The Costs of the Administration's Plan for the Army through the Year 2010.

Abstract : This staff memorandum describes Congressional Budget Office (CBO) estimates of the costs of the Army's plans through the year 2010. The Army's budget rose rapidly during the 1980-1985 period, from $61 billion to $95 billion, and then fell almost as precipitously back to $75 billion for the 1991 fiscal year. (All costs in this memorandum are expressed in constant 1992 dollars of budget authority.) The Administration has submitted a detailed plan for Army spending through 1997. That plan calls for a further decrease in the Army's budget to $58 billion by the year 1997, commensurate with a proposed reduction in the number of military personnel and major combat units during the same period. CBO's analysis shows that in the years beyond 1997, to carry out currently planned modernization programs, the Army's budget must grow even without an increase in the size of the Army. The average annual increase could be as low as 2 percent or as high as 4 percent during the period from 1997 to 2003, depending upon assumptions about the costs of Army programs in the future. From 2003 until 2010, Army budget requirements will remain roughly constant or decrease. Thus, the average annual increase between 1997 and 2010 might be as low as 0.6 percent, using one set of assumptions, or as high as 1.1 percent, using another. The need for budget increases is driven largely by two of the Army's planned modernization programs, the Armored Systems Modernization program and a program to produce a new reconnaissance-attack helicopter, formerly known as LHX and now renamed the RAH-66 Comanche. These two programs are scheduled to go into production in the late 1990s or the early part of the next decade. At their peaks, the programs could require annual funding of approximately $4 billion and $2 billion, respectively. Increases in program costs due to unanticipated cost growth could push the costs of these programs up even further.