151. Intelligence Report1

SR IR 74–7

Soviet Spending for Defense: A Dollar Cost Comparison of Soviet and US Defense Activity

Key Findings

Total Defense Costs

The estimated dollar costs of Soviet defense programs have exceeded US defense outlays in every year since 1971 and, at over 93 billion dollars (1973 prices), are about one-fifth higher than US outlays in 1974. If the costs of pensions and reserves are removed from both sides, 1974 Soviet costs exceed the US total by about one-fourth.

Total defense costs, expressed in current US prices, have grown in both countries over the 1964–1974 period. In constant US prices, which measure efforts in real terms, the costs of Soviet programs have grown [Page 687]at a more modest rate while US outlays have declined steadily from a peak in the late Sixties. In 1974, US outlays in constant dollars are lower than they were in 1964.

Military Mission Comparisons

Strategic Attack Forces. Estimated dollar costs of Soviet intercontinental attack programs have exceeded US outlays every year since 1966 and are some 60 percent higher than those of the US in 1974.

—Soviet ICBM programs cost about three times as much as US ICBM programs over the period as a whole. Soviet costs will reach almost four and one-half times the US level in 1974, reflecting the new wave of ICBM procurements.

—The costs of Soviet SLBM programs have exceeded US SLBM costs since 1969 and are almost 30 percent greater than US costs in 1974.

—US intercontinental bomber programs have amounted to about five times the estimated costs of Soviet intercontinental bomber programs over the period as a whole.

General Purpose Forces. The estimated dollar costs of Soviet general purpose forces increased steadily over the 1964–1974 period, passing the level of US outlays in 1971 and exceeding it by 20 percent in 1974. The costs of Soviet ground forces are now more than twice US spending, reflecting the much higher levels of Soviet manpower. The costs of naval forces are about the same in both countries. The costs of Soviet tactical air forces have been growing rapidly since 1969 but are still only about half the US level.

Strategic Defense Forces. The USSR has traditionally maintained much larger strategic defense forces than the US. The cumulative dollar costs of Soviet programs over the 1964–1974 period were more than four times US spending, the biggest difference being in SAM and fighter-interceptor programs.

Resource Category Comparisons

Military Investment and RDT&E. The estimated dollar costs of Soviet weapons acquisition programs have exceeded US outlays for comparable programs since 1970 and in 1974 were about one-fourth larger than US programs.

—Initial procurement for the new generation of Soviet ICBMs and the costs of deploying modern tactical aircraft have caused missiles and aircraft to be the fastest growing elements of Soviet procurement in recent years. As the estimated dollar costs of Soviet procurement have increased, US expenditures have declined, and in 1974 the costs of Soviet aircraft and missile procurements are about one-fourth greater than US outlays.

—The costs of Soviet ships and boats procurements have exceeded US outlays by one-half over the 1964–1974 period. They are about one-third greater than US expenditures in 1974.

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—Soviet land armaments procurements have amounted to over three times US expenditures for the 1964–1974 period.

Operating Costs. The largest component of operating costs for both the USSR and the US is the cost of military personnel. Estimated dollar costs for Soviet military personnel rose steadily over the 1964–1974 period, whereas military force reductions have lowered total US expenditures for active military personnel since 1968. In 1974 total dollar costs for Soviet military personnel are almost 50 percent higher than corresponding US costs, reflecting the much larger base of Soviet military manpower. If pensions and the costs of reserves are set aside, estimated Soviet costs, in dollar terms, for active military personnel are almost 80 percent higher than comparable US costs.

[Omitted here is the table of contents, the body of the report, and annexes.]

  1. Source: Library of Congress, Manuscript Division, Schlesinger Papers, Soviet Defense Expenditures. Secret. Proctor forwarded the report to Schlesinger under a covering memorandum, January 10, 1975. A note on the memorandum dated March 3 reads: “Sec Def Has Seen.” (Ibid.)