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The defense budget remains one of the central shaping features of U.S. national security and national military strategy. To understand what is possible in terms of defense transformation, one must first have a firm grasp of the budgetary context of strategic decisions. The author shows that defense will continue to compete with domestic programs for that portion of the budget allocated to discretionary spending, and argues that this is a competition in which defense needs have not fared especially well in the past and may not in the future. If accurate, this assessment will have tremendous implications for defense transformation. The leaders of the Army and the Department of Defense must therefore frame their transformation strategies within fiscal realities.

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BUDGET POLICY; Ippolito; QDR; entitlements; discretionary spending; surpluses; deficit reduction; Gramm-Rudman-Hollings Act

Budget Policy and Fiscal Risk: Implications for Defense