By Thom Shanker

The New York Times

Sunday 03 February 2008

Washington - As Congress and the public focus on more than $600 billion already approved in supplemental budgets to pay for the wars in Iraq and Afghanistan and for counterterrorism operations, the Bush administration has with little notice reached a landmark in military spending.

When the Pentagon on Monday unveils its proposed 2009 budget of $515.4 billion, annual military spending, when adjusted for inflation, will have reached its highest level since World War II.

That new Defense Department budget proposal, which is to pay for the standard operations of the Pentagon and the military but does not include supplemental spending on the war efforts or on nuclear weapons, is an increase in real terms of about 5 percent over last year.

Since coming to office, the administration has increased baseline military spending by 30 percent over all, a figure sure to be noted in the coming budget battles as the American economy seems headed downward and government social spending is strained, especially by health-care costs.

Still, the nation's economy has grown faster than the level of military spending, and even the current huge Pentagon budgets for regular operations and the war efforts consume a smaller portion of the nation's gross domestic product than in previous conflicts.

About 14 percent of the national economy was spent on the military during the Korean War, and about 9 percent during the conflict in Vietnam. By comparison, when the base Pentagon budget, nuclear weapons and supplemental war costs are combined, they total just over 4 percent of the current economy, according to budget experts. The base Pentagon spending alone is about 3.4 percent of gross domestic product.

"The Bush administration's 2009 defense request follows the continuously ascending path of military outlays the president embraced at the beginning of his tenure," said Loren Thompson, a budget and procurement expert at the Lexington Institute, a policy research center. "However, the 2009 request may be the peak for defense spending."

Pentagon and military officials acknowledge the considerable commitment of money that will be required for continuing the missions in Iraq and Afghanistan, as well as efforts to increase the size of the Army, Marine Corps and Special Operations forces, to replace weapons worn out in the desert and to assure "quality of life" for those in uniform so they will remain in the military.

Yet, those demands for money do not even include the price of efforts to refocus the military's attention beyond the current wars to prepare for other challenges.

Senior Pentagon civilians and the top generals and admirals do not deny the challenge of sustaining military spending, and they acknowledge that Congress and the American people may turn inward after Iraq.

"I believe that we need to have a broad public discussion about what we should spend on defense," Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, said Friday.

Defense Secretary Robert M. Gates and Admiral Mullen have said military spending should not drop below 4 percent of the national economy. "I really do believe this 4 percent floor is important," Admiral Mullen said. "It's really important, given the world we're living in, given the threats that we see out there, the risks that are, in fact, global, not just in the Middle East."

Geoff Morrell, the Pentagon press secretary, said Mr. Gates and the senior Pentagon leadership were well aware that the large, emergency spending bills for the war, over and above the Pentagon base budget, will at some point come to an end.

"The secretary believes that whenever we transition away from war supplementals, the Congress should dedicate 4 percent of our G.D.P. to funding national security," Mr. Morrell said. "That is what he believes to be a reasonable price to stay free and protect our interests around the world."

No weapons programs are canceled in the new Pentagon budget, officials said; in fact, steadily increasing base defense budgets and the large war-fighting supplemental spending packages have made it easier for the Pentagon to avoid some tough calls on where to trim.

"But I think it's doubtful the nation will sustain this level of defense spending," said Steven Kosiak, vice president for budget studies at the Center for Strategic and Budgetary Assessments.

The 2009 military spending proposal will be the 11th year of continuous increases in the base military budget, he added. War-fighting supplement spending measures are outside the base Pentagon budget, an issue that has angered some in Congress. Pentagon officials have announced a proposal for a $70 billion special war budget just to carry on operations from Oct. 1, the start of the new fiscal year, into the early months of the next presidency.

Another supplemental spending proposal is expected before October, but after Gen. David H. Petraeus, the senior commander in Iraq, reports to Congress on his recommendations for troop levels through the end of 2008.

Any budget proposal is more than just a list of personnel costs and weapons to be purchased, as it lays out the building blocks of future military strategy. Democrats vow to scrutinize the new budget, the last by this president.

Senator Jack Reed, Democrat of Rhode Island, who visited Iraq again last month, said that expanding the ground force as proposed in the new budget is an important step to relieve pressure on the Army and Marine Corps - one he will support even though he said it came too late.

Mr. Reed, a senior member of the Armed Services Committee, said demands of the counter-insurgency wars in Iraq and Afghanistan raise questions whether troops were receiving sufficient training, and were instead surrendering skills across a broader range of combat missions.

"It's going to require a re-balancing," he said. "It's going to require budget decisions that'll be very difficult."

-------