Department of DefenseBudget

APEX2006

Strategic Priorities

• The Quadrennial Defense Review – the first conducted

in an era of global terrorism – continues a shift in emphasis by identifying strategic priorities.

• The FY 2007 budget invests in capabilities and forces in these priority areas.

– Prevail in Irregular Warfare Operations– Defend the Homeland Against Advanced Threats– Maintain America’s Military Superiority – Support Service members and their families

Department of Defense Topline(Discretionary budget authority $ in billions)

FY 06 FY 07 Change

DoD Budget 410.8 439.3 +28.5

FY 2007 Budget provides:

• 7 percent increase over FY 2006 enacted budget

• Capabilities for future challenges

• Advanced technology for greater operational capability and combat power

• Robust pay & incentives for recruitment and retention

• Superior health care coverage

0

5

10

15

20

25

30

35

40

1945 1955 1965 1975 1985 1995 2005

Per

cent

age

VIETNAM (1968)

KOREA (1953)

GULF WAR (1991)

GWOT

34.5%

11.7%

8.9%

6.0%

3.9% (2005)

BUILD UP (1986)

4.6%

DoD Budget as % of GDP

Source: Historical Table, Budget of the United States Government

FY 2007 Budget by Service (Discretionary budget authority, $ in billions)

FY 06 FY 07Army 99.1 111.8 +12.7

Navy 106.5 110.6 +4.1

Marine Corps 16.0 16.8 +0.8

Air Force 124.1 130.4 +6.3

Defense Wide 65.1 69.7 +4.6

Total 410.8 439.3 +28.5

IncreaseEnacted

FY 2007 Budget by Title (Discretionary budget authority, $ in billions)

FY 06* FY 07 Increase

Military Personnel 106.8 110.8 +4.0

O&M 142.6 152.0 +9.4

Procurement 76.2 84.2 +8.0

RDT&E 71.0 73.2 +2.2

Military Construction 8.0 12.6 +4.6

Family Housing 4.0 4.1 +0.1

Working Capital Funds 2.2 2.4 +0.2

Total 410.8 439.3 +28.5

Enacted

*FY 06 supplemental not included in FY 06 totals

$0

$25

$50

$75

$100

$125

1970 1975 1980 1985 1990 1995 2000 2005 2010

2011

DoD Procurement(current $ in billions)

1996$42.6B

2001$62.6B

2007$84.2B

1985$96.8B

Sustaining Military Health Care

• DoD provides one of the best health care coverage programs in the Nation.

• Our goal is to maintain exceptional health care coverage for those who serve by placing the program on a fiscally sound foundation for the long-term.

• Health care costs are projected to rise by 31 percent from FY 05 to 11. 0

10

20

30

40

50

FY '05 FY '06 FY '07 FY '08 FY '09 FY '10 FY 11

35 3739 40

4244 46

Department of Defense Health Care(dollars in billions)

FY 2007 Budget Congressional Action

• Appropriation Bills:– House: $4 billion reduction– Senate: $9 billion reduction– Significant operations/military personnel reductions– Selected acquisition programs affected– War on terrorism funding included– House/Senate bills differ in framework

• Denied Savings proposals• “Churn”• Potentially difficult conference• Possible continuing resolution

FY 2008 Budget Challenges

• Constrained fiscal controls• Must-pay Bills

– Inflation– Fuel– Pay raises

• ConPlan 7500• Core readiness

– Force structure– Training– Depot Maintenance

• QDR Initiatives• BRAC Implementation• Equipment recapitalization• War on Terrorism