Soon, we will get the president’s proposed fiscal 2014 spending plan. Much attention will focus on Social Security and Medicare, which have been flashpoints lately. Meanwhile, if coverage in years past is any guide, we can expect stories from many news outlets that will significantly understate a third huge slice of spending—the real costs of military and other national defense spending.
Chuck Hagel, on the griddle now as President Obama’s nominee for Secretary of Defense, famously called the Defense Department “bloated,” in a 2011 interview with Financial Times. But budget stories then and now tend to report on the base budget from the Department of Defense, leaving readers with the impression that that is the full cost of fulfilling the Constitutional mandate to “provide for the common defence.”
It isn’t. From the perspective of taxpayers who must bear the burden, total national security costs are as much as 2.5 times the base Defense budget. Reporters might want to take a look at the true costs, and not just at the way the White House prepares the budget and Pentagon spins it.
A year ago, in budget reporting on defense costs, the figure of $525 billion got wide play, as did the fact that the number was down slightly from the previous year. The New York Times reported that “the military budget is to be $525 billion,” a decline of $6 billion mostly because of increased health insurance fees paid by military personnel, while the Los Angeles Times reported that “the $525 billion sought in fiscal year 2013 is $6 billion less than Congress approved for 2012.” The $525 billion figure was also cited by The Wall Street Journal, Bloomberg, and The Associated Press (via Fox).
The Washington Post’s Federal Eye blog did a little better. It used a qualifier word, “core” budget, while Reuters used the a different qualifier—“base”
But even qualifiers like “core” or “base” don’t quite do the trick. They don’t help readers understand the much larger costs of national security. Journalists covering the fiscal 2014 budget that the White House will issue in a matter of days should look carefully at the document as well as at other sources that have analyzed the total costs.
So how misleading is the $525 billion figure?
For starters, the $525.4 billion does not include $88.5 billion for unbudgeted costs of wars overseas, called Overseas Contingency Operations. Add other Pentagon spending details and the projected outlays (see fiscal 2013 budget at p. 84) come to $672.9 billion, which is 28 percent more than the basic Defense budget.
But wait!—There’s more.
Each year the Director of National Intelligence releases a total budget figure for national intelligence. For fiscal 2013 it was $52.6 billion, down from $53.9 billion in fiscal 2012. National security includes the NSA, CIA, and other intelligence services. Military intelligence spending, included in the base Defense budget, was $19.2 billion. (A good place to track these budget issues is the Federation of American Scientists Intelligence Resource Program.)
Next there’s $19.2 billion for the nuclear bomb-making arm of the Energy Department. Homeland Security includes $13.2 billion for customs and border patrol and $10.5 billion for the Coast Guard.
Then there is the considerable cost of wars past. The budget shows almost $139 billion for Veterans Affairs, though the numbers are presented in the budget text in a way that anyone not reading carefully would think is less than half that much.
Add all these up and the total cost grows 86 percent, to $977.5 billion. Most military intelligence spending is buried in these figures.
Meanwhile, wars are debt-financed, even though taxes were raised to help pay for every war American prior to Afghanistan and Iraq. Add in interest costs attributable to past conflicts, as the pacifist War Resisters League does, and the fiscal 2013 cost of national security comes to more than $1.3 trillion—two and a half times the basic Defense budget.
That pretty much all-in cost almost equals the $1.6 trillion expected to be raised through the individual federal income tax in fiscal 2013, as shown in Table S-5 of the proposed White House budget.

Social Security and Medicare, financed with payroll taxes, cost $820 billion and $528 billion respectively, for a total of $1.3 trillion, making their combined cost less than the broadest measure of national security spending.
Taking the narrowest measure of entitlement and welfare spending and comparing it to the broadest measurement of defense spending and thinking it has any meaning is dishonest. Applying the same logic to medicaid,which the feds spent over $400 billion on, how much was the "real cost" if financing is taken into account. Same with Medicare, which ran a $400 billion deficit last year ... whats Medicare's 'real' cost if we calculate financing into the equation.
#1 Posted by Mike H, CJR on Thu 31 Jan 2013 at 05:59 PM
@Mike H,
"Medicare, which ran a $400 billion deficit last year..."
Source for this number, please?
That figure is not in the proposed budget nor the Medicare trustees report.
The latest Medicare trustees report is available at http://www.socialsecurity.gov/OACT/TRSUM/index.html while the latest report to Congress for the HI and SMI (hospital and supplemental medical) reports are at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/downloads/tr2012.pdf
#2 Posted by David Cay Johnston, CJR on Fri 1 Feb 2013 at 05:42 AM
"the cost of national security consumes every individual income tax dollar except the last one paid by each American"
$1.6 trillion minus $1.3 trilllion is $300 billion. Since the U.S. population is 300 million, I think you mean every income tax dollar minus the last thousand.
And while that's an interesting way of looking at it, because many Americans pay no net federal income tax and they're usually paid by household not individual, I think it'd be a little misleading even if the math added up. Better to let the numbers speak for themselves.
#3 Posted by Jamie McCarthy, CJR on Fri 1 Feb 2013 at 06:30 AM
This piece is unbelievably sloppy, with inaccurate addition, double-counting, and impossible assumptions.
I've been somewhat skeptical of David Cay Johnston's work for some time, because in his writing on taxes, he's all too often failed to provide the reader the links needed to substantiate his often extraordinary claims. But I've kept my mouth shut, figuring that someone at the NYT must have been checking his work before letting it be published in the paper.
But this is a piece of total crap.
Let's start from that $672.9 billion, and see if we can get to his $977.5 billion, for instance.
672.9 billion
33.4 billion (intel minus defense intel - already included in base P'gon budget)
19.2 billion (Energy dept. bombs)
13.2 billion (customs and border patrol)
10.5 billion (coast guard)
139 billion (veterans affairs)
--------------
888.2 billion (nearly $90B less than Johnston)
Now let's take a look at that over $325B in interest costs. We've got a $3,600 billion budget; ~6% of that is interest, or somewhere around $216 billion. So Johnston is attributing 150% of all interest on the national debt to defense.
Grrrrreeeeaaaat, as Tony the Tiger used to say.
Suppose we say past defense is responsible for 40% of the national debt, hence for 40% of today's interest. That's highballing it; I can't come up with a metric to assign that large a share to defense. That would be $86.4 billion. Add that to the $888.2 billion, and we get $974.6 billion.
Wouldn't that be shocking enough?
Instead, Johnston has to shoot for $1.3 trillion, and undermine his own argument by his blatant skewing of the numbers.
Jerk.
#4 Posted by low-tech cyclist, CJR on Fri 1 Feb 2013 at 06:46 AM
However, David Cay Johnston also forgot some national security expenditures. All or parts of the following agencies are within the national security sphere:
Bureau of Alcohol, Tobacco, Firearms and Explosives
Drug Enforcement Agency
Secret Service
Federal Bureau of Investigation
Federal Protective Service
CDC (at least the portion responsible for bioweapon defense)
Transportation Security Administration
Bureau of Indian Affairs Police
United States Park Police
State Department Bureau of Diplomatic Security
Amtrak Police
U.S. Mint Police
U.S. Postal Police (e.g. preventing more anthrax attacks, with CDC)
Federal Reserve Police
TVA Police
....And that's not a complete list.
#5 Posted by Timothy Sipples, CJR on Fri 1 Feb 2013 at 08:41 AM
I'm sympathetic to the goal of this piece, but it really is incredibly sloppy. For example:
--Overseas Contingency Operations costs are not "unbudgeted."
--Budget authority is not the same as outlays. The $525.4 billion to $672.9 billion leap made in the piece is completely unfounded.
--As a previous commenter noted, the interest on the debt calculation is highly suspicious.
I don't think you need to engage in this type of sloppy exaggeration to make the (true) statement that defense spending (and even more so, "security" spending generally) makes up an enormous and probably too large portion of the federal budget. The DOD budget alone is more than half the discretionary total and a quarter of the overall total (including Social Security, Medicare, etc.).
A better question is, how much "security" is all that money buying, and is it worth the cost?
#6 Posted by Victoria St. Jackson, CJR on Fri 1 Feb 2013 at 09:47 AM
Timothy - there's a fundamental difference between internal law enforcement and national security. Hell, we had the FBI and Secret Service back in the days when we believed two oceans sufficed for 99% of our national security needs.
I'm not saying that none of the institutions on that list have national security tasks as part of their mission. But by and large, tossing them into the mix just confuses the issue.
#7 Posted by low-tech cyclist, CJR on Fri 1 Feb 2013 at 04:22 PM
How much of that is the cost of all the bases we have overseas?
#8 Posted by Curtis, CJR on Fri 1 Feb 2013 at 05:37 PM
Columnist here,
Readers above make some good points. Thank you.
I mixed millions and billions, as McCarthy noticed. The correct figure is almost $1,000 per American, not $1. Thank you for a reminder of why spreadsheets should always be done in full numbers. My editors will correct that error.
Victoria St. Jackson also makes a good point: instead of “unbudgeted” I should have written additionally budgeted, but seldom reported.
Low-tech says he cannot come up with a figure as large as my $977.5 billion and a lack of links to check numbers. My column has 19 hyperlinks, including specific budget figures. As for the high-end $1.3 trillion figure, I attributed it to the source, told readers its pacifist perspective and linked to a page on how that figure was calculated.
Because of the way the 256-page federal budget is prepared, reasonable people can come up with different figures for total national security spending. How much of NASA do you count as national security, for example? How about transportation security?
There is no orthodoxy or even accepted standard on reporting these numbers, as the exchange between Timothy Sipples and low-tech shows.
Instead of a consolidated, easy to grasp statement of national security spending, costs are spread across many budget categories. Adding them up come with a risk of double counting. I should have been explicit about that and more nuanced in my language.
Even with budget protocols, there is no reason the government cannot itself prepare a separate consolidated report instead of, in my view, one that obfuscates.
Readers were understandably confused about intelligence spending because my first reference wrongly suggests an add-on, while the second and third note that military intelligence is “included in the base Defense budget” and that “most military intelligence spending is buried in these figures.”
When the column went up, I sent it to several experts to get their critiques, as I always do when writing about a subject for the first time and often do on others because I write about complicated subjects.
Winslow Wheeler, long a student of national security spending, pointed to omissions of spending items sprinkled through the budget. His analysis totaled $994.3 billion, which consists of all the figures in budget categories 050, 600 and 950; retiree health costs in categories 600 and 950; International Affairs, Veterans Affairs, Homeland Security and 24 percent of net interest on the debt, or $63.7 billion.
He urged study of Tables 32-1 and 32-2, among others, in the analytical perspectives supplement to the budget, which I download each year. For fiscal 2013 that table and some others was not online, however.
“Add it all up and you will get about $1 trillion, very probably more,” Wheeler wrote last year about the differing ways to count national security spending, adding “if you don’t get that high you are missing something – something big.”
My thesis remains correct -- that national security spending is significantly larger than the base figure so often reported. Journalists should give readers, listeners and viewers a fuller accounting than just the base Defense budget, which no matter how you count it significantly understates actual burdens.
#9 Posted by David Cay Johnston, CJR on Fri 1 Feb 2013 at 07:23 PM
"Journalists should give readers, listeners and viewers a fuller accounting than just the base Defense budget, which no matter how you count it significantly understates actual burdens."
The American people deserve truth and transparency in the budget (the whole damn thing) which THEY fund. Obviously, those in Washington don't believe the American public can handle the truth and obscure the numbers across a wide array of government programs and bills.
So when journalists try to unravel the details and attempt to report the truth, we get a very opinionated and subjective view of what is included in this or that budget. Should we not include the state's costs for registration of guns? After all, isn't a gun a form of defense........notwithstanding all those who don't and believe it is only offensive in nature. Talk about bias!
If this attempt is not done by mainstream media, it will never achieve making the point on an American public to busy living the American life! If the journalistic industry wants to make an impact, they need to collectively, and quite publicly, conduct a concentrated effort to drill down and extract the truth across all the sources, make rational assumptions of the scope of their inquiry, and present it to the American people the way they like it: prime time TV with lots of fanfare.
Does journalism seek to simply inform just for the sake of informing? Or should it not play out its RESPONSIBILITY to wake up American people? Do your jobs. We can handle the truth.
#10 Posted by Steve of Kings County, CJR on Sat 2 Feb 2013 at 11:33 AM
The Trillion dollars a year poured into the military rathole has nothing to do with "
National Security".
#11 Posted by Bilejones, CJR on Tue 5 Feb 2013 at 04:15 PM
Bilejones, that depends on how you define "national". If, as policymakers seem wont to do, you treat the wealthy as citizens and the non-wealthy primarily as milking goats, The New York Izvestia, Washington Pravda and national news in general become much clearer and more coherent.
#12 Posted by Jonathan, CJR on Fri 8 Feb 2013 at 02:44 PM
Since most of the budgets with which DCJ is working are secret to one extent or another, it's fair to believe that they are severely understated, those parts that make it into the public discourse directly or through wheedling.
My guess is that when one adds in money spent by foreign allies, for which we pay beaucoups bucks in unassociated but considerable tithes, the true cost of American "security" is $3-4 trillion annually. In other words, enough to bankrupt the nation were it not for our bankers ripping off the rest of the world and dumping the money in New York City and other bastions of wealth, to percolate throughout the economy.
I know, journalists are supposed to be more discreet, to not suggest calamity even when it's staring them in the face. Fortunately, I'm not a journalist, only a citizen, paying through the nose like all the rest so that our military-industrialists can sleep well at night.
#13 Posted by Bob Jacobson, CJR on Thu 23 May 2013 at 09:39 PM