Originally Posted by Billybob

Military budget and total US federal spending
The U.S. Department of Defense budget accounted in fiscal year 2010 for about 19% of the United States federal budgeted expenditures and 28% of estimated tax revenues. Including non-DOD expenditures, defense spending was approximately 25–29% of budgeted expenditures and 38–44% of estimated tax revenues. According to the Congressional Budget Office, defense spending grew 9% annually on average from fiscal year 2000–2009.[19]
Because of constitutional limitations, military funding is appropriated in a discretionary spending account. (Such accounts permit government planners to have more flexibility to change spending each year, as opposed to mandatory spending accounts that mandate spending on programs in accordance with the law, outside of the budgetary process.) In recent years, discretionary spending as a whole has amounted to about one-third of total federal outlays.[20] Military funding's share of discretionary funding was 50.5% in 2003, and has risen steadily ever since.[21]
For FY 2010, Department of Defense spending amounts to 4.7% of GDP.[22] Because the U.S. GDP has risen over time, the military budget can rise in absolute terms while shrinking as a percentage of the GDP. For example, the Department of Defense budget is slated to be $664 billion in 2010 (including the cost of operations in Iraq and Afghanistan previously funded through supplementary budget legislation[23][24]), higher than at any other point in American history, but still 1.1–1.4% lower as a percentage of GDP than the amount spent on defense during the peak of Cold-War military spending in the late 1980s.[22] Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, has called four percent an "absolute floor".[25] This calculation does not take into account some other defense-related non-DOD spending, such as Veterans Affairs, Homeland Security, and interest paid on debt incurred in past wars, which has increased even as a percentage of the national GDP.

Graphic added for the benefit of the "edumacated" among us.