    [Budget Supplement]
    [Projecting American Leadership]
    [4. Supporting the World’s Strongest Military Force]
    [From the U.S. Government Printing Office, www.gpo.gov]

      ----------------------------------------------------------------------

      The men and women of our armed forces remain the foundation, the fundamental foundation of our security. You
    put the steel into our diplomacy. You get the job done when all means short of force have been tried and failed.

                                          President Clinton
                                          May 1995

      ----------------------------------------------------------------------
      America's defense capability is the bulwark that sustains and supports
    its foreign policy.
       Only when U.S. forces were about to land could our
              negotiators convince an unwelcome dictatorship to leave Haiti;
              we then reinstalled the rightful democratically-elected leader
              and, in the process, stemmed the large-scale migration from
              Haiti to our borders.
       With Iraq once again threatening Kuwait, we moved quickly to
              send additional forces to the region, averting another crisis.
       We saved hundreds of thousands of lives by employing our
              military forces in humanitarian efforts in Rwanda.
       Finally, the resolve shown in the NATO air campaign and the
              promise of U.S. military involvement in securing a peace was
              pivotal in bringing the warring factions in Bosnia to the
              negotiating table and achieving the Dayton Peace Accord; U.S.
              forces are now leading the cooperative NATO effort to enforce
              that agreement.
       Because the United States must lead, and our forces must prevail when
    called to fight in a world of new post-Cold War threats, the budget
    proposes to continue sustaining and modernizing the world's strongest,
    best-trained, best-equipped, and most ready military force.
       The budget continues the Administration's defense funding plan,
    supporting our military forces with quality of life improvements and the
    best technology we can develop. The budget also supports the President's
    commitment to arms control and to reducing the dangers of nuclear
    weapons at home and abroad.

     Sustaining a Strong Military Capability

       U.S. military forces must deter our adversaries and reassure our
    friends and allies that America is prepared to use force to defend its
    interests.
       When committed to combat, U.S. forces must win decisively. They must
    be highly ready and armed with the best equipment that technology can
    provide. They must be prepared and trained for the new threats of the
    post-Cold War era, many of which know no national borders: the
    proliferation of weapons of mass destruction; ethnic and regional
    conflicts that undermine stability; and terrorism and drug trafficking,
    which directly threaten our free and open society.
      ----------------------------------------------------------------------

                        Table 4-1.  MILITARY FORCE TRENDS
    ------------------------------------------------------------------------
                                                1989                 Target
                                              Cold War     1997      Force
    ------------------------------------------------------------------------
    Active Forces:
       Army Divisions......................        18         10         10
       Navy Aircraft Carriers\1\...........        16         11         11
       Navy Air Wings......................        13         10         10
       Navy Surface Combatants and Attack
       Submarines..........................       287        192    161-171
       Marine Divisions and Air Wings......         3          3          3
       Air Force Tactical Wings............        25         13         13

    Reserve Forces:
       Army Combat Brigades................        57         42         42
       Navy Air Wings......................         2          1          1
       Navy Aircraft Carrier...............         0          1          1
       Other Navy Ships....................        26         17         15
       Marine Divisions/Air Wings..........         1          1          1
       Air Force Tactical Wings............        12          7          7

    Nuclear Deterrent:\2\
       Intercontinental Ballistic Missiles.     1,000        580        500
       Ballistic Missile Submarines
       (Missiles)..........................   32 (576)   17 (408)   14 (336)
       Bombers.............................       359        174         86

    Mobility Forces:
       Strategic Airlift Aircraft..........       431        389        283
       Sealift Ships\3\....................       162        152        149

    Military Personnel (in thousands):
       Active Forces.......................     2,130      1,457      1,418
       Guard and Reserve Forces............     1,171        901        893

    ------------------------------------------------------------------------
    \1\Includes one non-deployable training carrier in 1989.

    \2\Assumes START II ratification and entry into force. Does not include
      95 B-1 bombers dedicated to conventional missions in 2002 or in the
      Target Force.

    \3\Includes ships in the Ready Reserve Force maintained by the
      Department of Transportation but funded by DOD.

      ----------------------------------------------------------------------
       Today, the United States is the only nation with the logistics,
    mobility, intelligence, and communications capabilities required to
    conduct large-scale, effective military operations on a global basis.
    Coupled with our unique position as the preferred security partner in
    many regions, our military capability provides a foundation for regional
    stability through mutually beneficial partnerships. Our willingness and
    ability to play a leading role in defending common interests help ensure
    that we retain a strong leadership position in the world.
       The budget builds upon the Administration's policy of the last three
    years--sustaining and modernizing the world's strongest and
    [[Page 46]]
    most ready military force, capable of prevailing
     with our regional allies in two
    nearly simultaneous regional conflicts. The budget maintains our
    commitment to high levels of training and readiness for that force and
    equipping it with technology second to none (see Table 4-1).

    Providing Budget Levels that Ensure a Strong Defense

       For programs in the National Defense function (050), the budget
    proposes 1997 discretionary funding of $255.1 billion in budget
    authority and $259.4 billion in outlays. This overall function includes
    the activities of the Department of Defense-Military (051), Atomic
    Energy Defense Activities (053), and other Defense-Related Activities
    (054).
       Table 4-2 shows budget authority and outlay levels for these
    functions through 2002.
      ----------------------------------------------------------------------

                                     Table 4-2  FUNDING SUMMARY FOR NATIONAL DEFENSE
                                     (Discretionary funding, in billions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                         Proposed
                                                    1995      1996   -----------------------------------------------
                                                   Actual   Estimate   1997    1998    1999    2000    2001    2002
    ----------------------------------------------------------------------------------------------------------------

    Department of Defense-Military (051):
       Budget Authority........................      257.4    252.6    243.4   248.9   255.0   262.4   270.3   277.3
       Outlays.................................      261.2    255.3    248.3   244.7   247.3   254.6   257.3   265.6

    Atomic Energy Defense Activities (053):
       Budget Authority........................       10.1     10.6     10.9    10.0     9.1     8.2     9.4    10.6
       Outlays.................................       11.7     10.2     10.5    10.2     9.3     8.4     8.8     9.9

    Other Defense Related Activities (054):
       Budget Authority........................        0.4      0.7      0.8     0.4     0.3     0.3     0.3     0.4
       Outlays.................................        0.7      0.9      0.6     0.6     0.5     0.5     0.5     0.6

    Total National Defense (050):
       Budget Authority........................      267.9    263.9    255.1   259.3   264.4   270.9   280.0   288.3
       Outlays.................................      273.6    266.4    259.4   255.5   257.1   263.5   266.6   276.1
    ----------------------------------------------------------------------------------------------------------------

      ----------------------------------------------------------------------
      For Department of Defense (DOD) military functions (051), the budget
    proposes $243.4 billion in budget authority and $248.3 billion in
    outlays for 1997. After 1997, the budget reflects the impact of lower
    estimates of inflation, offset by the planned increases needed to
    modernize our military forces. DOD funding would roughly keep pace with
    inflation through 1999, then increase slightly faster than inflation
    through the rest of the five-year planning period.
       The budget continues the Administration's defense funding plan of the
    last three years, which provides for a careful resizing of our
    [[Page 47]]
    military forces, ensures full support in the
     near term for military readiness and
    quality of life, and provides properly for modernizing our forces as new
    technology comes on line later in the decade.
       We have carefully recalibrated this defense plan over the past three
    years in response to experience and events. Reflecting the findings of a
    1993 review of previously assumed but unrealized savings, we increased
    the 1994 defense budget. As pay levels rose, we adjusted defense budgets
    accordingly. In December 1994, we added $25 billion to our long-term
    defense plan to provide for readiness and quality of life initiatives
    and for real growth in 2000 and 2001 to purchase new military hardware.
      The President's plan is a rational, careful approach to defense
    funding. By contrast, in 1996 Congress provided $7 billion more than the
    Administration requested, principally for military hardware programs
    that the services have said they do not need or had planned to request
    later.
       These additional funds mean that, overall, 1996 funding for DOD
    military functions is higher than the 1997 proposed level--and observers
    might take that to mean that most programs funded in 1996 would face
    cuts in 1997. This is not the case. Congress added funding for programs
    in 1996 that do not require funding in 1997.
       As Chart 4-1 shows, our 1997 request returns defense funding to a
    plan that makes sense, providing increases for modernization at the end
    of the decade when new technologies become available. By contrast, the
    congressional plan provides funds for older technologies early, then
    falls well below the Administration's budget plan at the turn of the
    century--just as the newer defense technologies for which the military
    forces are planning will begin production.
       Because the President believes that Congress added funds last year
    for many unnecessary projects, the budget proposes to rescind or cancel
    some 1996 defense resources.

    [[Page 48]]

    Modernizing Our Military Forces

       Relating Procurement to the Total Defense Budget: A key objective of
    the Administration's defense funding plan is to modernize our military
    hardware.
       As Chart 4-2 shows, historical changes in procurement funding
    coincide with changes in total defense funding. In the late 1970s and
    early 1980s, as the defense budget rose, the President and Congress
    invested more and more in equipment. These investments funded a wide
    range of systems (such as fighter aircraft, attack submarines, and
    armored vehicles) and provided the backbone of today's modern force.
       The equipment that the Government bought then is now aging and must
    be modernized to include the latest technological advances. For example,
    the average age of Air Force fighter and attack aircraft is about 10
    years today, but will grow to around 20 years by 2010. When complex
    military equipment ages, it becomes costlier and more difficult to
    maintain and operate. Most important of all, the decisive technological
    advantage that superior equipment provides means few casualties and the
    quick, successful resolution of conflict. For all these reasons,
    modernization is a high priority.

       Providing Modernization Funding: The Administration proposes $314
    billion from 1997 to 2002 for procurement, so that procurement funding
    would grow by 42 percent in real terms over the period. Important
    modernization programs in production would continue, including DDG-51
    guided-missile destroyers, the C-17 strategic airlift aircraft, and
    standoff precision munitions like the Joint Standoff Weapon.

       In 1997, low-rate production of Marine Corps V-22 tilt rotor aircraft
    and the Navy's multi-role F/A-18E/F fighter would begin. Modernization
    funding would grow in 1998 and
    [[Page 49]]
    1999 with initial procurement of the
    Navy's New Attack Submarine and low-rate production of the Air Force's
    F-22 Advanced Tactical Fighter. Full-rate production of the V-22, F/A-
    18E/F, and the F-22 would occur at the turn of the century.

       Providing Modernization for the Long-Term: The budget proposes large
    investments in research and development for advanced systems that will
    enter production in the middle of the next decade. The Air Force, Navy,
    and Marine Corps are developing a Joint Strike Fighter as a cost-
    effective replacement for today's tactical fighter and attack aircraft.
    Other major weapons in development include the Army Comanche helicopter,
    a new surface ship for the Navy, and an advanced amphibious-assault
    vehicle for the Marine Corps.

    Ensuring the Nation's Security

       Achieving Arms Control: The President's policy of stressing arms
    control to reduce threats from weapons of mass destruction was rewarded
    by an overwhelming Senate vote for ratification of the START II treaty.
    Following approval by the Russian Republic, implementation of this
    seminal treaty, together with the START I Treaty that took effect in
    December 1994, will bring warheads deployed on long-range missiles and
    bombers by the former Soviet Union to a third of the Cold War level. By
    reducing weapons levels on both sides, and by banning land-based
    missiles with multiple warheads, START II will make the world a much
    safer place.
       To reinforce our arms control efforts, the budget proposes $3.3
    billion for a wide range of programs to blunt threats posed by the
    global proliferation of nuclear, biological, and chemical weapons.

       Reducing Weapons of Mass Destruction in the Former Soviet Union
    (FSU): The Cooperative Threat Reduction program (also known as the Nunn-
    Lugar program) has contributed greatly to U.S. security. Nunn-Lugar
    [[Page 50]]
    assistance increased the safety and speed with which states of the FSU
    have dismantled their nuclear weapons. The budget proposes $328 million
    to continue this important program in 1997.
       Countering Proliferation of Weapons of Mass Destruction: The budget
    proposes nearly $500 million to develop capabilities to locate and
    neutralize weapons of mass destruction before they can be used, and to
    protect U.S. troops against their effects. High-priority efforts include
    developing the means to identify and destroy underground storage sites,
    and the methods to detect and track weapons shipments. To protect troops
    against chemical and biological agents, key efforts include developing
    advanced detection devices, vaccines, and protective clothing.
       Developing and Deploying Defenses Against Tactical Ballistic
    Missiles:  The Administration's Theater Missile Defense (TMD) program is
    designed to defeat existing and future ballistic missile threats around
    the world. With over $2 billion in proposed funding (more than two-
    thirds of the total budgeted for ballistic-missile defense), TMD would
    provide defenses against those missiles that directly threaten American
    and allied ground, naval, and air forces deployed abroad. Funding for
    TMD supports development, as soon as possible, of an advanced version of
    the Army's Patriot missile and the Navy's Lower-Tier System, as well as
    the development of more advanced systems to meet future threats.
       Developing Options to Defend Against Strategic Ballistic Missiles:
    The budget proposes $500 million for a vigorous program to develop the
    central elements of a national missile defense system that could be used
    to protect the United States. Although the Administration does not
    believe that such a system is needed now, the development of a
    contingency capability continues to ensure that deployment could proceed
    rapidly--if a missile threat emerges sooner than our intelligence
    community estimates. A decision to force early deployment would not only
    waste billions of dollars, it would force adoption of immature
    technologies that would not likely provide an effective defense.
       Maintaining Stewardship Over Our Nuclear Capability: The unifying
    mission of the Department of Energy's (DOE) defense activities is to
    reduce the global nuclear danger. DOE does this by:
       supporting and maintaining a safe, secure, reliable, and
              smaller nuclear weapons stockpile without explosive testing of
              nuclear weapons;
       dismantling excess nuclear weapons;
       providing technical leadership for national and global
              nonproliferation efforts; and
       reducing the environmental, safety, and health risks from
              current and former facilities in the nuclear weapons complex.
       The budget proposes $10.9 billion for DOE spending on defense
    activities, a $230 million increase from the 1996 enacted level. Funding
    for stewardship and management of the nuclear weapons stockpile would
    rise by $250 million, to $3.7 billion, reflecting the President's
    commitment to provide sufficient funding for this program next year and
    over the next decade. The increase is designed to help maintain the
    safety and reliability of the nuclear weapons stockpile under a
    comprehensive test ban treaty, which the Administration hopes to
    complete and sign in 1996.

       Undertaking Successful Contingency Operations: U.S. forces are
    engaged in contingency operations around the world that support American
    interests and demonstrate international leadership--from monitoring U.N.
    sanctions on Iraq, to supporting the return to democracy in Haiti, to
    playing a key role in the NATO-led military force implementing the
    Dayton Peace Accord in Bosnia and Herzegovina. The budget includes
    funding for ongoing contingency operations in Southwest Asia, and Bosnia
    and Herzegovina, to help ensure that we protect force readiness. If
    Congress approves these funds, and no unexpected new costs arise, DOD
    can avoid redirecting funds from operations and maintenance programs,
    thereby maintaining its high level of readiness.
       In the 1996 Defense Appropriations Act, Congress funded a portion of
    the costs of contingency operations in Southwest Asia. The remaining
    unfunded contingency operations costs, stemming mostly from operations
    [[Page 51]]
    in Bosnia and Herzegovina, total $2.2 billion. A reprogramming of
    savings from lower-than-expected inflation can fund nearly half of these
    costs. Another $620 million is included in a supplemental appropriations
    request. The Administration submitted these proposals to Congress early
    this year and plans to submit a second reprogramming to fund the balance
    of the Bosnia and other contingency costs.

       Establishing Information Dominance: Information is power. U.S.
    preeminence in information technology helps us to field the world's
    premier military force. The Administration's goal is to continue
    advances in information technology to support military operations and
    our national security strategy.
       Intelligence is critical to information dominance and it continues to
    play a large role in military operations and national security decision-
    making. This year's intelligence budget is guided by explicit
    intelligence priorities that the President established for the post-Cold
    War era. We have realigned funds within national and tactical
    intelligence to better cover the President's top priorities, such as
    support to military operations and counter-proliferation. The
    intelligence budget also realigns funds to achieve a better balance
    between collecting and analyzing information.
       A new initiative--the Global Broadcast System--exemplifies the
    Administration's drive for information dominance. DOD is adapting
    commercial, direct-broadcast, digital TV technology to provide real-time
    logistics, weather, and intelligence information to military forces.
    Commanders equipped with terminals as small as 18 inches would receive
    instantaneous, secure, high-data-rate information to out-smart, out-
    maneuver, and out-fight any opponent.

    Maintaining the Readiness of Our Forces

       Ensuring Adequate Resources for Readiness: The Administration's top
    defense priority continues to be maintaining the readiness and
    sustainability of our military forces. The budget provides full funding
    for operations and support programs critical to sustaining the
    military's current high readiness levels. These programs include unit
    training activities, recruiting and retention programs, joint exercises,
    and equipment maintenance activities. The Administration also proposes
    funding for humanitarian assistance programs.
       DOD has embarked on several initiatives to improve the assessment of
    current and future military readiness. Of particular note are the Senior
    Readiness Oversight Council and the Joint Monthly Readiness Review
    process. These initiatives enhance DOD's ability to ensure that critical
    readiness programs receive sufficient resources and that our forces
    remain prepared to accomplish their missions.

       Enhancing Quality of Life for Our Military Personnel: The
    Administration continues to strongly back programs that directly, or
    indirectly, support military readiness. Our armed forces have been
    extremely successful in attracting and retaining motivated, high-quality
    personnel in part because of the Administration's continuing strong
    commitment to fund quality of life programs. For example, the budget
    provides military personnel a three percent military pay raise,
    effective January 1997, and substantial funding to upgrade and improve
    military barracks and family housing.

    Managing our Defense Resources More Efficiently

       Implementing Base Closure and Realignment: Since 1988, four Base
    Closure and Realignment Commissions have recommended the closure of 97
    out of 495 major military installations and over 200 smaller
    installations--about 20 percent of our defense infrastructure. The
    projected annual savings of $5.8 billion by 2001 would help fund, in
    part, the modernization of our military forces. To ensure that the
    Government reaps these savings, the budget proposes increases for 1997-
    2000 to fully fund the implementation of final recommendations of the
    1995 Base Closure and Realignment Commission.
       Improving Financial Management: The Administration remains committed
    to reforming DOD's financial management and accounting systems. DOD's
    progress includes developing and implementing standard financial systems
    for civilian payroll, military retirement, transportation, and debt
    management. Significantly, DOD has cut the category known as problem
    disbursements from $51 billion in 1993 to $22 billion in 1995.
    [[Page 52]]
       The Administration is committed to implementing the Chief Financial
    Officers Act in order to ensure that DOD can produce auditable financial
    statements. In addition, DOD will continue to pursue the most cost-
    effective solutions to its finance and accounting needs, which may
    include contracting out some functions.

       Streamlining the Civilian Workforce: DOD plans to continue
    streamlining its civilian workforce while maintaining the quality of its
    workers. The budget reflects a cut of over 208,000, or 22 percent, of
    DOD civilian positions from 1993 to 1999. Consistent with the principles
    of the Vice President's National Performance Review, DOD is cutting
    headquarters, procurement, finance, and administrative staffs.
       Implementing the Government Performance and Results Act (GPRA): DOD
    continues to incorporate performance evaluation into its decision-making
    for such broad-based issues as weapons purchases, transportation
    methods, and inventory control. It has designated seven programs
    (including the Defense Logistics Agency and Air Combat Command) as
    demonstration projects to provide a guide to implementing GPRA fully.
       Using the Private Sector for Support Functions: The Commission on
    Roles and Missions of the Armed Forces (CORM) recommended that, to save
    money, DOD use the private sector for a number of support functions. In
    August 1995, the Deputy Secretary of Defense established an Integrated
    Policy Team for Privatization, which includes senior representatives
    from the military departments, defense agencies, and the Secretary's
    staff. They will look for opportunities, identify obstacles, and develop
    solutions and strategies to support the CORM recommendation. The budget
    provides funds to accomplish these goals.