You are low. You need to also include Homeland Security, parts of the FBI that do surveillance and para-military operations [i.e. HRT], as well, in my opinion, the VA. This number is discussed often. For example here. Additionally, it does not include any "black" off budget operations, including a big part of the NSA and CIA budgets, perhaps $50B. You simply can't look at only the defense industry.
The fact that it is declining in terms of GDP percentage doesn't mean that defense is shrinking, it means it's not growing as fast the overall budget or the economy. Which is to say, it's still growing in real dollars in most years.
Thanks for correct on Medical GDP. I apparently have not updated that number in my head since the last 1990's. Healthcare is another huge topic.
The bottom line is that it is ridiculous to think that the US would go to war based on the advocacy of any single company, or even the defense industry.
And this is because it's not the single biggest sector in the US economy? It is a huge boondoggle, with millions flowing through the government to private industries. And it's highly political. The defense industry has outsized influence.