Editing National Security Act of 1947 (section)

=== Shrinking budgets ===
Immediately following the war, confronting the Soviets was a lower priority than ending wartime austerity, balancing the federal budget, and returning to peace. This situation would not change until the Soviet Union developed nuclear weapons in 1949, followed by the Korean War in 1950.<ref name="OSDHistVol1" />

In this environment, forces were rapidly demobilized, and budgets were slashed. In Fiscal Year 1946, the military's total budget ceiling was approximately $42 billion. In Fiscal Year 1947, it was $14 billion. On V-J Day, the US military consisted of the Army's 91 Army divisions, 9 Marine Corps divisions, 1,166 combat ships in the Navy, and 213 combat groups in the Army Air Forces. By the end of demobilization on June 30, 1947, the Army had 10 divisions, the Marine Corps had 2 divisions, the Navy had 343 combat ships, and the Army Air Forces had 63 groups of which only 11 were fully operational.<ref name="OSDHistVol1" />

As forces were reduced and budgets were cut, unification seemed like a promising way to save money by reducing duplication, and this would become a theme to which its proponents would repeatedly return. It also created a sense of urgency to quickly institutionalize lessons learned from World War 2. However, the shrinking budgets also created a zero-sum game environment which encouraged interservice bickering by pitting Army and Navy advocates against each other.<ref name="OSDHistVol1" />