ABSTRACT

U.S. defense budgets are both policy and financial documents. The budgets reflect judgments about the world's security environment and the policies necessary to meet the challenges of national defense. Defense budgets also serve as financial enablers, allowing the DoD to purchase the weapons and equipment, people, and training required to fulfill those policies. Defense budgets act to set the agenda for a year's activities within the DoD and to provide expectations and measurements of program performance. Defense budgets therefore are a reflection of both strategy and finance involving both public policy and public administration. This entry addresses the policies and practices involved in defense budgeting and financial management in five broad categories: 1) The Context of Defense Budgeting; 2) The Content of the Defense Budget; 3) The Processes of Defense Budgeting; 4) Financial Management; and 5) Policy Issues in Defense Budgeting. The concluding section addresses some current and future-looking issues associated with the defense budget: determining the right amount for defense spending, budgeting and financing for war, determining whether and how to reduce defense spending, and improving financial management.