[Economic Outlook, Highlights from FY 1994 to FY 2001, FY 2002 Baseline Projections]
[III. Major Functions of the Federal Government]
[2. National Defense]
[From the U.S. Government Printing Office, www.gpo.gov]
[[Page 43]]
2. NATIONAL DEFENSE
----------------------------------------------------------------------
Table 2-1. Federal Resources in Support of National Defense
(Dollar amounts in millions)
----------------------------------------------------------------------------------------------------------------
Percent
Function 050 1993 2001 Change:
Actual Estimate 1993-2001
----------------------------------------------------------------------------------------------------------------
Spending:
Discretionary budget authority............................................ 276,109 311,030 13%
Mandatory outlays......................................................... -1,344 -418 -69%
Credit Activity:
Direct loan disbursements................................................ .......... 11 NA
Guaranteed loans......................................................... .......... 39 NA
Tax expenditures............................................................ 2,115 2,160 2%
----------------------------------------------------------------------------------------------------------------
NA = Not applicable.
----------------------------------------------------------------------
Since 1993, the Clinton-Gore Administration has sustained its
commitment to supporting the world's strongest military force, capable
of defending the United States, its citizens, and its allies, and
protecting and advancing American interests and values around the world.
Today, the United States is the sole remaining superpower in the world,
with military capabilities unsurpassed by any Nation. The United States
has sought to use that position of strength in a manner consistent with
the fundamental values and ideals upon which our republic was founded.
We have maintained a steadfast focus on simple goals--peace, shared
prosperity, and freedom. The U.S. military, as the world's best trained
and best equipped fighting force, provides the strength and leadership
that serve as the foundation for regional peace and stability that
allows us to share our goals with others around the globe. This has been
demonstrated throughout the tenure of this Administration, most recently
by the restoration of stability in Kosovo and during humanitarian relief
and other contingency operations.
President Clinton took significant steps to ensure that our Nation's
military is fully prepared to meet the challenges of this new century.
The Administration strengthened our Nation's security by sustaining a
commitment to recruit, train, and equip the best fighting force that the
world has ever known, one capable of defeating large-scale cross-border
aggression in two distant theaters in overlapping timeframes. This was
achieved by enhancing military readiness and operational capabilities,
and supporting programs to take care of military personnel and their
families from recruitment through retirement, including defense health
programs. The Administration also prepared for the future by procuring
effective and modern weapons systems and funding a strong and diverse
research and development effort to maintain our technological advantage
through the development of advanced weapons systems.
The Administration's efforts to shape the strategic landscape through
continued deterrence, arms control agreements, such as the START
agreements, and threat reduction assistance programs in Russia and other
states of the former Soviet Union, has reduced the global danger from
nuclear weapons and other weapons of mass destruction. The Department of
Energy's (DOE's) national security program has maintained confidence in
our nuclear stockpile deterrent and has significantly advanced the
cleanup of radioactive waste from fifty years of weapons production.
[[Page 44]]
Building a new Defense Strategy for the Post-Cold War World
The end of the Cold War left the United States armed forces with a
strategy, force structure, and infrastructure no longer appropriate for
the new security environment. Based on an in-depth assessment of the new
security environment and rethinking of U.S. defense strategy, the
Administration conducted a Bottom Up Review (BUR) in 1993 and
restructured its forces to meet four key requirements:
fight and win two nearly simultaneous major regional wars;
conduct, in peacetime, a variety of operations short of a
major regional conflict;
maintain a strong forward presence; and,
deter and prevent the use of weapons of mass destruction
against U.S. territory, forces, and allies.
In an effort to better align U.S. military strategy, force structure,
infrastructure, manning, and resource requirements, the Administration
conducted the Quadrennial Defense Review (QDR) in 1997. This is the
Department of Defense's (DOD's) strategic plan, which was reviewed and
approved by the President and the Congress. The QDR supported the BUR
requirement to maintain the ability to fight two major-theater wars
nearly simultaneously, and adopted a defense strategy of shaping the
international environment to prevent conflict, responding to crises, and
preparing for future threats. It also emphasized that it was in the
Nation's interest to respond to small-scale contingency operations and
address asymmetric threats such as information warfare, weapons of mass
destruction, and terrorism. The QDR force structure is shown in Table 2-
2.
----------------------------------------------------------------------
Table 2-2. U.S. Conventional Force Structure
------------------------------------------------------------------------
Cold War QDR Target
(1990) 2001 (by 2003)
------------------------------------------------------------------------
Land Forces:
Army divisions (active/ 18/10 10/8 10/8
National Guard)............
Marine Corps divisions 3/1 3/1 3/1
(active/reserve)...........
Tactical Air Forces:
Air Force fighter wings 24/12 12+/7+ 12+/8
(active/reserve)...........
Navy air wings (active/ 13/2 10/1 10/1
reserve)...................
Marine Corps wings.......... 3/1 3/1 3/1
Naval Forces:
Aircraft carriers (active/ 15/1 12/0 11/1
reserve)...................
Battle forces ships......... 546 317 306
Mobility Forces:
Airlift (tactical/ 513/432 526/335 478/329
strategic).................
Sealift (Surge/Ready Reserve 69/102 67/76 78/90
Force).....................
Military Personnel:
Active..................... 2,069,000 1,382,242 1,367,600
Selected reserve............ 1,128,000 863,775 837,200
------------------------------------------------------------------------
----------------------------------------------------------------------
Maintaining a Strong Defense
When this Administration took office, the DOD budget, as a result of
the end of the Cold War, had already declined by 33 percent in real
(after inflation) terms from its 1985 peak, when the drawdown started,
and active military forces had been reduced by 25 percent. Today, our
military forces and programs are sized to meet the threats and strategy
addressed in both the BUR and QDR.
The Administration requested several significant increases in the
defense budget to provide full support in the near term for
[[Page 45]]
military readiness and quality of life, and to modernize our forces over
the long term. These objectives--first outlined in the Defense Funding
Initiative of December 1994--which added $25 billion over five years--
have remained the essential pillars of this Administration's defense
program.
The President's approval of a six-year, $112 billion increase for
defense in the 2000 Budget furthered these efforts and represented the
first long-term, sustained increases for defense programs in over a
decade. That, and subsequent budget proposals, provided continued
significant increases for military readiness programs to enhance our
forces' ability to respond immediately to crises; build for the future
by increasing funding for weapons modernization programs; and, care for
our military troops and their families by further enhancing quality of
life programs. These efforts help ensure that the United States will be
fully prepared to meet the security challenges of the 21st Century.
In addition, the Administration has placed great emphasis on managing
our defense resources more efficiently by reforming and improving the
management of defense programs. The Defense Reform Initiative increased
the use of competitive sourcing and privatization, adopted best business
practices through acquisition reform, and eliminated excess
infrastructure through base realignments and closures. Other initiatives
included streamlining of the civilian work force, improving financial
management practices, and implementing information technology reforms.
Ensuring the Nation's Security Through the Best Equipped, Best Trained,
and Best Prepared Fighting Force in the World
Enhancing Military Readiness and Operations: Maintaining high levels
of readiness has been this Administration's top defense priority. Robust
funding has been provided for training, spare parts, and weapons
maintenance critical to unit readiness, and for recruiting and retaining
quality personnel. In addition, in an effort to monitor current and
future military readiness, the Administration has undertaken efforts to
improve readiness reporting systems to ensure early identification of
potential problems, and allow prompt remedial action. To meet the
diverse security challenges of the 21st Century, the Administration has
undertaken initiatives to transform the Army into a more deployable
force, restructure the Air Force into 10 flexibly-sized air
expeditionary force units, and reduce the Navy's operating costs and
manning requirements through the Smart Ship Program. Greater use has
also been made of National Guard and reserve forces and personnel to
complement active duty forces.
Funding Contingency Operations: The U.S. military has protected U.S.
interests through involvement in contingency operations such as Bosnia,
Kosovo, and Iraq. To pay for these operations, the Administration
consistently sought supplemental appropriations, including nearly $4
billion in a 1999 request for Kosovo operations. These supplemental
requests ensured that U.S. military forces remained at high levels of
readiness as they participated in contingency operations. The
Administration developed accurate cost projection methodologies which
served to inform policy decisions. The Administration made special
efforts to track the incremental costs of these operations, especially
Kosovo, separately from traditional defense operations costs. The
Administration also sought supplemental funding in advance, whenever
possible, so that normal military activities would not be disrupted by
diverting funds to cover contingency costs. It is true that U.S.
military participation in contingency operations has been costly in
terms of dollars, in part because the Congress has provided funding
above the requested levels for items not directly related to these
operations. However, costs of individual operations have come down as
they have made progress toward their objectives. Moreover, the
Administration has clearly advanced U.S. national security interests by
helping to contain Iraq, stopping the bloodshed in the Balkans,
strengthening the NATO alliance and demonstrating its continuing value.
Taking Care of Military Personnel and their Families from Recruitment
through Retirement--including Defense Health Programs: In order to
attract and retain high quality personnel and ensure that military
compensation remains competitive with private sector pay, the
Administration has consistently supported increases in military pay
[[Page 46]]
and retirement benefits. The Administration has also provided
significant enhancements to the quality of life of our military
personnel and their families, including a compensation initiative to
reduce service members' out-of-pocket costs for housing. This program,
approved by the Congress in 2001, will reduce out-of-pocket costs for
military personnel from 19 percent to 15 percent by 2001, and eliminate
these costs entirely by 2005.
Additional quality of life improvements have been demonstrated by the
tremendous decline in the number of military personnel on food stamps--a
result of the Administration's consistent support for military pay
increases. In 1991, 19,400 military personnel received food stamps; by
2000, this number had been reduced to 5,100. For 2001, the
Administration submitted legislation designed to immediately eliminate
military personnel dependence on food stamps by providing a military
commissary benefit. Other quality of life improvements include a
worldwide family support and communications program to ease the
hardships of deployments and family separations, and the construction
and improvement of child care centers, fitness centers, upgraded
barracks, and family housing. Specifically, the Administration has moved
aggressively to upgrade the inventory of Government-owned housing for
military families and utilize private sector capital and expertise to
provide new, modern privatized housing for military families. DOD has
awarded contracts for the construction of about 5,600 housing units and
issued solicitations for the construction of approximately another
22,000 units.
To reduce the costs of defense health programs, the Administration
established a managed care approach to military health care known as
TRICARE---now also available for Medicare-eligible military retirees for
the first time. The Administration has also implemented special programs
for active duty families stationed in remote areas of the country where
health care may not be available.
Preparing for the Future by Modernizing Weapons Systems: The U.S.
military is the best equipped fighting force in the world. Over the past
eight years, the Administration has strongly supported a robust
modernization program focused on the most advanced technologies to
incorporate in future systems. This effort is critical to maintaining
military forces capable of deterring and winning wars and successfully
executing all contingency missions that may arise. Weapons
modernization, including procurement of new systems, upgrades to
existing systems, and development of new technologies to incorporate in
future systems, has been a high priority for this Administration. The
Administration's efforts in developing and procuring new systems have
positioned the U.S. military to continue its unrivaled military
superiority well into the 21st Century, as the discussion that follows
highlight.
Ground Forces: Over the past eight years, the Army developed
new systems to improve warfighting capabilities, such as the
Comanche helicopter and the Crusader howitzer, and upgraded
existing systems such as the Apache helicopter and the Abrams
tank to enhance operational readiness and improve
capabilities. In addition, both the Army and the Marine Corps
have developed a new light weight 155mm howitzer. The hallmark
of the Army's modernization effort is its plan to transform
itself into a more mobile and lethal force. The Army plans
first to field a medium weight force between now and 2007 to
provide greater combat power and mobility to units that deploy
to hostile areas in the early stages of a conflict or to peace
enforcement operations. In the long term, the Army plans to
field an ``objective force'' that is lighter and more lethal
than the current force by developing a Future Combat System
(FCS). Ultimately, Army transformation will exploit technology
advances anticipated in the FCS along with new operational
concepts and organizational structures to maintain its
battlefield superiority.
The Administration has funded the cornerstones of the Marine
Corps' modernization program--the V-22 tilt-rotor aircraft and
the Advanced Amphibious Assault Vehicle--to significantly
enhance capability as well. Both programs, developed over the
course of the last decade, will replace aging helicopters and
tracked vehicles and increase the Marines' ability to execute
their ship-to-shore and cross-country
[[Page 47]]
movements with greater speed, range, and payload.
Naval Forces: Since 1994, the Administration has funded
several new classes of ships that will ensure U.S. naval
superiority far into the future. These new classes include the
LPD-17 amphibious ship, the Virginia Class attack submarine,
and a new auxiliary support ship. The Administration also
fully funded continued procurement of Nimitz class nuclear
aircraft carriers, the backbone of the Navy's fleet, as well
as Seawolf attack submarines, and DDG-51 class destroyers. The
Administration provided funds to develop new technologies that
will lead to procurement of next-generation systems including
a new design nuclear aircraft carrier and the next generation
surface combatant, known as DD-21, that will serve the Navy
well into this century. The Administration has also supported
programs that augment the fleet's warfighting capabilities and
enable more cost-effective operation. Initiatives, such as
Cooperative Engagement Capability and the Smart Ship program,
take advantage of advances in information technology to
deliver improved combat capabilities to our Navy while also
reducing personnel and operations costs.
Tactical Aviation Forces: Aviation force modernization has
been an important part of the Administration's modernization
program from the start. As a result of the President's
efforts, the Navy's F/A-18E/F attack fighter and the Air
Force's F-22 fighter are now in production, and the Joint
Strike Fighter, a low-cost, stealthy, multiservice attack
aircraft, is entering advanced development. These aircraft
will ensure that U.S. troops will never have to fight under
threat of enemy air attack.
Mobility Forces: The Administration has aggressively pursued
modernization of DOD's strategic airlift and sealift forces,
which are vital to transporting U.S. forces where they are
needed anywhere in the world. The Administration corrected
serious problems it inherited in the C-17 airlift aircraft
program and put the program on track. Recent operations in the
Balkans proved the C-17's versatility in performing a variety
of airlift missions. The Department plans to purchase
additional C-17s in coming years to ensure that U.S. mobility
forces possess the maximum possible flexibility with which to
face the uncertain world of the future. In addition, the
Administration provided funding that enabled the Air Force to
initiate a C-5 modernization program to ensure that they are
capable of meeting the projected airlift requirements; and it
funded procurement of a new class of sealift ships intended to
expand the ability to transport large quantities of equipment
around the world.
Tactical Munitions: The Administration has pursued a munitions
investment strategy to develop and procure weapons with
revolutionary capabilities--such as precision accuracy, all-
weather performance, U.S. Global Positioning System (GPS)
guidance, and increased standoff range. America's role in
NATO's victory in the Kosovo air war showcased the success of
this strategy. The Joint Direct Attack Munition (JDAM), a GPS
guidance kit which inexpensively transforms unguided bombs
into accurate weapons with all-weather capability, is a
revolutionary munition first procured during this
Administration; the Air Force used JDAM to great effect in
Kosovo. The Administration requested funds to improve the
Navy's Tomahawk cruise missile, a ``weapon of choice'' against
high-value, heavily-defended targets. The newer Tactical
Tomahawk version will feature a number of improved
capabilities, including in-flight re-targeting. The military
Departments also initiated a mid-range Joint Air-to-Surface
Standoff Missile which is now under development.
Space Systems: The Administration made significant investments
in space systems that are critical to supporting military
operations worldwide. These systems will enhance military
communications, positioning and navigation, missile detection
and warning, and weather monitoring. The Administration's
National Space Transportation policy sustained and revitalized
U.S. space launch capabilities and led to development of the
Evolved Expendable Launch Vehicles program to provide
[[Page 48]]
more efficient, economical access to space. The Space Based
Infra-red Satellites will replace the existing missile
detection and warning satellite constellation. The
Administration consolidated Department of Commerce and DOD
programs into a single enhanced, polar-orbiting satellite
system now in development to reduce the cost of acquiring and
operating weather systems. Finally, the Administration
formulated a national policy and strategic vision for the
management and use of the GPS, and funded a modernization
program for GPS that will significantly improve services for
all users, both civil and military.
Missile Defense: The Administration has invested in both
ballistic missile defense technologies and theater missile
defense systems that will defend against missiles directly
threatening deployed United States and allied forces. The
Administration has also been committed to the development of a
limited National Missile Defense (NMD) system to counter the
emerging ballistic missile threat from states of concern, and
to working with Russia on any changes to the Anti-Ballistic
Missile Treaty that may be required to deploy a limited NMD.
The NMD system as a whole is not yet proven, and the President
decided in September 2000 not to proceed with the deployment
at this time. However, the Administration is continuing a
program that represents the fastest, and most technologically
mature path to achieving an effective NMD that can protect all
50 States against emerging threats.
Reducing the Global Danger from Nuclear Weapons and Other Weapons of
Mass Destruction
Shaping the Strategic Landscape Through Deterrence, Arms Control, and
Cooperative Threat Reduction: The President has remained firmly
committed to maintaining a robust deterrent capability while reducing
the threat from weapons of mass destruction (WMD) through arms control
and cooperative threat reduction efforts with states of the former
Soviet Union.
President Clinton's budgets over the past eight years have
maintained and improved the Nation's deterrent capability by
selectively enhancing the current nuclear force. The largest
program in this regard will modify the remaining four Trident
nuclear submarines to enable them to carry the most accurate
and longest range submarine launched ballistic missile. Other
DOD efforts to maintain the strategic nuclear force include
programs that support upgrades to intercontinental ballistic
missiles and intercontinental bombers such as the B-2.
DOE also plays a critical role in the nuclear deterrence
mission. Following President Clinton's announcement in August
1995 that he would seek a ``zero yield'' Comprehensive Test
Ban Treaty, which would ban any nuclear weapons test
explosions, DOE implemented a science-based Stockpile
Stewardship Program to ensure the safety and reliability of
our nuclear deterrent. Through this program, which relies on
non-nuclear test facilities and computer codes (rather than
underground testing) to simulate nuclear explosions to predict
the performance of the weapons, DOE has been able to annually
certify the nuclear weapons stockpile as safe and reliable.
The 2001 enacted level for this program is nearly $5 billion.
The Administration successfully negotiated the zero-yield
Comprehensive Test Ban Treaty with the other nuclear powers
and sent it to the Senate for ratification in September, 1997.
It remains in the Senate awaiting ratification.
In addition, DOE made significant progress in reducing
contamination at former weapons production facilities. Over
the past eight years, DOE completed remedial action at more
than 4,000 of the 9,700 areas of known hazardous or
radioactive material contamination, including cleanup of some
ecologically sensitive areas such as along the Columbia River
in Washington and above the Snake River Plain Aquifer in
Idaho.
While investing in these force enhancements and the stockpile
stewardship program, the Administration has simulta
[[Page 49]]
neously worked to lower the risks associated with WMD. To that
end, the President has maintained arms control as a high
priority of U.S. policy and implemented reductions under the
Strategic Arms Reduction Treaty (START I), brought the START
II treaty to the threshold of implementation (pending Senate
approval), and laid the groundwork for even further reductions
under a START III agreement. In addition, the Administration
negotiated the passage in 1997 of the Chemical Weapons
Convention to ban the worldwide production, storage, and use
of chemical weapons. To date, the United States has destroyed
22 percent of its chemical weapons stockpile.
----------------------------------------------------------------------
Table 2-3. Strategic Forces
------------------------------------------------------------------------
Cold War Current Projected
(Pre-START) (START I) (START II)
------------------------------------------------------------------------
ICBMs
Minuteman................... 950 500 500
Peacekeeper................. 50 50 0
TRIDENT Submarines............ 31 18 14
SLBMs......................... 568 432 336
Heavy Bombers................. 324 97 \1\ 97 \1\
Total Warheads................ 13,498 6,000 \2\ 3,500
------------------------------------------------------------------------
\1\ Excludes 93 B-1B bombers dedicated to conventional missions.
\2\ Maximum number of warheads on delivery vehicles determined by
``counting rules'' established by each treaty.
----------------------------------------------------------------------
The Administration's threat reduction assistance programs in
Russia and other states of the former Soviet Union have
steadily grown to nearly $1.0 billion per year, and they have
reaped significant benefits over the past eight years. Managed
by DOD, DOE, and State, the programs mitigate the danger posed
by WMD, the proliferation of their fissile material
components, and the scientific expertise behind them. In 2001,
DOD's Cooperative Threat Reduction (CTR) program accounted for
about 48 percent of the total Administration threat reduction
request while DOE's portion was about 37 percent and State's
was 14 percent.
DOD funds support accelerated strategic arms reductions in
Russia and states of the former Soviet Union by dismantling
and destroying strategic warheads, their delivery systems, and
infrastructure. They also support WMD nonproliferation efforts
by enhancing the safety, security, and control of nuclear
weapons and fissile material components as well as chemical
and biological munitions. Over the past eight years, CTR
programs have supported deactivating over 5,000 nuclear
warheads, destroying 17 strategic nuclear submarines and 405
intercontinental ballistic missiles (ICBMs), and eliminating
365 ICBM silos and 67 strategic bombers, while maintaining the
fissile components of these weapons in a secure environment.
The Administration began eliminating United States surplus
weapons-grade plutonium by conversion and immobilization, and
negotiated a similar program to dispose of Russian surplus
plutonium; improved the safety of 65 reactors at Soviet-
designed nuclear power plants and assisted nine countries to
adopt and implement internationally accepted nuclear safety
programs; and, provided security and accounting upgrades to
protect over 400 metric tons of weapons-grade nuclear material
at dozens of Russian and former Soviet sites. The United
States and Russia also concluded an agreement in 1993 under
which Russia will sell to the United States low-enriched
uranium (LEU) derived from 500 tons of highly enriched uranium
(HEU) from dismantled former
[[Page 50]]
Soviet Union nuclear weapons. To date, the U.S. Enrichment
Corporation (the United States agent in these purchases) has
purchased LEU fuel derived from about 6,000 nuclear weapons'
worth of HEU.
State's programs also support proliferation prevention
activities by engaging former weapons scientists to direct
their efforts away from weapons programs to activities with
civilian benefits, and by preventing the illicit transfer of
WMD through implementation of effective export controls.
Meeting the Challenges of Unconventional Threats: The Administration
has focused on meeting the challenge from emerging unconventional and
asymmetric threats designed to offset U.S. superiority. The last decade
has seen an increase in the frequency and severity of terrorist attacks
on military forces and civilian targets, as well as the sophistication
of emerging threats, such as WMD and information-based warfare.
President Clinton has made defending the United States against such
threats a top national security priority, and has sought to defend
against these threats through diplomatic and military means abroad and
increased preparedness at home. Over the past eight years, the
President:
Issued three Presidential Directives to combat terrorism and
defend against WMD at home and abroad, and to protect the
Nation's critical infrastructure from cyber attack. The
Directives codified the roles and responsibilities of the many
U.S. agencies involved in these missions.
Appointed a National Coordinator for Security, Infrastructure
Protection, and Counter-terrorism to coordinate the U.S.
Government's efforts to confront emerging threats against
Americans at home and abroad.
Provided over $11 billion across the Government in 2001--a
funding increase of more than 40 percent since 1998--to combat
terrorism, defend against WMD, and protect critical
infrastructure. This funding included efforts to equip and
train first responders in the Nation's 120 largest
metropolitan areas to prepare for and defend against weapons
of mass destruction; create the first ever civilian medical
stockpile for WMD incidents; and, recruit and train cyber
security personnel to protect the Federal Government's own
critical infrastructure.
----------------------------------------------------------------------
Table 2-4. Overall Funding for Unconventional Threats
(Budget authority, in millions of dollars)
------------------------------------------------------------------------
Actual
---------------------------- 2001
1998 \1\ 1999 2000 Estimate
------------------------------------------------------------------------
Combating Terrorism, excluding WMD 5,871 7,519 6,966 7,759
Defense Against WMD............... 645 1,238 1,454 1,552
Critical Infrastructure Protection 1,142 1,429 1,759 2,027
-------------------------------------
Total........................... 7,658 10,186 10,179 11,338
------------------------------------------------------------------------
\1\ 1998 was the first year that data were available.
----------------------------------------------------------------------
Reforming and Improving the Management of Defense Programs
Defense Management Initiatives: The Administration identified defense
reform as a major DOD priority. In November 1997, the Department
announced the Defense Reform Initiative (DRI), which adopted the best
business practices used by industry. The goal was to improve these
activities and to reduce the overhead burden that these support
activities place on the defense budget. DOD has completed two-thirds of
54 separate Defense Reform Initiatives and the remainder are well
underway. Since the DRI was launched, DOD has made progress in
consolidating various defense organizations, streamlining its
[[Page 51]]
infrastructure, re-engineering its business practices, and competing
more jobs with the private sector than ever before. DOD has projected
that the work currently performed by approximately 150,000 positions
will be bid against private sector firms by 2005, with projected savings
of approximately $7 billion. Savings that result from competition are
being reallocated to meet readiness and modernization needs.
Reforming the Acquisition System: The Administration has also
strongly supported efforts by DOD to reform the way it
acquires weapon systems and services. Over the past eight
years, DOD has reduced the amount of time it takes to field
new weapon systems by 25 percent, saved millions of dollars in
small purchases through the use of a Government-wide
commercial purchase card, and, through the use of electronic
commerce, reduced cumbersome paper transactions by 50 percent.
Reducing Infrastructure: The reduction in the U.S. force
structure made possible by the end of the Cold War has left
DOD with more land and buildings than it needs to carry out
its mission. The Administration inherited an established
process, the Base Realignment and Closure Commission (BRAC),
to remove this infrastructure from DOD's inventory. Since
1988, BRAC has closed or restructured 97 major military
installations and hundreds of smaller ones (55 of these major
installations since 1993). While this process is costly in the
short term, it is an investment that leads to elimination of
the cost of upkeep on unused buildings and yields operational
efficiencies. By the end of 2001, BRAC will have more than
paid for itself, saving a net of $15 billion, and will save
nearly $6 billion annually thereafter. At the same time, the
Administration has worked diligently to minimize the effect of
moving jobs out of affected communities by providing technical
support to community redevelopment efforts, and turning over
land to reuse as quickly as possible. Although the reduction
in total DOD infrastructure has been beneficial and despite
the many efficiencies achieved, BRAC has not kept pace with
the overall change in force structure. For the last several
years, the Administration requested additional BRAC rounds to
allow for a further ``right-sizing'' of Defense
infrastructure. This request, strongly endorsed by both
internal DOD and external analysis, has failed to win
congressional approval.
The Administration has also implemented an aggressive
demolition program, and has recently widened the authority to
lease out unneeded DOD buildings and land. These programs have
helped to reduce costs without moving people, and have become
particularly important given the failure of the Congress to
pass the legislation needed to replicate the success of
previous BRAC rounds.
Streamlining the Civilian Work Force: Over the past eight
years, DOD has used buyouts and early retirements to achieve a
streamlined and more productive work force. During this time,
the Department has shrunk its civilian work force by
approximately 37 percent, roughly commensurate with the
reduction in military forces. The Administration was able to
achieve this result mainly by offering incentives to those
eligible or nearly eligible for retirement. Providing these
incentives reduced the need for reductions-in-force, and thus
accomplished the downsizing and streamlining with a minimal
amount of disruption or economic hardship. While using these
transition initiatives to ease the way for the many workers
who left the work force, the Administration has also supported
pay and benefit increases for the remaining employees who
continue to become a more productive work force.
Improving Financial Management: DOD has made significant
progress in reforming its financial management operations. The
Defense Finance and Accounting Service (DFAS) is the
Department's agent for accomplishing needed financial
management reforms. DFAS has consolidated DOD's financial
operations, significantly reduced the number of finance and
accounting systems, established and implemented ambitious
deployment schedules, and reengineered business practices to
adopt best practices from both the private and Government
sectors. For example, over 300
[[Page 52]]
financial management field sites were reduced to just 26,
saving about $120 million annually; 324 finance and account
systems were reduced to 76--with further reductions planned to
achieve ultimately a 90-percent reduction; and, between 1993
and 1999, personnel levels at the DFAS decreased by 37
percent, from 31,000 personnel in 1993 to 19,500 personnel at
the end of 1999. Since 1996, the DFAS has identified over 85
percent of its personnel in finance and accounting functions
as available for public-private competition, and has committed
to study over 6,000 positions for competitive outsourcing. To
date, the DFAS has completed six competitions resulting in
annual savings of over $28 million.
Implementing the Information Technology Management Reform Act
(ITMRA): Also known as the Clinger-Cohen Act, ITMRA is
designed to help agencies improve mission performance by
effectively using information technology. One example is the
Global Command and Control System, which provides the seamless
integration of Service capabilities necessary to conduct joint
and multinational operations into the 21st Century. In October
2000, the U.S. Navy awarded an eight-year, $6.95 billion
Navy--Marine Corps Intranet (NMCI) contract for managing the
Service's shore-based computing enterprise. NMCI represents
one of the biggest technology outsourcing contracts ever. The
DOD Chief Information Officer Council manages DOD's
information technology budget and its command, control, and
communications budget, and provides advice on ITMRA-related
issues. In addition, DOD continues to restructure its work
processes while applying modern technologies to maximize the
performance of information systems, achieve a significant
return on investment, cut costs, and produce measurable
results.