CBO: True cost of active-duty troops exceeds budget by $86,000 per person

A Congressional Budget Office (CBO) analysis reveals that the actual annual cost of an active-duty service member is approximately $86,000 higher than current military budgets reflect. This discrepancy stems from the fact that future Veterans Benefits Administration and Veterans Health Administration costs are not included in the Department of Defense's personnel-cost accounting.

By treating these future benefits as deferred compensation through an accrual model, the CBO estimates that the total deferred cost for a force of 1.3 million active-duty troops amounts to roughly $112 billion annually. While this is not a new expense, it is an accounting cost that sits outside current military personnel planning.

The impact is significant at the individual level. For a median enlisted service member (E-4), the annual cost rises from $129,000 to $215,000 when VA benefits are included. For a median officer (O-3), the total compensation shifts from $196,000 to $282,000. These projected costs are expected to peak in the 2070s before gradually declining by 2126.