A DOLLAR COMPARISON OF SOVIET AND US DEFENSE ACTIVITIES, 1965-1975

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79M00467A002400040036-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 12
• Document Creation Date: December 16, 2016
• Document Release Date: June 22, 2005
• Sequence Number: 36
• Publication Date: February 1, 1976
• Content Type: REPORT

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FOR PERSONAL ATTENTION OF:
A Dollar Comparison of Soviet and US
Defense Activities, 1965-1975
SR 76-10053
February 1976
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A Dollar Comparison
of Soviet and US Defense Activities
1965-1975
Problems in Comparing US and Soviet Programs
The military establishments of the Soviet Union
and the US are difficult to compare because they differ
so much in missions, structure, and characteristics.
Any common denominator used for comparative sizing is
inevitably imperfect, and its limitations must be
understood in interpreting such comparisons.
Dollar Cost Comparisons. The common denominator
used in this report is dollar cost. The approach is to
estimate how much it would cost in dollars to reproduce
individual Soviet military programs in the US, and then
to compare these estimates with expenditure data of
the Department of Defense.*
The utility of this approach is that it provides
a general appreciation of the overall sizes of defense
programs in the two countries. It also reveals trends
and relationships between the two defense establishments
that are difficult to discern and measure in other ways.
Whatever conclusions are drawn from this dollar
cost analysis, however, must be tempered by an appreci-
ation of what it does not do. It does not, for example,
measure actual Soviet defense expenditures or their
burden on the Soviet economy. These questions are ad-
dressed by totally different analytical techniques
yielding estimates of the ruble costs of Soviet military
programs. Neither can the dollar cost analysis alone
be used to draw inferences about the relative military
effectiveness or capabilities of US and Soviet forces.
The basis for the US financial data presented in this
report is the Total ObZigationaZ Authority (TOA) series
in the January 1976 The Five-Year Defense Program.
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Some activities funded by defense budgets contrib-
ute only indirectly to military capabilities--for example,
pensions, medical care for dependents, and commissaries--
and such activities are likely to be larger in the US
than in the Soviet Union. Even those comparisons that
focus on costs that contribute directly to capabilities--
for example, procurement of weapons--are not necessarily
indexes of relative military capabilities. Data on
the size and technical characteristics of the forces
must also be considered for such judgments.
Finally, dollar cost calculations tend to overstate
Soviet programs relative to the US because of a basic
measurement problem common to all international economic
comparisons and known to economists as the index number
problem. If Soviet decision makers were confronted
with the US dollar price structure that is used for our
dollar cost analysis, rather than the ruble prices they
in fact have to pay, they undoubtedly would choose a
different and cheaper (in dollar terms) mix of manpower
and equipment inputs. While it is not possible to quantify
the degree of overstatement that this consideration
introduces, it is clearly not large enough to alter
the basic conclusion that the Soviet military program
overall is currently significantly larger than that of
the US.
Price Basis and Structure of Comparisons
The dollar cost data presented here for the years
1965-1975 are expressed in constant prices so that all
changes in monetary levels from year to year reflect
changes in-forces and programs rather than the effects
of price fluctuations. The base year used is 1974.
The US data have been adjusted to achieve comparable
accounting coverage with the dollar estimates made for the
USSR as well as converted to constant prices, and there-
fore do not match actual budget authorizations or ap-
propriations.
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US Expenditures and
Estimated Dollar Costs of Soviet Defense Programs
- BILLION 1974 DOLLARS
W
I-
ti
20
us
USSR
NOTE: The dollar figures for the USSR are estimates of what the Soviet forces and programs would cost if developed, purchased and operated in the US. For
perational forces the figures are obtained by costing directly individual Soviet forces and programs. The estimated dollar costs of Soviet ROTH
are derived in the aggregate using a less certain methodology and should be viewed only as rough measures. For this reason they are shown
separate from the dollar costs of operational forces. The US defense expenditure series is based on Total Obligational Authority (TOA) data from The
Five-Year Defense Program, January 1976)Department of Defense). The US data are in fiscal year terms and the estimated dollar costs of Soviet
programs are in calendar year terms.
US and Estimated Soviet Active Military Manpower
MILLION MEN (mid-year)
I I I I I I I I I I 1
1965 67 69 71 73 75
NOTE: The manpower series for the USSR includes border guards, internal security troops,
and construction troops, for which the US Armed Forces have no counterpart.
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--DoD authorizations for military aid and civil
defense are excluded and those for military research,
development, testing, and evaluation (RDT&E) have
been aggregated into one account.
--Energy Research Development Administration
authorizations related to nuclear weapons are
included.
Total Defense Costs
The estimated total dollar costs of Soviet defense
programs exceed US defense authorizations in every year
since 1970. At about 114 billion dollars (1974 prices),
they are more than 40 percent higher than comparable
US authorizations of 80 billion dollars in 1975.
(See Figure 1.) If the costs of pensions are sub-
tracted from both sides, the dollar costs of Soviet
programs in 1975 exceed those of the US by 50 percent.
When expressed in constant US prices, which measure
growth in real terms, the trend in the dollar costs
of Soviet defense programs is one of continuous growth
throughout the period averaging about 3 percent per year.
This growth is evident in nearly all the major components
of the Soviet defense establishment. Quite a different
picture is seen for the US. Despite increases in the
current dollar costs of US defense programs, defense
authorizations expressed in constant dollar terms
have declined continuously since the peak of 1968, and
since 1973 have been below the 1965 level. This de-
cline reflects reductions in nearly every major US force
component in the Seventies, in contrast to the Vietnam
buildup of the late Sixties. For the 1965-1975 period
as a whole the estimated dollar costs of Soviet programs
are not significantly different from cumulative US
authorizations. In the Seventies the Soviet total ex-
ceeds that of the US by 20 percent.
In Figure 1, the costs of RDT&E are segregated
from those of other programs. This is because the
analytical problems involved in estimating the dollar
costs of Soviet RDT&E are much more difficult than for
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Dollar Cost of Soviet Programs as a
Percent of US Defense Expenditures*
200 - 200
C
175
125
75 I I I I I I I I I I 75
Strategic Defense
1,000 r
Note: Scale for this graph is significantly
different from others.
200
US=100%
01 1 I 1 1 1 1 1 I I I
General Purpose Forces
200 r
Investment Cost Operating Cost
75 1 "u,sl~f I I I I I I I 75
epartment of Defense Total Obligational Authority data have been
adjusted to attain comparability with the Soviet data.
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the other elements of the Soviet defense establishment
and the uncertainty in these estimates is substantially
higher. If the dollar costs for RDT&E are subtracted
from both sides for the year 1975, the estimated Soviet
figure is 40 percent higher than that of the US.
Manpower
The estimated level of Soviet military manpower
exceeds that of the US in every year from 1965 to 1975.
Soviet military manpower grows by about one million
men during the period. Most of this increase is in
the ground forces, although there are some increases
in strategic forces as well. On the other hand, US
manpower in 1975 was less than its 1965 level.
The Soviets have historically maintained a large
military force which has a broader range of responsi-
bilities than the military does in the US. The Soviet
manpower series includes border guards, internal security
troops, and construction troops, forces for which
the US has no counterparts. Even without these forces,
however, the Soviet manpower total is higher than that
of the US throughout the period.
Dollar Comparisons of Military Missions
Intercontinental Attack Forces. Estimated dollar
costs of Soviet intercontinental attack programs, ex-
cluding RDT&E, exceed the US figures for every year
beginning in 1966, when most of the currently deployed
US systems were operational. (See Figure 2.) For the
1965-1975 period as a whole, the estimated dollar costs
of Soviet programs are 50 percent greater than the US
level. In the Seventies they are 70 percent greater and
in 1975 they exceed the US level by 100 percent.
--Expressed in dollar terms, the costs of Soviet
ICBM programs are more than four times the US level
for the 1965-1975 period as a whole. The estimated
dollar costs of Soviet programs in 1975 are seven
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times the US level, a result of the large Soviet
procurement programs for new ICBMs.
--The estimated dollar costs of Soviet submarine-
launched ballistic missile (SLBM) programs exceed
US levels for every year beginning in 1968 and are
30 percent greater than those for the US in 1975.
--US authorizations for intercontinental bomber
programs are about five times the estimated dollar
costs of Soviet intercontinental bomber programs
for the period as a whole.
If the estimated dollar costs of Soviet peripheral
attack forces intended for use on the Eurasian continent
are counted, the cumulative dollar costs of Soviet
strategic attack programs for the 1965-1975 period are
more than twice the cumulative US level. The US has
no counterpart for the Soviet peripheral attack forces,
which include large numbers of medium- and intermediate-
range ballistic missiles and medium bombers.
Strategic Defense Forces. The USSR has tradi-
tionally maintained much larger strategic defense forces
than the US. The cumulative dollar costs of Soviet
programs over the 1965-1975 period are four times the
US figure, the biggest difference being in surface-to-
air missile (SAM) and fighter-interceptor programs.
US authorizations for the Safeguard ABM system narrow
the gap somewhat in the early Seventies. Recent reductions
in US air defense programs account for the widening gap
since that time. In 1975, the estimated dollar costs
of Soviet strategic defense programs amount to nine times
the US authorizations for strategic defense.
General Purpose Forces. The estimate of dollar
costs of Soviet general purpose forces increases continu-
ously from 1965 through 1975. The US level, in contrast,
grew rapidly during the Vietnam involvement but had re-
turned to the 1965 level by 1971. As a result, the
estimated dollar costs of Soviet general purpose forces
surpass the level of the US in 1970, and for the Seventies
as a whole, they are 40, percent greater than the US
total. In 1975 they exceed the US level by 70 percent.
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The estimate of dollar costs of Soviet ground forces
in 1975 is more than three times the US figure, reflecting
primarily the much higher level of Soviet manpower.
The dollar costs of Soviet general purpose naval forces
are about 25 percent higher in 1975 than the US. The
estimate of dollar costs of Soviet tactical air forces
grows rapidly beginning in 1970 but in 1975 is still
less than three-quarters of the US level.
Command, Support, and Other. This mission covers
activities involved in command and general support,
as well as all other activities--except RDT&E--which
cannot be assigned to the combat missions. It also
includes nuclear weapons programs. The trends in
dollar costs for this mission parallel those of the
combat missions, and in 1975 the dollar costs for
Soviet programs are slightly higher than the US.
Resource Category Comparisons
Dollar costs of military forces can also be compared
in terms of investment and operating costs.
Military Investment. The estimated dollar costs
of Soviet military investment programs (excluding RDT&E)
exceed the US level for comparable programs beginning
in 1970. The dollar costs of Soviet investment rise
rapidly beginning in 1973. US authorizations have
declined sharply in the wake of the Vietnam buildup.
The estimated costs of Soviet investment programs in
1975 exceed the 1972 level by 15 percent, while US
authorizations in 1975 are nearly 25 percent less than
in 1972. In 1975, the estimated investment costs of
Soviet programs are 85 percent greater than those of
the US.
--The upturn in estimated dollar costs of
Soviet investment beginning in 1973 reflects
the procurement of the new generation of Soviet
ICBMs. US procurement of missiles declined during
the same period. The estimated dollar procurement
costs in 1975 for Soviet missiles are about three
and one-half times those of the US.
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--During the last few years the dollar procure-
ment costs of Soviet aircraft have remained high
while those of the US have declined. In 1975
the Soviet figure is some 30 percent higher.
--The cumulative estimated dollar costs of
Soviet procurement for naval ships and boats exceed
the US figure by 70 percent over the 1965-1975
period and are about 90 percent greater than the
US in 1975.
Operating Costs. The largest component of operating
costs is the cost of military personnel. Soviet military
manpower rises steadily over the 1965-1975 period, where-
as US military manpower has decreased.
Comparisons With Previous Estimates
Estimates of the dollar costs of Soviet defense
programs are revised each year to take into account
new information on and new assessments of the size,
composition, and technical characteristics of the Soviet
forces and to put them on a more current dollar price
base. The dollar cost comparisons presented in this report
show the costs of Soviet programs to be higher relative
to the US than previous estimates.
The last published CIA estimate--disseminated in
January 1975--extended through 1974. It showed the dollar
costs of Soviet programs exceeding US authorizations in
1974 by about 20 percent (about 25 percent when pensions
are excluded from both sides). In this report the
dollar costs of Soviet programs for 1974 exceed the
US level by about 30 percent (about 35 percent when
pensions are excluded).
In an unpublished preliminary study prepared in
October 1975, the estimated Soviet level exceeded that
of the US by about 35 percent (about 45 percent when
pensions are excluded) for the year 1975. These re-
lationships have been cited publicly by Government
officials and quoted widely in the press. The estimate
in this report is that the dollar costs of Soviet pro-
grams for 1975 exceed those of the US by about 40 percent
(about 50 percent when pensions are excluded).
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These changes for 1974 and 1975 occurred for a
number of reasons. One factor was a downward revision
in US authorizations for both years in the.January 1976
edition of The Five Year Defense Program reflecting
more recent information. On the Soviet side, the
estimates presented in this report differ from those
of the earlier studies principally because of changes
in the estimated costs of some weapons and activities.
Changes in the Intelligence Community's estimates of
the number of deployed weapon systems--particularly
in the later years--also contributed to the increase,
but to a lesser extent. The Intelligence Community
also increased its estimate of Soviet military man-
power since the last comparative cost analysis. This
increase was nearly offset, however, by a decrease
in the estimated number of civilians working for the
Soviet Ministry of Defense.
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