1. Analysis of the FY 2015 Defense Budget Todd Harrison

2. Defense-Related Funding in FY 2015 Request CategoryFY 2015 Request DoD Base (discretionary)$495.6B DoD Base (mandatory)$6.2B DoD Overseas Contingency Operations$58.6B DoD Subtotal (051)$560.4B Atomic Energy (053)$19.3B Defense-Related Activities (054)$8.3B National Defense Budget Function Total$588.0B Department of Veterans Affairs (discretionary)$65.3B Department of Veterans Affairs (mandatory)$95.5B Other Agencies$0.4B Veterans Budget Function Total$161.2B Treasury Pmt. to the Military Retirement Trust$73.2B Treasury Pmt. to the Retiree Health Care Fund$3.4B Tax Exemptions for Military Personnel$13.2B Tax Exemptions for Veterans’ Benefits$7.1B Other Total$96.9B Total Defense-Related$846.1B

3. Base DoD Budget vs. BCA Caps 3

4. FYDP as a Lagging Indicator 4

5. Base DoD Budget by Service 5

6. Base DoD Budget by Title 6

7. Military Compensation Growth 7

8. O&M Cost Growth 8

9. Acquisition Funding 9

10. Top 20 Acquisition Programs 10

11. MILCON and Family Housing 11

12. War-Related Funding 12

13. Strategy-Resource Mismatch DoD could need some $200-300B more than BCA caps over the FYDP to execute the defense program in the 2014 QDR – FY 2015 budget already $116B over the BCA caps – Would need additional ~$20B for higher force levels in QDR – May need $50-100B for OCO-to-base migration – Other assumptions in the request that may not come true: Savings from military compensation reform “Efficiency” savings Acquisition cost growth O&M cost growth 13

14. Questions?

15. Historical Perspective 15

16. Military Personnel-Related 16 Total: $183B

17. RDT&E by Activity 17

18. Procurement by System Type 18

19. Veterans’ Benefits and Services 19