The United States spent $820 billion on national defense during fiscal year (FY) 2023 according to the Office of Management and Budget, which amounted to 13 percent of federal spending. Defense spending in 2023 was less than the average for the last decade, which was 15 percent of the budget. Such spending indicates that lawmakers have prioritized national defense as a key part of our budget; indeed, the United States spends more on defense, relative to the size of its economy, than any other member of the G7 (a group of the world’s largest advanced economies, the members of which are shown in the chart below). This explainer looks at the components of the U.S. defense budget.
How is the defense budget allocated?
The majority of the overall defense budget, $776 billion in FY2023, was spent by the Department of Defense (DoD) on military activities. The remaining $43 billion was spent on defense-related activities carried out by other agencies, such as the Department of Energy and the Federal Bureau of Investigation.
DoD funding for military activities support a broad range of activities. The largest category, operation and maintenance, cost $318 billion in 2023. It covers the cost of military operations such as training and planning, maintenance of equipment, and most of the military healthcare system (separate from outlays made by the Department of Veterans Affairs). The second largest category, military personnel, supports pay and retirement benefits for service members and cost $184 billion in 2023.
Several smaller categories accounted for the rest of DoD spending. Procurement of weapons and systems cost $142 billion in 2023 and $122 billion was spent on research and development of weapons and equipment. The military also spent over $10 billion on the construction and management of military facilities and $1 billion on family housing.
How has national defense spending changed over time?
The composition of DoD spending has varied over time. Operation and maintenance accounted for 39 percent of military spending in 2023, which is up from just over one-quarter of all military spending in 1973. Although the United States was involved in the Vietnam War around that time and operational costs were significant, a much larger share of military spending was devoted to military personnel and procuring weapons and systems at that time.
Two large categories of spending have a close relationship with the defense budget, though they technically fall outside of it. The first is veterans’ benefits and services, on which the federal government spent $302 billion in 2023. Those commitments arise in part from past military decisions. The second is international affairs, to which the federal government devoted $84 billion in 2023 for discretionary spending on activities such as humanitarian assistance and international development. That spending influences political and economic developments in other countries and can therefore affect future decisions on military involvement and defense spending. Those categories, and their relationship to national defense, highlight the federal government’s significant budgetary commitment in this area.
National defense spending remains a top priority of the federal government
The national defense budget funds a wide range of activities and represents a significant share of overall federal spending. Indeed, the United States spends more than any other advanced economy in this area, not only in raw dollars, but also as a share of the economy. While the appropriate level of defense funding is part of an ongoing debate, one thing is clear — national defense spending is currently one of the top priorities of the U.S. federal government.
What percentage of the US budget goes toward the military? In 2023, defense spending made up 13.3% of the federal budget. Since 1980, the percentage of federal spending for the military has fluctuated between a height of 27.9% in 1987 and lows of 11% in 2020 and 2021.
The military budget pays the salaries, training, and health care of uniformed and civilian personnel, maintains arms, equipment and facilities, funds operations, and develops and buys new items.
The military branch with the highest budget is typically the Department of the Army, which includes the Army, the Army Reserve, and the Army National Guard. Their budget covers pay and benefits as well as research, development, and acquisition of new equipment.
Defense. Approximately 20 percent of the federal budget is spent on defense and security. Most of that 20 percent is for the Department of Defense, which covers the cost of military operations, troop training, equipment, and weapons research.
Major categories of FY 2022 spending included: Medicare and Medicaid ($1,339B or 5.4% of GDP), Social Security ($1.2T or 4.8% of GDP), non-defense discretionary spending used to run federal Departments and Agencies ($910B or 3.6% of GDP), Defense Department ($751B or 3.0% of GDP), and net interest ($475B or 1.9% of GDP ...
In 2022, the Stockholm International Peace Research Institute estimated the China's military spending is $230 billion which accounted for 1.7% of the country total GDP. A 2024 study by Taylor Fravel, George J. Gilboy, and Eric Heginbotham estimated China's total military spending for 2024 at US$471 billion.
The United States led the ranking of the countries with the highest military spending in 2023, with 916 billion U.S. dollars dedicated to the military. That constituted over 40 percent of the total military spending worldwide that year, which amounted to 2.4 trillion U.S. dollars.
Historically, the branch of the military that tends to receive the least amount of funding is the U.S. Coast Guard. The Coast Guard is part of the Department of Homeland Security, rather than the Department of Defense, which the other branches fall under.
The largest category, operation and maintenance, cost $318 billion in 2023. It covers the cost of military operations such as training and planning, maintenance of equipment, and most of the military healthcare system (separate from outlays made by the Department of Veterans Affairs).
The United States has the highest military spending of any nation. Its military spending includes all of the Department of Defense's regular activities, war spending, the nuclear weapon program, international military assistance, and other Pentagon-related spending.
At U.S. Department of Defense, the highest paid job is a Director of Sales at $229,803 annually and the lowest is an Admin Assistant at $35,399 annually. Average U.S. Department of Defense salaries by department include: HR at $124,403, Operations at $100,336, Engineering at $153,960, and Communications at $103,336.
Compensation for military personnel is found in both the defense and nondefense parts of the federal budget. Defense funding, in the Department of Defense's (DoD's) budget, is mostly for current military personnel. Nondefense funding in the Department of Veterans Affairs (VA) is mostly for former military personnel.
The statistic represents the U.S. defense outlays from 2000 to 2023 with an additional forecast from 2024 to 2034, as a percentage of the gross domestic product. Defense outlays amounted to 746 billion U.S. dollars in 2022, which was about three percent of the U.S. GDP.
Servicing the federal debt has been taking up an increasingly larger share of government spending. Interest payments made up about 13 percent of federal spending in 2024, being the third highest category of spending ahead of spending on defense, Medicare and income security programs (see here).
The United States' welfare budget totaled $1.101 trillion in fiscal year 2023, or 18% of all federal outlays. Eight different federal agencies run welfare. This analysis pulls information from the agencies to show a combined federal welfare budget.
The statistic represents the U.S. defense outlays from 2000 to 2023 with an additional forecast from 2024 to 2034, as a percentage of the gross domestic product. Defense outlays amounted to 746 billion U.S. dollars in 2022, which was about three percent of the U.S. GDP.
The United States led the ranking of the countries with the highest military spending in 2023, with 916 billion U.S. dollars dedicated to the military. That constituted over 40 percent of the total military spending worldwide that year, which amounted to 2.4 trillion U.S. dollars.
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