Politically, he was a democrat and he opposed abolitionism. At the start of the Civil War, Budd offered his services to the Union and was placed in command of the gunboat . The "Penguin" was initially a part of the North Atlantic Blockading Squadron, but joined the Potomac Flotilla on August 19, 1861. In October she shifted to the South Atlantic Blockading Squadron. He participated in the bombardment of Hilton Head in November. During that battle, the "Penguin" was disabled, and Budd ordered that a tug tow the ship into range so that it could continue to bombard the harbor. In December 1861, Budd assisted escaped slaves around Edisto Island, South Carolina, while supporting activities in that area while under the command of Percival Drayton. He was killed in a skirmish at Mosquito Inlet on the east coast of Florida near Smyrna on March 22, 1862. He was buried in Buffalo's Forest Lawn Cemetery.