Harrison (2012) asserted that budget authority is described as the Congressional power that enables the various government agencies to spend the federal funds. Part of the authority conferred on the Congress is to specify the criteria that will be used in allocating the particular funds. With regards to the defence sector, the Congress might stipulate the amount of money the agency spends in a year or any amount of time in the future. Several forms of budget authority exist including the authority to borrow, appropriations, contract authority, collections, and offsetting receipts among others. The budget authority is mainly if the intention is to depict the impact that the policy decisions had on an agency in a particular year. It does not take into account the funds approved in the previous years and therefore gives a correct portrayal of whether the administration is increasing or cutting funding to a certain department such as the defence department in this case.
Another defence budget term that is closely associated with budget authority is the outlays. It is also referred to as the disbursements or expenditures. Korb, Hoffman and Blakeley (2014) asserted that outlays are defined as the particular amount of money that is released from the federal treasurer in a year. Therefore, the outlay for fiscal 2014 is a reflection of the amount of funds that the federal government will utilize in 2014. The outlays are used in two situations including when referring to the size of a fiscal budget in a given financial year, and secondly when the intention is to depict either the surplus or the deficit. Outlays and budget authority are the two most important functions of a budget resolution. They both serve different purposes as the budget authority focuses on representing limitations on the new financial obligations incurred by the defence agency while the outlay highlights the cash flow and thereby helping in determining the deficits or surpluses.
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Another term that is commonly associated with the defence department is the Total Obligation Authority commonly abbreviated as TOA. It includes the totals for programming that are available in a given year. It includes aspects such as the new obligation authority, reimbursements, unobligated balances, reprogrammed and unprogrammed obligation authority among others ( Heniff, Lynch, & Tollestrup, 2012). Another budget term that is closely associated with the defence department is deflator. Deflators are described as a way of measuring any broad price movements in a given economy. The Department of defence exhibits uniqueness in that it is one of the few federal agencies whose funding is classified in the discretional category. The discretional program is defined as that which involves annual funding through the process of congressional appropriation. On the other hand, the federal budget falls mainly in the mandatory category. The mandatory programs, also referred to as the ‘'pay-as-you-go'' are defined as direct spending programs. Mandatory programs include military retirement, social security, and Medicare among others.
Other terms that are closely associated with the defence department include current and constant dollars. These two entities are used to display funding in the Green Book. When an item is priced using the current dollars, it shows that it is inclusive of inflationary changes. It is the value of a commodity without necessarily adjusting the effect of inflation. On the other hand, the constant dollars are used in measuring the value of purchased commodities and services at prices that are equivalent to the base year level.
References
Harrison, T. (2012). Analysis of the FY 2013 Defense Budget and Sequestration. Washington, DC: Center for Strategic and International Studies .
Heniff Jr, B., Lynch, M. S., & Tollestrup, J. (2012). Introduction to the federal budget process. Congressional Research Service .
Korb, L. J., Hoffman, M., & Blakeley, K. (2014). A user’s guide to the Fiscal Year 2015 Defense Budget. AmericanProgress. org .
