The Congressional Budget Office (CBO) has estimated that reassessing the Department of Defense’s annual budget could save $959 billion over the next 10 years. Reducing the number of active-component military personnel, reducing ground combat and air combat units, or relying on allies to provide their own defenses rather than using a U.S. combat force are possible methods of achieving the reform.

In 2021, the United States had approximately 750 military bases across 80 foreign countries and territories at a cost of $55 billion annually, according to a report by the Quincy Institute for Responsible Statecraft. That is about three times more military bases than all other countries combined. Closing some of those bases would create savings and allow for prioritizing higher-risk needs. In addition, proponents argue that the policy would help deter future military action because closing overseas bases would increase the costs of intervening, complicate logistics, and lower expectations for intervention from nearby allies.

The DoD obligated $205 billion in service contracts during fiscal year 2022, which represented 49 percent of all department contracts. The cost of service contracting has grown significantly over the past few decades, and contractor employees can cost two to three times more than federal employees doing the same work. The Center for International Policy estimated that reducing DoD spending on service contractors by 15 percent would save $263 billion over 10 years.

In a 2024 report, the Government Accountability Office (GAO) noted that it was not able to calculate the extent of improper payments by the Department of Defense (DoD) because DoD did not comply with its obligation to publish satisfactory improper payment estimates. In fact, DoD has not published reliable improper payment estimates in 14 consecutive years. In 2020, DoD approximated that it paid roughly $11 billion in improper payments, which is 1.7 percent of all payments the department made that year. By comparison, the federal government spent $13 billion on veterans’ education, training, and rehabilitation the same year. Improving DoD’s financial management could help eliminate waste and find efficiencies. For example, after taking steps to implement some of GAO’s recommendations, the Navy identified a warehouse of unused aircraft parts and was able to fill $20 million in open orders using those parts.

CBO has also identified several other options available to policymakers that would cut defense spending on a smaller scale from 2025 to 2034. Of those smaller options, the most significant savings would come from reducing the size of the aircraft fleet by retiring the F-22 fighter aircraft, which would reduce defense spending by $29 billion over the next decade. Other reforms include capping increases in basic pay for military service members (saving $22 billion), replacing some military personnel with civilian employees (saving $17 billion) and reducing the basic allowance for military-personnel housing (saving $17 billion).