America's Disastrous Budgets

Editor's Note: This essay is part of a series of Audits of the Conventional Wisdom, a project of the Center for International Studies at MIT.

Since September 2001, federal budgets for national security have climbed more than 50 percent in real terms. Unfortunately, much of the added money reflects "business as usual" rather than programs aimed at making the nation safer from today's threats.

Compared with past decades, national security spending makes up a relatively small share of the U.S. economy. Nevertheless, with the federal debt growing rapidly and as large numbers of baby boomers approach retirement age, many observers expect future federal budgets to be tight. Thus it is critically important to ensure that national security funds go to projects that make the nation more secure. This article examines broad changes in national security budgets since September 2001. It first reviews the three categories of federal spending for national security. It then examines how budgets in those categories have changed since September 2001. It ends with a look at alternatives that seem more relevant in an era of international mass-casualty terrorism.

Three ways to improve security

Three categories of federal spending are closely related to national security. The first is national defense -- the offensive element. National defense includes funds for the Department of Defense (DoD), nuclear activities of the Department of Energy, and smaller military-related programs in other agencies. The national defense budget pays to raise, equip, train and maintain the armed forces, conduct military operations, and deter attacks on the United States and its allies. It also pays about 80 percent of the nation's intelligence bills. The second category is homeland security -- the defensive element. This category includes law enforcement to track down terrorists and bring them to justice, border and aviation security, physical and cyber protection of critical facilities and systems, improvements to the public health infrastructure, and preparations to respond to and mitigate the consequences of attacks should they occur.

The third category is international affairs -- the preventive element. International affairs includes the conduct of foreign affairs and diplomacy through the State Department, economic and military aid to foreign countries, contributions to international organizations like the United Nations, and foreign information and exchange programs.

The Bush administration's national security strategy calls for bringing to bear all the tools of statecraft and security, including elements of offense, defense and prevention. Of course, no simple formula can tell U.S. leaders how spending should be divided among the three categories. National security policy serves multiple objectives: protecting U.S. sovereignty and territorial integrity, and sustaining a suitable level of relative power in the world, as well as keeping people and infrastructure safe from the threat of direct attack. To those ends, the United States needs a strong military, regardless of the terrorist threat. It also devoted efforts to homeland security even before the tragedy of Sept. 11, 2001. Moreover, even if terrorism were not a problem, international diplomacy and aid programs would be crucial to sustaining national security.

Achieving U.S. security objectives in the future will require continued substantial investment across all three categories. Nevertheless, U.S. resources for national security are not inexhaustible.

Setting priorities and explicitly considering tradeoffs among the competing demands of offense, defense and prevention are crucial for the nation to get the most out of its sizeable financial investment in security.

National security spending since 2001