Chris Edwards

In an analysis of the spy budget (or “black budget”) last year, the Washington Post found that the NIP and MIP spanned 16 agencies and had 107,000 employees. The largest agency is the CIA with a $15 billion budget and 22,000 employees. Further details are here and here.

I don’t think we know what share of the total $68 billion goes toward worker wages and benefits. Let’s take a wild guess and say that the average compensation of intelligence workers is $200,000. If we apply that figure to the workforce of 107,000, we get a total compensation cost of $21 billion. But that’s less than one-third of the total spy budget. So it appears that the great bulk of the spy budget goes toward procuring goods and services from contractors.

The good news is that the spy budget has come down from a peak in 2010. Further cuts would have the beneficial effect of forcing agencies to better prioritize and hopefully cut some of their excessive data collection activities and most intrusive programs. In many areas of the federal budget, spending and civil liberties can be inversely related. Cato analysts have proposed reducing the spy budget by one-quarter in conjunction with an array of other federal spending cuts.

Chris Edwards

Chris Edwards is the director of tax policy studies at the Cato Institute, and editor of Before joining Cato, Edwards was a senior economist on the congressional Joint Economic Committee, a manager with PricewaterhouseCoopers, and an economist with the Tax Foundation.

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