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Is the defense effort of the United States disproportionate to that of its allies, when one takes account of the relative sizes of their populations and economies? The Congress, for some time, has expressed concern that the United States bears an excessive share of the cost of the common defense, especially in Europe. In 1984 the Senate came close to passing an amendment to the defense authorization bill that would have compelled the Secretary of Defense to withdraw troops from Europe if the other members of the North Atlantic Treaty Organization (NATO) did not meet certain quantitative targets for increasing their defense efforts. This year, again, the suggestion has been made that the United States should withdraw some forces from Europe and force its allies to assume a greater share of the burden of defending themselves.

The Congressional Budget Office (CBO) has been requested by the Subcommittee on Conventional Forces and Alliance Defense of the Committee on Armed Services, U.S. Senate, to review the Department of Defense's Report on Allied Contributions to the Common Defense. That annual report assesses a variety of quantitative measures bearing on the relative defense efforts of the NATO allies and Japan. It also examines other factors relating to this issue. CBO previously reviewed the Defense Department's 1984 report and was critical in certain respects of its analysis and conclusions (see "Burdensharing in the North Atlantic Alliance," Staff Working Paper, February 1985). One reason for this new review is to determine whether those concerns are still valid.

R. William Thomas of CBO's National Security Division prepared this analysis under the supervision of Robert F. Hale and John D. Mayer, Jr. Elizabeth Sterman of the National Security Division and Stephan Thurman of the Fiscal Analysis Division assisted in the analysis. The paper was edited by Francis Pierce.

Edward M. Gramlich
Acting Director
June 1987
 
 

Under Congressional mandate, the Department of Defense (DoD) issues an annual report on the contributions made by the United States and its allies to the common defense. In its 1987 report, the seventh so far, DoD concludes that "the United States by certain measures is doing more than almost all its partners."¹ But DoD also emphasizes that the allied contribution is substantial, and that "for some important quantitative defense measures, our NATO allies and Japan compare well with the United States."² The report goes on to note that "important differences emerge ... when the results for individual countries are compared. Some nations appear to be doing their fair share; other nations appear, on the whole, to be making financial contributions below their fair share."³ Finally, the report discusses important qualitative contributions made by the allies that are not captured in its quantitative assessment.

The ultimate judgment as to whether the U.S. military burden is excessive is a political one, and cannot be based simply on comparing quantitative indicators of one or another country's defense efforts. The Congressional Budget Office (CBO) review does not attempt to judge the fairness of the U.S. or the allied defense burdens. Rather, it examines the data and analysis presented in DoD's report and reaches the following conclusions:

• Overall, the DoD report presents a wide variety of data to measure burdensharing, and draws reasonable and fair conclusions as to the performance of individual countries.
  
  
• DoD concludes that measures of military forces present a more favorable picture of the other countries' relative contribution than do economic measures (such as shares of GDP spent on defense). But the report's military measures exclude strategic forces, naval aviation squadrons, and mobility forces, in which the United States dominates; also (with one exception) they do not capture important differences in the quality of equipment where, as DoD notes, the United States is generally superior.
  
  
• CBO supports DoD's finding that the United States is currently bearing a higher economic burden than its allies. DoD qualified that finding by noting the allies bear certain costs that are not included in the quantitative measures. When CBO estimated some of these costs for Germany, however, the results did not materially affect the U.S.-German comparison.
  
  
• Measured relative to its share of GDP, the U.S. burden grew moderately between 1980 and 1985. The United States has always borne more than its share of defense costs, but to a degree varying with the ebb and flow of U.S. defense spending. The allies, by contrast, have been more constant in their expenditures on defense.
  
  
• The Congress directed DoD to include an analysis of Japanese defense contributions in its report but did not specify how to do this. Since Japan does not belong to NATO, and has a high GDP but low defense spending, the inclusion of Japanese data tends to distort the measure of burdensharing in NATO, though not enough to alter the fundamental conclusions of the DoD report.

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1. Secretary of Defense Caspar W. Weinberger, Report on Allied Contributions to the Common Defense (March 1987), p. i.

2. Ibid., p. 4.

3. Ibid., p. 4.