The transformation of the U.S. military is entering a critical stage. The Department of Defense is initiating the most far-reaching changes in its worldwide bases and deployments since the 1950s. Parallel efforts to consolidate domestic bases and defense facilities are likely as well, now that the 2005 Base Realignment and Closure Commission has begun its work. And the Quadrennial Defense Review currently underway could have a profound impact on the size and shape of future forces. As defense planners grapple with the pace and direction of military transformation, the budgetary context of strategic decisionmaking is becoming much less favorable. In this monograph, Dennis S. Ippolito focuses on the spending policy, deficit and debt, and retirement and healthcare entitlement dynamics that will make it difficult, if not impossible, to fund current defense plans.