This report analyzed the economic impact of transferring $30 billion of outlays per year over the 1986-1990 period from the Department of Defense budget to key urban programs. Chicago, IL, Trenton, NJ, Austin, TX, and Irvine, CA were chosen as test cities for the impact of this budget decision. Although each city did not see sharp increases as a result of their dependency on military employment and involvement in urban programs, all four of the studied cities gained in their capacity to provide critical goods and services to their citizens.