Lots of people have views about U.S. military spending. Liberals and libertarians think we spend far too much on defense. On the other side, Mitt Romney speaks for many conservatives in arguing that we should spend more: “If you do not want America to be the strongest nation on Earth,” says Romney, “I am not your President. You have that President today.” But while we usually think of military spending in terms of foreign wars and joint strike fighters, we often neglect one of the biggest growth drivers of the U.S. defense budget: health care.
“Health care costs are eating the Defense Department alive,” said former Defense Secretary Robert Gates in 2011. Military spending consumes over half of all federal discretionary spending: $712 billion out of $1,277 billion in 2011 discretionary outlays. Defense analyst Todd Harrison calculates that military health spending is about 9.5 percent of the base defense budget: $52.5 billion out of the $559 billion that the Defense Department requested for fiscal year 2012. On top of that, the Department of Veterans Affairs, which has a separate budget, seeks to spend $51 billion of its $132 billion 2012 budget request on health care.
We spend $520 billion a year on Medicare, $450 billion a year on Medicaid, and $300 billion a year on the employer health insurance tax deduction. Still, $100 billion in annual military health spending is real money. And while defense spending as a percentage of GDP nears historic lows (about 4 percent today, compared to 6 percent in the 1980s), the military’s health-care spending is increasing at rates much faster than inflation, just like health spending elsewhere.