 439.6

C-130J Hercules 2,061.0 231.3 2,292.3

C-12 Liberty 105.0 105.0
RQ-4 Global Hawk 667.9 783.2 1,451.1
Joint Cargo Aircraft (JCA) 319.1 9.4 328.5
F-35 Joint Strike Fighter (JSF) 6,827.5 3,599.4 10,426.9
DoD/Joint
Predator and Reaper Unmanned Aircraft Systems
1,140.8 145.1 1,285.9
(UAS)
V-22 Osprey 2,751.3 109.1 2,860.4
T-6A Texan II Joint Primary Aircraft Training System
282.2 282.2
(JPATS)
Shadow and Raven UAS 191.8 33.0 224.8
1
FY10 data are estimates.
2
Procurement includes initial spares.
3
RDA equals sum of Procurement and Research, Development, Test and Evaluation.
Source: DoD FY 2010 Budget Request Summary Justification, Major Weapons Systems

40
 Table 33

Research, Development and Acquisition

Selected Major Weapon Systems – Missiles and Munitions
($ millions)

FY101
Service Missiles/Munitions
Procurement2 RDT&E RDA3
Javelin Advanced Antitank Weapon 289.6 289.6
Army
High Mobility Artillery Rocket System (HIMARS) 354.2 27.7 381.9
Evolved Seasparrow Missile (ESSM) 51.4 51.4
Rolling Airframe Missile (RAM) 74.8 74.8
Navy Standard Family of Missiles 249.2 182.2 431.4
Tactical Cruise Missile 283.1 13.2 296.3
Trident II Ballistic Missile 1,060.5 74.9 1,135.4
Advanced Medium Range Air-to-Air Missile (AMRAAM) 437.3 53.6 490.9
Air Intercept Missile–9X (AIM–9X) 135.6 8.2 143.8
Chemical Demilitarization4 1,707.3 1,707.3
Joint Air-to-Ground Missile (JAGM) 208.8 208.8
DoD/Joint
Joint Air-to-Surface Standoff Missile (JASSM) 52.7 29.5 82.2
Joint Direct Attack Munition (JDAM) 203.0 203.0
Joint Standoff Weapon (JSOW) 145.3 10.0 155.3
Small Diameter Bomb (SDB) 142.1 197.7 339.8
1
FY10 are estimates.
2
Procurement includes initial spares.
3
RDA equals the sum of Procurement and RDT&E.
4
Includes $146.5 million Military Construction.
Source: DoD FY 2010 Budget Request Summary Justification, Major Weapons Systems

Table 34

Research, Development and Acquisition

Selected Major Weapon Systems – Missile Defense
($ millions)

FY101
Service Missile Defense
Procurement2 RDT&E RDA3
Aegis Ballistic Missile Defense 168.7 1,690.8 1,859.50
Terminal High Altitude Area Defense (THAAD) 420.3 697.2 1,117.50
DoD/Joint Patriot Medium Extended Air Defense (MEADS) 16.4 569.2 585.6
Patriot/Patriot Advanced Capability-3 (PAC-3) 393.2 11.2 404.4
Missile Defense* 1,115.4 8,186.1 9,301.5
Ground Vehicles
Armored Security Vehicle (ASV) 149.8 149.8
Family of Heavy Tactical Vehicles (FHTV) 1,436.1 1,436.1
Family of Medium Tactical Vehicles (FMTV) 1,620.0 1,620.0
Army
M1 Abrams Tank Upgrade Program 369.4 101.7 471.1
Stryker Family of Armored Vehicles 388.6 90.3 478.9
High Mobility Multipurpose Wheeled Vehicle (HMMWV) 1,746.9 1,746.9
Marine Corps Expeditionary Fighting Vehicle (EFV) 293.5 293.5
Joint Light Tactical Vehicle (JLTV) 90.1 90.1
DoD/Joint
Mine-Resistant Ambush Protected (MRAP) 5,456.0 5,456.0
1
FY10 are estimates.
2
Procurement includes initial spares.
3
RDA equals the sum of Procurement and RDT&E.
* Includes Military Construction and Base Realignment and Closure.
Source: DoD FY 2010 Budget Request Summary Justification, Major Weapons Systems

The Department of Defense Budget 41

Table 35

Research, Development and Acquisition

Selected Major Weapon Systems – Shipbuilding and Maritime Systems
($ millions)

FY101
Service Shipbuilding and Maritime Systems
Procurement2 RDT&E RDA3
CVN-21 Carrier Replacement 1,223.7 173.6 1,397.3
DDG 1000 Destroyer 1,084.1 539.1 1,623.2
DDG 51 Aegis Destroyer 2,241.3 2,241.3

Navy/ Littoral Combat Ship (LCS) 1,517.3 360.5 1,877.8

Marine Corps LPD-17 Amphibious Transport Dock Ship 1,056.9 5.3 1,062.2
SSN 774 Virginia-Class Submarine 4,027.2 154.8 4,182.0
CVN Refueling Complex Overhaul (RCOH) 1,775.4 1,775.4
T-AKE Auxiliary Dry Cargo and Ammunition Ship 940.1 940.1
DoD/Joint Joint High Speed Vessel (JHSV) 361.8 11.5 373.3
1
FY10 are estimates.
2
Procurement includes initial spares.
3
RDA equals the sum of Procurement and RDT&E.
Source: DoD FY 2010 Budget Request Summary Justification, Major Weapon Systems

Table 36

Research, Development and Acquisition

Selected Major Weapon Systems – Space and Command,
Control, Communications, Computers and Intelligence
($ millions)

FY101
Service Space
Procurement2 RDT&E RDA3
Navy Mobile User Objective System (MUOS) 516.1 387.5 903.6
Advanced Extremely High Frequency (AEHF) Satellite 1,843.5 464.3 2,307.8
Evolved Expendable Launch Vehicle (EELV) 1,295.3 26.5 1,321.8
Global Positioning System (GPS) 60.7 867.1 927.8
Air Force National Polar-Orbiting Operational Environmental
3.9 396.6 400.5
Satellite System (NPOESS)
Space-based Infrared Systems (SBIRS) 500.9 512.6 1,013.5
Wideband Global Satellite (WGS) Communications 264.1 71.0 335.1
C4I
Future Combat Systems (FCS) 328.0 2,653.0 2,981.0
Army Single Channel Ground and Airborne Radio (SINCGARS) 135.0 135.0
Warfighter Info Network–Tactical (WIN–T) 557.7 180.7 738.4
DoD/Joint Joint Tactical Radio System (JTRS) 187.4 876.4 1,063.8
1
FY10 are estimates.
2
Procurement includes initial spares.
3
RDA equals the sum of Procurement and RDT&E.
Source: DoD FY 2010 Budget Request Summary Justification, Major Weapon Systems

42
 The following six weapon systems or groups of
line items account for 55 percent of all Procurement for
FY 2010:
• $285.9 million for SOF Operational Enhancements,
including $11.9 million in OCO funds;
• $227.5 million for non-standard aviation;
• $146.8 million for the MH-60 SOF Modernization
Program;
• $114.5 million for CV-22 SOF Modification;
• $112.5 million for SOF Ordnance Replenishment,
including $51.2 million in OCO funds; and
• $101.9 million for Rotary Wing Upgrades and
Sustainment.
The FY 2010 procurement proposal, even with OCO,
is $1.8 billion or 40 percent below the FY 2008 experience.
See table 37 for RDT&E and Procurement amounts.
Table 37
Research, Development and Acquisition
U.S. Special Operations Command
($ billions1)
FY082 FY093
RDT&E 5
0.5 0.5
Procurement 6
3.0 1.6
Total 3.5 2.1
1
Numbers may not add due to rounding.
2
FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that
was requested again with the FY 2010 budget.
Source: 5 Department of Defense Fiscal Year 2010 Budget Request,
RDT&E Programs (R-1), May 2009; 6 Department of Defense Fiscal Year
2010 Budget Request, Procurement Programs (P-1), May 2009
Missile Defense Agency
The mission of the Missile Defense Agency (MDA) is
to develop the Ballistic Missile Defense System (BMDS)
to protect the United States, its allies and deployed forces
from attacks by ballistic missiles of all ranges in all phases
of flight. The MDA is the successor to the Ballistic Missile
Defense Organization and the Strategic Defense Initiative
Organization. The FY 2010 budget requests $7.8 billion to
provide greater capability to the warfighter and to reshape
the missile defense program.17
The FY 2010 budget reshapes the program in response
to arising threats, including the proliferation of ballistic
missiles and the threat to forces deployed. In 2003, there
were 4,700 ballistic missiles outside of U.S., Russian and
Chinese inventories; by 2008, there were some 5,900.
North Korea and Iran currently have hundreds of deploy-
able short- and medium-range ballistic missiles capable of
attacking deployed forces in Asia and the Middle East. The
budget seeks to leverage emerging intercept technologies
to defeat launched missiles in their ascent phase—after
the boost phase and prior to the threat missile’s apogee.
This ascent phase intercept (API) would allow the use
of multiple elements in a larger battlespace and enable a
“shoot-look-shoot” approach to defeating a threat.
The budget increases emphasis on near-term devel-
opment and fielding of capabilities against short- and
medium-range ballistic missile threats. This is in response
to the warfighter’s expressed needs to bolster transport-
able regional defense capabilities to provide more robust
protection to deployed forces, allies and friends against
existing threats. The budget also maintains a ground-
based midcourse capability to defeat a limited long-range
rogue state attack or accidental launch against the United
States.18
The FY 2010 budget includes multiple appropriations
and is $1.4 billion or 13 percent below the FY 2008 budget
FY10
experience. See table 38 for appropriation data, and table
39 for a list of funds by major BMD programs.
0.4
1.8 Table 38
2.2
Missile Defense Program Funding by Title
($ millions1)
FY082 FY093 FY10
RDT&E 9,605.0 9,372.4 8,186.1
Procurement 994.9 1,218.6 998.6
Military Construction 169.5 30.2
Base Realignment
110.0 160.0 86.6
and Closure (BRAC)
Total 10,709.9 10,920.5 9,301.5
1
Numbers may not add due to rounding.
2
FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that
was requested again with the FY 2010 budget.
Source: DoD FY 2010 Budget Request Summary Justification, Major
Weapons Systems
In response to the warfighters’ expressed needs for
additional theater defensive capabilities, the budget
increases the acquisition plans for THAAD batteries and
interceptors. In FY 2010, the budget provides an addi-
tional $8 million to begin meeting the full funding policy
and $30 million to increase the production line from three
to four interceptors per month. The budget also increases
The Department of Defense Budget 43
 Table 39

Missile Defense Program

Funding by Major Systems
($ millions)

FY081 FY092 FY10

Ballistic Missile Defense (BMD) Midcourse Defense 2,198.7 1,507.5 982.9
BMD Boost Defense 503.5 400.8 186.7
BMD Terminal Defense 1,034.5 956.7 719.5
BMD Test and Targets 619.0 911.7 966.8
BMD Technology, Aegis, Sensors, and Interceptors 2,225.6 2,442.9 2,606.2
Patriot/Patriot Advanced Capability-3 (PAC-3) 1,005.4 1,037.1 404.4
Patriot Medium Extended Air Defense System (MEADS) 401.6 460.8 585.6
Terminal High Altitude Area Defense (THAAD) 881.4 882.4 1,117.5
BMD Command and Control, Battle Management and Communications (C2BMC) 440.0 288.3 340.0
BMD Enabling Programs 416.9 402.8 369.1
Advanced Concepts/Special Programs 193.2 175.7 301.6
Aerostat Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System
464.9 355.3 360.1
(JLENS)
Other 325.2 1,098.5 361.1
Total 10,709.9 10,920.5 9,301.5
1
FY08 are actual expenditures.
2
FY09 includes $65 billion enacted for overseas contingency operations (OCOs) with the FY 2009 budget, but not the remaining $75 billion that was
requested again with the FY 2010 budget.
Source: DoD FY 2010 Budget Request Summary Justification, Major Weapons Systems

the acquisition plans for Aegis BMD SM-3 interceptors.
Additional funding is included for Aegis BMD to move to
the full funding policy.
Facilities and Infrastructure Investment
Defense installations, including their associated envi-
ronment, sustain regular home stationing, support train-
ing of new recruits and unit training, deployment to meet
the nation’s needs in periods of crisis, contingency and
combat, and the forward presence of U.S. forces. Installa-
tions need to ensure a productive, safe and efficient work-
place, and also offer a decent quality of life for military
members and families. “America’s security depends upon
defense installation assets that are available when and
where needed, and with the right capabilities to support
current and future mission requirements.”19
Worldwide, DoD currently manages more than 539,000
facilities on approximately 29 million acres of land, with a
plant replacement value exceeding $700 billion.20
The American Recovery and Reinvestment Act
(ARRA) of February 2009 provides Military Construc-
tion and Operation and Maintenance funds available for
obligation through the end of FY 2013 and FY 2010,
respectively. DoD has identified more than 4,200 projects
to capitalize on these funds in the following categories:
• $4.2 billion in O&M accounts to improve, repair and
modernize DoD facilities, including energy-related
improvements;
• $1.3 billion in MILCON for hospitals;
• $240 million in MILCON for child development
centers;
• $100 million in MILCON for warrior transition
complexes;
• $535 million for other MILCON projects, such as
housing for servicemembers and their families,
energy conservation and National Guard facilities;
• $300 million to develop energy-efficient technologies;
• $120 million for the Energy Conservation Invest-
ment Program (ECIP);
• $555 million for a temporary expansion of Hom-
eowners’ Assistance Program (HAP) benefits for
private home sale losses of DoD military and civil-
ian personnel; and

44
• $15 million for DoD Inspector General oversight See table 41 for the Military Construction budget
and audit of ARRA execution. proposal by service.
In April 2009, DoD submitted an OCO funding Table 41
request for FY 2009 of $2.3 billion. The funds support
the realignment of forces into and within Afghanistan; Military Construction by Service
($ billions1)
intelligence, surveillance and reconnaissance capabilities;
access to child care; and improvement of support facili- Service FY082 FY093 FY104
ties for wounded warriors and their families. Army 5.3 4.8 3.7
In the FY 2010 budget, DoD requests $1.4 billion Navy/Marine Corps 2.5 3.6 3.8
for OCO to continue the support for the increase of U.S. Air Force 1.3 1.1 0.9
forces in Afghanistan, specifically in the Regional Com- Defensewide 2.5 3.1 3.1
mands in the south and east.
Total 11.6 12.6 11.5
The FY 2010 budget requests $23 billion for Military 1
Numbers may not add due to rounding.
Construction and Family Housing. This is a decrease of 2
FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations
$1.9 billion from the FY 2009 budget, with the decreases (OCOs) with the FY 2009 budget, but not the remaining $75 billion that
primarily in the Base Realignment and Closure (BRAC) 4
was requested again with the FY 2010 budget.
FY10 excludes OCO budget proposal.
and Family Housing programs. See table 40. Source: Department of Defense National Defense Budget Estimates
for FY 2010 (Green Book), Office of the Under Secretary of Defense
Table 40 (Comptroller), June 2009, Table 6-6

Military Construction and Family Housing

($ millions) Family Housing
FY09 FY10 Safe, desirable and affordable housing is a key con-
Request Request tributor to the quality of life of servicemembers and their
Military Construction 11,283 12,835
families. The preferred approach is to provide a housing
allowance to the servicemembers and rely on the local
NATO Security Investment
Program
241 276 community to provide housing for military families. If
the market cannot supply sufficient quantities of quality
Base Realignment and Closure IV 393 397
and affordable housing, DoD uses privatization to supply
Base Realignment and Closure housing. If privatization is not feasible, then DoD provides
9,065 7,480
2005
government-owned or government-leased housing.
Family Housing Construction/
1,457 489 In the early 1990s, DoD recognized that more than
Improvements
Family Housing Operation and 60 percent of DoD-owned family housing (approxi-
1,741 1,444 mately 180,000 units) was inadequate and affordable
Maintenance
Chemical Demilitarization 134 147
private housing was unavailable. The traditional means
for remedying the problem was Military Construction;
Family Housing Improvement
Fund
1 3 however, the construction was projected to cost $20
billion and to take 30 years to complete at expected
Energy Conservation Investment
Program
80 90 funding levels. DoD proposed private-sector participa-
tion to replace construction funds in implementing a
Homeowners Assistance
Program
5 23 long-term housing solution.
Total 24,400 22,515 Congress authorized the Military Housing Privatiza-
Source: Statement of Mr. Wayne Arny, Deputy Under Secretary of tion Initiative (MHPI) with the National Defense Autho-
Defense (Installations and Environment), Before the Subcommittee on rization Act of 1996. The Housing Revitalization Act of
Military Construction, Veterans Affairs and Related Agencies of the
House Appropriations Committee, 19 May 2009 1997 established a Family Housing Improvement Fund
(FHIF) and authorized entering into limited partnerships,
Military Construction making guaranteed loans and conveying DoD-owned
The Military Construction title includes separate appro- property to stimulate private-sector participation.21
priations for Army, Navy, Air Force and Defense agencies Privatization has enabled the military services to lever-
and is a significant source of facilities investment funding. age housing dollars by 10 to 1, with $2.5 billion in federal

The Department of Defense Budget 45

investments generating $25 billion in housing develop-
ment at privatized installations. The projects include 50
years of maintenance and replacement where necessary.
See table 42 for Family Housing funds by service.
Table 42
an operational reserve force, the reserve component is
moving toward a rotational status with a goal of not more
than one year mobilized in a six-year period. When mobi-
lized, reservists receive the same pay and allowances as
full-time active component personnel.

Family Housing by Service

The National Guard is subject to state and territo-
($ billions1) rial laws that define their use in peacetime; the services’
Reserve forces are federal troops and always subject to
Family Housing Operations FY082 FY093 FY104
federal control.
Army 0.7 0.7 0.5
The reserve component provides nearly 36 percent of
Navy/Marine Corps 0.3 0.4 0.1
the total military endstrength for 7.8 percent of the base
Air Force 0.7 0.6 0.5 budget in FY 2010 (return to table 17 for the base budget
Defensewide 0.1 0.1 0.1 and to table 9 for endstrength data). See table 43 for
National Guard and Reserve funding data by service.
Subtotal 1.8 1.8 1.2
Family Housing Construction5 Table 43
Army 0.4 0.6 0.3 Reserve Component Funding by Service
($ billions1)
Navy/Marine Corps 0.4 0.4 0.4
Air Force 0.3 0.4 0.1 Military Personnel FY052 FY082 FY093 FY104

Defensewide Reserve5 7.9 9.3 9.0 9.6

Subtotal 1.1 1.4 0.8 National Guard 6

9.0 12.2 11.1 12.2

Total 2.9 3.2 2.0 Operation and Maintenance

1
Numbers may not add due to rounding. Reserve5 5.9 7.3 7.3 7.2
2
FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations National Guard6 9.5 12.7 12.1 12.2
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that
was requested again with the FY 2010 budget. Military Construction
4
FY10 excludes OCO budget proposal.
5
Excludes DoD Family Housing Improvement Fund. Reserve5 0.3 0.2 0.4 0.5
Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 769)
National Guard 6
0.7 0.9 1.2 0.5
Reserve Component Total7 33.3 42.6 41.1 42.2
The reserve component includes members and units 1
Numbers may not add due to rounding.
2
FY05 and FY08 are actual expenditures.
of the Army and Air National Guard and the Army, Navy, 3
FY09 includes $65 billion enacted for overseas contingency operations
Air Force, Marine Corps and Coast Guard Reserve. (OCOs) with the FY 2009 budget, but not the remaining $75 billion that
was requested again with the FY 2010 budget.
Reserve component units are located in communities, and 4
FY10 excludes OCO budget proposal.
their members are volunteers from the local communities. 5
Reserve includes Army, Navy, Marine Corps and Air Force.
6
National Guard includes Army and Air Force.
The members of the reserve component are assigned to 7
Includes Medicare Retirement Contributions but excludes Recovery
Account.
one of three categories—the Ready Reserve, including Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730)
the Selected Reserve, Individual Ready Reserve (IRR),
and Inactive National Guard; the Standby Reserve; and
Defensewide Programs
the Retired Reserve.22
In addition to the appropriations that are grouped into
The budget includes funding for the Ready Reserve, titles, the DoD budget includes a number of other smaller
with emphasis on the Selected Reserve forces who train dollar amount appropriations and specific programs of
to the same standards as the active force. The Standby particular congressional interest. The most significant are
Reserve and the Retired Reserve are not funded and can described below.
be activated only under a full mobilization with a formal
declaration of war by Congress. Environmental Restoration Program
Since 2001, the reserve component has been transi- DoD serves as the custodian and environmen-
tioning to an operational role from a strategic reserve. As tal steward of nearly 30 million acres of land at more

46
than 3,700 locations. The military’s first environmental
mandate from Congress was in 1872 for custodial respon-
sibility to protect the natural resources at Yellowstone
National Park. The environmental responsibility today
includes activities at active installations, BRAC installa-
tions and Formerly Used Defense Sites (FUDS).
The Defense Environmental Restoration Program
has evolved over the last 20 years to include enhancing
the overall sustainability of land, air and water resources
and supporting the military mission. The department cat-
egorizes the environmental programs into four areas:
• Conservation—to protect and enhance the natural
and cultural resources;
• Restoration—to identify, assess and remediate
contamination from hazardous substances, military
munitions and pollutants from previous military
operations in the Defense Environmental Restora-
tion Program;
• Compliance—to ensure that DoD operations meet
or exceed federal, state, local and host nation envi-
ronmental requirements; and
• Pollution Prevention—to promote the reduction or
elimination of the amount of waste, including haz-
ardous and toxic chemicals, that enters the environ-
ment by focusing on the source of pollution instead
of the end result.
The DoD funds for Conservation, Compliance and
Pollution Prevention programs are in a number of appro-
priations, with the bulk in Operation and Maintenance
and some funds in Military Construction, RDT&E, Pro-
curement and the Defense Working Capital Fund.
The DoD funds for Restoration activities are in the
Environmental Restoration (ER) and BRAC accounts. In
FY 1997, Congress established five separate ER accounts,
one each for the Army, Navy, Air Force, Defense Agen-
cies and FUDS. The Army is the executive agent for
management of FUDS properties, and the U.S. Army
Corps of Engineers is the executor for all aspects of
the program.
The ER funds are executed within O&M appropria-
tions and, therefore, no actual execution data are available
from the accounting system for the ER program. The ER
program continues to advance and demonstrate progress
over the years.
The Comprehensive Environmental Response, Com-
pensation and Liability Act; the Resource Conservation
and Recovery Act; and various other laws and regulations
require the department to submit an annual report to Con-
gress. Over the past 10 years, DoD has invested nearly
$42 billion to ensure the success of its environmental pro-
grams. In FY 2008 alone, DoD obligated approximately
$4.3 billion in environmental activities.23 See table 44 for
budget information by service.
Table 44
Environmental Restoration Program
($ millions)
FY081 FY092 FY103
Army 456.8 415.9
Navy/Marine Corps 290.2 285.9
Air Force 495.3 494.3
Defensewide 3.4 13.2 11.1
Formerly Used Defense Sites
290.7 267.7
(FUDS)
Total 3.4 1,546.2 1,474.9
1
FY08 are actual expenditures.
2
FY09 includes $65 billion enacted for overseas contingency operations
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that
was requested again with the FY 2010 budget.
3
FY10 excludes OCO budget proposal.
Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730)
Chemical Destruction Program
As a signatory of the Chemical Weapons Conven-
tion (CWC), which went into force in 1997, the United
States has an obligation to destroy stockpiles of chemical
agents, munitions and any other chemical warfare mate-
rials that are not in the chemical weapon stockpile. The
CWC goal is to destroy all chemical weapons stockpiles
worldwide by 2007, with exceptions to April 2012. The
DoD Chemical Demilitarization Program is for destroy-
ing those chemical weapons. The task involves dispos-
ing of some 30,000 tons of chemical agents and about 3.3
million weapons and storage vessels. In 1991, DoD des-
ignated the Secretary of the Army as the Defense Execu-
tive Agent for the program and assigned the destruction
of chemical warfare-related materiel to the Army. The
U.S. Army’s Chemical Materials Agency (CMA) mission
includes that of the former Program Manager for Chemi-
cal Demilitarization.
The program experienced technological difficulties
and community concerns with respect to safety and assur-
ance of doing the job in a risk-free way, which slowed
down construction of facilities. However, the United
States had destroyed 11,506 tons as of the end of FY
2007.24 The FY 2009 budget for the Chemical Demili-
tarization Program focuses on achieving the long-term
The Department of Defense Budget 47
outcome of compliance with the CWC, while meeting the
annual performance objectives of no chemical releases
and zero exposures to ensure achieving the outcome of
worker, public and environmental safety. See table 45.
Table 45
Chemical Agents and Munitions
Destruction Program
($ millions1)
FY082 FY093
Research, Development,
Test and Evaluation
Procurement 1,512.7 1,505.6
Operation and
Maintenance
Construction 104.2 144.3
Total 1,616.9 1,649.9
1
Numbers may not add due to rounding.
2
FY08 are actual expenditures.
3
FY09 includes $65 billion enacted for overseas contingency operations
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that
4
was requested again with the FY 2010 budget.
FY10 excludes OCO budget proposal.
Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730)
In the DoD budget justification material, the RDT&E,
Procurement and O&M requests for Chemical Demilitar-
ization are, in fact, carried as a single line entry in the
Procurement title. The Military Construction request is
carried in the MILCON title.
Counternarcotics Program
The Counternarcotics (CN) Program is another special
line entry in the DoD budget. Most CN activities involve
combating narcotics trafficking and include detection and
monitoring of drug movement using military command,
control, communications and intelligence resources, as
well as military operational planning capabilities.
The CN activities involve extensive use of reserve
component personnel. The funds appropriated under this
line are restricted to the CN purpose and may be trans-
ferred to appropriations that are available for use by
the reserve component. This applies particularly to the
National Guard, which is active in a number of coopera-
tive antidrug programs. See table 46 for budget data.
Base Realignment and Closure
The current BRAC round consists of the 2005 Base
Closure and Realignment Commission’s recommenda-
tions that became law on 9 November 2005. Identified
as BRAC 2005, this is the largest round; it includes rec-
ommendations affecting more than 800 locations across
48
Table 46
Counternarcotics Program Budget Authority
($ millions)
FY081 FY092 FY103
45.6 1,284.7 1,059.0
1
FY08 are actual expenditures.
2
FY09 includes $65 billion enacted for overseas contingency operations
(OCOs) with the FY 2009 budget, but not the remaining $75 billion that
was requested again with the FY 2010 budget.
3
FY10 excludes OCO budget proposal.
FY104 Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730)
the nation through 25 major closures, 24 major realign-
1,560.8
ments and 765 lesser actions.25 BRAC 2005 has a six-year
implementation period, from November 2005 to 15 Sep-
tember 2011. The round focuses on the reconfiguration of
operational capacity to maximize warfighting capability
146.5
and efficiency.
1,707.3
The first BRAC round began on 3 May 1988, when
Secretary of Defense Frank C. Carlucci chartered the first
Base Realignment and Closure Commission to recom-
mend military installations within the United States, its
commonwealths, territories and possessions for realign-
ment or closure. Mr. Carlucci and subsequent Secretaries
of Defense, Presidents and Congress recognized that DoD
was maintaining excessive bases and facilities, which
consume a great deal of resources and billions of dollars.
However, all the parties also recognize that DoD bases
and facilities are economic engines for local communi-
ties and even regions. Therefore, the decision to close or
even realign work among bases is very contentious. Since
1988, the actions of each President and Congress indicate
their acceptance of the BRAC approach as a fair way of
addressing this difficult issue.
In addition to the first BRAC round, which began
in 1988, subsequent rounds were enacted in 1991, 1993
and 1995. DoD credits the first four BRAC rounds with
97 major closures, 55 major realignments and 235 minor
actions. DoD estimates that the closings and realignments
in the four rounds saved approximately $18 billion though
FY 2001 and a further $7 billion per year since.26
The BRAC program is substantial, representing a
$38.6 billion requirement from FY 2006 through FY 2011,
and $5.3 billion in annual savings after full implementa-
tion. The costs and savings estimates for BRAC 2005, the
current and fifth round, are in table 47.
BRAC 2005 focuses on reconfiguring operational
capacity and includes a great deal of military construc-
tion, which makes up approximately 70 percent of this
BRAC program compared to about 33 percent in previous
 Table 47

Base Realignment and Closure Account 2005

Costs and Savings by Fiscal Year
($ millions)

Costs FY06 FY07 FY08 FY09 FY10 FY11 FY06–FY11

One-time BRAC account 1,502.5 5,634.1 8,478.4 8,765.6 7,479.5 2,299.7 34,159.8
One-time non-BRAC accounts 27.9 5.2 9.2 308.1 202.6 207.6 760.6
Annual recurring, non-BRAC
2.0 147.6 55.8 92.8 1,529.8 1,828.2 3,656.2
account
Total Costs 1,532.4 5,786.9 8,543.4 9,166.5 9,211.9 4,335.5 38,576.6
Savings
One-Time Savings 110.2 98.7 207.5 163.6 181.1 761.1
Recurring Savings 53.8 644.8 1,533.1 2,764.7 4,198.6 5,326.3 14,521.3
Total Savings 53.8 755.0 1,631.8 2,972.2 4,362.2 5,507.4 15,282.4
Source: DoD Base Realignment and Closure, 2005 BRAC Commission, Executive Summary, Fiscal Year (FY) 2010 Budget Estimates, Exhibit BC-02, BRAC
Implementation Cost

BRAC rounds. As a result, the original estimates for the
round have increased as construction costs have grown.
In part, the construction in this round relates to the DoD
and Army decisions to recapitalize facilities to accommo-
date larger Army units and a growing force, and to improve
facilities such as training ranges, reserve component infra-
structure and quality-of-life facilities. Other DoD deci-
sions include accelerating the closure of Walter Reed Army
Medical Center in Washington, D.C., and applying lessons
learned to improve other medical facilities.
Working Capital and Revolving Funds
With the war on terrorism, the mix and volumes of
material have changed. For example, DoD purchased
certain items to have on hand if they were required, but
some of these items (such as preventive vaccines) may
never be purchased by customers. Therefore, FY 2010
continues to include an infusion of appropriated funds, but
much smaller than the FY 2008 experience. See table 48.
Table 48
Defense Management and
Revolving Funds Budget Authority
($ millions1)

DoD operates a number of industrial and commercial FY082 FY093 FY104

activities using Working Capital and Revolving Funds in Army 3,559.6 102.2 38.5
order to be efficient and responsive to warfighting needs. Navy/Marine Corps 619.7 1.6
The funds operate in a commercial business manner—they Air Force -934.0 61.5 64.2
sell their services and products to the military services and
Defensewide including
other authorized customers, charging rates that generally Defense Commissary 5,673.6 1,324.0 1,352.3
recover the cost of their operations. Agency
The intent is for the funds to operate on a break-even Army Conventional
Ammunition
basis over the budget cycle. The funds establish an activity
group rate to recover the full costs plus any adjustment for Total4 8,918.9 1,489.3 1,455.0
prior-year operating gains or losses. The funds charge the 1
Numbers may not add due to rounding.
2
FY08 are actual expenditures.
customers at the established rates, and the payments are 3
FY09 includes $65 billion enacted for overseas contingency operations
effectively revenue to the funds. The payments from other (OCOs) with the FY 2009 budget, but not the remaining $75 billion that
was requested again with the FY 2010 budget.
Defense organizations are generally from appropriated 4
FY10 excludes OCO budget proposal.
Source: DoD Financial Summary Tables Fiscal Year 2010 (FAD 730)
funds, which then become part of the fund’s cash on hand.
Initially, Congress finances the corpus of the funds The department operates four working capital funds—
with appropriated money. From time to time, the fund the Army Working Capital Fund, the Navy Working
may request additional appropriated money from Con- Capital Fund, the Air Force Working Capital Fund and
gress for capitalization. the Defensewide Working Capital Fund. Five revolving

The Department of Defense Budget 49

funds—Pentagon Reservation Maintenance Revolving
Fund, Buildings Maintenance Fund, National Defense Stock-
pile Transaction Fund, Conventional Ammunition Working
Capital Fund and Defense Coalition Support Account—are
for control and financial accounting purposes.
The four working capital funds include a mix of the
activities listed below:
• supply management;
• depot maintenance;
• ordnance;
• information services;
• commissary operations;
• printing and publications;
• transportation;
• financial operations;
• distribution depots;
• research and development (Navy);
• industrial plant equipment services; and
• defense reutilization and marketing service.
The Defensewide Working Capital Fund includes
the Defense Logistics Agency, the Defense Finance and
Accounting Service and the Defense Information Ser-
vices Agency. Each organization operates different activi-
ties within the single Defensewide Fund.
Keep America Strong and Secure
The DoD budget proposes $663.8 billion for FY 2010,
including $533.8 billion in discretionary budget authority
to fund base defense programs and $130 billion to support
overseas contingency operations, primarily in Iraq and
Afghanistan.27 This proposal is for significant funding for
the defense component of national security.
In remarks to Congress in January 2009, Secretary
Gates describes concerns with prior budgets and the
budget formulation process:
Our struggles to put the defense bureaucra-
cies on a war footing these past few years have
50
revealed underlying flaws in the priorities, cul-
tural preferences, and reward structures of Amer-
ica’s defense establishment—a set of institutions
largely arranged to prepare for conflicts against
other modern armies, navies, and air forces. Pro-
grams to directly support, protect, and care for
the man or woman at the front have been devel-
oped ad hoc and funded outside the Base budget.
Put simply, until recently there has not been an
institutional home in the Defense Department for
today’s warfighter. Our contemporary wartime
needs must receive steady long-term funding and
a bureaucratic constituency similar to conven-
tional modernization programs. I intend to use
the FY10 budget to begin this process.28
Secretary Gates was clearly considering the signifi-
cant amount of funding and his concern with priorities
when he expressed the following principle:
It is important to remember that every defense
dollar spent to over-insure against a remote or
diminishing risk—or, in effect, to “run up the
score” in a capability where the United States
is already dominant—is a dollar not available to
take care of our people, reset the force, win the
wars we are in, and improve capabilities in areas
where we are underinvested and potentially vul-
nerable. That is a risk I will not take.29
Secretary Gates and Chairman of the Joint Chiefs
of Staff Admiral Mullen describe the budget proposal as
representing “a budget crafted to reshape the priorities of
America’s defense establishment. If approved, these rec-
ommendations will profoundly reform how this depart-
ment does business.”30 The reshaping diminishes risk by
terminating programs and balancing low-intensity needs
with conventional capabilities. The Budget Priorities and
Resources section, above, provides insights into the sig-
nificant reshaping initiatives in the current budget pro-
posal. Overall, the budget top line at $664 billion com-
pares favorably with outlays for the most recently com-
pleted fiscal year—$667 billion in FY 2008.
 Endnotes
1
Robert M. Gates was sworn in as Secretary of Defense on 18 December 2006.
2
U.S. Department of Defense, Office of the Assistant Secretary of Defense (Public Affairs), Speech, Defense Bud-
get Recommendation Statement, as prepared for delivery by Secretary of Defense Robert M. Gates, Arlington, VA,
Budget Press Briefing, 6 April 2009, http://www.defenselink.mil/speeches/speech.aspx?speechid=1341.
3
News Transcript, U.S. Department of Defense, Office of the Assistant Secretary of Defense (Public Affairs), 5 Feb-
ruary 2007. Presenters: Secretary of Defense Robert M. Gates, Under Secretary of Defense (Comptroller) Tina Jo-
nas and Director, Force Structure, Resources and Assessment for the Joint Staff, Vice Admiral Steve Stanley, http://
www.defenselink.mil/transcripts/transcript.aspx?transcriptid=3881.
4
“DoD Releases Fiscal 2010 Budget Proposal,” U.S. Department of Defense, News Release No. 304-09, 7 May 2009,
http://www.defenselink.mil/releases/release.aspx?releaseid=12652.
5
U.S. Department of Defense, Defense Budget Recommendation Statement, Budget Press Briefing, 6 April 2009.
6
Testimony as delivered by Secretary of Defense Robert M. Gates and Chairman of the Joint Chiefs of Staff
Navy Admiral Mike Mullen to the House Armed Services Committee, 13 May 2009, http://www.jcs.mil/speech.
aspx?id=1181.
7
U.S. Department of Defense, Defense Budget Recommendation Statement, Budget Press Briefing, 6 April 2009.
8
Testimony Delivered by Secretary of Defense Robert M. Gates, to the Defense Subcommittee of the Senate Appro-
priations Committee, Wednesday, 9 May 2007, http://www.defenselink.mil/speeches/speech.aspx?speechid=1150.
9
U.S. Department of Defense, Defense Budget Recommendation Statement, Budget Press Briefing, 6 April 2009.
10
Ibid.
11
Office of the Secretary of Defense (Comptroller), Department of Defense Budget Titles, http://www.defenselink.mil/
comptroller/icenter/budget/budgtitles.htm.
12
DoD FY 2010 Budget Request Summary Justification, Special Topics, Combatant Commands, http://www.de-
fenselink.mil/comptroller/defbudget/fy2010/fy2010_SSJ.pdf.
13
Gates and Mullen testimony to the House Armed Services Committee, 13 May 2009.
14
United States Special Operations Command, FY 2010 Budget Highlights, http://www.socom.mil/Docs/FY2010_Bud-
get_Highlights.pdf.
15
DoD FY 2010 Budget Request Summary Justification, pp. 1-8 and 1-9, http://www.defenselink.mil/comptroller/def-
budget/fy2010/fy2010_SSJ.pdf.
16
DoD Defensewide Justification Documentation, Defense Health Program, Volume 1, PB-11B, http://www.de-
fenselink.mil/comptroller/defbudget/fy2010/budget_justification/pdfs/09_Defense_Health_Program/VOL_1/Vol_I_
Sec_6-C_PB-11B_MEDICAL_WORKLOAD_10PB_DHP.pdf
17
DoD FY 2010 Budget Request Summary Justification, Services and Defense Agencies, p. 1-58, http://www.de-
fenselink.mil/comptroller/defbudget/fy2010/fy2010_SSJ.pdf.
18
Missile Defense Agency, Fiscal Year 2010 Budget Estimates, http://www.mda.mil/mdaLink/pdf/budgetfy10.pdf.
19
Office of the Deputy Under Secretary of Defense, Installations and Environment, http://www.acq.osd.mil/ie/index.
shtml.
20
Statement of Mr. Wayne Arny, Deputy Under Secretary of Defense (Installations and Environment), before the Sub-
committee on Military Construction, Veterans Affairs, and Related Agencies of the House Appropriations Commit-
tee, 19 May 2009, http://www.acq.osd.mil/ie/download/posture_stmt_fy10.pdf.

The Department of Defense Budget 51

21
Office of the Deputy Under Secretary of Defense, Installations and Environment, Military Housing Privatization,
http://www.acq.osd.mil/housing/housing101.htm.
22
DoD FY 2009 Budget Request Summary Justification, 4 February 2008, page 107, http://www.defenselink.mil/comp-
troller/defbudget/fy2010/fy2010_SSJ.pdf.
23
Defense Environmental Programs, Annual Report to Congress, Fiscal Year 2008, http://deparc.xservices.com/do/
home.
24
ExpectMore.gov, Program Assessment, Chemical Demilitarization, http://www.whitehouse.gov/omb/expectmore/
summary/10000050.2005.html.
25
Statement of Mr. Wayne Arny, Deputy Under Secretary of Defense (Installations and Environment), before the Sub-
committee on Military Construction, Veterans Affairs and Related Agencies of the House Appropriations Commit-
tee, 22 April 2009, http://www.acq.osd.mil/ie/download/arny_042209.pdf.
26
Donna Miles, “BRAC Deadline Expires; DoD to Begin Closure, Realignments,” American Forces Information Ser-
vice, 9 November 2005, http://www.defenselink.mil/news/Nov2005/20051109_3280.html.
27
“DoD Releases Fiscal 2010 Budget Proposal,” 7 May 2009.
28
U.S. Department of Defense, Defense Budget Recommendation Statement, Budget Press Briefing, 6 April 2009.
29
Ibid.
30
Ibid.

52
 The Army Budget
Introduction
The Army requests $142.1 billion in Total Obligational
Authority (TOA) in the base budget proposal for Fiscal
Year (FY) 2010—1 October 2009 to 30 September 2010.
The proposal is $2 billion greater than the FY 2009 enacted
budget of $140.1 billion.1
The Army also requests an additional $83.1 billion in
FY 2010 to support ongoing overseas contingency opera-
tions (OCOs) (including the continuing military operations
in Iraq and Afghanistan), resetting the force and continuing
programs for which the Army is the executive agent—the
Afghanistan Security Forces Fund, the Joint Improvised
Explosive Device Defeat Fund (JIEDDF) and the new Pak-
istan Counterinsurgency Capability Fund.
With the base and supplemental budgets, the Army is
requesting a total of $225.2 billion in FY 2010.
In addition to the FY 2010 request, the Army requests
an additional $90.8 billion for FY 2009 for OCOs.2 The
sum of this supplemental request and the enacted $140.1
billion is $230.9 billion, $5.7 billion more than the FY
2010 total.
The Army notes that the budget proposal for FY 2010
enables the Army to continue to protect America’s national
security interests and to transform to meet the challenges
of today and the future. Then Secretary of the Army Pete
Geren and Chief of Staff of the Army General George W.
Casey, Jr., discuss these challenges in their letter transmit-
ting the 2009 Army Posture Statement to Congress:
Our nation is in its eighth year of war, a war in which
our Army—Active, Guard, and Reserve—is fully
engaged. The Army has grown to more than one
million Soldiers, with 710,000 currently serving
on active duty and more than 255,000 deployed to
nearly 80 countries worldwide. Our Soldiers and
Army Civilians have performed magnificently, not
only in Afghanistan and Iraq, but also in defense
of the homeland and in support to civil authorities
in responding to domestic emergencies.3
The Secretary and the Chief of Staff go on to state
that “the Army remains the best led, best trained, and
best equipped Army in the world, but it also remains out
of balance.”4 They also observe that the continuing
demand for land forces has stretched Soldiers and their
families, and has limited the Army’s flexibility in meeting
other contingencies:
In 2007, our Army initiated a plan based on four
imperatives: sustain our Soldiers and families;
prepare our forces for success in the current con-
flicts; reset returning units to rebuild readiness;
and transform to meet the demands of the 21st
century. We have made progress in all of these
and are on track to meet the two critical chal-
lenges we face: restoring balance and setting con-
ditions for the future.5
The FY 2010 budget fully funds the all-volunteer
force at accelerated levels: 547,400 for the active com-
ponent (AC), 358,200 for the Army National Guard and
205,000 for the Army Reserve. In addition, the budget
continues the initiatives begun in 2007 to restore balance
and set conditions for the future. The budget requests ade-
quate resources to:
• complete current operations effectively—to engage
and destroy the enemy, and to assist the host coun-
tries in achieving a basic level of peace that will
enable personal dignity, economic growth and politi-
cal stability; and
• generate the capability and capacity to deter future
challenges or decisively defeat future enemies.
Top Line Analysis
The analysis in this chapter begins with the top line,
i.e., budget totals, and subsequently examines the individ-
ual appropriations. In response to congressional require-
ments, the budget generally presents funding data for three
fiscal years—the prior year (FY 2008), the current year
(FY 2009) and the budget year (FY 2010). The FY 2010
base budget and supplemental requests are in table 49.
The Army Budget 53
 Table 49
Army Budget Summary
Total Obligational Authority
($ billions)
FY081 FY092 FY103
Base proposal4 128.9 140.1 142.1
Overseas contingency
121.7 90.83 83.1
operations (OCOs) proposal5
Total 250.6 230.9 225.2
1
The actual amounts of the base budget and OCO budget are
unavailable from Army sources. Army documents state that OCO
actuals were $13.8 billion for Military Personnel, $53.6 billion for
Operation and Maintenance, $2.7 billion for the Afghanistan Security
Forces Fund and $4.3 billion for Joint Improvised Explosive Device
Defeat; they do not identify Military Construction or Procurement.
Therefore, the total is the actual experience, the base proposal is from
the President’s Budget and the OCO is the difference between these.
2
FY09 includes the enacted base budget and bridge supplemental.
3
4
FY09 supplemental and FY10 are estimates.
Includes Environmental Restoration Act (ERA).
5
Includes OCO, Homeowner’s Assistance Program, Iraq Security Forces
Funds, Pakistan Counterinsurgency Capability Fund, Joint Improvised
Explosive Device Defeat Fund (JIEEDF) and Army Working Capital Fund
(AWCF).
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of
the Army for Financial Management and Comptroller, May 2009;
Department of Defense National Defense Budget Estimates for FY 2010
(Green Book), Office of the Under Secretary of Defense (Comptroller),
June 2009, Table 6-6
Three points are evident from the data in table 49:
1. The base budget proposal increases annually.
2. The war supplemental proposal decreases annually.
3. The base is not increasing as much as the supple-
mental proposals are decreasing; therefore, the total
decreases annually.
The FY 2010 total is 2.5 percent less than the FY
2009 total, and the FY 2009 total is 7.9 percent less than
that of FY 2008.
Army Land Forces
The Army budget is a plan for the next fiscal year
plus a proposal for resources to implement the plan. The
budget focuses on the Army mission—to provide trained
and ready land forces with the capability of operating
across the spectrum of operations and as part of the joint
force available to a combatant commander—and the
vision for implementing that mission now and into the
future. Land forces are essential to the Army mission—
they wrest control of land and people from hostile forces
and are essential for defense and stability operations in
environments where governments are nonexistent, unsta-
ble or contending with counterinsurgency.
Entering the ninth year of war against violent extrem-
ist groups, the nation continues to rely on the joint forces,
54
particularly the land forces, to stop the violent extremists,
putting great strains on the Army, Soldiers and their fami-
lies. In 2007, the Army initiated a plan to rebalance the
force—by growing the Army and by pursuing four imper-
atives: sustain, prepare, reset and transform. The Army is
seeking to balance the continuous demands of the current
war and the requirement to generate adequate quantities
of forces for the full spectrum of operations. The FY 2010
budget specifically provides funds for growing the force
and for the four imperatives.
Global Commitments
The budget supports the Army’s primary focus—con-
tinuing the support of the combined counterinsurgency
operations in Iraq and Afghanistan, which includes train-
ing each nation’s indigenous forces and building their
ability to establish peace and maintain stability. The Army
has 140,000 Soldiers in active combat theaters.
In addition to commitments to operations in Iraq and
Afghanistan, the Army’s global commitments include
more than 255,000 Soldiers deployed (including the
140,000 Soldiers in active combat theaters) in nearly 80
countries around the world. In addition, more than 4,100
Army civilians and more than 33,000 contractor person-
nel are also forward-deployed. See figure 9.
Grow the Army
In January 2007, the President requested and Con-
gress approved an increase of 74,200 Soldiers in the Army
by FY 2012. The initiative was titled “Grow the Army.”
The distribution includes increases of 65,000 in the active
Army, 8,200 in the Army National Guard and 1,000 in the
Army Reserve.
The Army budget supports the accelerated growth of
the active component to an endstrength of 547,400 Sol-
diers, the Army National Guard to 358,200 Soldiers and the
Army Reserve to 206,000 Soldiers by the end of 2010.
In the 2009 Army Posture Statement, the Secretary
and the Chief of Staff of the Army observe that the Army
has grown to more than one million Soldiers, with 710,000
currently serving on active duty. The FY 2010 budget sup-
ports 547,400 active component Soldiers, and thousands
of Army National Guard and Army Reserve Soldiers also
serve on active duty.
Sustain. The budget provides funds to sustain the quality
of the all-volunteer force, including focusing on recruit-
ment and retention; care of Soldiers, families and civil-
ians; care for wounded warriors; and support for families
of fallen Soldiers.
 Figure 9

Army Global Commitments

265,000 Soldiers deployed/forward stationed
in nearly 80 countries overseas1
as of 15 September 2009

Other Operations and

Exercises
3,390 Soldiers

Alaska U.S. Army Europe

13,200 Soldiers 38,600 Soldiers
Bosnia OEF-Afghanistan
CONUS Support Base 10 Soldiers OIF-Iraq
4,700 Soldiers2 43,500 Soldiers
KFOR 99,400 Soldiers South Korea
1,400 Soldiers OEF/OIF-Kuwait 17,200 Soldiers3
11,200 Soldiers
Honduas JTF-GTMO MFO Qatar
JTF-BRAVO 600 Soldiers 700 Soldiers 1,000 Soldiers OEF-Philippines
Hawaii
300 Soldiers 200 Soldiers
21,400 Soldiers
JTF-HOA
1,200 Soldiers

Army Personnel Strength

AC Stationed Overseas: 102,100
Component RC Authorized for Mobilization/
On Current Orders AC Stationed Stateside: 450,300
Active (AC) 552,400 4
N/A
Reserve (RC) 1
Includes active component stationed overseas.
Army Reserve 207,400 31,000 2
Reserve component mobilized stateside.
Army National Guard 362,000 68,100 3
Part of active component stationed overseas.
4
Stationed overseas – 102,100; stationed stateside – 450,300.
1,120,800

GTMO = Guantánamo JTF = Joint Task Force MFO = Multinational Force & Observers OIF = Operation Iraqi Freedom
HOA = Horn of Africa KFOR = Kosovo Force (NATO) OEF = Operation Enduring Freedom CONUS = Continental United States

Source: National Defense Budget Estimates for FY 2010, Green Book, Office of the Under Secretary of Defense (Comptroller), June 2009, Table 7-5 for AC
and Civilian component Department of the Army Fiscal Year (FY) 2010 Budget Estimates, Justification Books for Army National Guard and Army Reserve,
May 2009

Prepare. The budget for preparing the forces includes
readying Soldiers, units and equipment to succeed in the
current conflicts, especially in Iraq and Afghanistan. This
includes continuing to adapt institutional, collective and
individual training to enable Soldiers to succeed in combat
and prevail against adaptive and intelligent adversaries.
It also includes continuing to acquire the best available
equipment to both protect Soldiers and maintain a tech-
nological advantage over adversaries.
Reset. Reset focuses on restoring deployed units to a level
of personnel and equipment readiness necessary for future
missions. To reset the force, the Army budget provides
funds to revitalize Soldiers and families; repair, replace
and recapitalize equipment; and retrain Soldiers. The
Army is using a standard reset model and is continuing
a reset pilot program to further improve the effectiveness
and efficiency of the Army Force Generation (ARFOR-
GEN) process.
Transform. Transforming the force involves continu-
ously improving to meet the needs of the combatant com-
manders in the changing security environment of the 21st
century. The Army budget includes funds for adopting

The Army Budget 55

modular organizations, accelerating delivery of advanced
technologies, operating the reserve component in support
of the active forces, restationing forces and transforming
leader development.
Transformation includes the reorganization of the
Army into standardized modular organizations centered
around brigade combat teams (BCTs). The active and
reserve components are increasing the number of BCTs
and support brigades to meet operational requirements to
create a more deployable, adaptable and versatile force.
The Army plan was to grow to 76 BCTs and approxi-
mately 227 support brigades; in June 2009, Secretary of
Defense Robert M. Gates cut the active Army from 48 to
45 BCTs.
Army Force Generation
The basic underpinning of the four imperatives is
the ARFORGEN initiative. The ARFORGEN process
involves systematically increasing unit readiness over
time and increasing the availability of trained, ready and
cohesive units. The ARFORGEN process includes allo-
cating resources based on a unit’s mission and deploy-
ment sequence, regardless of component.
The process involves a six-year cycle in which units
proceed through three pools to meet operational require-
ments with increased predictability:
• Reset and Train. These forces redeploy from
operations, receive and stabilize personnel, reset
equipment and conduct individual and collective
training. The phase culminates in a brigade-level
collective training event. Units in this force pool
are not ready or available for major combat opera-
tions; however, they should be ready to respond to
homeland defense requirements and provide defense
support to civil authorities.
• Ready. These forces continue mission-specific collec-
tive training and are eligible for sourcing if necessary
to meet joint requirements. Their collective training is
designed to focus on directed Mission Essential Task
List (METL) tasks, such as stability operations.
• Available. These forces are in their planned deploy-
ment windows and are fully trained, equipped and
resourced to meet operational requirements.   Obama decided that a budget proposal for OCOs could
The ARFORGEN process applies to the active and
reserve components and relies upon a fundamental
change in strategy for the Army National Guard and the
Army Reserve—a change from a strategic reserve to an
operational force. The planning objective for involuntary
56
mobilization of Army National Guard and Army Reserve
units is one year mobilized to five years demobilized. The
planning objective for the active component is one year
deployed to two years at home station.
Budget Basics
Knowledge of certain basics federal budgeting terms
and practices is essential to an understanding of this anal-
ysis—for example, the appropriation structure and the
different means of expressing the amount of funding. This
paragraph provides an introduction to or a review of the
key budgeting terms and practices for better understand-
ing the subsequent analysis.
The Army generally expresses the budget proposal
as Total Obligational Authority in its briefing material.
The Defense Department generally expresses the budget
proposal in terms of Budget Authority (BA), as observed
in the prior section, and the Office of Management and
Budget generally expresses the President’s Budget in
terms of Outlays, as observed in the federal section. Since
each term has a unique definition, the dollar amounts for
the same fiscal year are different.
The Army budget proposal to Congress includes both
BA and TOA:
• Budget Authority is the authority provided by law to
incur financial obligations that will result in Outlays.
• Total Obligational Authority is the sum of:
◦ Budget Authority for a given fiscal year;
◦ balances of Budget Authority brought forward
from prior years that remain available for obliga-
tion in the fiscal year; and
◦ amounts authorized to be credited to a specific
fund or account during that year, including trans-
fers between funds or accounts.
The federal budget process requires a separate sub-
mission for “emergency requirements,” i.e., where the
future circumstance are unknown or unpredictable. As
the emergency situation becomes clearer, the administra-
tion submits a supplemental proposal to Congress. The
military operations in Afghanistan and Iraq were consid-
ered such an emergency situation. However, President
be prepared along with the base budget, and has acted
accordingly.
An organization may be designated as an execu-
tive agent when, typically, there is a nexus between an
organization’s experience and a particular program. For
example, certain appropriations are in the DoD budget
proposal, but the funds for the program are executed
by the Army. This difference, between where the funds
are requested and where the funds are executed, needs
to be considered when making comparisons across the
years.
The Army budget is prepared in current dollars, and
therefore all tables and figures are in current dollars, unless
specifically noted otherwise. The difference between
current and constant dollars is:
• Current dollars are a measure of spending or rev-
enues in a given year that has not been adjusted for
differences in prices (such as inflation).
• Constant dollars are a measure of spending (or
revenues) in a given year that has been adjusted for
differences in prices (such as inflation) between that
year and a base year.
Army Appropriations
The Army appropriations are listed below and dis-
cussed in subsequent paragraphs.
• Military Personnel, Army;
• Reserve Personnel, Army;
• National Guard Personnel, Army;
• Operation and Maintenance, Army;
• Operation and Maintenance, Army Reserve;
• Operation and Maintenance, Army National Guard;
• Aircraft Procurement, Army;
• Missile Procurement, Army;
• Procurement of Weapons and Tracked Combat Vehi-
cles, Army;
• Procurement of Ammunition, Army;
• Other Procurement, Army;
• Research, Development, Test and Evaluation, Army;
• Military Construction, Army;
• Military Construction, Army National Guard;
• Military Construction, Army Reserve;
• Family Housing Construction, Army;
• Family Housing Operations, Army;
• Chemical Agents and Munitions Destruction, Army;
• Environmental Restoration Fund, Army; and
• Defense Working Capital Fund, Army.
In addition, the Army receives funds allocated spe-
cifically for Base Realignment and Closure (BRAC).
Budget Formulation Process
The Army Budget Formulation process is critical
because it produces the only product—the budget—that
is approved by DoD and the President and is submitted
to Congress for authorizations and appropriations. Army
Budget Formulation responds to DoD Planning, Program-
ming, Budgeting and Execution (PPBE), and DoD PPBE
responds to the federal process that is governed by the
Office of Management and Budget (OMB) and is respon-
sive to Congress.
The federal budget formulation process begins with
dollar guidance from the OMB to the departments, includ-
ing DoD. DoD distributes the guidance, or controls, to the
services and other DoD agencies. Headquarters, Depart-
ment of the Army distributes the dollar controls and pro-
mulgates guidance among the Army commands, Army
service component commands and direct reporting units.
The Army, like all federal agencies, prepares its budget
using the appropriation structure prescribed by Congress.
The Army process includes accumulating and integrating
budget proposals from across the Army; reviewing, ana-
lyzing and prioritizing the budget requests; and obtain-
ing approval and preparing hundreds of exhibits and other
detail justification material.
The Army submits its budget proposal to the DoD
Comptroller for joint DoD and OMB review. DoD issues
draft Program Budget Decisions (PBDs) and the Army
prepares reclamas. At the end of process, the Secretary
of the Army or the Assistant Secretary of the Army for
Financial Management and Comptroller (ASA[FM&C])
meets with the Secretary or Deputy Secretary of Defense
to resolve major budget issues. As approved, the Army
budget becomes part of the President’s Budget that is sub-
mitted to Congress in February.
Congress reviews the budget with the intent of provid-
ing appropriation acts to the President before the begin-
ning of the fiscal year. However, if no congressional budget
agreement is reached by 1 October, Congress passes Con-
tinuing Resolution Acts (CRA), which allow the depart-
ments to continue operating within stipulated restrictions.
When the President signs the appropriation acts
into law, first the U.S. Treasury, then DoD and next the
Army receives funds for execution. The various appro-
priations carry specific restrictions. For example, most
The Army Budget 57
appropriations expire at the end of one or three or five
fiscal years, and money generally cannot be moved across
appropriations without prior congressional reprogram-
ming approval.
Budget Documents
The Army budget includes separate documents for each
appropriation. In fact, the ASA (FM&C) lists about 35 doc-
uments, which contain perhaps 10,000 pages of detail.6
In addition to actual budget documents, other docu-
ments such as the 2009 Army Posture Statement and testi-
mony to Congress provide other pertinent information on
the budget and the Army’s resource needs. This analysis
integrates key information from the many sources, orga-
nizes the information under topical categories and pro-
vides insights on the budget.
Budget Summary
The Army budget is a plan for the next fiscal year
along with a proposal for resources to implement the
plan. The budget is built with participation from across
the Army and includes a great deal of detailed data, such
as appropriation, budget activity, program, function and
component; within these there are various levels of detail.
The budget reflects the recommendations as reviewed and
approved by many organizations. The budget integrates,
prioritizes and balances operational, functional and pro-
grammatic requirements; it is presented with thousands of
pages of justification material to the Secretary of Defense,
OMB and, ultimately, Congress.
Congress requires budget information for at least three
years—the prior year (i.e., last completed), the current
year and the budget year. In addition, Congress requires
that the budget comply with the appropriation structure
and associated mandates and restrictions.
The intent of the multiyear display of data is to facili-
tate comparisons across the years; however, comparisons
are more challenging with annual supplemental budgets.
The prior-year data include all supplemental funds. The
current-year data include enacted base and supplemental
funds, commonly described as “bridge” funds, if enacted.
The budget-year data distinguishes base and supplemen-
tal proposals. These distinctions make multiyear compari-
sons and trend analyses very difficult.
Budget by Appropriation
The sum of the base budget and OCO funds for the
three fiscal years is:
58
• FY 2008–$250 billion;
• FY 2009–$231.0 billion; and
• FY 2010–$225.2 billion.
The FY 2010 sum is nearly $6 billion less than for
FY 2009, and $25 billion or 10 percent less than the FY
2008 actual experience. Since the FY 2009 and FY 2010
proposals are similar, the following observations refer to
comparisons of the sum of the FY 2010 base and OCO
proposals with the FY 2008 experience:
• The Operation and Maintenance, Army (OMA)
appropriation consistently consumes the greatest
portion of the budget—37 percent in FY 2010.
• Military Personnel, Army (MPA) consumes the
next greatest portion at 22 percent and increases
by $5 billion or 12 percent more than the FY 2008
experience.
• Procurement is the third largest at 14 percent, but
declines by $30.3 billion or 50 percent from the FY
2008 experience. Within the Procurement group,
between FYs 2010 and 2008:
◦ the Aircraft appropriation increases by $1.1
billion or 18 percent;
◦ the Missiles appropriation decreases by $0.5
billion or 21 percent;
◦ the Weapons and Tracked Combat Vehicles appro-
priation decreases by $6.2 billion or 66 percent;
◦ the Ammunition appropriation decreases by $0.2
billion or 7 percent; and
◦ the Other Procurement appropriation decreases
by $24.4 billion or 60 percent.
• The combination of MPA and OMA is 59 percent of
the FY 2010 budget proposal. Adding the Military Pay
and Operation and Maintenance appropriations for the
Army National Guard and the Army Reserve increases
this to 69 percent of the FY 2010 budget proposal.
• Research, Development and Acquisition (RDA,
comprising Procurement and Research, Develop-
ment, Test and Evaluation) equals $41 billion or 18
percent of the FY 2010 budget proposal.
• All of the other appropriations account for the
remaining 13 percent of the FY 2010 budget proposal.
A summary of the Army budget proposal is in table 50.
 Table 50

Army Summary
Total Obligational Authority by Component and Appropriation Group
($ billions1)

FY08 FY09 FY10

Appropriation Base Base
Actual2 OCO OCO
Enacted Estimate
Personnel 45.0 36.5 11.0 41.3 9.0
  Medicare-Eligible Retiree Health Care Fund 3.1 2.9 3.1
Operation and Maintenance 82.8 31.3 51.4 31.3 52.2
Total Procurement 60.9 23.2 13.5 21.1 9.5
  Aircraft 5.9 4.9 0.8 5.3 1.6
  Missiles 2.4 2.2 0.8 1.4 0.5
  Weapons and Tracked Combat Vehicles 9.4 3.2 2.5 2.5 0.8
  Ammunition 2.7 2.3 0.3 2.1 0.4
  Other Procurement 40.5 10.7 9.1 9.9 6.2
Research, Development, Test and Evaluation 12.5 12.0 0.1 10.4 0.1
Military Construction 5.3 4.7 1.2 3.7 0.9
Army Family Housing 1.1 1.0 0.8
Homeowners' Assistance Program 0.0 0.0
Base Realignment and Closure (BRAC) 4.1 4.4 4.2
Environmental Restoration, Army 3
0.5 0.4
Army National Guard
Personnel 9.2 6.6 1.6 7.6 0.8
Medicare-Eligible Retiree Health Care Fund 1.3 1.2 1.2
Operation and Maintenance 6.9 5.8 0.5 6.3 0.3
Military Construction 0.6 0.9 0.4
Army Reserve
Personnel 4.7 3.9 0.3 4.3 0.3
Medicare-Eligible Retiree Health Care Fund 0.7 0.7 0.7
Operation and Maintenance 2.7 2.6 0.2 2.6 0.2
Military Construction 0.1 0.3 0.4
Chemical Demilitarization 1.5 1.6 1.7
Army Working Capital Fund 1.3 0.1 0.4 0.0
Joint Improvised Explosive Device Defeat Fund 4.3 3.5 0.6 1.5
Afghanistan Security Forces Fund 3.0 5.6 7.5
Iraq Security Forces Fund 1.0
Pakistan Counterinsurgency Capability Fund 0.4 0.7
Total 250.6 140.2 90.8 142.1 83.1
1
Numbers may not add due to rounding.
2
FY08 are actual Total Obligational Authority including base and supplemental.
3
ERA is executed in Operation and Maintenance, Army for FY08 but the budget proposal is in a separate line for FY09 and FY10.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense National Defense Budget Estimates for FY 2010 (Green Book), Office of the Under Secretary of Defense (Comptroller), June 2009, Table 6-6

The Army Budget 59

Overseas Contingency Operations The FY 2008 OCO budget proposal for Procurement
The OCO funds provide the incremental costs for was $21.1 billion; the FY 2010 OCO proposal is $9.5 bil-
military and intelligence operations, force protection, lion—a decrease of $11.6 billion. The base proposal for
Procurement in FY 2008 was $23.8 billion; the FY 2010
training, overseas facilities and base support, communica-
base proposal is $21.1 billion—a decrease of $2.7 billion.
tions, transportation, maintenance, supplies, weapons and
equipment refurbishment or replacement, and other essen- The sum of the base and OCO for FY 2008 was $44.9
tials for U.S. forces. The funds also support deployed per- billion; the sum for FY 2010 is $30.6 billion—a decrease
sonnel with special pay and benefits, food, medical and of $14.3 billion or 32 percent.
other services, and training and equipping of Iraqi and The subsequent discussion focuses on the individual
Afghan security forces. appropriations.
The Army budget material provides information on
the distribution of the OCO funds in FYs 2009 and 2010,
Personnel
but provides information only on Military Personnel, The American Soldier is the nucleus of Army forces
Operation and Maintenance, the Afghanistan Security and the ultimate Army capability. Soldiers operate the
Forces Fund and the Joint Improvised Explosive Devices high-technology systems of the modern Army and Soldiers
Defeat Fund (JIEDDF) for the FY 2008 experience. provide “boots on the ground” to close with the enemy in
close combat. Soldiers are the ultimate representatives of
However, the FY 2008 budget proposal included another
the America people as they interact with the local people
$23.3 billion for Procurement, Research, Development, in stability and counterinsurgency operations.
Test and Evaluation (RDT&E), Military Construction and
the Army Working Capital Fund that is not included in the The American Soldier serves in one of three
Army budget material. See table 51. components: the active Army, Army National Guard and
Army Reserve.
Table 51
The Army civilian workforce constitutes the fourth
Overseas Contingency Operations component and provides expertise and continuity for the
($ billions1)
other components at home and abroad. Contractor per-
FY082 FY09 FY10 sonnel also support and often serve alongside Soldiers.
Military Personnel 13.8 12.9 10.1 In addition, Soldiers receive support from their fami-
Operation and Maintenance 53.6 52.1 52.7 lies, who endure hardships and make many sacrifices.
Procurement 21.1 13.5 9.5
More than half of all Soldiers are married, and Army fam-
ilies include more than 700,000 children.
Research, Development,
0.1 0.1 0.1 The Army budget supports retaining and recruiting
Test and Evaluation (RDT&E)
Military Construction quality Soldiers to sustain the all-volunteer force. The
0.7 1.2 0.9 budget supports the Army’s commitment to meeting
(MILCON)
Army Working Capital Fund
adequate quality-of-life standards for Soldiers and their
1.4 0.4 families, to providing a safe and conducive work envi-
(AWCF)
ronment for Soldiers, Army civilians and contractors,
Afghanistan Security Forces 2.7 5.6 7.5
and to training and professional development for Soldiers
Iraq Security Forces 1.0 and civilians.
Pakistan Counterinsurgency 0.4 0.7
Joint Improvised Explosive
Endstrength
4.3 3.6 1.5
Devices Defeat Fund The Army proposes and Congress authorizes the number
Total 97.7 90.8 83.1 of Soldiers and Army civilians who serve in and work for the
Army, i.e., endstrength. Endstrength is managed separately
1
Numbers may not add due to rounding.
2
FY 2008 execution data are incomplete and unavailable from Army by each of the components: active Army, Army National
sources; the FY 2008 supplemental proposal included a total of $23.3 Guard, Army Reserve and Army civilians.
billion—$21.1 billion for Procurement, $0.1 billion for RDT&E, $0.7 billion
for MILCON and $1.4 billion for AWCF. At the end of the Cold War, endstrength was on the
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the
Army for Financial Management and Comptroller, May 2009; DoD FY decline. Military endstrength declined by an additional 30
2010 Budget Request Summary Justification, Overseas Contingency percent and civilian endstrength by 42 percent between
Operations
FYs 1990 and 2000. The Army National Guard and Army

60
Reserve continued to decline until FY 2005; the active
and civilian components increased slightly. Between FYs
2005 and 2010:
• the active Army increases by 11 percent;
• the Army National Guard increases by 7.5 percent;
• the Army Reserve increases by 8.5 percent; and
• the civilian component increases by 8 percent.
See figure 10 for endstrength trends from the Cold
War to the FY 2010 budget proposals for the active Army,
Army National Guard, Army Reserve and Army civilians.
The growth in endstrength is largely the result of
President George W. Bush’s decision in January 2007 to
increase the overall endstrength of the Army and Marine
Figure 10
Corps. The President’s intent was to better pursue the war
on terrorism, to reduce the excessive demands on land
force units and to reduce the stress on Soldiers, Marines
and their families. Under this plan, Army endstrength
increases as follows:
• the active component from 482,400 in the FY 2007
President’s Budget request to 547,400 by FY 2012,
an increase of 65,000;
• the Army National Guard from 350,000 in the FY
2007 President’s Budget request to 358,200 by FY
2013, an increase of 8,200; and
• the Army Reserve from 200,000 in the FY 2007
President’s Budget request to 206,000 by FY 2013,
an increase of 6,000.

Personnel Endstrength
(personnel in thousands)

2,000

1,750

1,500

1,250

1,000 Active Army

750

Army National Guard

500

Army Reserve
250

Army Civilians

0
FY85 FY90 FY95 FY00 FY05 FY06 FY07 FY08 FY09 FY10

Source: National Defense Budget Estimates for FY 2010, Green Book, Office of the Under Secretary of Defense (Comptroller), June 2009, Table 7-5 for
AC and Civilian component Department of the Army FY 2010 (Green Book), Budget Estimates, Justification Books for Army National Guard and Army
Reserve, May 2009

The Army Budget 61

 The FY 2010 budget supports the following Table 52
endstrength:
Military Personnel Appropriations
• 547,400 in the active component, an increase of ($ billions1)

15,000 over FY 2009 that achieves the Army’s goal FY082 FY093 FY104
two years ahead of schedule; Military Personnel, Army 47.9 50.4 53.6
• 358,200 in the Army National Guard, an increase National Guard Personnel, Army 9.2 9.4 9.6
of 5,600 over FY 2009 that achieves the goal three Reserve Personnel, Army 4.7 4.9 5.3
years ahead of schedule; and
Total 5
61.8 64.7 68.5
• 205,000 in the Army Reserve, which represents no 1
Numbers may not add due to rounding.
change and is within 1,000 Soldiers of the goal. 2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
The endstrength for each military component is 5
Includes Medicare-Eligible Retiree Health Care Fund.
funded by a separate appropriation. Source: FY 2010 President’s Budget Highlights, Assistant Secretary of
the Army for Financial Management and Comptroller, May 2009;
Department of Defense Fiscal Year 2010 Budget Request, Military
Military Personnel Personnel Programs (M-1), May 2009

The federal budget process requires separate appro-

priations for military pay and allowances for each of the
military components. Collectively, the three are the Mili-
tary Personnel (MILPERS) group. The Army military
pay appropriations are Military Personnel, Army (MPA),
National Guard Personnel, Army (NGPA) and Reserve
Personnel, Army (RPA).
Each of the three MILPERS appropriations is cen-
trally managed and provides the funds for pay and allow-
ances, monetary benefits and incentives and subsistence.
The active Army appropriation differs from the reserve
component’s appropriations, e.g., MPA includes funds
for permanent change of station (PCS). The NGPA and
RPA include funds for certain training, e.g., annual train-
Military Accrual Accounts
The military accrual accounts for retirement and
health care involve funding for expenses regardless of
when the payment is made. The amount is a function
of entitlements and endstrength; the increase in military
endstrength increases the contributions to the Retired
Pay Accrual and Health Accrual accounts. The payments
in the FY 2010 budget proposal are $13.1 billion, or 19
percent of the Military Personnel group. See table 53.
Table 53
Military Retired Pay Accruals
($ billions1)

ing, inactive duty training (drills), active duty for school Retired Pay Accrual FY082 FY093 FY104
training or a special training. The reserve appropriations
Military Personnel, Army (MPA) 5.6 5.2 6.4
also provide for the pay and benefits for active Guard and
Reserve Soldiers, who provide the backbone of manag- National Guard Personnel, Army
0.9 0.9 1.1
ing day-to-day requirements, supporting unit and Soldier (NGPA)
mobilization and demobilization, and recruiting and Reserve Personnel, Army (RPA) 0.5 0.5 0.6
retaining a quality force. Subtotal 7.0 6.6 8.1
The MPA appropriation pays all Soldiers on active Health Fund Accrual5
duty regardless of their component. Currently, 710,000 Military Personnel, Army (MPA) 3.1 2.9 3.1
Soldiers are serving on active duty.7 The overall end-
National Guard Personnel, Army
strength in FY 2010 will likely be about the same; (NGPA)
1.3 1.2 1.2
however, the mix will change with the Grow the Army
Reserve Personnel, Army (RPA) 0.7 0.7 0.7
initiative. The active component endstrength will increase
in FY 2010, and the number of reserve component Sol- Subtotal 5.1 4.8 5.0
diers on active duty will likely decrease. Total 12.1 11.4 13.1
The budget proposal provides a 2.9 percent military 1
Numbers may not add due to rounding.
2
FY08 are actuals.
basic pay raise, an increase of 6.5 percent for the basic 3
FY09 are enacted base and supplemental proposal.
allowance for housing, and an increase of 5 percent for 4

subsistence. The President’s Budget for the Military Per-
sonnel appropriations is in table 52.
5
FY10 are base and supplemental proposal.
Medicare-eligible Retiree Health Fund Contribution.
Source: Department of the Army FY 2010 Budget Estimates, MPA, NGPA
and RPA Justification Books, May 2009

62
 The Retired Pay Accrual account consumes $8.1 compensation accounts for a considerable portion of the
billion or 11.8 percent of the Military Personnel group in O&M appropriations. Therefore, pay raise rates are key
FY 2010. contributors to increases in the Military Personnel appro-
The Health Accrual account consumes $5 billion or priations and the O&M appropriations. The President’s
7.3 percent of the Military Personnel group in FY 2010. Budget proposal for FY 2010 includes a military pay raise
of 2.9 percent and a civilian pay raise of 2.0 percent, both
Civilian Personnel beginning on 1 January 2010.
The Army civilian endstrength proposal is 250,100, or
22.5 percent of total military personnel. The civilian per- Operation and Maintenance
sonnel data by the various appropriations are in table 54. The Operation and Maintenance (O&M) appropria-
tions provide the resources for the day-to-day costs of
Table 54 operating the Army, including training and achieving
Civilian Endstrength readiness, sustaining and managing the forces, installa-
(in thousands) tion operations, Soldier and family programs and more.
Percentage The O&M appropriations contribute to the four impera-
Direct hires FY09 FY10
FY10 tives: Sustain, Prepare, Reset and Transform.
Operation and
Maintenance, Army
132.7 140.1 56.0% The O&M group includes three appropriations:
Operation and • Operation and Maintenance, Army (OMA) for the
Maintenance, Army 28.1 29.1 11.6% active component;
National Guard
Operation and • Operation and Maintenance, Army National Guard
Maintenance, Army 11.9 11.9 4.8% (OMNG); and
Reserve
• Operation and Maintenance, Army Reserve (OMAR).
Research, Development,
17.4 17.2 6.9%
Test and Evaluation The base budget proposal for the O&M group in FY
Military Construction 5.5 5.7 2.3% 2010 accounts for 28 percent of the base budget; with the
Family Housing 0.5 0.5 0.2% supplemental, the O&M group accounts for 37 percent. In
Army Working Capital FY 2008, the actual expenditures for the O&M group also
29.8 29.6 11.8%
Fund account for 37 percent of all expenditures.
Subtotal 226.0 234.0 93.6% The individual appropriations include up to four
Indirect hires Budget Activities (BAs); each BA includes Budget Activ-
Operation and
15.8 15.4 6.2%
ity Groups (BAGs); each BAG includes subactivity
Maintenance, Army groups (SAGs). The title of each activity or subactivity is
Other 0.8 0.7 0.3% generally descriptive of the purposes, projects or types of
Subtotal 16.6 16.1 6.4% activities that it finances. The four BAs are:
Total 242.6 250.1 100.0%
• BA1: Operating Forces;
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the
Army for Financial Management and Comptroller, May 2009 • BA2: Mobilization;
• BA3: Training and Recruiting; and
The Operation and Maintenance group employs more
than 72 percent of the civilian workforce; civilian pay • BA4: Administration and Servicewide Support.
consumes more than 25 percent of the O&M appropri- The reserve component uses only two of the four BAs:
ation group. Typically, civilian pay consumes approxi-
mately 11 percent of the budget. • BA1: Operating Forces; and

Pay Raise Rates • BA4: Administration and Servicewide Support.

Military compensation accounts for the major The budget data on OMA, OMNG and OMAR with
portion of the Military Personnel appropriations; civilian BA and BAG levels of detail are in table 55.

The Army Budget 63

 Table 55

Army Operation and Maintenance

($ millions1)

Operation and Maintenance, Army (OMA) FY082 FY093 FY104

BA1: Operating Forces
  Land Forces 4,229.6 4,667.4 4,782.2
  Land Forces Readiness 3,083.0 3,161.5 3,414.5
  Land Forces Readiness Support 58,990.2 44,983.4 10,724.3
Subtotal BA1 66,302.8 52,812.3 18,921.1
BA2: Mobilization
  Mobility Operations 347.9 313.3 332.2
Subtotal BA2 347.9 313.3 332.2
BA3: Training and Recruiting
  Accession Training 568.4 712.7 721.8
  Basic Skills and Advanced Training 2,088.8 2,533.4 2,683.5
  Recruiting and Other Training and Education 1,223.0 1,333.2 1,302.4
Subtotal BA3 3,880.2 4,579.3 4,707.7
BA4: Administration and Servicewide Support
  Security Programs 2,050.1 1,685.4 1,017.1
  Logistics Operations 5,187.5 4,645.3 2,070.3
  Servicewide Support 4,666.8 3,828.8 3,782.3
  Support of Other Nations 403.1 429.5 444.1
Subtotal BA4 12,307.5 10,589.0 7,313.8
Subtotal OMA 82,838.4 68,293.8 31,274.9
Operation and Maintenance, Army National Guard (OMNG)
BA1: Operating Forces 6,294.6 5,683.2 5,640.9
BA4: Administration and Servicewide Support 563.4 442.4 616.1
Subtotal OMNG 6,858.0 6,125.6 6,257.0
Operation and Maintenance, Army Reserve (OMAR)
BA1: Operating Forces 2,568.1 2,551.1 2,464.9
BA4: Administration and Servicewide Support 156.7 128.4 155.3
Subtotal OMAR 2,724.7 2,679.5 2,620.2
Total Operation and Maintenance (excludes Security Forces) 92,421.1 77,098.9 40,152.1
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base only
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Operation and Maintenance Programs (O-1), May 2009

Operation and Maintenance, Army Overview
The OMA budget provides funds for realistic training
at unit and individual levels, recruiting of the all-volun-
teer force, weapon system maintenance and servicewide
support for logistic operations, transportation and commu-
nications. The budget increases funds to family programs
and warfighter and family support programs. These pro-
grams provide a full range of services to Soldiers and their
families, helping them respond to transitions, separations
and deployments.
The appropriation also provides the DoD contribu-
tion to the North Atlantic Treaty Organization (NATO),

64
and funds the Army’s executive agent responsibili-
ties for U.S. European Command (USEUCOM), U.S.
Southern Command (USSOUTHCOM) and U.S. Africa
Command (USAFRICOM).
Budget Activity 1: Operating Forces. In the base bud-
get, Budget Activity 1 (BA1) includes $18.9 billion for
FY 2010. BA1 consumes 60 percent of the appropriation
and is larger than many appropriations.
The BA includes three Budget Activity Groups:
• Land Forces ($4.8 billion) provides resources for
executing the ground operational tempo and flying-
hour training strategy, the operations of forces such
as brigade combat teams and modular support bri-
gades, echelons above brigades, theater-level assets
and special force-related training activities. This
BAG increases by nearly $0.5 billion over the FY
2008 actual.
• Land Forces Readiness ($3.4 billion) includes
activities essential to operational readiness, such as
depot maintenance, participation in joint exercises,
communications infrastructure, intelligence support
for combatant commands and combat development.
This BAG increases by nearly $0.4 billion over the
FY 2008 actual.
• Land Force Readiness Support ($10.7 billion)
provides for infrastructure maintenance and support,
management headquarters, unified command
support, and special activities of the operating
forces, to include contingency operations. This BAG
decreases by more than $48 billion from the FY
2008 actual.
For FY 2008–FY 2010 funding comparisons of
OMA’s other Budget Activities—BA2: Mobilization,
BA3: Training and Recruiting and BA4: Adminstration
and Servicewide Support—see table 55.
Operation and Maintenance, Army National
Guard Overview
With the demands of the continuing war, the Army
National Guard has converted from a strategic reserve
force to an operational force. This involves transforming
into modular, capabilities-based forces capable of seam-
lessly integrating with other Army formations in joint and
combined expeditionary and campaign operations.
The OMNG appropriation provides funds to operate
and maintain Army National Guard units in 50 states
and four territories, including Puerto Rico, the U.S.
Virgin Islands, the Territory of Guam and the District of
Columbia. The Army National Guard forces support the
nation’s global operations and Homeland Defense/Home-
land Security missions.
The OMNG account includes two Budget Activities:
BA1: Operating Forces, and BA4: Administration and
Servicewide Activities. The total FY 2010 budget pro-
posal is $6.3 billion—$0.6 billion less than the FY 2008
experience.
Budget Activity 1: Operating Forces. The Operating
Forces BA includes the same three BAGs as the OMA:
Land Forces, Land Forces Readiness and Land Forces
Readiness Support. BA1 funds provide for the day-to-
day operational and readiness training activities of the
Army National Guard forces.
Budget Activity 4: Administration and Servicewide Ac-
tivities. This activity provides funds for staff manage-
ment, servicewide communications, manpower manage-
ment and other personnel support.
Operation and Maintenance, Army Reserve
Overview
The Army has called to active duty 100,000 Army
Reserve Soldiers to support the war on terrorism. To
meet the demands of the continuing war, the Army
Reserve has converted from a strategic reserve force to
an operational force.
The Army Reserve is transforming low-demand
units with low operational tempo (OPTEMPO) cost
to high-demand units with high OPTEMPO cost. The
Army Reserve is also redistributing 16,000 spaces from
the Tables of Distribution and Allowances (TDA) orga-
nizations to high-demand units between FYs 2008 and
2013.
The OMAR appropriations include two Budget
Activities: BA1: Operating Forces, and BA4: Adminis-
tration and Servicewide Activities.
The OMAR appropriation provides funds for:
• operational, logistical, administrative, engineering
and management support;
• installation management, maintenance of real
property and record maintenance;
• personnel support to retirees, veterans and their
families; and
• civilian pay, information systems, networks, tele-
communications, supplies, fuel, equipment and
base operations support.
The Army Budget 65
 The FY 2010 OMAR budget request provides training
and support for an average strength of 205,000 Soldiers
and includes a mobilization offset for 24,000 mobilized
Soldiers. The OMAR budget also provides funding for
11,900 Army civilian employees, including 9,000 Military
Technicians.
Budget Activity 1: Operating Forces. The budget pro-
posal for BA1 is $2.5 billion. The funds are distributed
among the same three SAGs as OMA and OMNG: Land
Forces, Land Forces Readiness and Land Forces Readi-
ness Support.
Budget Activity 4: Administrative and Servicewide Ac-
tivities. The proposal for BA4 is $0.2 billion. This activity
provides funds for staff management, servicewide com-
munications, manpower management and other personnel
support. The activities include dollars for civilian pay and
other support costs (e.g., travel, contracts, supplies and
services) for civilian and military, and for Army Manage-
ment Headquarters Activities, including the Office of the
Chief, Army Reserve and United States Army Reserve
Command.
Research, Development and Acquisition
The Research, Development and Acquisition (RDA)
title refers to the aggregation of the Research, Develop-
ment, Test and Evaluation (RDT&E) appropriation and
the Army’s five Procurement appropriations. The RDA
appropriations provide funds for materiel capabilities to
support current operations, and to develop and field mate-
riel capabilities.
The RDA budget proposal is $43.2 billion for FY
2010; this includes base and supplemental proposals for
RDT&E, the five Procurement appropriations and the Joint
Improvised Explosive Device Defeat Fund. See table 56.
Table 56
Army Research, Development and Acquisition
($ millions)
FY081 FY09
Research, Development,
12.6 12.1
Test and Evaluation
Procurement 65.5 40.2
Total 78.1 52.3
1
FY08 are actuals.
2
FY09 are enacted and include Joint Improvised Explosive Device
Defeat Fund (JIEDDF).
3
FY10 are estimates and include JIEDDF.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of
the Army for Financial Management and Comptroller, May 2009;
Department of Defense Fiscal Year 2010 Budget Request, Procurement
Programs (P-1) and Research, Development, Test and Evaluation
Programs (R-1), May 2009
66
The RDA proposal accounts for 19 percent of the
total Army budget for FY 2010; by comparison, RDA
accounts for 30 percent of the DoD budget.
The budget continues the Army’s investment strat-
egy that balances acquisitions for current operations and
pursuit of technological opportunities for future acquisi-
tions. The investments involve:
• modernization programs that develop and
procure new systems with improved warfighting
capabilities;
• recapitalization programs that rebuild or provide
selected upgrades to systems that are currently
fielded to ensure operational readiness and a zero-
time, zero-mile system; and
• maintenance programs that repair or replace end
items, parts, assemblies and subassemblies that wear
out or break.
In light of the quantity and diversity of materiel
systems, the Army follows a systematic approach to pur-
suing and acquiring materiel capabilities. The approach
involves developing, producing and sustaining materiel
solutions from RDT&E to the post-production acquisi-
tions that sustain fielded systems. The Army describes
this acquisition approach as four phases:
• Concept and Technology Development—includes
concept exploration, decision review and advance
development of components.
• Systems Development and Demonstration—
includes systems integration, systems demonstration
and interim progress review.
• Production and Deployment—includes low-rate
initial production, full-rate production decision
review, and full-rate production and deployment.
• Operations and Support—includes supply mainte-
nance, transportation, sustaining engineering, data
FY10
management, information technology supportability,
safety, environmental management, etc.
10.5
32.7 The Army is both pursuing future technologies and
43.2 spinning out emerging technologies to existing systems
to stay ahead of adversaries and to provide a decisive
edge to America’s Soldiers.
However, the RDT&E proposal is down 16 percent
from the FY 2008 experience. Procurement is down nearly
$35 billion, or more than 50 percent from the FY 2008
experience and $7.5 billion from the FY 2009 proposal.
Top Ten Weapon Systems
The RDA budget involves research into many dif-
ferent technologies and the acquisition of hundreds of
weapon and other materiel systems. However, just ten
weapon systems account for 37.5 percent of all RDA
funds in FY 2010. Of the top ten, the RDT&E for the
Future Combat Systems (FCS) is the single largest item
in RDA.
The top ten systems in RDA, in terms of dollars, are
shown in table 57.
Research, Development, Test and Evaluation
The Research, Development, Test and Evaluation
base budget is 7 percent of the total base budget proposal.
The RDT&E appropriation enables the Army to explore
and examine new technologies and transition emerging
technology into weapon and materiel systems, system
upgrades and other products for the warfighter.
The RDT&E budget includes seven Budget
Activities; each includes Program Elements (PEs) that
contain one or more projects. The individual projects
encompass a wide range of research, e.g., independent
laboratory research; avionic, ballistics, engineering,
information technology, medical and warfighter tech-
nologies; test ranges and facilities; and product improve-
ment programs.
Table 57
The RDT&E base budget proposal declines from
the FY 2008 experience by nearly 4 percent in FY 2009,
and another 13 percent between FYs 2009 and 2010. The
funding proposal for six of the BAs decline; only BA7:
Operational Systems Development, increases.
Future Combat Systems (FCS) remains the largest
single RDT&E program at $2.6 billion, or 25 percent of
all funds. See table 58 for RDT&E by BA.
The Army RDT&E proposal accounts for 13 percent
of DoD RDT&E. The other services are investing much
more in RDT&E than is the Army.
The follow paragraphs provide information on each
RDT&E BA.
Budget Activities 1–3: Science and Technology. BA1:
Research, BA2: Applied Research and BA3: Advanced
Technology Development are collectively known as the
Science and Technology (S&T) Program. The Army S&T
Master Plan focuses on developing and transitioning tech-
nology into weapon systems, system upgrades and other
products for the warfighter.
The S&T program for FY 2010 accounts for $1.8
billion or 17.7 percent of the RDT&E budget. However, the
S&T budget vacillates with an increase of $171 million or
6 percent between FYs 2008 and 2009, then a decrease of
$1.2 billion or 39 percent between FYs 2009 and 2010.

Research, Development and Acquisition Programs1

Top Ten Systems
($ millions2)

RDT&E Procurement Total RDA2

Future Combat Systems (FCS) 2,653.0 327.9 2,981.0
Ammunition 1,733.0 1,733.0
Black Hawk Utility Helicopter (UH-60) and Utility Helicopter Modifications 33.5 1,424.1 1,457.6
Family of Medium Tactical Vehicles (FMTV) 1,158.5 1,158.5
Chinook Cargo Helicopter Modernization (CH-47) 1,014.0 1,014.0
Patriot Medium Extended Air Defense System (MEADS) and Patriot
580.4 409.6 990.0
Advanced Capability-3 (PAC-3)
Family of Heavy Tactical Vehicles (FHTV) 813.0 813.0
Warfighter Information Network-Tactical (WIN-T) 180.7 544.2 724.9
Bradley Program Modifications 526.0 526.0
Apache Longbow Attack Helicopter (AH-64) Modifications 426.0 426.0
Total 3,447.6 8,376.3 11,824.0
1
Research, Development & Acquisition (RDA) equals Procurement plus Research, Development, Test and Evaluation (RDT&E).
2
Numbers may not add due to rounding.
Source: Department of Defense Program Acquisition Costs by Weapon System, May 2009; FY 2010 President’s Budget Highlights, Assistant Secretary of
the Army for Financial Management and Comptroller, May 2009

The Army Budget 67

 Table 58

Research, Development, Test and Evaluation

($ millions1)

FY082 FY093 FY104

Basic Research5 373 438 377
Applied Research 5
1,177 1,230 781
Advanced Technology Development 5
1,320 1,400 695
Advanced Component Development and Prototypes 1,235 1,011 908
System Development and Demonstration 5,206 5,167 4,659
Management Support 1,473 1,170 1,149
Operational Systems Development 1,766 1,675 1,922
Total 12,550 12,090 10,492
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
5
Basic Research, Applied Research and Advanced Technology Development together are summarized as Science and Technology.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

The S&T totals by BA plus the high-dollar PEs are in
table 59.
Budget Activity 4: Advanced Component Develop-
ment and Prototypes. BA4 involves examining technol-
ogies for FCS and Soldiers and assessing advantages and
disadvantages of each technology, their costs and imple-
mentation impact. If successful, the technology can move
into further development or into production.
The BA4 program for FY 2009 accounts for $0.9 bil-
lion or 9 percent of the RDT&E budget. BA4 is down
16.5 percent from FY 2008, but up 82 percent from FY
2007. The individual PEs are very volatile from year to
year. See table 60.
Budget Activity 5: System Development and Demon-
stration. BA5 is by far the largest RDT&E activity, with
nearly $5 billion or 44 percent of all RDT&E funds. BA5
remains rather consistent from year to year. See table 61.
Budget Activity 6: Management Support. BA6 pro-
vides for a wide variety of support activities and ac-
counts for nearly 11 percent of all RDT&E. The FY 2010
proposal is 1.8 percent below the FY 2009 proposal and
22 percent below the FY 2008 experience; the major-
ity of the decrease in funding is in the Other line. Two
PEs—Army Kwajalein Atoll ($164 million) and Army
Test Ranges ($355 million)—account for 45 percent of
all the BA6 dollars. A list of the BA6 PE/projects is in
table 62.
Budget Activity 7: Operational System Development.
The RDT&E Budget Activities are a continuum from
BA1: Basic Research to BA7: Operational System De-
velopment. BA7 involves leveraging technology to en-
hance performance and increase capability through new
systems or product improvement programs for existing
systems.
BA7 is $1.9 billion or 18.3 percent of RDT&E—15
percent more than for FY 2009 but just 8 percent more
than the FY 2008 experience. A list of the BA7 PE/proj-
ects is in table 63.
Procurement
The Army Procurement proposal for FY 2010 is
$32.7 billion for the Procurement appropriations plus
the Joint Improvised Explosive Device Defeat Fund. The
total includes the base budget and supplemental propos-
als. This is $7.5 billion less than the FY 2009 proposal,
and $32.8 billion or one half the FY 2008 experience.
The Army Procurement proposal is actually the sum
of five separate appropriations:
• Aviation Procurement, Army;
• Missiles Procurement, Army;
• Weapons and Tracked Combat Vehicles Procure-
ment, Army;
• Ammunition Procurement, Army; and
• Other Procurement, Army;
• plus the Joint Improvised Explosive Device Defeat
Fund.

68
 Table 59

Research, Development, Test and Evaluation

Science and Technology
Total Obligational Authority($ millions1)

BA1: Basic Research FY082 FY093 FY104

In-house Laboratory Independent Research 19.7 16.8 19.7
Defense Research Sciences 164.6 198.1 173.0
University Research Science (Health) 79.5 89.6 88.4
University and Industry Research Centers 109.5 130.3 96.1
Subtotal 373.3 434.8 377.2
BA2: Applied Research
Medical Technology 181.5 188.2 99.0
Electronics and Electronic Devices 124.1 99.7 61.4
Weapons and Munitions Technology 101.0 102.3 41.1
Combat Vehicle and Automotive Technology 87.1 89.0 55.9
Missile Technology 67.1 56.7 50.7
Ballistic Technology 89.5 88.0 61.8
Sensors and Electronic Survivability 61.2 75.3 50.6
Materials Technology 60.3 80.9 27.2
Military Engineering Technology 55.2 58.8 54.8
Other 349.6 367.1 278.5
Subtotal 1,176.6 1,206.0 781.0
BA3: Advanced Technology Development
Warfighter Advanced Technology 65.5 73.4 37.6
Medical 299.4 321.3 72.9
Aviation 99.5 106.3 60.1
Weapons and Munitions 84.7 109.1 66.4
Combat Vehicle and Automotive 242.3 263.9 89.6
Missile and Rocket Advanced Technology 77.2 76.7 64.0
Night Vision 62.6 70.7 40.3
Electronic Warfare Advanced Technology 41.9 33.1 19.2
Advanced Tactical Computer Science and Sensor Technology 69.3 62.0 41.6
Other 277.6 283.5 203.3
Subtotal 1,320.0 1,400.0 695.0
Total Science and Technology 5
2,869.9 3,040.8 1,853.2
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
5
Basic Research, Applied Research and Advanced Technology Development together are summarized as Science and Technology.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

The Army Budget 69

Table 60

Research, Development, Test and Evaluation

BA4: Advanced Component Development and Prototypes
Total Obligational Authority ($ millions1)

FY082 FY093 FY104

Army Missile Defense Systems Integration 128.8 90.8 14.7
Army Space Systems Integration 58.1 47.8 117.5
Air and Missile Defense Systems Engineer 155.7 118.8 209.5
Advanced Tank Armament System (ATAS) 127.7 79.4 90.3
Soldier Support and Survivability 36.9 32.6 31.8
Warfighter Info Network – Tactical 309.1 393.1 180.7
Soldier Systems – Advanced Development 26.2 41.6 71.8
Medical Systems – Advanced Development 25.2 30.2 31.3
Tank and Medium Caliber Ammunition 46.2 40.7 33.9
Logistics and Engineering Equipment – Advanced Development 133.0 44.0 56.4
Other 187.7 92.5 70.3
Total 1,234.6 1,011.5 908.2
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

Table 61

Research, Development, Test and Evaluation

BA5: System Development and Demonstration
Total Obligational Authority($ millions1)

FY082 FY093 FY104

Armed, Deployable OH-58D Kiowa Warrior Reconnaissance/Attack Helicopter 176.1 135.2 65.5
Future Combat Systems (FCS) Manned Ground Vehicles and Common Ground Vehicle 635.8 782.7 368.6
FCS Unmanned Ground Vehicles 78.8 103.0 125.6
FCS System of Systems Engineering and Program Management 1,292.5 1,414.8 1,067.2
FCS Sustainment and Training Research and Development 724.4 556.3 749.2
Non-Line-of-Sight Launch System 246.1 208.0 88.7
Non-Line-of-Sight Cannon 133.1 89.5 58.2
Command, Control and Communications Systems – Engingeering Development 9.2 9.8 89.0
Electronic Warfare Development 53.8 36.2 267.1
Army Tactical Command and Control Hardware and Software 109.9 65.3 90.9
Landmine Warfare/Barrier – Engineering Development 172.1 116.7 82.3
Weapons and Munitions 63.4 57.9 34.9
Joint Air-to-Ground Missile (JAGM) 118.1 127.4
Patriot/Medium Extended Air Defense System (MEADS) Combined Aggregate Program
401.6 429.8 569.2
(CAP)
Manned Ground Vehicle 100.0
Other 1,108.9 1,043.2 775.3
Total 5,205.7 5,166.5 4,659.1
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

70
 Table 62

Research, Development, Test and Evaluation

BA6: Management Support
Total Obligational Authority ($ millions1)

FY082 FY093 FY104

Major Test and Evaluation 64.5 64.4 51.8
Army Kwajalein Atoll 180.8 174.0 163.5
Concept Experimentation 28.9 33.9 23.4
Army Test Ranges/Facilities 349.9 346.4 354.7
Army Technology Test Instrumentation and Targets 89.3 80.7 72.9
Technical Information Activities 44.5 44.4 51.6
Survivability/Lethality Analysis 40.7 40.9 45.0
Munitions Standardization, Effectiveness, Safety 39.8 47.9 45.1
Support of Operation Testing 73.0 74.7 77.9
Army Evaluation Center 59.3 63.2 66.3
Program-wide Activities 72.4 73.5 77.8
Other 430.3 125.9 119.1
Total 1,473.4 1,169.9 1,149.1
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

Table 63

Research, Development, Test and Evaluation

BA7: Operational Systems Development
Total Obligational Authority ($ millions1)

FY082 FY093 FY104

Multiple Launch Rocket System (MLRS) Product Improvement Program (PIP) 42.4 59.6 27.7
Aerostat Joint Project Office 464.9 355.3 360.1
Combat Vehicle Improvement Programs 42.8 143.0 190.3
End Item Industrial Preparation Activities 91.3 90.8 68.5
Maneuver Control 43.6 37.0 21.4
Aircraft Modifications/PIPs 327.3 459.4 209.4
Distributed Common Ground/Surface Systems 128.3 68.7 188.4
Aerial Common Sensor (ACS) 210.0
Information System Security Program 52.0 43.1 76.6
Global Combat Support System 125.5 104.6 144.7
Satellite Communications (SATCOM) Ground Environment 45.3 58.9 40.1
Tactical Unmanned Aerial Vehicles 188.3 103.9 232.0
Missile/Air Defense PIPs 29.2 37.7 39.3
Other 185.1 112.5 113.8
Total 1,766.0 1,674.5 1,922.3
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Research, Development, Test and Evaluation Programs (R-1), May 2009

The Army Budget 71

 Table 64 In addition, individual systems within each appro-
priation are identified by a Budget Line Item Number
Procurement Summary by Appropriation (BLIN). A system may, in fact, be a system of systems,
($ billions1)
e.g., the Army Data Distribution System (ADDS), which
FY082 FY093 FY104 includes three radio systems.
Aircraft 6.0 5.7 6.9
The following paragraphs provide information on
Missiles 2.5 2.9 1.9
each of the procurement appropriations.
Weapons and Tracked
9.5 5.7 3.2
Combat Vehicles Aircraft Procurement, Army
Ammunition 2.7 2.6 2.4 The Aircraft Procurement, Army appropriation
Other Procurement 40.6 19.8 16.1 includes funds for the procurement of aircraft, aircraft
Joint Improvised Explosive modifications, spare parts, and repair and support equip-
4.3 3.5 2.1 ment and facilities. The FY 2010 base budget proposal is
Device Defeat Fund
Total 65.5 40.2 32.7 $6.9 billion, an increase of $1.2 billion over FY 2009 and
1
Numbers may not add due to rounding.
$1 billion over FY 2008. This is the only Procurement
2
FY08 are actuals. appropriation that increases in FY 2010.
3
FY09 are enacted base and supplemental proposal.
FY10 are base and supplemental proposal.
The Aircraft appropriation, the second largest Pro-
4

Source: FY 2010 President’s Budget Highlights, Assistant Secretary of

the Army for Financial Management and Comptroller, May 2009; curement appropriation, accounts for 21 percent of the
Department of Defense Fiscal Year 2010 Budget Request, Procurement
Programs (P-1), May 2009
Procurement budget. See table 65.

The budget proposal for the Procurement appropria-
tions is in table 64.
The Army Procurement budget accounts for 14.5
percent of the total budget for FY 2010, while the DoD
Procurement budget accounts for 19.3 percent of the
DoD budget.
From another perspective, the Army Procurement
proposal is 25 percent of the DoD Procurement proposal
for FY 2010. However, the Army Procurement experi-
ence in FY 2008 was 39.7 percent of DoD Procurement.
The very substantial decline in FY 2010, with no sub-
stantial programmatic changes to justify this drop, sug-
gests that the Army reset, transform and modernization
programs cannot achieve the necessary level of support
in FY 2010.
The Procurement appropriations include various
budget activities, among them:
• procuring end items, such as the Apache Longbow
Weapon Systems and Stryker;
Missile Procurement, Army
The Missile Procurement, Army appropriation includes
funds for the procurement of missiles, missile modifica-
tions, spare parts, and support equipment and facilities.
The budget proposal for FY 2010 is $1.9 billion—
$1.0 billion or 35 percent less than FY 2009 and $0.5
billion or 23 percent less than the FY 2008 experience.
The Missile appropriation proposal is the smallest Pro-
curement appropriation. See table 66.
Weapons and Tracked Combat Vehicles
Procurement, Army
The Weapons and Tracked Combat Vehicles appro-
priation includes funds for four budget activities: Tracked
Combat Vehicles, Modification of Tracked Combat Vehi-
cles, Weapons and Other Combat Vehicles, and Modifica-
tion of Weapons and Other Combat Vehicles.
The Army budget proposal for FY 2010 is $3.2 bil-
lion—nearly 43 percent less than for FY 2009, and 66
percent less than the FY 2008 experience. See table 67.

• modifying existing systems, typically to enhance Ammunition Procurement, Army

capability, reduce operating costs and extend system
life;
• acquiring spares, which are typically depot-level
reparables; and
• improving facilities that support the manufacture and
modification of systems.
The Ammunition Procurement appropriation includes
funding for the acquisition of ammunition end items and
ammunition production base support. The Ammunition
appropriation is somewhat different from the other Pro-
curement appropriations because the budget lines are
really consolidations of types of munitions, and not par-
ticular systems. The Army budget proposal for FY 2010

72
 Table 65

Aircraft Procurement, Army

Total Obligational Authority ($ millions1)

FY082 FY093 FY104

Aircraft QTY $ QTY $ QTY $
UH-60 Black Hawk Utility Helicopter (Multiyear Procurement) 77 1,238.6 68 1,006.1 83 1,332.7
CH-47 Chinook Cargo Helicopter 6 156.8 27 562.2 39 1,001.3
C-12 Cargo Airplane 6 45.0
AH-64 Apache Helicopter Block III 8 161.3
Armed Reconnaissance Helicopter 197.1
Light Utility Helicopter (LUH) 42 228.9 44 256.4 54 326.0
Sky Warrior MQ1 Unmanned Aerial Vehicle (UAV) 36 651.4
RQ-11 Raven UAV 876 79.6
Other 316.7 446.4 227.0
Subtotal 1,941.0 2,468.2 3,824.3
Modifications
Guardrail/Airborne Reconnaissance Low 178.5 147.7 111.7
Multi-sensor Airborne Reconnaissance (Multiyear
236.3 23.2 75.5
Procurement)
AH-64 Apache Modifications 5 817.0 12 962.5 4 741.7
CH-47 Cargo Helicopter Modifications (Multiyear
41 1,157.8 23 678.8 102.9
Procurement)
Utility/Cargo Airplane Modifications 20.2 16.5 39.5
Utility Helicopter Modifications 65.9 27.0 69.2
Kiowa Warrior 88.8 117.1 6 235.1
Airborne Avionics 169.1 174.5 241.3
Global Air Traffic Management Rollup 58.4 79.0 103.1
RQ-7 Unmanned Aerial System Modifications 609.4
Other 90.9 79.2 163.1
Subtotal 2,882.9 2,305.5 2,492.5
Spares
Spare Parts (Aircraft) 9.2 6.9 25.3
Subtotal 9.2 6.9 25.3
Support Equipment and Facilities
Aircraft Survivability Equipment (ASE) 47.8 56.7 25.9
ASE Infrared Countermeasure 814.3 585.5 298.0
Airborne Communications 21.1 11.1
Common Ground Equipment 85.0 108.6 111.4
Aircrew Integrated Systems 54.2 48.1 77.5
Air Traffic Control 110.9 122.4 77.0
Other 9.8 10.0 9.2
Subtotal 1,122.0 952.4 610.1
Total 5,955.1 5,733.0 6,952.2
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009

The Army Budget 73

 Table 66

Missile Procurement, Army

Total Obligational Authority ($ millions1)

FY082 FY093 FY104

Missiles QTY $ QTY $ QTY $
Patriot Advanced Capability (PAC-3) 108 479.7 108 540.6 59 348.4
Surface-Launched Advanced Medium Range Air-to-
13 72.9
Air System (SLAMRAAM)
Hellfire 2,850 252.6 2,945 274.1 2,373 250.9
Javelin 1,320 278.5 1,320 377.9 1,334 289.6
Tube-Launced Optically-Tracked, Wire-Guided (TOW)
2,255 85.3 8,400 426.4 2,459 167.3
2 System
Guided Multiple Launch Rocket System (MLRS)
2,070 263.7 2,652 309.2 3,306 354.2
Rockets
High Mobility Artillery Rocket System (HIMARS) 57 225.1 57 245.3 46 209.1
Army Tactical Missile System (ATACMS) 84 84.8
Other 3.5 66.6 32.0
Subtotal 1,673.2 2,240.1 1,724.4
Modifications of Missiles
Patriot 515.2 515.4 44.8
Improved Target Acquisition (ITAS)/TOW 238.0 136.7 7.0
MLRS 4.8 1.9 22.4
HIMARS 10.5 16.4 71.0
Subtotal 768.8 670.3 145.2
Spares and Repair Parts 24.2 24.8 22.3
Support Equipment and Facilities 8.3 10.5 9.8
Total 2,474.5 2,945.7 1,901.7
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009

is $2.4 billion—5 percent below that of FY 2009 and 10.4
percent below the FY 2008 experience. The Ammuni-
tion appropriation is only 7 percent of the Procurement
budget. See table 68.
Other Procurement, Army
The budget proposal for Other Procurement, Army
(OPA) is $16.1 billion—more than 49 percent of all Army
Procurement funds—in FY 2010.
The OPA appropriation includes three principal
budget activities plus spare and repair parts. The principal
activities involve very different types of equipment:
• OPA1: Tactical and Support Vehicles – 35 percent
of OPA;
• OPA2: Communications and Electronics Equipment
– 42 percent of OPA;
• OPA3: Other Support Equipment – 23 percent of
OPA; and
• OPA4: Spares and Repair Parts – less than 1 percent.
The $16.1 billion in FY 2010 is $3.7 billion or 18.7
percent less than for FY 2009 and $24.4 billion or 60
percent less than the FY 2008 actual expenditures. The
greatest reductions are in OPA1. See table 69.
OPA1: Tactical and Support Vehicles. The OPA1 pro-
posal for FY 2010 is $5.7 billion or 35 percent of OPA.
This is $2.5 billion or 30 percent less than for FY 2009

74
 Table 67

Weapons and Tracked Combat Vehicles

Total Obligational Authority ($ millions1)

FY082 FY093 FY104

Tracked Combat Vehicles QTY $ QTY $ QTY $
Abrams 3.0
Bradley 524 1,677.9 94 394.8
Future Combat Systems (FCS) 50.8 128.0
FCS Spin-Outs 24.1 1 285.9
Stryker 677 2,792.1 88 1,309.0 388.6
Other 34.1 80.2 42.0
Subtotal 4,554.9 1,939.1 716.5
Modifications of Tracked Combat Vehicles
Armored Breacher Vehicle 10 44.8 13 63.3
Fire Support Team (FIST) Vehicle Modifications 54 160.4 33.3 70.2
Bradley Fighting Vehicle Systems (BFVS) Modifications 181.9 852.0 770.0
Howitzer M109A6 Paladin 60.4 28.8 134.1
Abrams Upgrade Program 260 1,238.7 111 580.5 22 185.6
Improved Recovery Vehicle 116 281.5 120 369.1 12 96.8
Joint Assault Bridge 10.3 11 40.3 22 70.6
M1 Abrams Tank Modifications 1,123.1 766.5 183.8
Production Base Support 7.7 8.7 6.6
Subtotal 3,108.8 2,679.3 1,581.0
Total Tracked Combat Vehicles 7,663.7 4,618.4 2,297.5
Weapons and Other Combat Vehicles
Howitzer, Light Towed, 105mm, M119 127 117.2 90 112.6 70 95.6
M240 Medium Machine Gun 7.62mm 11,050 101.5 7,932 84.0 2,010 32.9
Machine Gun, .50-caliber M2 Roll 3,934 57.3 6,167 99.6 4,825 84.6
M249 Machine Gun, 5.56mm Squad Automatic Weapon (SAW) 10,870 45.9 5,150 22.1 1,550 7.5
MK-19 Grenade Machine Gun (40mm) 4,098 64.4 785 17.3 349 7.7
Mortar Systems 695 53.6 351 17.0 315 14.8
Sniper Rifle M107, .50-caliber 0.8 0.2 0.2
XM320 Grenade Launcher Module 8,457 30.2 9342 31.7 8,383 29.9
XM110 Semi-Automatic Sniper System 801 10.4 439 7.4 448 6.2
Carbine M4, 5.56mm 112,423 178.3 88,964 150.6 12,000 20.5
Shotgun, Modular Accessory System 5,167 10.1 4,918 9.1 3,738 6.9
Common Remotely Operated Weapons Stations (CROWS) 700 223.2 1,215 279.5 1,000 235.0
Howitzer, 155mm, Light Weight 203 470.6 38 112.9 53 157.6
Future Handgun System (FHS) 1.8 4.5
Subtotal 1,363.5 945.8 703.9
Modifications of Weapons and Other Combat Vehicles 369.7 70.9 189.2
Support Equipment and Facilities 48.0 30.7 20.8
Total Weapons and Other Combat Vehicles 1,781.2 1,047.4 913.9
Total 9,444.9 5,665.8 3,211.4
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009

The Army Budget 75

Table 68 and $19 billion or 77 percent less than the FY 2008 expe-
rience. See table 70.
Ammunition Procurement
Total Obligational Authority ($ millions1) OPA2: Communications and Electronics Equipment.
FY08 2
FY09 3
FY10 4 The OPA2 proposal for FY 2010 is $6.7 billion, 42 per-
Small and Medium Caliber 972.4 921.5 796.9 cent of OPA. This is $1.4 billion or 17.7 percent less than
for FY 2009 and $4.6 billion or 41 percent less than the
Mortars 177.8 200.9 177.3
FY 2008 experience. See table 71.
Tank 177.3 166.4 121.2
OPA3: Other Support Equipment. The OPA3 proposal
Artillery 263.3 263.5 317.6
for FY 2010 is $3.6 billion or 23 percent of OPA. This
Artillery Fuzes 4.2 19.9 27.7 is $0.2 billion or 6.6 percent more than for FY 2009 and
Mines/Countermine 58.8 59.3 88.7 $0.7 billion or 16 percent less than the FY 2008 experi-
ence. See table 72.
Rockets 214.4 216.0 314.7
Demolitions, Grenades, OPA4: Initial Spares. The OPA4 proposal for FY 2010
186.8 231.6 164.0
Signals is $35 million in the base budget, less than 1 percent of
Non-Lethal Ammunition OPA; there are no funds in the OCO proposal.
74.8 69.4 39.4
Equipment
Installations and Facilities
Production Base
345.7 191.5 151.9 Army installations and facilities are the platforms
Improvements
for generating, projecting and sustaining Army forces.
Ammunition
Demilitarization
134.3 153.7 145.8 Army installations, facilities and infrastructure support
training, readiness and transformation, and sustain opera-
Other 93.6 63.5 77.3
tions around the world with reach-back capability. Army
Total 2,703.4 2,557.2 2,422.5 installations provide safe workplaces for Army civilians
1
Numbers may not add due to rounding. and many of the contractors who support the Army. Army
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal. installations provide homes, communities and quality of
4
FY10 are base and supplemental proposal. life for Soldiers and their families.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of
the Army for Financial Management and Comptroller, May 2009;
Department of Defense Fiscal Year 2010 Budget Request, Procurement
The locations of installations and facilities in the
Programs (P-1), May 2009 United States and around the world are generally the
result of the 40-year Cold War strategy. However, DoD
Table 69 and the Army are pursuing new strategic stationing to
Other Procurement, Army create a global infrastructure to better respond to world-
($ millions1) wide threats. The Army is integrating and synchroniz-
FY082 FY093 FY104 ing various initiatives including Global Defense Posture
Realignment (GDPR), Base Realignment and Closure
OPA1: Tactical and
Support Vehicles
24,742 8,187 5,696 (BRAC) and Army transformation to produce modern
power-projection capabilities.
OPA2: Communications
11,392 8,172 6,729
and Electronics Equipment As part of GDPR, the Army is returning more than
OPA3: Other Support 50,000 Soldiers and their families from Germany and
4,381 3,443 3,670 elsewhere to installations in the United States. BRAC
Equipment
2005 implementation involves completing some 1,200
OPA4: Spares and Repair
43 36 36 stationing actions by the statutory deadline of 15 Sep-
Parts
tember 2011. The Grow the Army initiative increases
Total 40,559 19,838 16,130
the active Army by 65,000, the Army National Guard by
Numbers may not add due to rounding.
8,200 and the Army Reserve by 1,000 Soldiers—all with
1

2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal. stationing implications.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of
the Army for Financial Management and Comptroller, May 2009;
The budget continues the initiatives to provide Sol-
Department of Defense Fiscal Year 2010 Budget Request, Procurement diers with modern barracks and family housing commen-
Programs (P-1), May 2009
surate with the service they provide to the nation. Funding

76
 Table 70

Other Procurement, Army

OPA1: Tactical, Non-Tactical and Support Vehicles
Total Obligational Authority ($ millions1)

FY082 FY093 FY104

Tactical and Support QTY $ QTY $ QTY $
High-Mobility Multipurpose Wheeled Vehicles (HMMWV) 17,012 2,796.9 10,995 1,676.0 10,214 1,532.2
Family of Medium Tactical Vehicles 6,802 2,147.0 3,724 1,017.5 5,532 1,620.2
Family of Heavy Tactical Vehicles 3,095.8 1,978.6 1,436.1
Modification of In-Service Equipment 1,085.4 492.1 10.3
Amored Security Vehicles 685 568.9 345 318.7 150 149.8
All Other Vehicles and Trailers 15,034.4 2,689.2 941.8
Subtotal 24,728.4 8,172.1 5,690.4
Non-Tactical
Heavy Armored Sedan 20 3.8 13 2.3 8 2.0
Passenger Carrying Vehicles 37 5.6 107 8.6 0.3
Other Non-Tactical Vehicles 4.0 3.4 3.0
Subtotal 13.4 14.3 5.3
Subtotal OPA1 24,741.8 8,186.5 5,695.7
Total OPA 40,558.7 19,838.0 16,129.8
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009

Table 71

Other Procurement, Army

OPA2: Communications and Electronic Equipment
Total Obligational Authority ($ millions1)

FY082 FY093 FY104

QTY $ QTY $ QTY $
Joint Communications 8.2 672.9 574.4
Satellite Communications 46,722 445.1 36,674 305.2 29,138 485.5
Command, Control and Communications (C3) System 30.8 31.4 23.0
Combat Communications 2,777.0 573.2 416.4
Intelligence Communications 8.3 1.5 1.4
Information Security 311.1 222.7 94.8
Long Haul Communications 84.7 371.2 58.7
Base Communications 430.6 645.9 967.4
Tactical Intelligence and Related Activities (TIARA) 14 1,795.2 32 1,093.1 23 429.8
Electronic Warfare (EW) 345.1 607.3 383.2
Tactical Surveillance 77,952 3,123.4 84,487 2,374.1 67,095 2,112.9
Tactical Command and Control (C2) 97 1,575.3 81 879.4 154 746.1
Automation 417.0 351.4 426.8
Audio Visual Systems (A/V) 13.4 19.2 7.9
Modifications to Tactical Systems and Equipment 15.1 15.1
Support 12.0 8.6 0.5
Subtotal OPA2 11,392.2 8,172.2 6,728.7
Total OPA 40,558.7 19,838.0 16,129.8
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009

The Army Budget 77

 Table 72

Other Procurement, Army

OPA3: Other Support Equipment
($ millions)

FY081 FY092 FY102

QTY $ QTY $ QTY $
Smoke/Obscurant Systems 255.6 74.5 200.8
Bridging Equipment 210.3 414.3 207.0
Engineer Equipment (Non-Construction) 247.6 324.4 173.2
Combat Service Support Equipment 1 382.5 237.5 20 470.1
Petroleum Equipment 164.0 66.0 142.6
Water Equipment 51.2 51.0 10.2
Medical Equipment 86 89.6 304 73.1 273 45.1
Maintenance Equipment 305.4 61.8 150.7
Construction Equipment 292 264.5 779 394.8 442 294.5
Rail Float Containerization Equipment 1 212.9 1 193.7 1 205.0
Generators 241.8 254.8 208.3
Materiel Handling Equipment 189 216.1 157 169.9 121 189.8
Training Equipment 484.9 450.6 458.5
Test Measuring and Diagnostic Equipment 252.2 78.1 139.0
Other Support Equipment 1,002.7 594.6 774.9
Subtotal OPA 3 3
4,381.4 3,443.1 3,669.8
Total OPA 40,558.7 19,838.0 16,129.8
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and Comptroller, May 2009; Department of
Defense Fiscal Year 2010 Budget Request, Procurement Programs (P-1), May 2009

for construction, renovation and disposal of facilities and
infrastructure is in the Military Construction (MILCON)
group, Army Family Housing (AFH) and BRAC. The
MILCON, AFH and BRAC funds are essential to achieve
strategic stationing for the 21st century. The FY 2010
budget proposal includes $5.4 billion for MILCON, $0.8
billion for AFH and $4.2 billion for BRAC.
Military Construction
The FY 2010 budget proposal reduces MILCON by
$1.7 billion from FY 2009, and $0.6 billion from the FY
2008 experience. The MILCON appropriations include
Military Construction, Army (MCA) for the active com-
ponent; Military Construction, Army National Guard
(MCARNG); and Military Construction, Army Reserve
(MCAR). The MILCON proposals for the active Army
and the Army National Guard decline in FY 2010, but
increase for the Army Reserve.
The MILCON appropriations provide funding for
construction projects involving new and renovated facili-
ties. The MILCON appropriations provide five-year funds,
i.e., the FY 2010 appropriations remain available for obli-
gation until 30 September 2014. A summary of the three
MILCON appropriations from the FY 2010 budget is in
table 73. The subsequent subparagraphs provide insights
into each of the MILCON appropriations.
Military Construction, Army. The FY 2010 MCA bud-
get proposal is $4.6 billion, which is down $1.3 billion or
22 percent from FY 2009 and down $0.7 billion or 13 per-
cent from the FY 2008 experience. MCA provides funds
for engineering and construction projects to improve op-
erational and quality-of-life infrastructure—where Sol-
diers train, work and live in the United States and over-
seas. See table 74.
The FY 2010 proposal reflects a shift from the prior
year when 75 percent of the funds were for accommodating

78
 Table 73 Table 75

Military Construction Military Construction, Army National Guard

($ millions1) ($ millions1)

FY082 FY093 FY104 Facility Categories FY092 FY103

Military Construction, Army 5,289.2 5,922.3 4,584.7 Replace Aging Facilities 462.0 154.0
Military Construction, Army Modularity 160.0 92.0
560.3 883.3 426.5
National Guard
Grow the Army 87.0 80.0
Military Construction, Army
148.1 282.6 374.9 Barracks Initiative 73.0
Reserve
Total 5,997.6 7,088.2 5,386.1 Planning and Design 19.0 24.0
1
Numbers may not add due to rounding. Minor Construction 61.0 10.0
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal. Other 21.0 66.0
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of Total 883.0 426.0
the Army for Financial Management and Comptroller, May 2009; 1
Numbers may not add due to rounding.
Department of Defense Fiscal Year 2010 Budget Request, Military 2
FY09 are enacted base and supplemental proposal.
Construction, Family Housing, and Base Realignment and Closure 3
FY10 are base and supplemental proposal.
Programs (C-1) and Financial Summary Tables, May 2009; Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the
Army for Financial Management and Comptroller, May 2009

Table 74
The budget proposal pursues providing state-of-the-art,
Military Construction, Army community-based installations and training sites. See
($ millions1)
table 75.
Facility Categories FY092 FY103
Military Construction, Army Reserve. The MCAR ap-
Grow the Army 3,275.0 898.0 propriation proposal is for $375 million in FY 2010, a
Replace Aging Facilities 629.0 1,168.0 32 percent increase over FY 2009. The Grow the Army
Modularity 266.0 393.0 category is by far the largest program. See table 76.
Planning and Design 179.0 178.0 Table 76
Barracks Initiative 71.0 226.0
Military Construction, Army Reserve
Global Defense Posture 40.0 272.0 ($ millions1)

Minor Construction 23.0 23.0 Facility Categories FY092 FY103

Improve Quality of Life 59.0 Replace Aging Facilities 72.0 45.0
Overseas Contingency Operations 1,229.7 923.9 Grow the Army 180.0 305.0
Other 151.0 503.0 Planning and Design 3.0 22.0
Total 5,922.7 4,584.9 Minor Construction 15.0 3.0
1
Numbers may not add due to rounding. Other 13.0
2
FY09 are enacted base and supplemental proposal.
3
FY10 are base and supplemental proposal. Total 283.0 375.0
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the
Army for Financial Management and Comptroller, May 2009
1
Numbers may not add due to rounding.
2
FY09 are enacted base and supplemental proposal.
3
FY10 are base and supplemental proposal.
the Grow the Army initiative. In FY 2010, Replace Aging Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the
Facilities consumes the greatest portion at 25 percent of Army for Financial Management and Comptroller, May 2009

the funds.
Military Construction, Army National Guard. The
MCARNG appropriation proposal is for $426 million in
FY 2010—51 percent less than for FY 2009 and 29 per-
cent less than the FY 2008 experience.
The proposal focuses on replacing aging facilities,
preparing facilities to support the conversion of the force
to the modular design and the Grow the Army initiative.
Family Housing
The Army Family Housing (AFH) budget proposal is
for $0.8 billion, a decrease of 17 percent ($166 million)
from FY 2009 and 31 percent ($0.3 billion) from FY 2008.
The AFH appropriation includes two separate accounts:
Family Housing Construction ($0.2 billion) and Family
Housing Operations ($0.5 billion). See table 77.

The Army Budget 79

 Table 77 Table 78

Army Family Housing Army Family Housing

($ millions1)
New Construction Units $ millions1
Construction FY092 FY103
Baumholder, Germany 38 18.0
New/Replace Construction 246.0 50.0
Wiesbaden, Germany 250 32.0
Improvement4 219.0
Subtotal 288 50.0
Planning and Design 1.0 4.0
Privatization
Subtotal 247.0 273.0
Fort Richardson, Alaska 1,242 46.0
Operations
Fort Wainwright, Alaska 176 52.0
Operation and Utilities 239.0 170.0
Fort Irwin, California 90 30.0
Maintenance 252.0 116.0
Fort Knox, Kentucky 129 14.0
Leasing 193.0 206.0
Fort Knox, Kentucky 205 26.7
Privatization 32.0 32.0
Fort Polk, Louisiana 144 18.4
Subtotal 716.0 524.0
Fort Bragg, North Carolina 11 5.4
Total 963.0 797.0
Fort Sill, Oklahoma 78 20.3
1
Numbers may not add due to rounding.
2
FY09 are enacted base and supplemental proposal. Fort Eustis, Virginia 8 6.5
3
FY10 are base and supplemental proposal.
4
Residential Communities Initiative equity transferred to Family Housing Subtotal 2,083 219.3
Improvement Fund.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the Total 2,371 269.3
Army for Financial Management and Comptroller, May 2009 1
Numbers may not add due to rounding
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of
AFH supports the operation, maintenance, leasing, the Army for Financial Management and Comptroller, May 2009;
Department of Defense Fiscal Year 2010 Budget Request, Military
privatization and construction of Army family housing Construction, Family Housing, and Base Realignment and Closure
worldwide and the implementation of the Army Family Programs (C-1), May 2009

Housing Master Plan. The AFH construction program pro-
vides for building new housing units at locations where
building is more economical than revitalizing, or where
adequate off-post housing is not available. The construc-
tion program also includes site preparation, demolition and
initial outfitting with fixtures and integral equipment, along
with associated facilities such as roads, driveways, side-
walks, utility systems and community facilities.
The Army follows the DoD policy for providing quality
housing to military families: First, provide a housing allow-
ance to the servicemembers and rely on the local commu-
nity to provide housing for military families; second, if
the market cannot supply sufficient quantities of quality
and affordable housing, then use privatization to supply
housing; third, if privatization is not feasible, then provide
government-owned or government-leased housing.
Privatization involves private-sector participation to
replace construction funds in implementing a long-term
housing solution. Privatization enables the Army to lever-
age housing dollars and replace inadequate housing stock
rapidly rather than over 30 years. See table 78 for the list
of privatization locations as well as new construction in the
FY 2010 budget proposal.
Base Realignment and Closure
In addition to the Military Construction appropria-
tions, Congress appropriates funds for Base Realignment
and Closure to close excessive installations and save oper-
ation and maintenance costs, and to relocate forces and
other organizations to improve installation efficiency.
The current round, BRAC 2005, focuses on the recon-
figuration of operational capacity to maximize warfight-
ing capability and efficiency. The BRAC proposal for FY
2010 is $4.2 billion—5 percent less than in FY 2009 and
just slightly higher than in FY 2008. See table 79.
The first BRAC round began with the Defense Base
Realignment and Closure Act of 1988 (Public Law 100-
526), which had a goal of identifying and closing unneeded
military installations in the United States. Subsequently,
Congress authorized three additional rounds in FY 1991,
FY 1993 and FY 1995. By 13 July 2001 the closures (112)
and realignments (27) from the first four rounds of BRAC
were complete.
In addition, since 1990 the Army has executed an
aggressive overseas closure program. The Army closed
680 installations overseas, the majority in Europe; this

80
 Table 79 Table 80

Base Realignment and Closure 1

Environmental Restoration, Army
($ millions) ($ millions)

FY08 2
FY09 3
FY10 3
FY08 1
FY092 FY102
BRAC 104.0 88.0 99.0 456.8 415.9
BRAC 2005 4,023.0 4,315.0 4,081.0 1
ERA is executed in Operation and Maintenance, Army; therefore, no
FY08 actual data are available.
Total 4,127.0 4,403.0 4,180.0 2
FY09 is enacted; FY10 is budget proposal. Both are base budget only.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of the
1
BRAC is a DoD-centralized summary appropriation with budget year Army for Financial Management and Comptroller, May 2009
information passed from each DoD component.
2
FY08 are actuals
3
FY09 is enacted; FY10 is budget proposal. Both are base budget only. • compliance to ensure that DoD operations meet or
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of exceed federal, state, local and host nation environ-
the Army for Financial Management and Comptroller, May 2009;
Department of Defense National Defense Budget Estimates for FY 2010 mental requirements; and
(Green Book), Office of the Under Secretary of Defense (Comptroller),
June 2009, Table 6-6 • pollution prevention to promote the reduction or
elimination of the amount of waste, including haz-
was comparable to closing 12 of the Army’s largest
ardous and toxic chemicals, that enters the environ-
installations.
ment by focusing on the source of pollution rather
In summary, the Army recognizes that installations than on the end result.
and facilities are essential to support the expeditionary
Army at war, to support training and force readiness and Chemical Demilitarization Program
to provide Soldiers and their families with the quality The FY 2010 budget proposes $1.5 billion in the Chem-
of life they deserve. The budget proposes resources to ical Agents and Munitions Destruction, Army (CAMD,A)
support unit restationing, endstrength growth and the account, which is slightly more than the amount in FYs
transition to a modular force. The budget also proposes 2009 and 2008. The Chemical Demilitarization Program
resources to provide high-quality housing, schooling and provides for the destruction of the U.S. stockpile of lethal
support services that are essential to helping retain the chemical agents and munitions and related (non-stockpile)
all-volunteer force. materiel. The program complies with the United States’
obligation to destroy all such weapons under the Chemi-
Environmental Restoration, Army cal Weapons Convention (CWC) of 1997. See table 81.
The Environmental Restoration, Army (ERA) pro-
Table 81
posal is $0.4 billion, $40 million or 9 percent less than for
FY 2009. The accounting for ERA execution is in OMA; Chemical Agents and Munitions Destruction, Army
therefore, no FY 2008 actual obligation data are available. ($ millions1)

See table 80. FY082 FY093 FY103

The ERA program focuses on reducing risks to human BA1: Operation and
1,181.5 1,152.7 1,146.8
Maintenance
health and the environment at active installations, BRAC
installations and Formerly Used Defense Sites (FUDS). BA2: Research and
312.8 288.9 401.3
Development
The Army is the DoD executive agent for FUDS and
therefore responsible for clean-up at all DoD FUDS prop- BA3: Procurement 18.4 64.1 12.7
erties. Congress requires DoD to comply with federal, Total 3
1,512.7 1,505.6 1,560.8
state and local environmental laws, as well as applicable 1
Numbers may not add due to rounding.
2
FY08 are actuals.
host-nation environmental standards. The Environmental 3
FY09 is enacted; FY10 is budget proposal. Both are base budget only.
Restoration program includes: Source: FY 2010 President’s Budget Estimates, Chemical Agents and
Munitions Destruction
• conservation to protect and enhance the natural and
cultural resources; Army Working Capital Fund
• restoration to identify, assess and remediate contami- The Army Working Capital Fund (AWCF), also known
nation from hazardous substances, military munitions as the Defense Working Capital Fund, Army (DWCF,A)
and pollutants from previous military operations in operates numerous commercial-like and industrial
the Defense Environmental Restoration Program; facilities that provide essential services and support for

The Army Budget 81

readiness and sustainability of the warfighting forces. The Customer Rates
AWCF includes two activity groups: Supply Management The AWCF needs to recover the costs of what it
and Industrial Operations (previously reported as Depot acquires and the costs of operations in order to break
Maintenance and Ordnance). even. The customer rates are the result of the analysis of
the full costs of operations. The AWCF uses the customer
The AWCF, like all DWCFs, operates under a revolv-
rates to adjust the prices of what it sells to recover the full
ing fund concept—i.e., the AWCF relies on revenue costs of operations. The customer rates establish the ulti-
from sales to finance operations rather than submitting a mate price that customers pay for materiel. The rates vary
budget proposal for direct appropriations from Congress. by activity group:
The AWCF operates as a business-like enterprise, manag-
ing cash in real-time and expenses over time. The AWCF • Supply Management buys and maintains assigned
stocks of materiel for sale to its customers; and
maintains cash on hand to support current operations; and
generates adequate revenue to cover the full costs of oper- • Industrial Operations maintains end items and
ations on a break-even basis over time, without making depot-level reparables and manufactures, renovates,
a profit or incurring a loss. Since the AWCF operates stores and demilitarizes munitions for all services
without direct appropriations, the fund operates without a within DoD and for foreign military customers.
fiscal year limitation on obligating money. Rate changes are expressed as a percent of change
from the previous year. The rate changes in the budget
Revenues and Expenses proposal are in table 83.
The AWCF generates revenue from the sale of mate-
Table 83
riel and services and accumulates expenses for the mate-
rial that it buys and in-house operating costs. The net of Army Working Capital Fund
revenue minus expenses generated a profit in FYs 2007 Customer Rate Changes
and 2008, but a slight loss is projected for FY 2009.
FY08 FY09 FY101
The AWCF is a big business, with annual revenue Supply Management 2.4% 0.7% 2.1%
averaging about $15 billion. The bulk of the revenue is Industrial Operations 2
12.6% -3.6% -8.2%
from sales to Army customers. The FY 2010 revenue 1
FY10 price change to customer reflects lower sales based on fewer
equates to 10 percent of the Army base budget, or more deployed forces in support of Operation Iraqi Freedom. Negative
Industrial Opns price change to customer results from return of positive
than 6 percent of the total budget, suggesting that between accumulated operating results.
6 and 10 percent of the Army budget is expended on 2
Previously reported as Depot Maintenance and Ordnance.
Source: FY 2010 President’s Budget Estimates, Army Working Capital
purchases of materiel from the AWCF. See table 82 for Fund
revenue and expense data.
Table 82 Direct Appropriated Funds
Army Working Capital Fund
The AWCF requests direct appropriated funds from
Revenues and Expenses Congress to cover expenses that are not directly related to
($ millions1) the cost of doing business. The AWCF may also request
direct appropriation for increases in capacity and capabil-
Revenue FY081 FY09 FY10
ity to meet mobilization and wartime surge requirements
Supply Management 10,002.9 9,543.3 7,951.2
and thereby ensure stabilized and competitive rates for
Industrial Operations 3
6,477.3 6,632.7 6,308.5 peacetime customers.
Total 16,480.2 16,176.0 14,259.7
The budget requests $38 million in direct appropria-
Expenses tions for FY 2010—a negligible amount. The three-year
Supply Management 9,400.3 9,032.9 8,045.4 trend suggests that the AWCF has achieved a new base-
Industrial Operations 3
6,318.6 6,608.1 6,419.2 line and no longer needs to grow to meet wartime capac-
Total 15,718.9 15,641.0 14,464.6 ity. See table 84.
1
Numbers may not add due to rounding.
2
FY08 are actuals. Remaining years are estimates. Capital Investment
3
Previously reported as Depot Maintenance and Ordnance.
Source: FY 2010 President’s Budget Estimates, Army Working Capital The AWCF also requests direct appropriated funds
Fund
for capital investment. The Supply Management Capital

82
 Table 84 51 percent of the total military endstrength—the Army
National Guard provides 32 percent, and the Army Reserve
Army Working Capital Fund provides 18 percent.
Direct Appropriation
($ millions1) The RC enables the Army to accomplish its missions at
FY08 2
FY09 3
FY10 4 home and abroad—this is particularly true with the require-
ment for land forces to conduct the continuing war, which
War Reserve Secondary
5.0 102.2 38.5 demands a quick response time from the RC. In response,
Items
the RC is transforming from a strategic reserve force to an
Supplemental Funding
operational force that includes creating a rotational force
Army Prepositioned Stocks 1,057.9 443.2 policy, manning units at a higher level with deployable per-
Spares, Combat Losses 120.1 sonnel, equipping units and replacing late-deploying units
Spares, Operation Iraqi with high-demand deploying units.
134.5
Freedom Demands
The rotational force policy involves an Army Force
Fuel 6.9 Generation process model for the RC that includes a pre-
Subtotal 1,319.4 443.2 dictable mobilization cycle. All reserve component forces
Total 1,324.4 545.4 38.5 rotate into the Alert pool and are available for mobilization
1
Numbers may not add due to rounding.
on a periodic basis. The RC forces may be called to active
2
FY08 are actuals. duty once every six years, if required.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal. Since the 11 September 2001 terrorist attacks on the
Source: FY 2010 President’s Budget Estimates, Army Working Capital
Fund United States, more than 348,000 Army National Guard
and 172,000 Army Reserve Soldiers have been called to
Investment includes replacing outdated automation hard- active duty and deployed in support of operations in Iraq,
ware and software. Industrial Operations Capital Investment Afghanistan, Guantánamo Bay, the Balkans, the Sinai and
includes equipment modernization, automation hardware elsewhere. These RC Soldiers deployed with active com-
and software and minor construction. See table 85. ponent Soldiers to secure the homeland by providing secu-
rity augmentation for key assets, airports, special events
Table 85
and Air Force bases.8
Army Working Capital Fund This is the context for the FY 2010 RC budgets. The
Capital Budget
($ millions )
1
Army National Guard and the Army Reserve prepare and
execute three appropriations: Military Personnel, Opera-
FY082 FY093 FY104 tion and Maintenance and Military Construction. These
Supply Management 88.8 63.7 58.8 appropriations were discussed in the MILPERS, O&M and
Industrial Operations 5
213.5 213.7 244.6 MILCON appropriation groups, respectively.
Total 302.3 277.4 303.4
Army National Guard
1
Numbers may not add due to rounding.
2
FY08 are actuals. The Army National Guard is the oldest component of
FY09 are enacted base and supplemental proposal.
the armed forces, tracing its origin to militia companies that
3

4
FY10 are base and supplemental proposal.
5
Previously reported as Depot Maintenance and Ordnance.
Source: FY 2010 President’s Budget Estimates, Army Working Capital
Fund
Army Reserve Component
The Army reserve component (RC) provides trained,
equipped and ready Soldiers and cohesive units to meet
global requirements across the full spectrum of opera-
tions. The RC forces deliver combat, combat support and
combat service support capability to the Army.
The RC includes both the Army National Guard and
the Army Reserve. The RC contributes a substantial part
of the Army’s land forces capabilities by providing nearly
were formed in 1637. The Army National Guard provides
the 50 states, three territories and the District of Columbia
with units trained and equipped to protect life and property.
The Army National Guard maintains properly trained and
equipped units that may be mobilized for federal duty for
war, national emergency or as otherwise needed.
Following the 2001 terrorist attacks, more than 50,000
Guardsmen were called up by states and the federal gov-
ernment to provide security at home and combat terrorism
abroad. At one point in 2005, half of the combat brigades
in Iraq were Army National Guard units; this level of reli-
ance on the Guard had not occurred since the first years
of World War II.

The Army Budget 83

 The Army National Guard military endstrength com- Table 86
prises the Selected Reserve and the Individual Ready
Army National Guard Personnel Summary
Reserve (IRR).
Military Endstrength
(thousands1)
• The Selected Reserve is the most readily available
group of Soldiers and includes Troop Program Units FY082 FY092 FY102
(TPUs), Active Guard and Reserve (AGR) Soldiers Selected Reserve 360 366 360
and Individual Mobilization Augmentees (IMAs).   Paid Drill Strength 331 335 327
  Full-time Active Strength 26 29 31
• The Individual Ready Reserve (IRR) is a manpower
pool comprising principally trained Soldiers who Inactived Personnel/
3 2 2
Individual Ready Reserve
have served previously in the active component or
Technicians 28 29 29
the Selected Reserve and who have some period of
  Dual Status 26 26 27
time remaining for their military service obligation.
The IRR also includes the Inactive National Guard,   Other Than Dual Status 2 3 3
consisting of Soldiers in an inactive status who Other Civilians (excludes
03 1 1
technicians)
muster once a year with their assigned unit but do 1
Numbers may not add due to rounding.
not participate in training activities. 2
Numbers shown represent average instead of begin or end numbers.
3
Number is fewer than 500.
In addition, the Army National Guard includes techni- Source: Department of the Army, FY2010 Budget Estimates, National
Guard Personnel, Army, Table PB-30G (NGPA) and PB-31R (OMNG),
cians and civilian employees. Technicians work full-time May 2009, and Congressional Reporting Requirement Exhibit
at various functions including organizing, administer-
Table 87
ing, instructing, training and recruiting new personnel;
and maintaining supplies, equipment and aircraft. The Army National Guard
technicians include dual status Military Technicians and Key Contributions
other competitive technicians. The Military Technicians 44 percent of Combat Units
maintain military membership, train with their units and (includes Field Artillery and Air Defense)
perform full-time work in their units. Competitive techni- 9 percent of Field Artillery
(20 percent of Combat Structure)
cians are not required to maintain military membership.
1 percent of Air Defense
The budget proposes Army National Guard Selected (2 percent of Combat Structure)
Reserve endstrength of 360,000 Soldiers with armories 19 percent of Combat Support
and training facilities in more than 2,800 communities. 27 percent of Combat Service Support
See table 86 for endstrength information. Source: National Guard Future Force Allocations

The Army National Guard forces provide a great deal Table 88

of specific capabilities; see table 87. Army National Guard Budget Summary
($ millions1)
The Army National Guard provides 32 percent of the
FY082 FY093 FY104
Army’s military endstrength but consumes only 7 percent
of the total Army budget in FY 2010. The Army National National Guard Personnel,
9,156 9,400 9,690
Army
Guard budget includes three appropriations: Military Per-
Operation and
sonnel (NGPA), Operation and Maintenance (OMNG) Maintenance, Army 6,858 6,126 6,257
and Military Construction (MCARNG). The Army Pro- National Guard
curement appropriations include funds for equipment for Military Construction, Army
the ARNG. In addition, the Army National Guard receives 562 932 426
National Guard
state funds for state-related functions. The Army National Total 16,576 16,458 16,373
Guard appropriation data are in table 88. Each of these 1
Numbers may not add due to rounding.
FY08 are actuals.
appropriations was discussed in the MILPERS, O&M and
2

MILCON appropriation groups.
Army Reserve
The Army Reserve provides trained Soldiers and ready
units with critical combat support and combat service
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: FY 2010 President’s Budget Highlights, Assistant Secretary of
the Army for Financial Management and Comptroller, May 2009;
Department of Defense Fiscal Year 2010 Budget Request, Operation
and Maintenance Programs (O-1), Department of Defense National
Defense Budget Estimates for FY 2010 (Green Book), Office of the Under
Secretary of Defense (Comptroller), June 2009, Table 6-6

84
support capabilities. The Army Reserve is a federal force
that supports peacetime, contingency and wartime opera-
tions. The Army Reserve is the newest of the Army com-
ponents—established in 1908 by Congress initially as the
Medical Reserve Corps.
Since 1990, Army Reserve Soldiers have mobilized
and deployed in support of every American military oper-
ation, including peacekeeping and humanitarian missions.
After the 2001 attacks on America and the subsequent war
on terrorism, more than 172,000 Army Reserve Soldiers
mobilized and deployed in support of operations in Iraq,
Afghanistan, Guantánamo Bay, the Balkans, the Sinai and
elsewhere.9
the President can mobilize all members of the Selected
Reserve and up to 30,000 members of the Individual
Ready Reserve.
In addition, the Army Reserve includes technicians
and civilian employees. Technicians work full-time at
various functions including organizing, administering,
instructing, training, and recruiting new personnel; and
maintaining supplies, equipment and aircraft. The tech-
nicians include dual status Military Technicians and
other competitive technicians. The Military Technicians
maintain military membership, train with their units, and
perform full-time work in their units. Competitive techni-
cians are not required to maintain military membership.

The continuing activation of Army Reserve Soldiers The Army Reserve proposes a total endstrength in FY
and units demonstrates the transformation of the Army 2010 of 205,000 members, which includes the Selected
Reserve from a strategic reserve to an operational force. Reserve and the IRR. See table 89 for endstrength
information.
The Army Reserve military endstrength comprises
Table 89
three groups of Soldiers: Selected Reserve, Individual
Ready Reserve and Retired Reserve. The distinctions Army Reserve Personnel Highlights
among the three groups of Army Reserve Soldiers are: Military Endstrength
(thousands)
• Selected Reserve—the most readily available group
FY08 FY09 FY10
of Army Reserve Soldiers—includes:
Selected Reserve 194 202 205
◦ Troop Program Units—Soldiers who typically   Paid Drill Strength 179 186 189
train in units on selected weekends and perform
  Full-time Active Strength 16 16 16
annual training;
Individual Ready Reserve 72 64 70
◦ Active Guard and Reserve—Soldiers who serve
Technicians 9 9 8
full-time on active duty in units and organiza-
tions of the Army Reserve, or who directly Dual Status (Military/Civilian) 8 8 8
support Army Reserve Soldiers; and Other than Dual Status
1 1 0
(Civilian)
◦ Individual Mobilization Augmentees—Soldiers
Other Civilians (excludes
who are assigned to high-level headquarters 3 3 3
technicians)
where they would serve if mobilized. Most Source: Department of the Army, FY2010 Budget Estimates, National
IMAs train annually for two weeks. Guard Personnel, Army, Table PB-30G (NGPA) and PB-31R (OMNG),
May 2009, and Congressional Reporting Requirement Exhibit
• Individual Ready Reserve—trained Soldiers who
may be called upon to replace Soldiers in active With the transition to the modular brigade structure,
and Reserve units. Many in the IRR have left active the Army Reserve will include 12 multifunctional and 48
duty and still have a Reserve commitment, while functional support brigades. The multifunctional brigades
others have chosen to remain in the Army Reserve will perform operational roles including Combat Avia-
but not as a unit member or Individual Mobilization tion, Combat Support (Maneuver Enhancement), Sustain-
Augmentee. ment, Fires and Battlefield Surveillance. The functional
• Retired Reserve—retirees from the active Army, brigades will perform broad support roles—including Air
Army National Guard and Army Reserve who Defense, Engineer, Explosive Ordnance Disposal, Mili-
remain part of the Army Reserve family. tary Police, Signal and others—on a theater-wide basis.
The budget proposal includes funding for 205,000 The Army Reserve provides many specific combat
Soldiers in the Selected Reserve, including 70,000 in the support and combat service support capabilities, as sum-
Individual Ready Reserve. In the event of an emergency, marized in tables 90 and 91.

The Army Budget 85

Table 90
Army Reserve
Key Contributions
1 percent of Army Combat Units
26 percent of Combat Support
41 percent of Combat Service Support
Source: Army Reserve Public Affairs
Table 91
Army Reserve
Key Units
The Army Reserve contributes to the Army's Total Force
by providing 100 percent of the:
  Chemical Brigades
  Internment Brigades
  Judge Advocate General Unit
  Medical Groups
  Railway Units
  Training & Exercise Divisions
  Water Supply Battalions
. . . more than two-thirds of the Army's:
  Civil Affairs Units
  Psychological Operations Units
  Transportation Groups
  Motor Battalions
  Chemical Battalions
  Hospitals
  Medical Brigades
  Theater Signal Commands
. . . and nearly half of the Army's:
  Petroleum Battalions
  Adjutant General Units
  Petroleum Groups
  Transportation Command
  Terminal Battalions
  Public Affairs Units
Source: Army Reserve website
The Army Reserve accounts for 18 percent of the
Army’s military endstrength but only 3.6 percent of the
total Army budget in FY 2010. The Army Reserve budget
includes three appropriations: Military Personnel (RPA),
Operation and Maintenance (OMAR) and Military Con-
struction (MCAR). The Army Procurement appropria-
tions include funds for equipment for the USAR. See the
Army Reserve appropriation data in table 92.
86
Table 92
Army Reserve Budget Summary
($ millions1)
FY082 FY093 FY104
Reserve Personnel, Army 4,732.0 4,583.0 5,029.0
Operation and
Maintenance, Army 2,726.0 2,801.0 2,620.0
Reserve
Military Construction, Army
148.0 283.0 375.0
Reserve
Total 7,606.0 7,667.0 8,024.0
1
Numbers may not add due to rounding.
2
FY08 are actuals.
3
FY09 are enacted base and supplemental proposal.
4
FY10 are base and supplemental proposal.
Source: Department of Defense National Defense Budget Estimates
for FY 2010 (Green Book), Office of the Under Secretary of Defense
(Comptroller), June 2009, Table 6-6
The budget proposals for these appropriations were
discussed in the MILPER, O&M and MILCON appro-
priation groups.
Summary
The Army’s FY 2010 base budget proposal is $142.1
billion and the OCO supplemental proposal is $83.1
billion for a total budget proposal of $225.2 billion. The
Secretary and the Chief of Staff of the Army state that the
budget continues the initiatives to remedy the strains of
eight years of war.
The budget proposal continues the initiatives to rebal-
ance the force, beginning with growing the Army and gen-
erating adequate quantities of agile and flexible forces to
meet the continuous demands of the current war and the
requirement for the full spectrum of operations, includ-
ing transforming the reserve component to a deployable,
brigade-centric operational force. The budget also con-
tinues to pursue four imperatives: Sustain, Prepare, Reset
and Transform. The FY 2010 budget requests adequate
resources to complete current operations effectively—to
engage and destroy the enemy, and assist the host coun-
tries in achieving a basic level of peace that will enable
personal dignity, economic growth and political stabil-
ity—and generate the capability and capacity to deter
future challenges or decisively defeat future enemies.
The Army states that the sum of the base and OCO
budget proposals
provides the resources necessary to grow and
sustain the force, build readiness, support
deployed operations in Iraq and Afghanistan,
reset the force and transform the Army to ensure
 continued full-spectrum capabilities in support of
combatant commanders and the nation.10
Specifically, the budget supports the increase in the
all-volunteer force at the accelerated Grow the Army
levels of 547,400 for the active component, 358,200
for the Army National Guard and 205,000 for the Army
Reserve. The budget also continues the reorganization
of the active and reserve components into standardized
brigade combat teams and support brigades with the
revised objective of 73 brigade combat teams (45 in the
active component and 28 in the Army National Guard)
and 227 support brigades.
The Army budget supports retaining and recruit-
ing quality Soldiers to sustain the all-volunteer force. It
also supports the Army’s commitment to meet adequate
quality-of-life standards for Soldiers and their families,
to provide a safe and conducive work environment for
Soldiers, Army civilians and contractors and to provide
training and professional development of the Soldiers and
civilians who are the Army.
In addition to the ongoing efforts to increase the
number of brigade combat teams and associated support
brigades, the Army’s Research, Development and Acqui-
sition budget proposal provides funds for the most modern
and lethal equipment.
The RDT&E base budget proposal is down 16 percent
of the FY 2008 experience. The Army base and supple-
mental budget proposal for Procurement, including the
Joint Improvised Explosive Device Defeat Fund, is $32.7
billion—$7.4 billion less than the FY 2008 proposal, but
a very large drop ($32.8 billion or nearly 50 percent) from
the FY 2008 experience.
Only the Aircraft Procurement, Army (APA) appro-
priation increases in FY 2010; every other Procurement
appropriation declines. The APA base budget proposal
is $6.9 billion or 21 percent of all Procurement funds,
an increase of $1.2 billion over that of FY 2009 and $1
billion over that of FY 2008.
The very substantial decline in Procurement funds—
and a fairly large decline in RDT&E—from the FY 2008
experience suggest substantial programmatic changes
beyond the cancellation of the Future Combat Systems
Brigade Combat Team (FCS BCT) program. The FCS
cancellation includes an exception—the budget continues
to fund the spin-out of the initial increment of the FCS
program to seven infantry brigades in the near term and
additional programs for information and communications
networks, unmanned ground and air vehicles and sensors,
and an integration effort aimed at follow-on spin-outs to
all Army brigades.
For comparison, the sum of the base and OCO budgets
for the three fiscal years is $250 billion for the FY 2008
actual experience, $231.0 billion enacted and proposed in
FY 2009; and $225.2 billion proposed in FY 2010.
The FY 2010 sum is nearly $6 billion less than for
FY 2009, and $24.8 billion or 10 percent less than the FY
2008 actual experience, due largely to the $32.8 billion
decline in the Procurement appropriations. The Army is
achieving the Grow the Army goals ahead of schedule,
but the decline in funds for Procurement is of concern
for resetting the force and transforming the Army, particu-
larly the reserve component.

Endnotes
1
FY 2010 President’s Budget Highlights, Assistant Secretary of the Army for Financial Management and
Comptroller, May 2009, http://www.army.mil/aps/09/index.html
2
Ibid.
3
2009 Army Posture Statement, The Honorable Pete Geren and General George W. Casey, Jr., to the Committees and
Subcommittees of the U.S. Senate and the House of Representatives, May 2009, http://www.asafm.army.mil/budget/
fybm/FY10/pbhl.pdf.
4
Ibid.
5
Ibid.
6
Assistant Secretary of the Army (Financial Management and Comptroller), Budget Material, http://www.asafm.army.
mil/budget/fybm/fybm.asp.

The Army Budget 87

7
2009 Army Posture Statement, May 2009.
8
Office of the Secretary of Defense (OSD), Reserve Components, Noble Eagle/Enduring Freedom/Iraqi Freedom,
Defense Manpower Data Center, as of 10 March 2009, http://www.defenselink.mil/news/Mar2009/d20090310ngr.pdf.
9
Ibid.
10
FY 2010 President’s Budget Highlights, ASA(FM&C) May 2009.

88
 Appendix I
Glossary of Budget Terms

Appropriation is the specific authority to obligate and expend funds provided for in appropriation bills, which are
prepared by the appropriation committees, passed by Congress and signed into law by the President. Appropriations
are provided in line-item detail. The time over which monies may be obligated is specified, varying from one year for
personnel and operation and maintenance to two years for research, development, test and evaluation and three years
(normally) for procurement and construction (extended to five years for shipbuilding).
Authorization is substantive legislation that provides the authority for an agency to carry out a particular program.
Authorization may be annual, for a specified number of years, or indefinite. Most national defense activities require
annual authorization before Congress may appropriate funds.
Budget authority (BA) is the authority to enter into obligations that will result in the payment of government funds.
Budget authority is normally provided in the form of appropriations. The defense budget as presented to Congress is
expressed in terms of budget authority.
Constant dollars measure the value of purchased goods and services at price levels that are the same as the base or
reference year. Constant dollars do not reflect adjustments for inflationary changes that have occurred or are forecast to
occur outside the base year.
Current or “then year” dollars are the dollar figures in the budget (or in the accounting records) actually associated
with the stated date (past, present or projected). When a price or cost is stated in current dollars, it contains all inflationary
increases expected to occur in a program over the duration of the spendout of an appropriation. Current dollars are also
called “then year” dollars or “budget” dollars.
Deficit is the amount by which outlays exceed receipts. The reverse is called “surplus.”
The Department of Defense (DoD) Budget, which carries the Federal Account Number 051, includes funding of
DoD itself. The budget that comes under the jurisdiction of the Secretary of Defense, it is frequently referred to as the
“Pentagon budget.”
Discretionary spending is what the President and Congress must decide to spend for the next fiscal year through 13
annual appropriation bills. Two of the annual appropriation bills (the Department of Defense Appropriation Bill and the
Military Construction Appropriation Bill) pertain to the Department of Defense.
Emergency spending is spending which the President and Congress have designated as an emergency requirement.
Such spending is not subject to limits established on discretionary spending or “pay-as-you-go” rules established for
direct (mandatory) spending.
Entitlement authority is a provision of law that legally obligates the federal government to make specified payments
to any person or government that meets the eligibility requirements established by that law. Example: Social Security.
Fiscal year (FY) is the federal government’s accounting period. It begins 1 October and ends 30 September, and is
designated by the calendar year in which it ends.
Gross domestic product (GDP) measures the market value of all goods and services produced during a particular period
by individuals, businesses and government in the United States, whether they are U.S. or foreign citizens or American-
owned or foreign-owned firms. GDP is currently used as the most reliable indicator of U.S. economic activity.
Gross national product (GNP) measures the market value of all goods and services produced during a particular period
by U.S. individuals, businesses and government, including income earned by U.S.-owned corporations overseas and by
U.S. residents working abroad but excluding income earned in the United States by residents of other nations.

Appendix I 89
National Defense Budget, which carries the Federal Account Number 050 as a designator, includes not only the
Department of Defense (military) budget, but also funding for defense-related activities of the Department of Energy
(primarily weapons activities and related support) and miscellaneous military activities of federal agencies.
Obligations are binding agreements that will result in outlays, immediately or in the future.
Outlays are the measure of government spending. They are the payments actually made for goods and services and
interest payments during a particular year. These payments (outlays) lag obligations because of the sequential cycle of
congressional appropriations, contracting, placing orders, receiving goods or services and (finally) making payments.
Receipts are collections from taxes or other payments to the federal government.
Supplemental appropriation is enacted subsequent to a regular annual appropriations act when the need for funds is
too urgent to be postponed until the next regular annual appropriation act.
Total Obligational Authority (TOA) is a DoD term that includes the total value of the direct program regardless
of the method of financing. As a practical matter TOA totals in the aggregate do not differ significantly from budget
authority (BA). TOA is used in managing the service budgets, as it is the most accurate reflection of program value.
The differences are attributed principally to offsetting receipts, such as recoveries from foreign military sales, and
financing adjustments. For example, application of sales receipts will increase TOA but not BA. Legislation transferring
unobligated funds for which the purpose has changed are reflected in the BA with no effect on TOA.

90
 Appendix II
The Budget Process
This appendix provides a summarized description of the budget process at the national (federal) level.
The overall process has three fundamental phases: formulation; subsequent actions by Congress and the President
to provide a legally executable budget; and actual execution.
The entire cycle is a continuum. While the last approved budget is being executed, the next budget is undergoing
review and approval in Congress. When passed by Congress and signed by the President, it becomes the Budget of the
United States for the following fiscal year. Concurrently, formulation of the next budget for submission to Congress is
taking place within the departments and agencies.
For purposes of this paper, we will focus primarily on formulation and on the review and approval aspects of the cycle.

The Budget of the United States

First is a review of the overall process at the national level, followed by a description of actions within the Department
of Defense (DoD) providing the DoD part of the President’s Budget.
From an overall perspective, this process has a lead time of at least nine months before formal submission to
Congress and 18 months before the fiscal year actually begins. In the spring, the President establishes general budget
and policy guidelines while the Office of Management and Budget (OMB), working with federal departments and
agencies, establishes policy directives and levels covering the budget year plus the four following years.
The budget calendar for major budget events during the review and approval process is summarized in the
figure below.

Budget Calendar
Date Action

Between first Monday in January Transmission of the President’s Budget to Congress

and first Monday in February

April 15 Action on the congressional budget resolution scheduled for

completion
May 15 House consideration of annual appropriations bills may begin

June 15 Action on reconciliation scheduled for completion

June 30 Action on appropriations by the House scheduled for completion

Throughout this period Hearings; committee reports; reconciliation by conference

committees; floor votes; appropriations bills; more floor votes;
signature or veto by the President

October 1 Fiscal Year begins

Post-October 1 Continuing resolution of all appropriations bills not yet signed

Appendix II 91
 Most agencies submit budget requests to OMB in the fall, followed by a review of details and resolution of issues.
For the Department of Defense, the OMB review is concurrent with the review in the Office of the Secretary of Defense
(OSD) during the September-to-December period. By the end of December, all decisions are complete, including issues
requiring involvement by the President or other White House policy officials. The budget is then finalized and budget
documents prepared. This is now the President’s Budget.
Transmittal to Congress is scheduled by law on or after the first Monday in February of each year. As a practical
matter, this has been an early February event, and additional delays sometimes occur in special cases such as a new
President.
Congress receives the budget proposals and approves, modifies or disapproves them. Through the process of a budget
resolution, it agrees on levels for total spending, receipts and other matters. This resolution provides the framework for
congressional committees to prepare the required appropriations bills. In so doing, Congress votes on budget authority—
the authority to incur legally binding authorizations of the government. In a separate process, Congress usually enacts
legislation that authorizes agencies to carry out particular programs and may limit the amounts that can be appropriated
for various programs. Normally, authorizations precede appropriations, but this is not always the case.
The Congressional Act of 1994 requires that Congress consider budget totals before completing action on the separate
appropriations. To do this, the budget committees formulate a budget resolution setting levels for budget authority,
both in total and by functional areas (such as national defense, energy, transportation, etc.). The budget resolution is
scheduled for adoption by the whole Congress by April 15, but delays are frequent. This resolution allocates amounts
to the appropriations committees that have jurisdiction over the programs, and these committees are required, in turn,
to allocate amounts to their respective subcommittees. Budget resolutions are not laws and do not require presidential
approval.
The appropriations committees in both the House and Senate are divided into subcommittees that hold hearings and
review detailed budget justification in their jurisdictional areas. Appropriations bills are initiated in the House. After
a bill has been approved by the committee and the whole House, it is forwarded to the Senate, where a similar review
takes place. When disagreements occur between the two houses of Congress, a conference committee meets to resolve
these differences. The report of the conference committee is returned to both houses for approval. It then goes to the
President as an enrolled bill for approval or veto.
If actions on one or more appropriations bills are not completed by the beginning of the fiscal year (1 October),
Congress enacts a continuing resolution to authorize continued operations at some designated level for a specified time,
pending a regular appropriation. Continuing resolutions require presidential approval and signature.
So far, the actions described pertain to annual appropriations included in 13 separate appropriations bills. These
apply to what is described as discretionary spending because of the need for annual budget authority by Congress.
While the majority of federal programs are dependent on annual appropriations, the discretionary portion covers only
about one-third of annual federal outlays. The rest of federal expenditures come from budget authority in permanent
laws which do not need to be reenacted annually. This applies to the large entitlement programs and the interest on the
public debt, which are funded by permanent law. Therefore, the majority of outlays in a year are not controlled through
separate appropriations actions for the year. The terms used are “discretionary” for the annual appropriations and “direct
spending” for those based on permanent laws.
Congress may enact new legislation or change existing legislation relating to direct spending, but need take no
action on an annual basis, in which case the spending continues in accordance with existing law. Without legislative
change, it is on automatic pilot.
For more information on the budget process at the federal level, see A Citizen’s Guide to the Federal Budget,
Fiscal Year 2002 (the most recent edition available online) and A Brief Introduction to the Federal Budget Process,
Congressional Research Report 96-912, last updated on 20 October 1997.

92
The Department of Defense Budget Process
Agencies of the U.S. government submit and justify budget packages for inclusion in the President’s Budget. The
Department of Defense budget is an important segment of the discretionary funding portion.
The DoD budget submitted for inclusion in the President’s Budget is a product of its Planning, Programming,
Budgeting and Execution process (PPBE). DoD prepares a Future Years Defense Program (FYDP) spanning six years;
the FYDP is periodically updated. The first year for the FYDP is the basis for the next budget requiring congressional
action. Actually, a two-year budget is prepared in even-numbered years, but Congress acts on only one year at a time,
and the second year’s budget is updated and resubmitted the following year.
The specific calendar of events varies somewhat from year to year, but the basic cycle goes something like this:
Defense Fiscal Guidance (DFG) provided in March is followed by revised programs from the services. This is in
the form of a Program Objective Memorandum (POM) each service provides to OSD in May or early June. The OSD
review leads to a Program Decision Memorandum (PDM) in August/September. In the meantime, budgets for the next
fiscal year are being prepared based on OSD guidance and directives. Budget Execution Submissions (BESs) are made
to OSD by the beginning of October, and the DoD budget now undergoes a detailed review within OSD.
The October-to-December review is actually a joint review by OSD and OMB. Decisions are made through a series
of Program Decision Memoranda under supervision of a senior review panel, the Defense Resources Board. After the
Secretary of Defense makes final decisions on major issues, the budget is presented to OMB and the President for final
review and incorporation into the President’s Budget.
With OMB and presidential approval, the backup documentation for submission to Congress is completed and the
DoD budget request (now part of the President’s Budget) is delivered in early February.
Next comes the congressional justification, review and approval period, ending with the authorization and
appropriations bills, passed by Congress and signed by the President. Ideally, all this is completed by the beginning of
the fiscal year on 1 October. If not, operations continue with an appropriate Continuing Resolution. A schematic of the
basic flow is shown in the figure on page 116.
After a series of hearings, Congress provides both authorization and appropriations bills. While authorization is
important for program approvals, it is the appropriations bills that provide DoD with the authority to obligate funds and
make payments (Outlays) against these obligations.
Appropriations for the Department of Defense are covered by two separate bills: the Military Construction
Appropriations Bill, which addresses Military Construction and Family Housing, and the Department of Defense
Appropriations Bill for all other DoD appropriations. These bills incorporate a number of individual appropriations
covering Military Personnel, Operation and Maintenance, Procurement, RDT&E (Research, Development, Test and
Evaluation), Military Construction and Family Housing. They are identified in the appropriations bills by title and
military service.
At the start of the new fiscal year, providing the bills are passed and signed by the President, the execution phase
begins. Before funds can be obligated, however, OMB must apportion the funds to DoD and Treasury warrants must be
issued. DoD, in turn, subapportions for further allocation to operating agencies.
The services play a subordinate role to DoD in all of this, in both the formulation and justification of their respective
portions of the DoD budget. All the services conform to the same calendar and procedures with respect to the DoD
budget process.
At any one time a number of concurrent actions involving different budgets are occurring. Using the Department of
the Army (DA) as an example, the present budget-related actions look something like this: DA is executing the FY 2009
budget that extends through September 2009 while concurrently justifying its portion of the FY 2010 Army budget in
Congress. At the same time DA is also engaged in the Pentagon in updating the program through FY 2017 and getting
ready for the next Army budget proposal to DoD. This remains a dynamic, ongoing process.

Appendix II 93
 DoD Budget Process

DoD Budget

OMB President’s Budget Congress

Budget Committees Budget Resolutions

Armed Services Committees Authorization Bills

Appropriations Committees Appropriation Bills

OMB Apportionment
Treasury Warrants

DoD

94
 Appendix III
Glossary of Acronyms
A/V Audio Visual System
ABL Airborne Laser
AC Active Component
ACE Armored Combat Earthmover
ACS Aerial Common Sensor
ADDS Army Data Distribution System
AEHF Advanced Extremely High Frequency
AFH Army Family Housing
AGR Active Guard and Reserve
AIM XXI Abrams Integrated Management for the
21st Century
AIM–9x Air Intercept Missile–9X
AMRAAM Advanced Medium Range Air-to-Air
Missile
AOR Area of Responsibility
APA Aircraft Procurement, Army
API Ascent Phase Intercept
ARFORGEN Army Force Generation
ARRA American Recovery and Reinvestment Act
ASA(FM&C) Assistant Secretary of the Army for
Financial Management and Comptroller
ASE Aircraft Survivability Equipment
ASV Armored Security Vehicle
ATACMS Army Tactical Missile System
ATAS Advanced Tank Armament System
AWCF Army Working Capital Fund
BA Budget Authority; Budget Activity
BAG Budget Activity Group
BCT Brigade Combat Team
BEA Bureau of Economic Analysis
BFVS Bradley Fighting Vehicle System
BLIN Budget Line Item Number
BMD Ballistic Missile Defense
BMDS Ballistic Missile Defense System
BRAC Base Realignment and Closure
C2 Command and Control
C2BMC Command and Control, Battle Management
and Communications
C3 Command, Control and Communications
C4I Command, Control, Communications,
Computers and Intelligence
C4ISR Command, Control, Communications,
Computers, Intelligence, Surveillance and
Reconnaissance
CAMD,A Chemical Agents and Munitions
Destruction, Army
CAP Combined Aggregate Program
CBO Congressional Budget Office
CMA Chemical Materials Agency
CN Counternarcotics
COCOM Combatant Command
CRA Continuing Resolution Act
CROWS Common Remotely Operated Weapons
Stations
CSAR-X Combat Search and Rescue X
CWC Chemical Weapons Convention
DHP Defense Health Program
DHS Department of Homeland Security
DLA Defense Logistics Agency
DoD Department of Defense
DWCF,A Defense Working Capital Fund, Army
ECIP Energy Conservation Investment Program
EFLV Evolved Expendable Launch Vehicle
EFV Expeditionary Fighting Vehicle
ER Environmental Restoration
ERA Environmental Restoration, Army
ESSM Evolved Seasparrow Missile
EW Electronic Warfare
FCS Future Combat Systems
FHIF Family Housing Improvement Fund
FHS Future Handgun System
FHTV Family of Heavy Tactical Vehicles
FIST Fire Support
FMTV Family of Medium Tactical Vehicles
FUDS Formerly Used Defense Sites
FY Fiscal Year
GDP Gross Domestic Product
GDPR Global Defense Posture Realignment
GFD Gross Federal Debt
GPS Global Positioning System
GS General Service
GTMO Guantánamo
GWOT Global War on Terror
HAP Homeowners’ Assistance Program
HIMARS High Mobility Artillery Rocket System
HMMWV High Mobility Multipurpose Wheeled
Vehicle
HOA Horn of Africa
IMA Individual Mobilization Augmentees
IRR Individual Ready Reserve
ISR Intelligence, Surveeillance and
Reconnaissance
ITAS Improved Target Acquisition
JAGM Joint Air to Ground Missile
JASSM Joint Air-to-Surface Standoff Missile
Appendix III 95
JCA Joint Cargo Aircraft
JDAM Joint Direct Attack Munition
JHSV Joint High Speed Vessel
JIEDDF Joint Improvised Explosive Device Defeat
Fund
JLENS Joint Land Attack Cruise Missile Defense
Elevated Netted Sensor System
JLTV Joint Light Tactical Vehicle
JPATS Joint Primary Aircraft Training System
JSF Joint Strike Fighter
JSOW Joint Standoff Weapon
JTF Joint Task Force
JTRS Joint Tactical Radio System
KFOR Kosovo Force
LCS Littoral Combat Ship
LPD Landing Platform Dock
LUH Light Utility Helicopter
MCA Military Construction, Army
MCAR Military Construction, Army Reserve
MCARNG Military Construction, Army National
Guard
MDA Missile Defense Agency
MEADS CAP Medium Extended Air Defense System
Combined Aggregate Program
MERHCF Medicare-Eligible Retiree Health Care
Fund
METL Mission Essential Task List
MFO Multinational Force and Observers
MHPI Military Housing Privatization Initiative
MILCON Military Construction
MILPERS Military Personnel
MKV Multiple Kill Vehicle
MLP Mobile Landing Platform
MLRS Multiple Launch Rocket System
MPA Military Personnel, Army
MRAP Mine Restistant Ambush Protected
MUOS Mobile User Objective System
NATO North Atlantic Treaty Organization
NGPA National Guard Personnel, Army
NPOESS National Polar-Orbiting Operational
Environmental Satellite System
NSA National Security Agency
O&M Operation and Maintenance
OCO Overseas Contingency Operation
OEF Operation Enduring Freedom
OIF Operation Iraqi Freedom
OMA Operation and Maintenance, Army
OMAR Operation and Maintenance, Army Reserve
OMB Office of Management and Budget
OMNG Operation and Maintenance, Army National
Guard
OPA Other Procurement, Army
96
OPTEMPO Operational Tempo
PAC-3 Patriot Advanced Capability-3
PBD Program Budget Decision
PCS Permanent Change of Station
PE Program Elements
PIP Product Improvement Program
PPBE Planning, Programming, Budgeting and
Execution
PSIC Public Safety Interoperable
Communications
RAM Rolling Airframe Missile
RC Reserve Component
RCOH Refueling Complex Overhaul
RDA Research, Development and Acquisition
RDA Research, Development and Acquisition
RDT&E Research, Development, Test and
Evaluation
RPA Reserve Personnel, Army
S&T Science and Technology
SAG Subactivity Group
SATCOM Satellite Communications
SAW Squad Automatic Weapon
SBIRS Space-based Infrared Systems
SDB Small Diameter Bomb
SEP System Enhancement Program
SF Special Forces
SINCGARS Single Channel Ground and Airborne
Radio
SM3 Standard Missile 3
SOF Special Operations Forces
START Strategic Arms Reduction Treaty
TARP Troubled Asset Relief Program
TDA Tables of Distribution and Allowances
THAAD Terminal High Altitude Area Defense
TIARA Tactical Intelligence and Related Activities
TOA Total Obligational Authority
TOW Tube-Launched Optically-Tracked, Wire-
Guided
TPU Troop Program Unit
TSAT Transformational Satellite Communications
UAS Unmanned Aircraft System
UAV Unmanned Aerial Vehicles
UCC Unified Combatant Command
UCP Unified Command Plan
USAFRICOM U.S. Africa Command
USEUCOM U.S. European Command
USSOCOM U.S. Special Operations Command
USSOUTHCOM U.S. Southern Command
WGS Wideband Global Satellite
Communications
WIN-T Warfighter Information Network–Tactical
WTCV Weapons and Tracked Combat Vehicles
 Appendix IV
References

The Federal Budget

Budget of the U.S. Government, Fiscal Year 2010, Government Printing Office, Main Page.
http://www.gpoaccess.gov/usbudget/
“DoD Releases Fiscal 2010 Budget Proposal,” News Release No. 304-09, 7 May 2009.
http://www.defenselink.mil/releases/release.aspx?releaseid=12652
The Department of Defense Budget
Defense Budget Materials, FY 2010 Budget, Under Secretary of Defense (Comptroller).
http://www.defenselink.mil/comptroller/Budget2010.html
The Army Budget
FY 2010 Budget Materials, ASA(FM&C), Military Deputy for Budget (ABO).
http://www.asafm.army.mil/budget/fybm/fybm.asp
2009 Army Posture Statement, General George W. Casey, Jr., Army Chief of Staff, and Peter Geren, Secretary of
the Army, May 2009
http://www.army.mil/aps/09/2009_army_posture_statement_web.pdf

Appendix IV 97
98