Defense spending in the United States is the highest of any state in the world. Spending goes toward the financing of the American military industry, maintaining a constant replacement regime of weaponry and technology with the latest models, financing foreign allies and maintaining the regular duties of the armed forces and its bureaucracy. The American defense budget has been raised dramatically since the September 11, 2001 attacks, despite the fact it was already the highest in the world. As a result of American spending on its military operations since 2001, primarily on account of the war in Iraq, many have urged an equally dramatic reduction in order to boost the value of the dollar and decrease the budget deficit. The defense budget is not only born out of the national budget, but much of it is borrowed from foreign backers like China to finance the major operations in Iraq and Afghanistan.
According to government statistics, the 2000s saw a 9 percent annual growth in defense spending, raising the federal budget's allocation to the Department of Defense and other related defense outlets to approximately the value of half of all tax revenues to the federal government. Despite having a budget for the defense spending six times as large as China, American spending on defense only accounts for 4 percent of the country's gross domestic product, far below the high reaching in the high 30s during World War II. These numbers and the political lack of popularity suffered by the country's operations in several overseas theaters has gradually increased calls to slash spending.
Many have warned on the one hand that to continue this level of expenditure would expose the federal budget to cuts in essential domestic services and decrease the quality of life in the United States. Along with this come calls for the slashing of defense projects which might be considered useless or outdated. Prominent in this are the recommendations of former Secretary of Defense Robert Gates who considered the current makeup of the American armed forces inadequate and outdated. For example, he considered the size of the navy unjustifiably large with no tangible naval threat to counter it. He cited that the navy was larger than the next 13 largest navies worldwide combined, and even then 11 of them were primary American allies. Hawks have argued a reduction in defense spending would be a strategic blunder, granting morale to enemies worldwide and in particular the important theaters of Afghanistan and Iraq.
Commentators consider cuts to the American defense establishment inevitable but conditioned on equally large changes in American defense strategy and the incoporation of recommendations from national security assessments. Much like the Gates example regarding the navy, there is a growing argument that the United States military is too dependent on conventional strategies and weapons, while guerrilla warfare and terrorism have become more commonplace threats. Many say that slashing the budget would not threaten the country because it mostly supports a structure that was built around the threat of the Soviet Union and potentially fighting a third world war with a nuclear-wielding superpower.
Robert Gates has spoken in public forums where conservatives might support a maintainance of current spending levels and prefaced his recommendations with references to the dramataic decrease of the country's defense spending as a percentage of GDP to 15 percent as of May 2011. According to Gates, the Department of Defense was prepared since the incoming of the Obama Administration for an inevitable pattern of future cuts that differentiate highly with the culture of a supposedly "no-questions-asked" culture of supplementary budget requests. As part of that campaign, he claimed to have ended several defense programs that saved an estimated $300 billion dollars.
Despite that, he has also claimed the United States defense establishment has invested $700 billion in extra spending for research and development, resulting in very little change in the fighting strategy or capability of the United States armed forces. He even suggested they may have been a total waste by referencing increased expenditures on conventional combat resources; human resources, body armor and battlefield equipment. His most important point arguably was in overheads, where "there are still too many headquarters, offices, and agencies employing too many high ranking personnel and contractors consuming too many resources relative to real military missions and measurable results."
With the passage of a debt-limit deal in the United States Congress in the summer of 2011, there was a projection the defense budget of the country would be reduced by about $350 billion dollars, over half of what the budget would have directly allocated to the Department of Defense. While this has concerned hawks, Republican members of Congress have mentioned drawing funds from other defense and security agencies to make up for some of the shortfall.