Defense spending has ballooned since 2000, jumping from $294 billion to roughly $700 billion a year, or 20 percent of the entire federal budget. The Pentagon was to start paring that back, cutting $78 billion in spending over five years, but that was until bombs starting raining over Libya. The confrontation with Libyan leader Muammar Qaddafi has now thrown a curve at the possibility of cuts to the Pentagon budget.