Thursday, November 10, 2016

How Much Will Donald Trump Really Spend on Defense?

How Much Will Donald Trump Really Spend on Defense?: Defense industry stocks are soaring in reaction to a clean Republican sweep of the executive and legislative branches. But how much will President-elect Donald Trump’s plan to rebuild the military actually cost? Given this will be a president who campaigned on the idea that the U.S. military should be focused on counter-terrorism as its most important mission, can this plan stay on track?

First, President Obama’s defense plan is already $113 billion over the amended Budget Control Act spending caps for the next four years. Trump and the Republican Congress will need to repeal those legal caps and add that money before turning to their own priorities. Then, the foundation of Trump’s own plan would require another $100 billion over the same four-year timeframe. Conservatively, that’s about $55 to $60 billion extra per year over four years for the meat and potatoes of a military buildup. Adding in crucial smaller programs, accounting for weapons cost growth, and returning the entire force to adequate readiness pushes the real price tag even further upward to somewhere between an additional $250 to $300 billion over four years.

By comparison, the Budget Control Act has already cut $350 billion in planned military spending relative to the budget levels recommended by Secretary Gates in 2012. In a recent exercise, the American Enterprise Institute spent $1.3 trillion over ten years, but remained unable to match the Gates plan. The only limiting factor to the proposals below is the absorptive capacity of the defense industrial base.