This is a broad responsibility advised by the congress and is used to empower agencies of the government on how to spend government funds. For instance, it may instruct what a given agency in the defense spends within a specific year, number of years or any time in the future (Congressional budget Office (U S congress) Washington DC & Miller, 1981).
According to United States (1918) appropriations contract authority to borrow and expend. offsetting collections and receipts are some of the basic budget authority forms. Funds are made available by congress in a year, several years or no year. The defense classifies these term as either definite or indefinite. Both specified and unspecified amount can be made available. Budget authority can also be classified as permanent or current. Permanent authority does not need any current action by congress. Budget authority is used to get into contracts with defense contractors in defense budget. The department of defense unobligated balances of budget authority for defense activities is said to have grown from $12.8 billion to $34.5 billion in the U.S during the financial years 1972 through 1976 (Thomas et al, 2007).
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Outlay
Outlays are expenditures by the military of individual departments of the military such as the (army, navy and Air force) and defense agencies within defense departments. This also applies to Energy departments for defense nuclear programs and Homeland security department.
Discrepancies in budget outlays is said to be stemming out from difference in rates where appropriated funds are spent out. Another discrepancy factor is the use of different assumptions of the economy. Comparable method is one of the ways use to estimate defense outlays. Difference in projections of outlays result due to increased funding of spare parts, advance funding for the needs of working capital, finally is the capacity of limited industries to meet the demands of the large increased program (Roughead & Brookings Institution, 2013).
Obligations
Obligations are usually worth between 50 to 100 percent of the contract value and are either direct or indirect. Original defense contacts are lined directly with direct offsets. It entails companies agreeing to transfer important technological competence to the government. An indirect offset on the other hand is prompted by defense sale and has nothing to do with the country’s purchase. Examples include, a country investing in local industries or helping to export a country’s good (Thomas et al, 2007)
Conclusion
From the above discussion, it is evident that budget authority is used to empower agencies of the government on how to spend government funds. Outlays on the other hand are expenditures by the military of individual departments of the military such as the (army, navy and Air force) and defense agencies within defense departments. Finally, Obligations are usually worth between 50 to 100 percent of the contract value and are either direct or indirect
References
Congressional budget Office (U S congress) Washington DC, & Miller, Michael. (1981). Budget Outlays for Defense: A Comparison of Estimates by the Administration and the Congressional Budget Office (Mid-Session Budget Review).
Roughead, G., Schake, K., Hamilton Project., & Brookings Institution. (2013). National defense in a time of change. Washington, DC: Brookings.
Thomson, M., & Australian Strategic Policy Institute. (2007). 2007 defence budget summary. Barton, ACT: Australian Strategic Policy Institute.
United States. (1918). National defense. Washington, D.C: Field Division, Council of National Defense.
