I'm one of the people who, at various times and places, has called for what's labeled Unified National Security Budgeting. Three noted analysts at the Congressional Research Service have just done a paper exploring what that idea might mean in practice. They are skeptical of the idea, in part because it could mean so many different things and could be done in many different ways. I still like the idea but welcome the analysis showing the variety of approaches that fall under the umbrella.
For example, the concept could mean a single national security budget; or mission-based budgeting; or budget displays that cut across several agencies. Each has its presumed benefits and limitations. One of the most important but rarely considered consequence of any change in this direction is how it fits with congressional committees and processes.
I'll admit that many of my friends who endorse this idea do it because they think it would lead to shifts in funds from Defense to State. I'd like to see more of that, too, but I doubt that a unified budget would make much difference. When studying U.S. conventional strategy in Europe in the 1970s, I was appalled to learn that both the U.S. Air Force and the U.S. Army assumed that their service needed forces to destroy all Soviet tanks, that there was no reason to assume that airpower and ground power could each contribute to the fight. Today, both Defense and State have large foreign military aid programs that might be more efficient if they were evaluated and funded side by side rather than in different bills.
Some advocates of the concept believe that lumping State spending with Defense would protect the smaller department from knee-jerk cuts. That would be nice, too, but you can't really hide international affairs spending from its critics.
What for sure would improve national security policy making is for there to be stronger links between the NSC and OMB. Policy choices should include considerations of cost, and cost alternatives.