Defense Budget: Projected Inflation Savings
Defense Budget: Projected Inflation Savings

Author:

Publisher:

Published: 1998

Total Pages: 11

ISBN-13:

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On February 3, 1998, the Secretary of Defense testified before the Senate Armed Services Committee on the fiscal year 1999 Department of Defense (DOD) budget. In his statement, the Secretary said that DOD will be able to buy more defense programs in fiscal years 1999-2003 than previously planned because "President Clinton allowed the Department to keep about $20 billion in savings projected from lower estimates of future inflation." You asked that we (1) identify the projected savings by fiscal year and the programs that DOD plans to buy with those savings, (2) discuss the implications of applying those projected savings to additional DOD programs, and (3) compare DOD's estimated savings to estimates provided to you by the Congressional Budget Office (CBO) and identify possible reasons for the difference in those estimates. The Future Years Defense Program (FYDP) is an authoritative record of current and projected force structure, costs, and personnel levels that has been approved by the Secretary of Defense. The fiscal year 1999 FYDP supported the President's fiscal year 1999 budget and included budget estimates for fiscal years 1999-2003. Each year, the Office of Management and Budget provides DOD with guidance to use in preparing DOD's budget request and FYDP. The guidance includes the executive branch's assumptions for inflation, the price of fuel, and military and civilian pay raises. DOD uses these assumptions to reestimate the cost of its programs.

National Defense Budgeting and Financial Management
National Defense Budgeting and Financial Management

Author: Philip J. Candreva

Publisher: IAP

Published: 2024-01-01

Total Pages: 540

ISBN-13:

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Budgeting for national defense is a complex endeavor, particularly for a nation like the U.S. that assumes global responsibility and strives to have the most advanced and lethal force on earth. It is necessary – and challenging – to balance the myriad requirements between current and future readiness, across warfare areas and military services, between having state of the art capability with sufficient capacity, and among people, hardware, and the activities people do with that hardware. As analytically difficult as that problem is, it is embedded in the political budgeting processes and national security must be balanced with every other function of government and there must also be cooperation across branches of government. This text explores that complex endeavor. It takes the position that budgeting for defense is a particular instance of public budgeting which is a particular instance of public policy. Thus, this text starts with a conceptual, empirical, and process foundation before discussing the participants and processes that build the annual defense budget. It then covers the execution of that budget and the ultimate accounting. Compared to the first edition, this text is updated with current figures and examples. There is a new chapter on determinants of military spending in society and burden sharing within alliances. The chapter on budget execution has been disaggregated and a new chapter is devoted to fiscal law. The final chapter seeks to integrate all that came before it by discussing matters that integrate the stages of budgeting and which cross branches of government. Following in the tradition of the first edition, this is intended to be both a textbook for a course in budgeting, but also a desktop reference for defense budgeting practitioners.

National Defense Budgeting and Financial Management
National Defense Budgeting and Financial Management

Author: Philip J. Candreva

Publisher: IAP

Published: 2017-05-01

Total Pages: 494

ISBN-13: 1681238721

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The U.S. Department of Defense accounts for over half of federal government discretionary spending and over 3% of GDP. Half of all federal employees work for the Department. The annual budget for the military not only provides for those salaries, it covers the baseline and wartime operating expenses of the force, and hundreds of billions of dollars of investment in new capabilities and technologies. Given the materiality of the defense function and amount of resources it consumes, the processes for budgeting for defense and managing the funds is important to understand. This text provides a fully integrated view of defense budgeting. It takes the position that defense budgeting is a specific instance of public budgeting, and public budgeting is a specific instance of public policy. In order to fully understand how the nation budgets for defense, it first lays a theoretical and conceptual foundation for public policy and public budgeting. That is followed by an assessment of the political and policy context for defense, including the overarching federal budget process and role of Congress in setting defense policy. Only then does the text explore the specifics of defense budgeting: how, by whom, and why the budget is crafted. Beyond the topic of budgeting – formulating, requesting, and legitimating the request for funds – the book tackles financial management topics. Included are discussions of federal appropriations law, funds management, accounting requirements, intragovernmental business transactions, and contemporary topics of defense policy such as funding overseas contingency operations in an era of deficit control legislation. This book is an appropriate reference for both students and practitioners of defense budgeting and financial management. It would also be appropriate in a general public budgeting course. Most public budgeting texts focus on state and municipal governments and there are few that address the federal system. This book fills that gap and provides a specific example of federal budgeting.

Budget Issues Budgeting for Inflation in Civilian Agencies
Budget Issues Budgeting for Inflation in Civilian Agencies

Author:

Publisher:

Published: 1999

Total Pages: 13

ISBN-13:

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In recent years, the Department of Defense (DOD) has experienced increases in purchasing power (called inflation dividends) that occur when inflation is lower than had been projected at the time funds were requested. DOD has used those savings to fund a larger program without requesting or receiving additional resources. In 1998, DOD calculated that lower than expected inflation would reduce fiscal years 1999 through 2003 procurement costs, i.e., nonsalary purchases, by $21.3 billion compared to what had been projected 1 year earlier. Of this amount, $2.8 billion, or approximately 1 percent of DOD's annual budget, was savings estimated for fiscal year 1999. DOD was allowed to keep these savings and, in some cases, authorized to redirect funds to programs and purposes other than those originally planned, authorized, and appropriated. Given DOD's experience, the question of whether civilian agencies should also identify the effect of lower inflation on their funding requirements has been raised. To understand better the challenges to developing this capability in civilian agencies, this staff study describes how inflation is treated currently in budgeting for DOD and civilian discretionary nonpay activities. The General Accounting Office developed case studies in 3 civilian agencies: Department of the Interior's Bureau of Land Management, Department of Energy's Office of Environmental Management, and National Aeronautics and Space Administration. GAO also reviewed prior work pertaining to inflation changes in both civilian agencies and DOD and obtained written responses from DOD to questions on how it budgets for inflation. Not included is a discussion of funding for civilian and military pay because decisions on annual increases are not tied to the rate of inflation. However, these costs can be more significant than the costs associated with nonpayroll-related inflation since federal agencies are required to absorb these increases.