Defense spending hits high-water mark

U.S. defense spending hit its highest point in a decade at $678 billion in fiscal 2008, and most likely will be followed by a decline over the next 10 years, according to a forecast released today by the Information Technology Association of America. That apex is primarily the result of infusions of supplemental funds for the global war on terror, including $187 billion for that purpose in fiscal 2008.

When looking at baseline Pentagon spending, without the supplemental funds, the ITAA predicts an overall flattening of expenditures. The group's estimate uses an inflation-adjusted average annual growth rate of 0.4 percent from fiscal 2009 through 2019.

If the supplemental spending for the war in Iraq is figured in, there is a projected annual decline of 2 percent for defense spending during that period, adjusted for inflation. That assumes no new war supplemental funding will be added over that period.

Defense budgets will be subjected to downward pressures from the current economic crisis, the federal deficit, domestic entitlement programs and slower growth in gross domestic product, the ITAA said.

The ITAA presented its forecast during its 44th annual Vision Conference at the Waterford Conference Center in Springfield, Va.