	Introduction

Members of the North Atlantic Treaty Organization (NATO) contribute to the alliance in various ways. The most significant means by far is through funding, in their individual national defense budgets, the deployment of their respective armed forces in support of NATO missions. Several NATO activities, however, are coordinated and conducted by the alliance's headquarters in Brussels. These operations are directly funded by three common accounts: the NATO Military Budget, the NATO Civil Budget, and the NATO Security Investment Program (NSIP). Individual shares of the civil and military budgets remained unchanged for decades, while NSIP shares were adjusted every few years based upon relative gross domestic product (GDP), per capita GDP, and several other factors. Individual member state contributions to the budget are based on a cost-sharing formula. The U.S. share is approximately 25%. As noted above, the three NATO common accounts are funded by contributions from the member states. How have these national shares been determined in the past? The GAO cited the following: (1) the 1966 French withdrawal from the military command, described below; (2) the admission of Spain in 1982 (to which could be added the more recent enlargements in 1999, 2004, and 2009), for which shares were renegotiated among all members; and (3) Canada's 1994 unilateral 50% reduction of its NSIP contribution, for which several European member countries agreed to defray the cost among themselves. Some Members of Congress expressed concern over these cost projections and were also worried that the United States might be left to shoulder a large share of the expenditures; they questioned whether existing burdensharing arrangements should continue and suggested that the European allies should be encouraged to assume a larger financial share for the security of the continent. During its November 2010 summit in Lisbon, NATO member states agreed to the acquisition of a new capability: ballistic missile defense. In addition, individual countries will be responsible for supporting the deployment of their own ship- or land-based interceptors and sensors. That is no less damning a criticism, reflecting the toll on the alliance's fighting capability of inadequate or poorly conceived defence spending by too many of its members ... ."
The 112 th Congress may review the new common funds burdensharing arrangements—as well as U.S. contributions to the NATO budgets—in the context of the Defense Department and State Department appropriations.
For decades, Congress has maintained an interest in burdensharing arrangements with allies, particularly with those of the North Atlantic Treaty Organization (NATO). The 28 NATO member states contribute to the activities of the alliance in several ways, the chief of which is through the deployment of their own armed forces, funded by their individual national budgets. Certain commonly conducted activities, however, are paid for out of three NATO-run budgets. These three accounts—the civil budget, the military budget, and the security investment program—are funded by individual contributions from the member states.
The countries' percentage shares of the common funds are negotiated among the members, and are based upon per capita gross national income and several other factors. The U.S. shares for the three funds, which have fallen over the past three decades, currently range from about 22%-25%. In three waves, 12 central and eastern European nations were admitted into the alliance in 1999, 2004, and 2009. As NATO has expanded, it has incurred certain additional costs to address some of the force modernization needs of the new members. These costs are being shared by all, including the new countries. In 2005, members of the alliance adopted a new burdensharing agreement, under which the U.S. level was limited to its then-existing share. Further changes in the cost share formulas may be under review.
During a November 2010 summit in Lisbon, NATO member states agreed to the acquisition of a new capability: ballistic missile defense. Although the estimated commonly shared costs of the planned system are relatively modest, member states eventually will be encouraged to assume responsibility individually for deploying various elements of the system, such as radar, interceptor missiles, sensors, and Aegis-equipped naval vessels.
The 112th Congress may examine U.S. contributions to the NATO budgets. In the wake of the global financial crisis, most member states have been making or considering reductions in their defense budgets, prompting questions over their willingness and ability to contribute effectively to possible future alliance operations.