NATO’s 2 Percent Guideline: What About the United States?

At the NATO summit four years ago, the heads of state and government gathered in Wales recommitted themselves to increasing defense spending in real terms and to achieving the NATO guideline to spend a minimum of 2 percent of their country’s Gross Domestic Product (GDP) on defense by 2024. In the buildup to the NATO summit in Brussels last month, President Trump did much scolding of allies and finger-pointing at this commitment, which fewer than half NATO’s twenty-nine members currently have plans to achieve.

Though none of his counterparts gathered in Brussels pointed back, they might well have asked, “What about the United States: Does the United States spend at least 2 percent of national income on its commitment to European allies?”

Although I acknowledge that’s a different question than the one suggested by the NATO guideline—which focuses on aggregate defense spending, not just spending on the defense of Europe—the answer to this question is nonetheless instructive. At the least, it can help to put into a proper perspective the unfortunate acrimony the President has chosen to stir over this particular metric.

According to the Department of Defense (DoD) Comptroller’s National Defense Budget Estimates for 2019, the DoD is projected to spend 3.1 percent of GDP in the fiscal year ending September 30 (see Table 7-7 in the National Defense Budget Estimates for 2019). That’s the ratio of the comptroller’s roughly $620 billion estimate of DoD outlays in 2018 compared to an estimate for GDP of a little over $20 trillion. So, by the strict measure of the Wales commitment, the United States is a model ally, exceeding the 2 percent guideline by more than $200 billion, and achieving it well ahead of the 2024 deadline.

However, let’s recall that the United States spends such a large proportion of its national income on defense in no small part because of its geographic disposition on two great oceans and its national security strategy, which asserts expansive global interests and international engagement. No European nation holds anything approximating the geographic exposure and global ambitions of the United States, so we should hardly be surprised that these countries generally dedicate a smaller portion of their national income to defense.

Still, it begs the question: How much of the United States’ $620 billion defense budget is committed to the defense of Europe? The practical answer to that question is less amenable to calculation than it is to critical thinking. Because the forces and resources of the US military are neither organized nor budgeted into geographic regions. parsing the DoD’s $620 billion into pieces like “Europe,” the “North Atlantic,” or any other region is methodologically fraught.

Instead, let’s just think critically about the threshold of aggregate defense spending represented by the NATO guideline and whether it is reasonable to associate that proportion or dollar amount of US defense spending with our commitment to NATO.

To set that threshold, consider that two percent of $20 trillion is $400 billion. Given the range and scope of US national security interests across the globe, is it reasonable to think that such a preponderance—two-thirds—of aggregate US defense spending is committed only to the defense of Europe? Hardly. Conversely, would it be reasonable to think that the US military’s posture toward all the remaining interests of our nation—from the Korean Peninsula through South Asia and the Middle East and across the entire southern hemisphere—are financed by only one-third of the defense budget, or $200 billion? Again, that could hardly be true.

So, while the exact proportion of the US GDP we are spending on defending Europe is indeterminate, it’s not 2 percent of our national income. Indeed, by the measure of how much other NATO member states are spending on the defense of Europe, the United States most probably ranks in the middle of the pack, with somewhere between one percent and one-and-a-half percent of its GDP (or $200 billion to $300 billion) attributable to the interests in Europe of which our national security strategy compels a defense.

Scaled to the scope of their interests and grand strategies, our NATO allies are generally committing about the same proportion of GDP to the defense of Europe as the United States. Perhaps this perspective could give pause to American chest-beating over the burden-sharing question going forward from Brussels. Our alliance has far more important obligations to contest, after all.