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Record U.S. defense spending, but future budgets may decline

Other challenges – potential recession, budget deficits, and rising entitlement spending – could overshadow military priorities.

Budget outlook: The Defense Department's comptroller, Undersecretary Tina Jones, and Vice Admiral Steve Stanley outlined the Pentagon's fiscal year 2009 budget plan Monday.

Joshua Roberts/Reuters

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The Pentagon is asking for the biggest defense budget ever, but senior officers and analysts fear the days of big defense spending may soon be over.

The emerging reality: As supplemental war-funding streams dry up, the amount of overall defense money will probably decrease. "We in uniform all recognize that the budget will come down," says one senior officer in the Pentagon.

Since the terrorist attacks of 2001, the defense budget has ballooned about 35 percent in real terms. Much of that rise can be attributed to the wars in Iraq and Afghanistan, which have cost the US about $691 billion so far.

For the 2009 fiscal year, the Defense Department is asking for $515 billion and a separate $70 billion to cover war costs into the early months of a new administration. Those amounts combined would represent the highest level of military spending since the end of World War II (adjusted for inflation). Already, defense spending hovers around 4 percent of gross domestic product (GDP), a level that would represent the new floor for defense budgets if many in the Pentagon have their way. Defense Secretary Robert Gates and other senior officials believe that that floor is the minimum needed to fund the department and the war on terrorism more broadly, regardless of operations in Iraq and Afghanistan.


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