Myth and Fact Sheet: National Defense

Fact: Defense spending in 2024 was 12.5 percent of federal outlays for the year. More was spent on Social Security, Medicare, and net interest on the debt, individually, than on defense. The idea that defense spending is half the federal budget stems from it representing around half of discretionary spending. But discretionary spending is only around 27 percent of all federal outlays (including net interest). Entitlement and interest spending make up the rest of the budget.

Fact: The Congressional Budget Office projects defense spending will fall from 3.0 percent of the economy to 2.4 percent in 2034. Defense spending as a share of GDP has been on a long-term downward trend since the end of World War II. During the Cold War, defense spending was around 9 percent of GDP until the end of the Vietnam War, then around 5 percent during the 1980s, and is now on pace to fall to under 3 percent. Adjusting for inflation, growth in entitlement and interest costs means they will far outpace defense spending over the next decade.

Fact: The People’s Republic of China (PRC) has increased its defense spending by over 700 percent since 2000, but it still spends less on defense than the United States. In 2023, the PRC’s inflation-adjusted public defense budget was $220 billion; the United States spent $820 billion. China has been building coastal ships with a focus on Taiwan and the South China Sea. America maintains a “blue water” navy that can project force anywhere in the world. America also maintains a global network of alliances, logistics hubs, and power-projection capabilities that China has yet to replicate.

Fact: While China maintains a larger force of active-duty soldiers (2.0 million) compared to the United States (1.3 million), America retains a far greater global military capacity. China has more ships than the United States (around 370 vs. 300), but the tonnage of the U.S. Navy is around 4.1 million tons compared to 2.9 million tons for the PLA Navy. The United States also operates over 13,000 military aircraft compared to China’s ~3,300 and retains an edge in fifth-generation fighters and bombers.

Fact: US defense spending is divided across several categories. In FY 2024, the Department of Defense spent 38% ($338B) on operations, 22% ($192B) on military personnel, 17% ($152B) on procurement, 16% ($138B) on R&D, and 7% ($59B) on other categories like military construction and atomic energy defense. The Department of Veterans Affairs spent around $325B on healthcare, disability compensation, and other benefits for veterans.

Fact: In 2014, only 3 of NATO’s 32 members met the pledge of spending 2% of GDP on defense. The average was 1.4%. Beginning in 2025, all members are expected to meet the commitment. Several, including Poland and the Baltic states, are already spending far more, reflecting Europe's response to renewed Russian aggression and U.S. pressure. NATO members are also planning even more ambitious long-run spending goals.