Investopedia defines Zero-based budgeting (ZBB) as "A method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a "zero base" and every function within an organization is analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one."
ZBB was first pioneered in the early 1970's by Pete Pyhrr, then an accounting manager for TI.
Effect on government spending
Several members of congress have indicated that they favor ZBB, since it would put more emphasis on spending cuts.
- ↑ Zero-Based Budgeting - ZBB. Investopedia.
- ↑ Meet the Father of Zero-Based Budgeting. Wall Street Journal (March 26, 2015).
- ↑ In favor of zero-based budgeting. The Hill (June 7, 2012).
- ↑ Dennis Ross pushes zero-based budgeting for federal government. Washington Times (March 30, 2015).