Military Budget Proposal Would Cost an Extra $1.2 Trillion over 10 Years: Tax Expert

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Albert Einstein is said to have called compound interest “the most powerful force in the universe.” A recent budget analysis shows how that powerful force would affect U.S. fiscal policy if Congress follows recommendations to increase annual military spending by five-percent per year over the next decade.

Following the House Armed Service Committee’s (HASC) passage of the 2022 National Defense Authorization Act (NDAA) on Sept. 1, HASC ranking member Mike Rogers (R-Ala.) touted the fact that he helped secure a 5-percent increase over the Department of Defense’s topline budget for last year.

The five-percent bump follows the recommendations of the bipartisan National Defense Strategy Commission—a body that helps set broad U.S. security goals every four years—which has recommended annual DOD budget increases of 3-5 percent above inflation.

Proponents of this annual increase say it’s necessary for the military to complete ambitious goals of overhauling its legacy IT systems, investing in advanced technologies like artificial intelligence, and revamping its nuclear weapons program—all steps seen as necessary to pivot from the Middle East to great-power conflicts with Russia and China.

However, National Taxpayers Union analyst Andrew Lautz said annual 3-5 percent annual increases are untenable in the long run. Writing Sept. 2 for the Washington DC-based Quincy Institute for Responsible Statecraft, Lautz showed the long-term implications of this strategy.

This year, a 5-percent increase in the DOD’s 2021 budget results in $37.5 billion of extra spending. But that number quickly skyrockets to more than $100 billion in extra spending per year by 2026, and $200 billion per year by 2030.

“The differences compound over time, exceeding a $100-billion delta in four years (FY 2026) and a $200-billion delta in eight years (FY 2030),” said Lautz, referring to “delta” as the difference between the current long-term DOD budget forecast and what would be spent if the five-percent increase plan was followed.

By Ken Silva

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