A new report in the Wall Street Journal predicts that the percentage of the US federal budget devoted to defense spending may fall below 3% for the first time since the Cold War era, with the latest debt ceiling agreement driving much of the reduction in spending.

The recent deal to raise the debt ceiling, struck between the White House and Republicans, will increase defense spending from the $800 billion allocated in the current budget, to roughly $885 billion next year, an increase of 11%. In 2025, military spending will rise again, to $895 billion.

Although the total sum of spending increases, the funding represents a reduction in the budget in real terms, after accounting for inflation, according to an analysis of the debt ceiling deal contained in an editorial piece published by the Wall Street Journal following the signing of the debt ceiling bill into law on Friday.

After passing through the House of Representatives on Wednesday, the bill moved through the Senate on Thursday before reaching President Biden’s desk for his signature on Friday.

The bill raised the debt ceiling through January 1st of 2025, allowing the nation to avoid its first–ever default on its obligations, coming mere days before the June 5th deadline when it was predicted the defaults would begin.

The United States had been just days from defaulting on a sovereign debt which has reached $31.4 trillion. Were the government to default, it would significantly increase the borrowing costs for the nation, and complicate the options available for the government to pay future obligations, or borrow more money. A default could also have triggered financial chaos overseas, triggering negative effects on prices and mortgage rates in other nations.