Report: Fed homeland security spending increases are modest since 2002

Federal spending on homeland security grew substantially as a share of gross domestic product in the year following the Sept. 11, 2001, terrorist attacks. Since 2002, however, agency outlays have increased only modestly, a new survey finds.

According to a report commissioned by the Homeland Security and Defense Business Council, homeland security spending rose from $56.0 billion in 2001 to $99.5 billion in 2005. As a fraction of nominal GDP, the report said that translates into a rise from 0.55 percent in 2001 to 0.80 percent in 2005, the study said. Increases in federal homeland security spending accounted for $34.2 billion of the $43.5 billion increase. The remaining $9.4 billion came from the private sector.

Those numbers, the study said, indicate a relatively small increase in the share of resources targeted to homeland security in the post 9/11 period.

"Given this modest increase ? as well as the robust economic performance of the U.S. economy since 2001 ? we conclude that the broader economic impact of higher security spending has been very limited," the report's authors, Bart Hobijn and Erick Sager, wrote.

The report cites the Office of Management and Budget's six main objectives of the homeland security effort: Intelligence and warning, border and transportation security, domestic counterterrorism, protection of critical infrastructure and key assets, defense against catastrophic threats and emergency preparedness and response.

OMB reported that federal spending on the six priorities totaled $54.3 billion in fiscal 2005, or roughly 0.4 percent of GDP. That share of GDP was twice as high as it was in 2001, when the $20.1 billion spent on federal homeland security represented about 0.2 percent of GDP, the report said.

Budget proposals for fiscal 2007 include $58.3 billion for homeland security, which the Congressional Budget Office projects would be 0.4 percent of GDP. In addition, the CBO projects that by 2015, homeland security spending will decline to 0.25 percent.

The report notes also that Government Accountability Office estimates on homeland security spending totaled about 0.1 percent of GDP in the 1996-2001 period. That share increased to 0.35 percent of GDP in 2002 and has remained relatively stable since, the report said.