Fred Kaplan notes that the House Democrats aren't exactly mounting a huge challenge to Bush's Pentagon budget:
This $504 billion—measured in real terms (i.e., adjusting for inflation)—falls only a few billion short of the largest military budget in U.S. history, back in 1952, when America was embarking on its Cold War rearmament campaign and fighting a war in Korea.
One difference: The FY 1952 budget included the cost of fighting in Korea. The FY 2008 budget does not include the cost of fighting in Iraq and Afghanistan. (Those costs are covered in the $95.5 billion emergency-spending bill, part of a supplement to the FY 2007 budget, over which the White House and Congress are currently quarreling.)
Of course, on some level using inflation-adjusted dollars isn't the best metric. In percent of GDP terms, the current budget is substantially lower than the Korea-era budgets. On the other hand, in relative terms compared to the rest of the world, current defense spending is way higher than it was at the height of the Cold War.