#defensebudget

It costs HOW MUCH?

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The mind boggles. War is expensive to conduct. Once wars finish, the cost of looking after veterans is massive. In 2000, the Department of Veteran Affairs (VA) in America spent $43.6bn to look after returned servicemen and women. In 2020 it is expected to exceed $212bn (c. 5x), the equivalent of what the Chinese currently spends on its military.  Digging deeper into the data reveals that the cost of the aftermath of Operation Iraqi Freedom (OIF), Operation Enduring Freedom (OEF) and Operation New Dawn (OND) on veteran treatment keeps growing in a straight line.

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Total obligations for OIF/OEF/OND patients has grown 19-fold in the last 14 years to over $7bn. Total veterans from those campaigns now totals 965,000 and is expected to hit 1.1mn by 2020. Cost per veteran patient over the 2006-2020 period will virtually treble.

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Expenditure on prosthetic devices (e.g. limbs, hearing aids) has near as makes no difference quadrupled in that period.

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Spending on pharmaceutical products is up 1.9x since 2006.

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Drugs such as Oxycontin which contain opioids have found their way to creating problems in the US armed forces. 15% of Army troops admitted to taking illicit drugs (cocaine, heroin, marijuana) and opioids back in 2008.

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Spending on programs to prevent substance abuse is up 1.8x since 2006.

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The VA notes key clinical metric trends from Quarter Four of 2012 to Quarter Four of 2017 show:

• 67% reduction in Veterans receiving opioid and benzodiazepine together;
• 44% reduction in Veterans on long-term opioid therapy (> to 90 days);
• 38% reduction in Veterans receiving opioids;• 56% reduction in Veterans receiving > 100 Morphine Equivalent Daily Dose;
• 51% increase in Veterans on long-term opioid therapy with a Urine Drug Screen
(UDS) completed within last year to help guide treatment decisions.

Spending on mental health programs is up almost 4x since 2006. The VA plans to promote the development of skills in VA providers to diagnose and assess PTSD
by developing a computer-based training using simulated virtual patient
technology that will allow clinicians to practice and receive customizable feedback
on giving CAPS-5 to a lifelike virtual patient.

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The 2019 VA Budget requests $8.6 billion for Veterans’ mental health services, an increase of 5.8% above the 2018 current estimate. It also includes $190 million for suicide
prevention outreach. VA recognizes that Veterans are at an increased risk for suicide and
implemented a national suicide prevention strategy to address this crisis. Veteran suicide in the US is at a 22/day clip.

The price of freedom. All said and told the US over the last 20 years will have spent the equivalent of $2.476 trillion with a “T” on veterans. That is the equivalent of one entire year of UK GDP.

Smart technologies are an absolute must for the VA. The cost of veteran health is the equivalent of 29% of what the US spends on defence, up from 14.8% two decades ago. Asking for yearly increases is a band aid solution.

How well do Americans know their Defense budget?

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The US spends more than the next 9 countries combined when it comes to defence. What is probably lost on many Americans is the spiraling cost of funding the veterans who served. The US is forecast in 2020 to spend almost as much on the Dept of Veterans Affairs (VA) as China does on military spending. The direct cost of wars in Iraq and Afghanistan has driven the indirect costs of treating those who served almost 5-fold since the war began. US politicians have passed increase after increase.  Have these increases been thought of in context of the trend? Or do annual increases just get signed off as a reflex action?

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If we put the VA budget next to the defence budget, the former has grown from 14.8% of the latter to around 29% between 2000 and 2020. The number of veterans receiving disability compensation has grown 2 million in 2000 to 4.3 million in 2016. A total of 7.2 million veterans are actively seeking services or payments from the VA, up from 5.5 million in 2000.

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Spending per veteran by priority group also reveals sharply higher costs. This is not an exhaustive list of priorities, but the main 7.

Priority 1

• Veterans with VA-rated service-connected disabilities 50% or more disabling
• Veterans determined by VA to be unemployable due to service-connected conditions.

Priority 2

• Veterans with VA-rated service-connected disabilities 30% or 40% disabling

Priority 3

• Veterans who are Former Prisoners of War (POWs)
• Veterans awarded a Purple Heart medal
• Veterans whose discharge was for a disability that was incurred or aggravated in the line of duty
• Veterans with VA-rated service-connected disabilities 10% or 20% disabling
• Veterans awarded special eligibility classification under Title 38, U.S.C., § 1151, “benefits for individuals disabled by treatment or vocational rehabilitation
• Veterans awarded the Medal Of Honor (MOH)

Priority 4

• Veterans who are receiving aid and attendance or housebound benefits from VA
• Veterans who have been determined by VA to be catastrophically disabled

Priority 5

• Non service-connected Veterans and non-compensable service-connected Veterans rated 0% disabled by VA with annual income below the VA’s and geographically (based on your resident zip code) adjusted income limits
• Veterans receiving VA pension benefits
• Veterans eligible for Medicaid programs

Priority 6

• Compensable 0% service-connected Veterans.
• Veterans exposed to ionizing radiation during atmospheric testing or during the occupation of Hiroshima and Nagasaki.
• Project 112/SHAD participants.
• Veterans who served in the Republic of Vietnam between January 9, 1962, and May 7, 1975.
• Veterans of the Persian Gulf War who served between August 2, 1990, and November 11, 1998.
• Veterans who served on active duty at Camp Lejeune for at least 30 days between August 1, 1953, and December 31, 1987.
• Currently enrolled Veterans and new enrollees who served in a theater of combat operations after November 11, 1998 and those who were discharged from active duty on or after January 28, 2003, are eligible for the enhanced benefits for five years post discharge.

Priority 7

• Veterans with gross household income below the geographically-adjusted income limits for their resident location and who agree to pay copays.

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Countries have an obligation to look after the troops that sustain injury, physical, mental or otherwise. The question is whether politicians are cottoning on to the mounting relative increase in healing the veteran community to the spending on weapons of war?

There are 19.6 million veterans in the US. By 2045 this is expected to dip below 12 million. With 2.1 million serving active duty military personnel and reserves, the overall costs of healing may not come down anytime soon.

What it does say is that there is a massive need to work out how to reduce the costs to the VA without impeding improving healthcare and benefits for veterans.

Any idea how much military medical spending has grown?

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The news is out that President Trump is looking to spend $54bn more on defence On a $600bn odd military budget (China c. $250bn). I’m sure the press will be moaning about how this is about being bent on waging new wars. Looking at the most recent Quadrennial Defence Review (2014) medical related spending for the military has jumped from $19bn in 2001 to $49bn in 2014. The sad thing is most people do not understand defence budgets. Let’s start with some fast facts in no particular order in the US.

-The US defence budget has been slashed from over 4.2%~4.7% of GDP under previous administrations over the last 30 years to around 3.5%~3.7% under Obama. Trump’s plan would aim to get it back in the 4% range, nothing out of line with predecessors.

-80% of the defence budget is spent on wages, housing, education and maintenance of the war machines. The remaining 20% is spent on RDT&E (reseearch, development, testing and evaluation) and procurement.

-If a budget is cut and you want to maintain force numbers you can’t procure as much. Simple maths. If you cut force size you risk reducing it to levels that may impact capability.

-War is bad for defence budgets. Transporting 100,000 troops, feeding, housing, providing medical care, maintaining hardware on the ground takes huge wedges out of what can be left to “procure” new equipment. Bullets, bombs and missiles aren’t replaced 1 for 1. They have stockpiles which are calculated on likely usage projections.

-the US Navy is larger than the next 11 navies combined despite a surface fleet 1/20th of what it was 70 years ago and the smallest number for a century.

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-The US Forces are the single biggest consumer of oil period. Retiring the USS Kitty Hawk saved 2% of the gross fuel budget.

-War today is more about capability than raw numbers of equipment. Cyber warfare can switch off an enemy’s basic utilities and crush a country without dropping ordinance. Fighters that can see you before you can see them have the advantage but that costs a fortune to stay at the head of the pack. A US tank battalion in the first Iraq War took out 250 Iraqi tanks from a hidden position because satellite imagery pinpointed where they needed to fire. US losses were zero.

-To date most wars have been conventional. Now they are asymmetrical. Fighting terrorism does not require ballistic missile submarines (SSBNs). It needs agile fast reaction capability (i.e. V-22 Osprey) which can land a special unit in an inaccessible hot zone. However defence forces have to target what engagements they will face and what is required to defeat it. That requires a radical overhaul of defence forces – in equipment, development and training. Development can take 10-15 years to meet threats that may or may not exist in 25 years often with technology that doesn’t yet exist.

Just ask the Quadrennial Defence Review 2014‘s General Mark E. Dempsey:

“My greatest concern is that we will not innovate quickly enough or deeply enough to be
prepared for the future, for the world we will face 2 decades from now. I urge Congress—
again—to move quickly to implement difficult decisions and to remove limitations on our
ability to make hard choices within the Department of Defense. The changes required for
institutional reform are unpleasant and unpopular, but we need our elected leaders to work with  us to reduce excess infrastructure, slow the growth in military pay and compensation, and retire  equipment that we do not need. Savings from these and other reforms will help us modernize,  will add to research and development investments, and will provide needed funds to recover  readiness. The lack of will to do what is necessary may drain us of the will to pursue the more  far-reaching ideas promised in the QDR.

The true risk is that we will fail to achieve the far-reaching changes to our force, our plans, our  posture, our objectives, and our concepts of warfare. I believe that dramatic changes will be  needed in all of these by 2025. Some of these changes are well-known and outlined in the  QDR. Some of these changes are only dimly perceived today and need encouragement and  direction. Innovation is the military imperative and the leadership opportunity of this  generation. It’s a fleeting opportunity.

When we commit America’s sons and daughters into combat, we must ensure that they are the  best-trained, best-equipped, and best-led fighting force on the planet. That takes time, it takes  money, and it is perishable.”

Make no mistake. The increase in spending would have occurred under any GOP president. The sad thing is that because of the budget cuts, the military forces have relied more on operational leases from the defence contractors. In order to have a military capability the defence arms have had to “borrow” because the budget cuts have been too deep. So there we have it – not only is the private and public sector debt at record levels, we now have the military filling in credit forms…