This study of the history of American defense spending policy in the 1990s combines local economic development, national budget debates and international strategy to discuss the planning and management of the post-Cold War defense drawdown. For over 40 years during the Cold War, the primary justification for historically high levels of American defense spending was the threat of military conflict with the Soviet Union. Between 1989 and 1991, that existential threat effectively disappeared, creating expectations within the United States that funds previously dedicated to defense could be applied to domestic needs. Calls for this “peace dividend” were increased by an ongoing economic recession. However, by the end of the 1990s, the lowest the defense budget would fall was merely equal to the Cold War average level of spending. This doctoral project documents the primary political reasons for the continuation of historically high defense budgets during the post-Cold War period (1989-2001) and the related decisions about managing defense spending, defense policy, economic development and industrial policy in the context of this post-war drawdown.