CBO Projects 9% Increase in DOD Costs to $830B by 2037

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The cost of the Department of Defense’s programs is projected to increase by 9 percent from 2027 to 2037, due in large part to expenses on military personnel and operations and maintenance, according to the Congressional Budget Office.

CBO analyzed the 10-year implication of DOD’s 2023 Future Years Defense Program, which details program and cost expectations for five years, and is the basis for President Joe Biden’s proposed $772 billion budget for DOD in 2023.

The 2023 FYDP indicates a 1.5 percent increase in DOD budget in 2024, followed by a gradual decrease over a five-year period until 2027, amounting to $762 billion.

Based on the report, CBO estimated that DOD’s expenditures will increase within 10 years from 2027 to $830 billion in 2037, adjusting for inflation. Almost 80 percent of the growth will be due to personnel compensation, O&M and long-term acquisition plans that were made public by the agency.

CBO noted that the projected costs would be 5 percent higher in the FYDP period if its analysis was based on the defense agency’s historical cost growth. Congress’ approval of higher appropriation for the agency could also lead to more costly FYDPs, the budget office stated.

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